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Navigating Divorce

Ending a marriage comes with a lot of emotions and financial considerations. This guide provides insights into key financial matters and will help navigate the process. It's important to know what complications can easily derail the process and what you can do prior to starting the process with the legal system in order to save money for all parties involved.



This is a way to formally end a relationship but continue a marriage. Not all states allow or acknowledge legal separation, be sure to visit your state's court website to see the specifics in your area.

Some people prefer legal separation, due to many factors including:

  • Financial assistance
  • Medical insurance
  • Taxes
  • Qualifying to become a foster parent 
  • Religious beliefs
  • Not ready; keeping options open
<p>Property Distribution</p>

Property Distribution

Property Distribution is another major factor to consider when filing for divorce. This can often lead to contested cases, due to both parties feeling differently on the split of assets.

Marital & Exempt Property

The court or a mediator needs to establish marital property before any assets can be divided in an equitable fashion. 

  • Marital Property are any assets/debts acquired during a marriage, or any individual property that one brought into the marriage that was then turned into marital property.

  • Exempt Properties are any assets/debts acquired before the marriage or any agreed-upon assets that were not to be brought into the marriage before commencing the relationship.

Equitable Distribution

Once the courts decide what is marital property and what is exempt property, they will assign a monetary value to the assets and debt.

Equitable distribution changes state-by-state. This is where there is a fair allocation of assets, which is not always equal. It is usually advisable to agree upon this outside of the courts to save time and money for both the couple and the state. 

When making this decision, they will take into account:

  1. The duration of the marriage
  2. The value of the property
  3. The acquisition of the assets
  4. Age & health 
  5. Contribution to the marital property
  6. Economic circumstance
  7. The debts & liabilities of the parties
  8. Possible tax consequence



Alimony can be tricky and emotional, as both parties are opinionated on what they are entitled to, and typically do not agree.  

Limiting the duration of alimony for marriages shorter than twenty years was a recent change, whereas the length of alimony will not exceed the length of the marriage. A supporting spouse has a right to modify/terminate their alimony obligation if they have reached full retirement age (when one is eligible to receive Social Security benefits).

Both Parties are equally entitled to maintain a comparable lifestyle to what was enjoyed the marriage, and neither party having a greater entitlement over the other. All factors are looked at equally, and none is taking precedence over any other.

Open-Durational Alimony

When spouses have been involved in a long-term marriage, usually over 20 years, the court will typically award open-durational alimony. There is no set end date, and the amount can be modified based on changing circumstances.

Limited-Duration Alimony

When spouses have been involved in a short-term marriage, usually under 20 years, the court may order the payment of a limited-duration alimony. 

Rehabilitative Alimony

This is paid to allow the relatively financially dependent spouse to reach financial stability. Rehabilitative alimony is commonly used to pay for additional schooling or vocational training.

   Reimbursement Alimony

When one party has foregone meaningful employment in order to pursue an advanced degree, the court may award reimbursement alimony. This is often used to pay back the spouse who had to work while the other person was in school.

Prior to making a decision on the alimony award, the courts are required to address the below:

  1. Need & ability of the parties to pay
  2. Duration of the marriage 
  3. Age & health of the parties
  4. Standard of living established during the marriage 
  5. Earning capacities & employability of the parties 
  6. Length of absence from the job market for the supported spouse
  7. Parental responsibility for the children 
  8. Time & expense necessary to re-enter the workforce
  9. History of financial and non-financial contributions to the marriage 
  10. Equitable distribution of property
  11. Income available through investments 
  12. Tax treatment & consequences to both parties of any alimony award
  13. Nature, amount & length of pendente lite support
  14. Any other relevant factors
<p>Contested Divorce</p>

Contested Divorce

When a couple disagrees on terms within a divorce, this is considered a contested divorce. Sometimes these disagreements can cause the process to be even more drawn out and emotional. 

What can lead to contested divorces?

  • The distribution of assets
  • Spousal support
  • Child custory & visitation agreements
  • Child support
<p>Military Divorce</p>

Military Divorce

Military pensions can be a complex issue in divorce. This is dependent on the state you live in, but some states may consider military pensions as military property. If the latter is the case, they will distribute these funds equitably alongside other assets. In this circumstance, the spouses could be eligible for a share of the military pay if the marriage lasted for at least 10 years, and the military spouse served for at least 10 years. This is known as the 10/10 rule.

<p>Divorcing with a Business</p>

Divorcing with a Business

Whether the couple collaborates professionally, with one owning the business and the other pursuing separate employment, the business is likely to be a factor in the asset distribution process. In the absence of a written agreement stating otherwise, the business will typically be considered marital property. 

What is considered Exempt Property?

  1. Assets acquired before the marriage and not agreed to be marital property
  2. Inherited assets not agreed to be marital property
  3. Gifted assets not agreed to be marital property
  4. Any assets designated as exempt in a written agreement 

If a business is considered marital property, the business will be assigned a monetary value.

<p>Protecting your Business</p>

Protecting your Business

While contemplating divorce is not an ideal scenario at the outset of a relationship, there are agreements that provide protection for all parties involved in unforeseen circumstances. 

If a business is jointly owned, the couple can create a shareholders agreement. This document allows them to establish various terms in the event that the marriage doesn't succeed. The agreement outlines the valuation process for each party's stake in the company, assigns ownership in the event of a divorce, and restricts the transfer of ownership to third parties.

Alternatively, couples can consider drafting a prenuptial or postnuptial agreement that outlines the contingency plan for the business in the case of a divorce. 

<p>High Net-Worth Divorces</p>

High Net-Worth Divorces

Any divorce is considered a high net-worth divorce when the individuals have a combined wealth an assets exceeding $1,000,000.

While sharing common factors with other divorce cases, high net-worth divorces involve considerations such as child support, child custody, and spousal support. The main difference is the magnitude and intricacy of the assets and debts at stake.

These can include:

  • Multiple properties
  • High profile possessions
  • Professional practices
  • Successful businesses

Protecting Yourself

In high net-worth divorces, both spouses must disclose comprehensive financial information to the court, including a net worth statement and recent tax returns. If there are any discrepancies present, this may prompt the court to bring in forensic accountants. If anything is out of place, an IRA audit could be performed, as the courts and judges are mandated reporters to the IRS.

High net-worth individuals should highly consider prenuptial or postnuptial agreements to protect assets and create an outline for a potential divorce. These save both time and money by preventing drawn out court battles over property distinctions.

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