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Vital Insights from Maryland Divorce Attorneys
Facing divorce is a stressful process that can bring out the worst in people at times. We came up with Lessons from Maryland divorce attorneys to help you. Some people use divorce to seek revenge or punish their former spouse, making the process harder or trying to take away assets or access to children.
Although divorce can be a liberating experience, it can also be full of stress and become very expensive, if you do not know your rights in divorce and fight to protect them. The following is a list of:
1. Make Financial Decisions without focusing on Emotions
When facing divorce it is very easy to be motivated by anger, sadness, or revenge. However, this focus will have a very negative effect on your finances and may hurt your case. When you ask your Maryland divorce attorney to draft a demand letter or emails to the opposing party in your divorce for every wrongdoing, you will end up spending thousands of dollars in unnecessary attorney fees. Being aware of how quickly a divorce case becomes expensive will hopefully help you in picking your battles.
2. Make Large Purchase Before Filing for Divorce
In Maryland, filing for divorce triggers automatic temporary injunctions and financial restraining orders. Unless you agree otherwise, you’ll likely be barred from buying large assets, like a new car, after filing. If you’re planning a big purchase, it’s best to do it before filing for divorce.
3. Know Your Spouse’s Finances
You should be familiar with your spouse’s financial situation prior to filing for divorce or even separation. You can begin the process by tracking your spouse’s new or existing credit cards, loan applications, and the current balance and transactions of all your bank accounts. Many times people will elaborate on their income reporting for credit or loan purposes; however, the number is much more conservative when it comes to the IRS. Loan applications and other financial information can be critical in the discovery process for your divorce case.
4. Know your Case Before Filing for a Divorce
It can be tough to stay in your marriage just to gather information before filing for divorce. However, if it’s safe and you can manage, collect evidence and details before leaving the marital home. Photograph assets, copy account statements, note important numbers, and document other key information. This preparation is crucial for starting your divorce case strong. Having all this information will help your Maryland divorce attorney present your case effectively.
5. Everything Is Fair Game for Division
Divorcing parties often make the mistake that an asset in their name is separate property and not divisible as a marital asset. However, divorce experts and Maryland family law would caution you that the opposite is often true. Practically everything you own, or have obtained since marriage is divisible. On the opposite side of the equation, all debts are likely divisible as well. It is important to consider how assets and debts will be categorized as either marital or separate in planning your finances and how to approach your divorce.
6. Alimony may be a Tax Deduction
Although we have clients who are willing to pay alimony or spousal support, none of our divorce clients are excited about the obligation to pay alimony. However, paying alimony may be financially beneficial during tax season. In many instances, you can write off paying your ex-spouse alimony as a tax deduction. However, alternatively, you must report alimony on your taxes, if you are the recipient of alimony. An important point to remember is that alimony is taxable; however, child support is neither deductible nor taxable.
7. Money Transferred Outside of Alimony is Likely Not Taxable
Alternatively, if money is transferred in divorce that is not alimony, i.e. distribution in lieu of further property division. The receiving spouse in this circumstance may not be taxable income. However, the transferring spouse will not receive a tax break for transferring money during the divorce.
8. Look Out for Hidden Tax Consequences of Divorce
It is important to look out for hidden tax consequences and obligations during divorce. When you transfer stock that has increased in value during divorce, you will be on hook for the tax for capital gains. When you transfer or receive real estate, stocks, bonds, or other taxable gains, you will be on the hook to pay taxes on these assets, unless your former spouse is responsible for these expenses.
9. Get Property Valued Before You Part Ways
Property is always part of a divorce, but getting your fair share is hard if you don’t know the value of each asset. Experts can help: a realtor for your home or other property, an appraiser for specific assets, or a financial analyst or forensic accountant for business valuations.
10. Hiding Assets Doesn’t Work
You are violating the law if you hide assets in a divorce proceeding. When you hid assets during your divorce and it is discovered you can be sanctioned by the court, including potentially losing money by financial sanctions. In order to protect yourself from being sanctioned by the family law judge and to protect your property during divorce, it is best to declare assets honestly.
11. The Marital Division of Property is Complex
Dividing marital assets and marital properties is not only a mathematical transaction. Identifying property, determining its origin, and negotiating the division of property is a complex process that takes years of experience to master the most advantageous way to divide assets for divorce clients. However, this complex process really boils down to three steps: 1) determine the nature of the asset; 2) determine the asset’s value; and 3) divide marital property.
