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Charting Your Expenses (part three)
Settlement Outside of Court
You and your spouse have much more freedom to handle these issues through a settlement agreement. If you go to trial, a judge may neither have the power nor the inclination to consider your family's long range future situation. A judgment could lead to additional conflict and litigation between you and your ex-spouse.
One word of warning: even if you have an agreement now, you may still find yourself squared-off against your ex-spouse on these issues due to interpretation or enforcement of the agreement. You may also find yourself back in family law court to litigate the modification of an existing order.
Planning
One hint about expenses: be sure to take a look at what your spouse is doing with his or her money, especially if you both earn a good income. It's not uncommon for divorce lawyers to suggest that a spouse earning an income that exceeds his or her reasonable needs use the excess income to purchase prepaid items, household goods, or other merchandise such as a cemetery plot, a future vacation, or furniture to fill a new home. The intended effect is a reduction in your spouse's bank account balances and an increase in his or her consumer debt -- and subsequently, a reduction in his or her assumed net worth.
Another planning tactic is to prepay household bills that are not customarily listed as current debts on court financial disclosure forms. The goal is to reduce the amount of money in the bank account on the date of the divorce while saving the benefit and use of the money for the spouse who earned it.
Blended Families and Modification of Court Orders
Many families today are blended with children from two or more marriages. In cases that seek to modify a divorce order, the family blends may consist of:
- a second spouse
- children from a first or second marriage
- step-children
- an ex-spouse
Many modification actions involve the increase, decrease, or termination of some type of support obligation. The court considers the living expenses for each separate family unit. Prepare your family expenses so that you segregate the direct expenses of each family member.
There are no clear guidelines for this issue. One of the unfortunate consequences of blended families is that families headed by a spouse with financial obligations or custody of children from a prior marriage has to make do with less spendable income. The courts are just beginning to recognize this situation and some states are modifying support laws and charts to take children from a current marriage into account when modifying a prior support order. Ask your lawyer about your state's divorce law concerning blended families and support issues. Prepare your expense and income worksheets to present your evidence according to your state's law.
Financial Planning
The task of budgeting your family's historical, current, and future expenses is difficult for some people. A financial planner or an accountant can help you set up the system and prepare the worksheets using information you provide. The assistance of the professional can also help you set goals and plan for future events. If necessary, they can also testify as expert witnesses to present your financial plan to the court.
The responsibility for planning your financial future is still yours, even if you hire experts to help you set up your plan. Once started, it's relatively simple to keep track of your expenses and income. Saving and setting realistic goals are the challenges. But once you successfully reach a goal, life is sweet.
CONTINUE
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