You may be sick of hearing the phrase “trying times” but it’s true! No matter what was happening in your life before the days of COVID-19 and self-isolation began, chances are things are a lot more complicated these days, especially for those going through divorce or dealing with an ex.
On Wednesday, March 25th, we were joined by divorce attorney Laura Wasser, founder of It’s Over Easy, and CDFA Laurie Itkin of The Options Lady to discuss some the the legal and financial complications COVID-19 is throwing at us.
Here is a recap of everything we discussed so that you can be informed, even if you missed the webinar. Remember, we’re in this together!
Laurie: One of the main things I’ve been telling clients is that people need to be prepared to lose their jobs and the best way to do that is to tighten budgets. For anyone who receives support payments, alimony or child support, expect interruptions in those payments. It’s just as important for those being paid as those who pay to understand this. Spouses may not be able to make the full payments, therefore tightening the budget should be the first move.
If you have debt, such as credit card debt or student loans, call them and ask about what sort of relief they have for you. Know that federal taxes have been extended for three months and many states are following by example.
For fast cash, look out for side gigs and items that you can sell, like diamond jewelry. Financial assets can be time and skills or items to sell. Here are some other ideas for side gigs: Rover.com application, babysitting, pet sitting, yard sales, consider selling jewelry, Mellaluca and direct marketing companies. Here are some simple tips on freelancing.
Laura: First and most importantly, know that courts are closed, meaning you can’t adjust payments or make a complaint if payments are being made. In an emergency, such as cases of domestic violence, contact your lawyer and the court and they will advise on what to do in this type of emergency situation.
Try to remember that your issues are everyone’s issues in this situation. Try your best to work it out and if you can’t, take notes. When it comes to maintenance payments, as always, speak to the person involved in the maintenance payments, whether you are the payor and payee. If you decide to make any changes, get it in writing!
For custody issues, if you question the safety of your families because of your ex, put it in writing now so that it can be used later. Use email or a family communication app, like “Our Family Wizard”.
One participant wrote in: “I filed for divorce on 2/24/20 and my significant other was served on March 6th. What is the new response time given that most courts are closed to the public at this time?”
Laura: The response time is still 30 days and courts are still receiving filings, although the physical place for receiving those filings may have changed. Courts are also receiving e-filings. Extensions for response time can still be submitted, but it must be done in writing. If an ex does not respond within 30 days, there may be some leeway, but as of now that hasn’t changed.
Another wrote: “What if the date of separation is in 2017 and the negotiations for 2020?”
Laurie: This is where you need a CDFA and possibly a forensic accountant. The value of assets will have changed and each state treats the date of separation differently, some assess value at the time of a hearing, others at the date of separation. In a case like this and with so much financial uncertainty, make sure to consult with a mediator, CDFA, and your attorney.
Laura: Get educated! Take this time to find out more so you are better equipped to handle what’s ahead. Find out what the parameters for your state are.
If in your divorce negotiations, you and your spouse have done some “horse-trading” (i.e. assets are not split down the middle, rather one spouse gets an asset like the house and the other gets the retirement account), you’ll want to review that because the value of some assets, such as those retirement accounts, has gone down and it’s unclear when they will go back up.
For more info on QDROs and retirement accounts, check out Laurie’s blog post.
As Laurie says, cash is king right now, so before you start investing or buying stock or anything like that, make sure you have an emergency fund that you can count on.
A participant asked: “Is the ring something I can consider selling? What about the value? Will that fluctuate?”
Laura: In most states, the ring is the property of the person it was given to.
Laurie: Jewelry’s value doesn’t really appreciate the way we think it does. Selling a ring can bring you the money to do lots of things, like start a college fund or jump start your small business. But if we are concerned about the here and now, selling a ring can help you quickly pay off credit card debt rather than allowing the interest to build up. Here’s more on what selling your ring can do for you.
A participant wrote in: “Should I be worried to send my daughter to her dads during this time? He was driving for Lyft last week. My daughter is 6, and I’ve been self quarantined with her for a week now.”
Laura: This is a situation in which it is understandable why one parent would be uncomfortable with the other’s work situation and would make requests about custody changes. The ex spouses, in this situation, need to speak to one another so that the Lyft driver understand’s his ex’s concerns and arrangements are made for virtual visitations, etc. If there is pushback, make sure to get it all in writing.
Another participant wrote in: “What do I do if I have a temporary custody agreement that is vague and he doesn’t pay his half of expenses? He threatens to not give me the kids unless I say I will pay the babysitter. I separated in January 2018 and we still have not settled since he won’t sign what do I do?”
Laura: Do the best that you can to record everything that’s going on. Keep a list of the expenses so that you can ask for retroactive payments later on. If he’s trying to withhold the kids, try to get that in writing because that will come back to bite him at some point when you are talking about long time custody. Courts generally rule that less custodial time be given to the parent who is less likely to facilitate custodial arrangements. And again, get it in writing!
Another participant asked: “Knowing this is unchartered territory, any thoughts around how to establish a fair video chat schedule (meaning what’s fair – how many times per week, day etc?), keeping in mind that chats with Dad tend to throw off the 4 and 7 year old’s behavior afterwards.”
Laura: There are certainly resources on mental health websites with more information on video chatting and children. The age of your children should be the determining factor on how often the video chats should take place. Especially with younger children, frequent and continuous contact is essential. Young kids won’t want to talk for very long so pick a time, even a few minutes, each day for when the calls should take place. Pick a time that will be least disruptive to the schedule. If you are the one curtailing visitation or custody because of the virus, be aware that you need to be very easy with the facilitation of these chats on a daily basis.
