Monday, September 22, 2008

5 Common Financial Mistakes in Divorce


1. Hanging onto the house at all costs.
Many couples scrambling to obtain a divorce settlement wish to keep the house at any cost. However, keeping the four bedroom marital home may be a financial undertaking that neither party can absorb in the post-divorce environment. Maintenance and child support to the recipient parent can help fund the mortgage and taxes, but some parties find that the burdens of keeping the marital home post-divorce outweigh the benefits, especially in this current home market/mortgage environment.

2. Failing to make a clean financial break.
Clean separation of assets and debts is another difficult task, but one that Howard Dvorkin, the founder of Consolidated Credit Counseling Services says is absolutely necessary, or the consequences can be devastating. Although the task may seem insurmountable, “the alternative is much worse,” says Dvorkin. “Having a spouse drive up your debt when you’re not married anymore” can seriously affect one’s credit score.

3. Counting on your ex to honor financial commitments.
Depending on your former spouse to comply with financial arrangements is also a huge mistake, according to this article. Although both parties in a divorce are beholden to a court-ordered divorce agreement, creditors are not bound by the terms of the divorce judgment. If your ex fails to pay on debts or loans, you may be hurt when applying for future financing.

4. Forgetting to change your will and beneficiary forms.
Wills and trusts can also be seriously impacted by divorce proceedings. Parties in divorce should separately seek counsel for the redrafting and execution of new estate plans, reflecting the wishes of the maker of the will and/or trust prior to the time of the divorce.

5. Overlooking taxes.
Finally, never forget which amount of money in your divorce settlement is maintenance, and which amount is child support. While child support payments are not taxable to the recipient, maintenance payments are.


Jon D. McLaughlin, Esq.
Cannell & Maulson, P.C.
211 West Jefferson Street
Bloomington, Illinois 61701
(309) 828-5600



Wednesday, September 3, 2008

A Note To Stay-At-Home Moms (or other primary caregivers)

A Note To Stay-At-Home Moms (or other primary caregivers)

The law is sometimes counter-intuitive. I spoke with a nice lady today who was very unhappy in her marriage. When she could stand it no more, she told her husband that and then she left him. She did not take the children with her, however, because she did not want to disrupt their lives. Now this former stay-at-home mom is being kept away from her children by her now very angry husband.
By thinking of her children and trying to maintain normalcy for them, the nice lady feels like she is being punished. Her husband says he is filing for divorce and that he will seek sole custody. She feels caught flat-footed and she is concerned that he may have a leg up in court. He certainly has an emotional leg up over her right now as she is miserable. He assured her that he wouldn’t keep her from the children…. yet that is exactly what he has done!
If you are a primary caregiver and you are thinking about ending your marriage, part of your exit plan should include a meeting with a family law attorney (or two, as varied input can be a good thing). In some cases, leaving your children with the other parent may make your case for custody an uphill battle. Or maybe it is the right thing to do. Your individual facts will matter so get some advice in person BEFORE you make a move. It is much easier to plan than to scurry and react.


Jon D. McLaughlin, Esq.
Cannell & Maulson, P.C.
211 West Jefferson Street
Bloomington, Illinois 61701
(309) 828-5600