Once the property is characterized as marital property or separate property, the next step is determining the value of the property. Both of these steps include many hurdles and likely disputes as it related to substantial assets. Retirement accounts and real property, such as homes and land are complex to value and divide. These issues require experienced divorce attorney counsel and analysis to protect your interests both during and far beyond your divorce.
12. Retirement Accounts, Not as Simple as Account Balance
Determining the value of a retirement account is difficult in most circumstances. Deferred taxes must be paid at some point on many retirement accounts, which can greatly reduce the true value of a retirement account. Liquidating a retirement account early will come with serious tax consequences in most circumstances; therefore, whenever possible avoid early withdrawal and use tools like a Qualified Domestic Relations Order (“QDRO”) to avoid these tax consequences.
13. “Division of Property” in Divorce and State Law with
Maryland divorce law is used to determine the division of property in a divorce property dispute. There are two classifications of property in American divorce court: community property and equitable distribution. In community property states, which Maryland is not, spouses own income and assets equally and items are divided equally. Community property states divide property 50/50 in a divorce.
However, Maryland is an equitable distribution state, like most states, which is better for retaining your assets. Equitable division involves the “fair division” of assets and accounts established during the marriage. Additionally, any increases in the value of property during marriage, may impact the identify of property as marital or separate property, if the spouse seeking an interest can prove marital efforts contributed to the increase in value. Knowing how equitable distribution impacts your divorce can help you prepare for the way through division of assets in divorce.
14. Know Your Greatest Asset
Many people mistakenly believe that their home is their largest asset; however, in many divorce actions one party’s retirement account or pension is the most valuable asset. Although your retirement account may not be a large asset at this time, its future value may have substantial dividends. Using a Qualified Domestic Relation Order, you can divide your portion of your former spouse’s retirement account or pension without being required to follow up decades from now.
15. Retaining Financial Experts is not expensive, it’s an Investment
When financial assets and interests are at stake it is crucial that you work with an experienced family law and divorce attorney in Maryland to protect your financial interests and your future. In some cases, it is necessary to retain additional expert advice or financial analysis to ensure that all accounts are identified and closed or transferred properly to protect you from future tax implications or negative credit consequences. Although it will likely be expensive to work with experts to assist in dealing with the financial records and division of your divorce, it is an important investment to make for your future. Mistakes in division of accounts and beneficiaries can have life-long consequences and cost you thousands and thousands of dollars.
16. Considerations in Hiring a PI or Forensic Accountant in Divorce
Many people facing divorce do not want to spend the money to hire a private investigator or forensic accountant in divorce. Forensic accountants can assist you in getting accurate information on all the financial issues in your marriage and divorce, which may save you far more money than the expense.
17. Know Your Debt Obligations from Lessons from Maryland Divorce Attorneys
Marital debt is not determined by the name of the party on the debt alone in Maryland. Many factors contribute to determining whether or not debts are marital debt or personal debt. When considering paying down debt prior to filing for divorce or during the divorce process, you want to make sure that you are paying down marital debt to the extent possible, not the other party’s personal debt. You want to ensure you are not responsible for debts that the court would order are the other party’s responsibility.
18. Decide to Sell or Keep your Marital Home based on Reason Not Emotions
Decide to keep or sell your marital home based on what’s best for your mental health and finances. While you might have strong emotions tied to the home, consider if living there after divorce will be good for your well-being. Make sure you don’t give up valuable assets just to keep a home that you don’t truly want or can’t afford.
19. Improve your Employment Situation prior to Filing for Divorce
You should prepare for the potential of seeking employment, if you are currently supported by your spouse, i.e. updating your resume and/or seeking new job training. You may be awarded sufficient spousal support or alimony to provide for your needs after a divorce. However, it is not wise to rely on this outcome. You can continue to seek spousal support or alimony, while seeing employment to support yourself beyond divorce. Improving your job skills or education can protect you from being completely reliant on alimony, which is empowering in and of itself.
20. The Most Expensive Divorce Lawyer Isn’t Necessarily the Best
Your chosen Maryland divorce attorney can greatly assist you or hurt you in setting the tone and temperament of your divorce. The retainer and billable hourly rate of a divorce attorney is not the most important factor in deciding the attorney to trust with your case. It is important to know the family law attorney you hire understands your concerns and is dedicated to goals in the divorce, not their own goals. It is important to meet with and research a number of family law attorneys before deciding.
