Financial Issues in Divorce Mediation: Equitable Distribution
October 25, 2011 by Joseph F Dillon · Comments Off
As a NJ mediator, I’ve often said that divorce is really just a really big financial contract with a parenting component and equitable distribution is an excellent example of how true a statement that is. Equitable Distribution is the fair but not necessarily equal division of a couple’s marital assets and liabilities and is one of the areas where financial issues really come into play. Here are some general rules you’ll want to keep in mind when discussing Equitable Distribution.
First you’ll want to keep in mind whether an asset is a taxable or non-taxable item. For example, if you were to receive $1000 in stocks versus $1000 in cash during your Equitable Distribution, which would you take? On the surface they seem like the same thing but in reality, tax issues may make the stocks higher or lower in value than the $1000 they are currently worth. Not only that, stocks fluctuate in value whereas cash sits in a bank and doesn’t drop below it’s value unless you withdraw some. Same thing goes for IRA’s & 401(k)’s. In this case, plan on knocking off at least 20-25% of the account’s current value as unless it’s a Roth IRA, you’ll pay tax on the money when you go to take it out come retirement.
Second is the house. You know the old saying about what goes up must come down? Sadly many of us in NJ found out it also applies to housing prices. Houses are not only risky investments, they require a lot of work. For example, the average life of a water heater is 10 years. HVAC unit maybe 15-20 and a roof can vary depending on quality and grade. So if you plan on being in a home for an extended period of time, be real and consider the replacement and maintenance costs associated with home ownership, not just the monthly mortgage payment. Losses from hurricanes or other disasters can be costly as well and given the weather lately, seems like you can count on one of those events every 5-10 years.
Finally talk to your accountant (or get one if you don’t have one) about what your Equitable Distribution settlement will look like vis a vis your tax return. Many of the decisions you make in mediation will have a significant impact on your taxes so it’s important you understand those implications to make sure your Equitable Distribution is well, fair and equitable. When you’re sitting at the bargaining table it may not always be evident what the impact may be so reserve the right to say “I need some time to consult with my accountant to understand if this is in my best interest” before proceeding. With divorce mediation there is no rush and it’s important you feel comfortable before moving forward.
Have questions about Equitable Distribution? Please feel free to visit the Equitable Mediation Services website or give our offices a call at (908) 864-2177 and schedule an appointment for you and your spouse to come in a discuss your unique situation as we’re always glad to help.
Full Mobile Version of Equitable Mediation Services Website Now Available
October 24, 2011 by Joseph F Dillon · Comments Off
Did you know that 10% of the visitors to the Equitable Mediation Services website are using mobile devices? In order to make it even easier on our visitors, we have developed a true mobile version of our website that works seamlessly with your Android, iPhone or Blackberry device. Simply visit our regular website at www.equitablemediation.com and you’ll be automatically redirected. Or if you’re one of those folks who are smart enough to access it direct, please visit www.equitablemediation.mobi. As always, we welcome your feedback and would love to know what you think. Please call us at (908) 864-2177 with comments or questions.
Equitable Distribution and the Stock Market
October 4, 2011 by Joseph F Dillon · Comments Off
It would be an understatement to say the economy and the stock market has had its ups and downs lately. With housing prices in the tank and the value of everyone’s 401(k) much lower than it was a few years ago, it’s no surprise that the topic of equitable distribution and the stock market has been a major issue in divorce mediation lately. When account balances change month to month and what looked like an amicable agreement a few weeks ago now has been turned upside down, how do you fairly and equitably divide your marital assets and liabilities when it seems every day you turn on the television, there is a new story about where our economy is headed? The answer? You go to divorce mediation in New Jersey.
It’s no secret that divorce mediation is a much more efficient and much less expensive process as opposed to a lawyer-driven collaborative divorce or litigated divorce as the parties are doing much of the work themselves saving tens if not hundreds of thousands of dollars in the process (sad but true). But part of the reason divorce mediation in New Jersey also costs much less is that it is an efficient divorce. With the help of your NJ divorce mediator, you and your spouse will move through all of the equitable distribution issues surrounding your divorce in an efficient and organized fashion allowing you both to make better decisions in less time than if you involved attorneys. By moving through your mediation in as little as two sessions for couples without children and four session for couples with children, how much the market is up or down will impact you much less than if it took two to three years like an attorney driven divorce does. I’m not saying the market will be perfectly stable for a month long period but imagine if you had to wait two to three years to settle. I’m guessing there is a much better chance the market will have gone up or down in two to three years as opposed to one to two months. Account values change and “go stale” so I remind my clients that while I’m not here to rush you through the process, I am here to remind you that in order to remain efficient and not have to revisit equitable distribution decisions a year down the road, it’s in everyone’s best interest to make things move forward as smoothly as possible and divorce mediation is just the way to do that.
If you or your spouse has any questions about equitable distribution or how divorce mediation can benefit you, please call the offices of Joseph Dillon at (908) 864-2177 and we’d be happy to schedule an appointment for you and your spouse to come in for an initial meeting in one of our many convenient New Jersey office locations. Or if you’re not ready yet, please feel free to visit the Equitable Mediation Services website where you’ll find lots of great information about equitable distribution, divorce mediation and more.