Here are some mental health resources from It’s Over Easy for both parents and children.
A participant wrote: “For those who are early in the divorce process, is it prudent to delay until things stabilize or proceed more quickly?”
Laurie: Lawyers and mediators are working to make sure that their resources are available virtually, many at a reduced rate. Now is the time to get educated about your situation and get head of the curve so you will be more in the know than your spouse is when you head into the divorce process.
Another question: “My husband asked for a divorce and has not done anything else. Just said the words. This was in January and we are now isolating together. Do I have to do anything, besides learning and planning, or do I wait until he takes another action?”
Laurie: You are not alone! Many people are currently isolating with spouses who want a divorce. You are going to need all the support you can get – yoga, mental health professionals, all of it.
Laura: The answer is there is nothing to do right. If you can wait, take this time to start gather financial documents and thinking about potential custody plans. But the fact that he said those magic words means nothing. It doesn’t have any legal ramifications.
Another question: “What if the husband asked for a divorce in email – not just words. Is it still the same – I don’t need to do anything? Should I be concerned about financials? He stated that the date of email is date of separation. but nothings been filed. He sent me the email in December of 2019.”
Laura: In California, there are a series of protocol that you need for proof of separation and if none of that has been completed, then no, the email means nothing. However, if the husband has been earning income since that date and considers it the date of separation, you need to work hard to prove that that is not the case. You might to consider using a professional.
A timely question: “Unfortunate thing to think about but if I receive an inheritance right now, or he does, how do we keep that separate from marital assets?”
Laura: If you or your spouse receives an inheritance, that is generally considered private property, not communal. However, that money will be considered available to pay for support** so you will benefit more from receiving the inheritance later when your budget is not so tight.
**In the states of California and New York, money received in an inheritance can be considered income that is available for support payments.
Laurie: If you receive an inheritance, make sure to put it into your own account and by no means let your spouse convince or bully you into putting their name on it. It must be kept separate.
A general note on reducing support payments: while many people paying support may ask to have their payments reduced, as of now we are looking at the short time period of about 3 weeks. Courts generally look at a period of 12 months to determine whether support payments should be lessened, so unfortunately, it’s not likely that spouses will be able to pay less.
A participant asked: “I am getting ready for a divorce but he is MIA. He also retired, will this affect my spousal support and if he hid all his money is he in trouble?”
Laurie: This is a complicated one so let’s break it down.
Another participant asked: “If we used a mediator and he decides to lessen child support, should we go back to mediator and involve her (in writing) or what are the consequences of doing it on our own just in writing — is that enough?”
Laurie: If you’ve used a mediator to settle your divorce, there are often clauses in the settlement inviting you to come back to that same mediator when issues arise. If you felt that your mediator did you justice, by all means go back to them. If it is an issue of money and you would prefer to do it on your own, be aware that this might not hold up as an agreement.
Laura: As the participant said, “he decides to lessen child support”, this is a situation where you would want to involve a mediator to say that he doesn’t get to make this decision on his own. A mediator can be a voice of reason so I highly recommend using one in this case. If cost is an issue, ask the mediator for a reduced cost based on the current climate.
Another question we received: “My spouse has a hidden account in Canada that his parents have been putting money into every month. Is this off-limits and because it’s international there’s no way to address it?”
Laura and Laurie: It’s not off limits!
Laura: If you know about that account, get evidence. In almost every jurisdiction in the US, all discovery is done under penalty of perjury so the “hidden account” will be an omitted asset. In some situations when accounts are omitted by one party, the court awards the entire account to the other as a punishment.
Laurie: It could be a gift and therefore separate property. However, he is required to disclose it. During the negotiations, you may need a lawyer to help you get the details in discovery.
Another question: “My ex-husband’s mother died and left him a sizable trust and two properties, but he did not disclose this and he uses it to pay all his bills. Is this money that would be considered for child support? At this point I am not receiving child support or alimony.”
Laurie: From a California perspective, child support is based on one’s current income and ability to pay. If I was your financial advisor, I would be looking at those two properties and the rental income they bring in, the trust itself, and tax returns. All of that is fair game to request support. Of course, this is dependent on the state’s laws.
Laura: Of course, it can all be considered for both spousal and child support. There is no reason those accounts should be sequestered away. The bigger issue, for him, is the fact that he didn’t disclose it. Everything must be disclosed, no matter the state.
One participant pointed out: “If we try to push through divorce faster, then I lose health insurance.”
Laurie: This is a common question. If your spouse works at a company of a certain size and receives health benefits, you should be eligible for something called COBRA for up to 36 months. However, COBRA is typically very expensive because you will most likely not get the subsidy previously paid by the employer. You can speak to a healthcare agent for free or visit your state’s website but be prepared to do a lot of research, especially if you’ve never purchased healthcare before.
A participant asked: “I’m currently going through process of divorce. I’ve been married 14 years and a stay at home mom of 2 children for the last 8 years. Prior to that I was a paralegal with a 4-year degree. I was currently in process job searching trying to get back into a full-time career, but I fear that it will be even more difficult now that we are in the midst of a global pandemic with an uncertain job market. Currently, my husband and I have an agreement for him to continue paying our mortgage and all bills until October 31 when I’m expected to have a career and become financially independent from my husband and he will then begin keying child support & alimony.
Is there anything you advise to work into a separation agreement that would protect me in case my getting a job is impacted by the covid 19 crisis and takes me longer than the October 31 deadline we have agreed to to get a job?”
Laura: Absolutely add in to your agreement that you may need longer than October 31st to become employed. Given the current situation, you may need more time to become self-sufficient and you should absolutely request that the deadline be pushed before signing a separation agreement.
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