What is “Equitable distribution of property”?

May 21, 2013

5050THE DEFINITION of EQUITABLE DISTRIBUTION – NOT 50%/50%

Equitable Distribution is the legal term for how judges, in Virginia (and 39 other states), divide and distribute property and debt in a divorce.  “Equitable” means “fair”, not “equal”. . .  so you know you are in some tricky territory right there.  “Fair” is hardly clear.   States that actually divide marital property on a 50%/50% basis are called community property states.[1]  No matter what you read or hear, Virginia is not a 50%/50% state when it comes to the division of real estate, retirement plans, bank accounts, furniture, credit card debt, automobile loans, or anything other type of property or debt.

Though Virginia is not a community property state, property and debt division in a Virginia divorce often ends up in the neighborhood of 50%/50%, in the end. The judges have 11 criteria that they are required, by law, to consider before order the division and distribution of property in Virginia.  It is the job of the divorce attorneys to convince the judge – and each other – that their client deserves a bigger piece of the asset pie (and, of course, a smaller piece of debt pie), based on those 11 criteria.

HOW DO COURTS DETERMINE WHAT IS “EQUITABLE”?

Virginia judges have 11 criteria that must be considered when making a ruling in an equitable distribution situation? 

1. The contributions, monetary and nonmonetary, of each party to the well-being of the family;

2.  The contributions, monetary and nonmonetary, of each party in the acquisition and care and maintenance of the marital property of the parties;

3.  The duration of the marriage;

4.  The ages and physical and mental condition of the parties;

5.  The circumstances and factors which contributed to the dissolution of the marriage;

6.  The time period and circumstances of when and how specific items of property were acquired;

7.  The debts and liabilities of each spouse, the basis for such debts and liabilities, and the property which may serve as security for such debts and liabilities;

8.  The liquid or non-liquid character of all marital property;

9.  The tax consequences to each party under differing distribution options;

10. The use or expenditure of marital property by either of the parties for a non-marital separate purpose or the dissipation of such funds, when such was done in anticipation of divorce or separation or after the last separation of the parties; and

11. Such other factors as the parties deemed necessary and appropriate to consider in order to arrive at a fair and equitable distribution of their marital property and debt.

                   (from §20-107.3 of the  Virginia Code, Ann, 1950)            

However, as previously stated, it is not uncommon, when all is said and done, for a Virginia divorce case to end up in the neighborhood of 50%/50%.  That being said, why not start there and move out from that center point, depending on the facts and circumstances of the case?  The answer is, for the most part, cultural.  That is not how, in our country, most attorneys (and business people) negotiate.  The prevailing wisdom is that a negotiator needs to start by asking “for the moon”, and hope that the negotiation eventually brings the opposing parties to a point that is somewhere closer to the middle, but still weighted to the client’s advantage.  That is not, however, very efficient.  It is also very expensive and  often causes a lot of ill will between the parties who, most of the time, are also parents of the same children.

A MORE CONTEMPORARY APPROACH

A more contemporary approach, and one that is reflective of many mediation practices, is to start with a 50%/50% mentality and then, through the process of assisted negotiation, help the clients work their way out from that center point based on the particularities presented by their case.  The factors considered by the parties do not tend to differ much from the judge’s list, but it is the start point – the negotiating mindset – that is different. 

Also, for many divorcing parties, it is simply too expensive, time consuming and gut wrenching to start at a polar extreme and then try and prove why your position is correct and the other party’s position is wrong.  Most judges are of the belief that divorce is a two-way street and that neither party is probably 100% right.  Justice and the truth usually lie somewhere toward the middle – so why not start there and save yourself some money and aggravation? It’s a thought worth pondering.

For example:

MEDIATION: $100,000 to divide.  50%/50% with $4,000 in mediation fees  = $96,000 to divide  =

                  $48,000 for Wife and $48,000 for Husband.

LITIGATION: $100,000 to divide.  60% to Wife = $60,000 – $20,000 in attorneys fees; 40% to Husband =  $40,000 – $20,000 in attorneys fees

                  $40,000 for Wife and $20,000 for Husband

 

How is the concept of Equitable Distribution applied in mediation?

Usually, in mediation, the parties themselves determine what the criteria will be for equitably dividing their property.  They might not be as formal in their thinking and in the way that they assign weight to the various criteria as a judge would be, but they know what feels right and why.  There are sometimes trade offs and things bargained for in a mediation that might not occur in a courtroom.  What is fair to one couple may not work for another.