21. Mediation in Your Divorce
Divorce can be very expensive, especially if you and your spouse are unable to agree on a number of key points in your divorce, i.e. child custody or division of assets. One way to save yourself money and energy is to mediate your divorce prior to fighting in court. Professional divorce mediators are neutral and do not work for either party; rather they help facilitate agreements by addressing the concerns and hopes of both parties. Using a mediator may allow you to avoid all of your personal life being put before the court or even worse public, by reaching a divorce settlement out of court.
22. Fix Beneficiary Designations in Divorce
When you are married many of your accounts that have a beneficiary designation will be directed to your spouse. It is important that you remove your former spouse as the beneficiary designation on these accounts at the appropriate time. When you fail to remove your ex-spouse as the designated beneficiary on accounts, such as life insurance, they will likely receive these funds or your family will be in highly contested litigation over these funds. In other words, address beneficiary designations as quickly as possible.
23. Court-ordered attorney Fees Don’t Go Away
When the Court orders you to pay part or all of the other party’s attorney fees, it is mandatory. In Maryland, this usually happens after the case is finalized and in a separate contested proceeding. If you agree that one party will pay the fees or if the Court orders it, failing to pay can lead to contempt charges. This may result in additional fines or jail time.
Include clear terms about attorney fee payments in any agreement, including when they are due. This will help you understand your responsibilities and make it easier to enforce the agreement if you are the one receiving the fees.
24. Compromise Can Help You?
It will save your finances and your mental health to compromise on some issues. Far too often, we see potential clients that are dedicated to fighting every issue in their divorce but do not want to pay substantial retainer fees. When you are tempted to fight every issue in your divorce, remember the benefits to your health and your pocketbook by agreeing to compromise on some issues in divorce. Additionally, the decision to compromise on some issues may result in your spouse doing the same and simplifying your divorce.
25. Be Strategic in When you File your Divorce
It is important to know that property division in your divorce may be based on the date of separation. In Maryland, family courts typically use your formal date of separation in determining property division and when the value of marital assets will be determined. Some assets will have set dates that your property will increase or decrease in value, you may want to take note of this in deciding when to file for divorce.
26. Child Support Considerations
Child support helps the primary parent cover living expenses for minor children. The Maryland Child Support Guidelines, available online, can help you estimate your obligations. Key factors in determining child support include both parents’ incomes, the number of overnights each parent has per year, healthcare costs, and the child’s needs. Parents don’t need to prove that child support is used for the child’s needs, but it’s expected by law. If circumstances change, you might need to request a modification of the child support order.
27. What does Child Support Cover
Child support is meant to cover basic needs like food, clothing, education, and housing. In Maryland, it can also include other expenses such as medical care, childcare, transportation, and extracurricular activities. Sometimes, parents may agree to waive child support in exchange for the obligor paying for specific high-cost items.
28. Financial Benefit of More Overnight Visitations
The non-custodial parent under Maryland law can receive a shared parenting credit if he or she has more than 120 overnight visits per year. When you qualify for the shared parenting credit, your child support obligation will be reduced by a pre-determined percentage. However, you must be careful with the shared parenting credit, because if you qualify and fail to exercise over 120 overnight visits per year the other parent can seek court relief to increase child support.
As many parents expend a substantial amount of money directly in supporting their children, it is in your best interest to reduce your child support, which is a direct payment to the primary custodial parent. Therefore, if your custody discussions are around the 100 days per year mark, it is in your interest to step it up to above 120 nights per year. You will have more time with your children and save money in child support.
29. Child Dependents and Conditions for Claiming
You can set conditions upon a parent being able to claim a child as a dependent for tax purposes. Many of our clients will set being up to date on their child support obligation as a condition for claiming the child as a dependent for tax purposes. This may be a useful tool in protecting your right to claim the child as a dependent for tax purposes while protecting receiving financial benefits.
30. Focus on your Joint Parenting Arrangement
Claiming a child as a dependent is a great tax benefit, which you should not give up in divorce lightly. You should put protections in place, if possible, to protect your interest in claiming a child as a tax dependent. One option is to make the other party’s ability to claim the child as a tax dependent conditioned upon being current on child support or another condition in divorce. There are many conditions or agreements that can be reached in order to protect your child tax dependent interest and you should discuss these with your chosen Maryland divorce attorney.
