Breaking up is hard to do—yet more than 750,000 American marriages will end in divorce this year. And while many of those people saw the end of their marriages coming, most will be taken by surprise by aspects of the divorce process.
Despite what divorcees often expect, few get a chance to denounce their spouses’ misdeeds in court—the usual process is more like a financial negotiation than a courtroom drama. And while playing hardball with a soon-to-be-ex is a common—and, in some cases, justified—impulse, it generally results in both spouses suffering more than necessary. Even people who have been through a divorce before may be surprised if they end up divorcing again—divorce court rulings have changed in some significant ways in the past 10 or 20 years. So before you head to court, be wary of these potential surprises…
Spousal support has become a lot less supportive. A divorcing spouse who earned little or no income during the marriage often expects to receive a share of his/her former spouse’s income sufficient to maintain the lifestyle to which she had become accustomed, in addition to her share of the marital assets.
Don’t count on it! Divorce courts have been moving away from spousal support in recent decades. They reason that virtually every adult is capable of earning a living for himself/herself—even spouses who gave up their careers long ago to raise families. Today’s divorcees still might receive some support for a limited number of years—details vary by state and judge—and they’ll still receive their share of the marital income and potentially child support for young children, but the era of lifetime spousal support is over. Unless their share of the marital assets is sufficient to pay their bills for the rest of their lives, former stay-at-home spouses often must get jobs when the marriage ends.
The primary parent can no longer assume that he/she will receive full custody of the kids. A decade or two ago, the parent who did most of the child rearing—almost always the mother—would almost certainly get custody of the children in a divorce…but not anymore. In recent years, 50/50 custody has become many courts’ default position. Before the pandemic, primary parents could argue that their spouses weren’t qualified to share custody because they didn’t know the children’s preferences and routines. But after a year or two of quarantining together, career-focused parents are more likely to know when little Bobby goes to bed and how he likes his sandwiches sliced.
Also: This shift affects grandparents, too—the share of custody that a parent receives can have a dramatic impact on the amount of time that the parents’ parents get with their grandchildren.
A single tax return could shape your entire divorce agreement. A divorcing couple’s most recently filed tax return often plays a major role in negotiating the divorce settlement. Divorce attorneys can present other financial information for consideration as well, but that one tax return tends to weigh heavily.
That’s especially notable these days—tax returns for many households have been atypical due to the pandemic and the red-hot stock market.
Rule of thumb: If a marriage is ending, the low-earning spouse generally benefits by filing for divorce when investments have been rallying and the most recent tax return shows relatively high income…the high-earning spouse benefits by filing when the opposite is true.
Vengeance will cost you. Instructing a shark of a divorce attorney to rip your spouse to pieces doesn’t increase your odds of getting a great settlement. But it does increase the odds that your spouse will hire a shark, too…or that the attorney your spouse hires will respond in kind. Result: These sharks will fight it out, and you’ll end up with more or less the same percentage of the marital assets that you would have received if both spouses hired attorneys focused on working toward a fair settlement…but there will be fewer assets to divide, because those attorneys will end up getting a bigger piece of the pie.
A big-city divorce attorney can be a poor choice for a small-town divorcee. A local attorney will have tried so many divorces before the local judges that he/she usually can predict the outcome if a divorce reaches court. That means he knows whether and for how much to settle—a huge home-field advantage. An out-of-town attorney usually can’t do that…plus he likely will charge much more per hour than the local attorney.
Your spouse’s infidelity doesn’t matter. Divorcees often imagine that providing proof that their spouse was unfaithful will swing the proceedings in their favor. But in most states, it won’t even be a consideration—the modern “no fault” divorce process is about dividing up the assets, not assessing blame for the failure of the relationship. Divorce courts also won’t care about your spouse’s profligate spending, poor work ethic or other unpleasant behavior. Potential exception: If your spouse feels very guilty about the infidelity or other misbehavior, your attorney might be able to convince him/her to agree to a settlement that’s favorable to you.
Premarital assets sometimes become marital assets. Many married people know that the assets they owned before they wed generally will not be divided up as marital property in a divorce. But it is very easy to accidentally transform premarital assets partially or entirely into marital property.
Common misstep: Commingling premarital assets with marital assets—perhaps by using money earned during the marriage to purchase additional shares of stock in a premarital investment account…or to pay for repairs on a rental property that was owned before the marriage. In fact, simply trading stocks within a premarital investment account could partially transform that account into a marital asset even if no money enters or is removed from the account. Divorce courts have ruled that actively managing an asset during a marriage means that it is no longer entirely a premarital asset because the time the married person spent making investment decisions is itself a marital asset.
The value of the assets at the date the marriage began most likely still will be treated as a premarital asset, but any appreciation that occurred during the marriage is likely to be a marital asset. Leaving the management of premarital assets to professional managers could avoid this problem. The challenge of maintaining the status of premarital assets is one reason why prenuptial agreements are such a good idea.
It probably doesn’t matter that an account is in your name. If assets in an account were purchased using money accumulated during the marriage, then the account will be treated as a marital asset whether it is in one spouse’s name or both names. Potential exception: If one spouse inherits or is gifted assets during the marriage…keeps those assets in his/her own name…and never commingles them with marital assets, those assets are likely to be considered that spouse’s separate assets in many states.
Gifts you gave each other while married are marital property. If a gift was purchased using marital assets, it doesn’t matter that your spouse gave it to you—it will be considered a marital asset during the divorce.
This leads to a question—are wedding and engagement rings marital or separate assets? Wedding rings are exchanged during the wedding ceremony, so they generally are treated as gifts given during the marriage and considered marital property. But the bride-to-be received her engagement ring as a “conditional gift” prior to the marriage, so unless marital assets were used to repair or improve the ring during the marriage, it’s likely to be considered separate property and therefore is hers to keep. The engagement ring is considered a “conditional gift” because it is given on the condition that the bride follows through on her commitment to wed—if she doesn’t, courts generally rule that the giver can reclaim the ring.
