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Englewood Cliffs Legal Blog

Tips for divorcing with a high-net worth

New Jersey residents may have heard that Amazon founder Jeff Bezos and his wife MacKenzie Bezos are divorcing. What wasn't heard after the announcement was any name calling or blaming. This is because the couple jointly broke the news and are making an effort to stay amicable. There are some tips for dissolving a marriage without contention when extensive assets are involved.

The divorce process can take the form of collaboration, mediation, or traditional litigation. In addition to the personal issues that may arise during a divorce, several financial, legal, and tax issues will need tending to. One may need professionals like a business valuation expert, therapist, CPA, forensic accountant, estate planning and family law attorneys, and a financial analyst.If one or both parties had significant assets before a marriage began, a prenuptial or post-marital agreement may be in place. However, one should not assume such a document is sufficient protection when a divorce happens as these documents can be challenged.

Handling retirement accounts during a divorce

When people in New Jersey decide to divorce, they may be concerned about the future of their retirement accounts. Many couples have saved a significant amount in their 401(k)s, IRAs and similar plans to the extent that these are often the largest assets held by a divorcing couple. As a result, the division of these funds can be a contentious issue; one survey of divorce attorneys found that retirement assets were one of the top three subjects of conflict during the end of a marriage.

The issue with dividing retirement funds in a divorce goes beyond reaching an agreement over property division, however. It is also important that the division takes place in accordance with existing law in order to avoid costly taxes and penalties that could significantly reduce the value of these accounts. In order to divide a 401(k) or other workplace fund such as a pension plan, a qualified domestic relations order, or QDRO, must be approved by the court. The plan administrator cannot divide these accounts on the basis of the divorce decree alone; instead, a spouse's attorney must present a QDRO for approval to the court.

How does adultery affect divorce in New Jersey?

Adultery is one of the most common explanations for why couples divorce in the United States. According to recent surveys, men are more likely than women to cheat during a marriage. 

Many people assume adultery will affect the divorce proceedings to some capacity. In the past in New Jersey, couples needed to cite a clear reason why they wanted to divorce. Now, no such reason is necessary. For the most part, adultery will not impact divorce, but there are exceptions. 

Issues that commonly decide child custody cases

When parents in New Jersey or any other state choose to end their relationship, they must still take an active role in raising their children together. Parents may be granted custody based on their mental and financial stability as well as their ability to raise a child. In some cases, the children themselves will get a chance to voice their opinion in a custody hearing.

If a child has a sibling, a court may try to keep them together in the same home. However, this will only happen if it is in the best interests of the children. Otherwise, they could be placed in separate homes. In some cases, a judge will order that a representative of the court spend time with the parents. During this time, they will observe how he or she interacts with the children as well as take notes about how the parent lives.

Tips for divorced parents to enjoy the holiday season

Many divorced parents in New Jersey struggle with emotional distress related to the dissolution of a marriage, but the holidays can be especially difficult in shared child custody situations. Children often want to spend time with both parents and their extended family members over the holidays, but time is usually tight, and stress is already high. This creates anxiety for both parents and children, and it can also be difficult to explain to children that custody and visitation orders are still in effect during the holiday season.

A divorce attorney writing for WTOP states that it's best to prepare children for holiday plans to set clear expectations. Providing realistic expectations can help to minimize emotional turmoil as children of divorced parents generally tend to seek out stability. Additionally, the attorney goes on to state that parents need to be willing to listen to children talk about their holiday experiences without the need to speak out about how differently they would have done something. Attempting to outdo the other parent can create conflict and add stress, and the battle for a child's loyalty could breed confusion and resentment.

The advantages and disadvantages of nesting after divorce

Some parents in New Jersey who are getting a divorce might consider a custody arrangement called "birdnesting" or "nesting." This arrangement involves the children remaining in the family home while their parents rotate in and out. The parents maintain another place they live in when they are not staying with their children. Usually, this is a small apartment.

Experts say there are advantages and disadvantages to this schedule. Most recommend that it go on for no longer than a few months. Otherwise, over time, children may begin to believe there is a chance that their parents will reconcile. Parents also need to have a very amicable relationship for the arrangement to work, but even then, the relationship can become strained. Conflict may erupt over even small matters when they are forced to share living spaces even if it is not at the same time. However, the advantage is that it can give children a sense of stability during the upheaval of divorce.

Money moves to make in divorce

New Jersey couples who are planning on divorcing soon may have incentive to finalize them before 2019 begins. This is because a change to the tax treatment of alimony will soon take effect. For divorces that are finalized on or after Jan. 1, 2019, alimony is no longer income to the recipient, nor is it a tax deduction for the person making the payment.

However, alimony is just one issue that needs to be decided in a divorce. It is also important that retirement accounts are properly split. If the account is a 401(k), for example, it will need to be divided under the terms of a qualified domestic relations order, which will specify either a fixed dollar amount or a percentage to be transferred into an IRA owned by the other party.

Selling the family business is only one option in a divorce

If you are facing divorce, you may have significant assets to divide with your soon-to-be ex-spouse. If your family business is one of those assets, its fate may be the most important consideration when you reach the property division stage of the divorce proceedings. Here are three options to think about.

1. Put the business on the market

Myths and misconceptions about prenuptial agreements

Prenuptial agreements can make divorce less stressful and more efficient, but there are a number of misconceptions about prenups that make New Jersey couples less likely to have them. People often believe that prenups are only useful where one or both spouses are wealthy, that executing a prenup makes divorce more likely or that they are only useful in the event of divorce.

Contrary to popular belief, prenuptial agreements might be useful in many situations where neither spouse is particularly wealthy. They are designed to handle any and all marital assets, which might include money or real property as well as pets or future spousal support payments. A prenup might also address distribution of assets to children or division of debts among spouses.

Fathers and child custody

Determining who will have custody of the children when parents go their separate ways can be a very contentious issue. Fathers in New Jersey who are seeking full custody of their children should be aware of what steps they should take to have their children in their care.

The first step is to understand the distinction between full and joint custody. Full custody, which is also called sole custody, refers to custody in which the responsibility of the children belongs to one parent. With joint custody, parents have to share legal or physical custody of the children. Fathers should be mindful that the preference of the court is to give both parents joint custody.