31. Plan Your Finances Beyond After Divorce
Clients often overlook how their financial planning will change after divorce. You’ll likely have a different view on finances and investments than your spouse. It’s crucial to create a financial plan for success post-divorce. Many clients choose to work with a financial planner, especially if they weren’t responsible for finances during the marriage.
32. Secure Health Insurance
You should take steps to research and identify health insurance resources if your former spouse provided insurance for you prior to divorce. COBRA coverage is a substantial expense and should be avoided over long periods of time, if possible. When you get divorced from a service member or your former spouse was eligible for Tricare, through the military, you need to be aware that there are very limited circumstances under which you can keep using Tricare. Whether you find new employment that provides health insurance or not, it is important to be proactive in researching health insurance options, if necessary after divorce.
33. Document, Document, Document
Most assets are divisible in divorce; however, that is not true for every asset. Some assets are separate property and can maintain that characteristic. Documentation concerning assets can help preserve the separate property characteristic of an asset. Many documents have a strange way of disappearing during divorce, which is why it is so important to make copies of every important document prior to leaving the marital home or filing for divorce. You should set up a new cloud, dropbox, or Google Drive account to store this information as well as a paper copy.
34. High-Income Earners should have a Different Strategy than Low-Income Earners in Facing Divorce
Divorce financial analysts may recommend not taking all the items you originally requested in your divorce as higher income may result in disqualifying you from beneficial tax deductions. Personal exemptions for high-income earners become unavailable at certain milestones if you file your taxes as a single. It is wise to speak to a financial analyst to determine the best course of action for your financial situation and options to mitigate your tax consequences in divorce.
35. Know Your Family Finances before Filing for Divorce or Leaving the Marital Home
In most marriages, one party handles all the finances. However, this creates a power divide when it comes to identifying the assets in your divorce or negotiating a settlement in your divorce. There are many experts and resources to assist you in identifying your assets prior to filing a divorce, it will greatly benefit you in divorce and empower you if you know your family finances.
36. Be Strategic in Choosing your Date to File for Divorce
In Maryland, the date of marital separation is used to divide property and investments. This date is usually when you or your spouse file for divorce. While it may be tempting to file quickly, waiting can sometimes be financially beneficial. Consider delaying the filing if it means you could benefit from an increase in the value of a stock or investment.
37. Wait to File for Divorce After Doing Your Homework
Wise divorce attorneys will advise you to do your homework and prepare prior to filing for divorce. It is important to have all the financial information you can obtain concerning your household’s and your spouse’s accounts and assets prior to filing for divorce. Unfortunately, it is very easy to liquidate most accounts with limited records, which makes it very important to identify all assets and accounts you can prior to filing for divorce. Make sure you document these Lessons from Maryland divorce attorneys.
38. Choose your Battles in Divorce
You are likely not reaching the exact outcome that you want in your divorce case. However, when you are contemplating divorce it is important to identify the battles you care the most about and prepare to let other issues go in divorce. You should avoid attorney fees and fight over issues that you do not care about deeply. Take time to think and communicate with your divorce attorney to ensure that you and your legal team are on the same with your goals and concerns in your divorce case.
39. Prepare Your Finances for After Divorce
Many clients facing divorce fail or have a difficult time planning their finances for after divorce without any assistance. Your perspective on spending or saving money will likely differ from your spouse and you need to make decisions on your monthly budget and investments after divorce based on your beliefs. You may want to meet with a financial adviser or planner if you do not know where to start the process of planning your long-term finances.
40. Save Your Paper Trail
Many assets are divisible in divorce; however, exceptions exist when you can document the separate nature of the property. This is where saving a paper trail supporting separate property characterization is so important. Oftentimes, the documentation necessary to protect separate property tends to disappear when you need it, which is why it is so important to save documentation to help you protect the separate property nature in divorce.
41. Be Mindful of the Filing Fee for Divorce
There is a filing fee associated with filing any case in the Maryland Courts, including divorce actions. Divorces with minor children cost more than divorces without minor children. You should clarify with the Maryland divorce attorney you hire, if they will pay the filing fee of your divorce or whether you will be responsible for this cost. That’s why we bring you Lessons from Maryland divorce attorneys.
42. Be Mindful of the Time Requirements for Divorce
Some states make divorce harder to get, but Maryland isn’t one of them. If you and your spouse agree to divorce, consider moving to Maryland to finalize it. In Maryland, if you’ve established court jurisdiction, you can get a divorce in 10 days without children or in 90 days with minor children.
In some cases, the 90-day waiting period for divorces with minor children can be waived. This period starts on the date of service of the summons, the date of publication if allowed, or when the respondent or their lawyer makes an appearance.
43. Enforce the Orders within Your Divorce
Make sure you follow through and that your former spouse follows through on the terms of your divorce. Often times vehicles and real property, such as homes, need to be refinanced or the title must be transferred. When you or your spouse fail to follow through on these steps, it may have negative consequences on your finances and your credit. Protecting your credit takes more than signing and filing a divorce decree. Know these pain points and be sure to protect your financial interests by checking that your former spouse follows through on the agreement of your divorce.
44. Save Money to Take Care of Yourself During Divorce
It is wise to be conservative in your spending during the divorce process. Divorce can be an expensive process, especially if you and your spouse are fighting over issues in your divorce. During a divorce, it’s important to set aside resources for both your needs and your children’s. This includes gym memberships, therapy or counseling, and self-care like massages or weekend getaways with your kids or friends.
45. Never Underestimate Your Living Expenses in Divorce
Before divorce, you might have relied on your spouse for finances and home expenses. It’s crucial now to understand your spouse’s income and your family’s expenses. To help, complete the financial aid document on our client resource page or discuss financial planning during your consultation.
46. Ensure Your Safety and Your Children’s Safety
Most divorces don’t involve domestic violence, but those that do can be dangerous. If violence is a concern, seek help from the court or your Maryland divorce attorney. Victim Protective Orders (VPOs) can keep your spouse away during the divorce. In Maryland, courts often handle VPOs and divorce cases together to reduce court appearances. Talk to your family law attorney about whether a VPO is right for you.
47. Do Not Start a New Relationship During Divorce
Maryland law allows dating during a divorce, and it happens often. However, it might not be wise if your new partner is the reason for the divorce. This can make the process harder and more contentious. On the other hand, if both you and your spouse start dating and you have no minor children, it might help speed up the divorce process.
You should absolutely not introduce your children to your romantic interests during divorce. Your children are going through more than enough with their parents divorcing and you’re introducing a new interest will only make things more difficult and stressful for your children. You should definitely discuss this issue with your Maryland divorce attorney.
48. The Cost of Divorce is More than Financial
Most divorcing spouses will have continued contact with each other for years to come, especially if you have children. You don’t want to be exploited in your divorce. However, demanding every penny or piece of property can lead to high attorney fees and harm your mental health, job, and relationship with your children. Divorcing parents will have to co-parent, in some instances better than they ever did during the marriage. These reasons show why it’s important to work with a Maryland divorce attorney. They can help you choose your battles wisely and handle your case carefully.
49. Consider Pre-Divorce Counseling
Divorce is hard, emotionally, mentally, and financially. Divorce affects everyone differently. Sometimes, you only realize its impact when you’re feeling deep pain or depression. By participating in pre-separation counseling, you may be better prepared to deal with the emotions you are certainly facing. Divorce often causes new growth; however, it is often helpful to have a guide walk beside you during the process. These and many other reasons support the benefit of pre-divorce counseling and Lessons from Maryland divorce attorneys.
You can learn ways to handle your divorce emotions. Also, you’ll know how to react to triggers when they come up. Additionally, it is important to remember that not all counseling records are privileged. If you see a psychiatrist, your counseling records are likely to be protected by privilege. However, counseling records from a therapist may not be protected by the physician-patient privilege.
50. Dress Professionally for Court
Appearing in professional attire for court can only help your divorce case. The opposing party may take you more seriously and the divorce court judge will certainly take you more seriously. Additionally, dressing for success in your divorce court hearings will increase your confidence. It is important to dress in conservative clothing and not appear too flashy. Try your best to keep your accessories simple and do not overdo it.
By working with a knowledgeable Maryland lawyer, you will obtain accurate legal advice and assistance during your divorce process. We hope this 50 Lessons from Maryland divorce attorneys, helped. Retaining an experienced Maryland divorce attorney will help you protect your property and interests while going through a stressful time.
Navigate Divorce Confidently With Our Experienced Divorce Attorney
Navigating divorce in Maryland can be daunting, but armed with these vital insights from Maryland divorce attorneys, you can approach it with clarity. At Divorce With A Plan, we offer consultations to help you navigate this process with confidence. Contact us at (240) 269-3592 to take the first step towards a brighter future.