Parties in mediation are free to toss out certain criteria that they do not think fits their particular set of facts, or may be antithetic to their values and/or general sense of fairness. The effect of that is to streamline and personalize the negotiations for those parties’ parties particular set of facts and sensibilities.

Goals, Needs & Fears

It is important, in a mediation,  for the mediator to understsand what the parties’ goals, needs and fears are so that negotiations can be tailored to address those goals, needs and fears.  It is appropriate in mediation to sift through those goals, needs and fears and determine which requests are based on “the principal of the matter” and “concepts of punishment”.  Mediation tends to focus on tangible settlement prospects, such as the ability to support oneself, figuring out how to pay for the children’s college, getting one’s career underway, having a time for healing, digging through the potential tax aspects of various settlement options, etc.  In mediation, we call this “issue spotting” and it is this type of focus on what can actually be settled in a divorce (as opposed to “getting even”, which rarely works) that often saves clients tons of money and the traumatic effects of contested litigation.

WHAT IS CLASSIFICATION OF PROPERTY?

The Law

Before dividing and distributing property and debt in a court or mediated divorce case, there must first be decisions made with regard to whether the property and debt in question is to be classified as marital, non-marital or hybrid (some of each).  Marital property is divisible by the courts, non-marital is not (the marital portion of hybrid property is divisible, the non-marital portion is not.)

Couples in mediation are always informed of the law with regard to classification – marital property is that which is acquired/earned during the marriage, while non marital property is that which is acquired prior to the marriage, after the separation, inherited, or received as a gift to one the spouses (individually).

Classification of Property in Mediation

Most clients, in mediation, tend to draw fairly clear lines, in terms of classification, and do not seek to extract nonmarital property from marital property.  For example, I don’t often see clients arguing for a return of a downpayment they made on the marital residence from their nonmarital money.  They usually consider that downpayment to have been a gift (a key legal point) from them to the marriage. Also, I rarely see clients arguing mightily over the return of nonmarital money which was put into a joint account that the parties referred to, during the marriage, as the “nest egg”, the “retirement”, “our savings”, etc.

This is true even though Virginia law allows for great latitude in these types of situations, and is fairly protective of the spouse who put his or her non-marital money into the marital pot – as long as it was not a gift which, many people think, requires a fairly light standard of evidence to prove, in Virginia. For example, there is no presumption that nonmarital property, put into the joint names of a married couple, is converted to marital property.  (Unimaginable in many other jurisdictions, but that is law in Virginia).  Nonetheless, in my experience, most mediation clients do not see it that way and do not choose not to fight over whether or not those non-marital+marital cominglings  were or were not gifts.

Considerations when Classifying Property & Debt and Equitably Dividing & Distributing Property in Mediation

In classifying and, ultimately, dividing and distributing property and debt in a mediation setting, clients often consider the following (which are very similar to the criteria a judge must consider in equitably dividing and distributing property and debt, in Virginia):

  • Is the marriage of long duration?  If so, contributions of non-marital property to marital property often become less relevant as time goes on;
  • Does the client value the concept of generosity? (This is not, necessarily, a bad thing as long as it does the generous party no serious harm);
  • Is there a desire, for emotional, psychological, and/or financial reasons,  to “get it over with”? (This can be legitimate if the party in the hurry will not be harmed to any great degree)
  • Do one or both of the parties forsee a positive future financial projection for him/herself?  Negative financial projection?  Why?  What about for the other party?  Why?
  • Was there a clear division of labor in marriage? Of what effect did that have on career development?  The well-being of the children?
  • Are there perceived equal/unequal contributions to the marriage (financial or otherwise),
  • Do either of the parties have access to other non-marital assets?
  • Is it appropriate for there to be “pay back” for negative/positive behavior during the marriage?
  • Is there a mutual belief that nonmarital property comingled with marital property is actually a gift to the marriage?

It is important to remember that, in Virginia, judges are not permitted to order the division and distribution of non-marital property.  Only in settlement may parties choose to share non-nonmarital property, if that is their desire.  Mediation frees parties to settle a case – after being fully informed of their legal rights – on their own principals of fairness and equity and not have their property and debt divided and distributed based on a judge’s restricted ability to assess and weight what is fair and equitable in their situation.  The price tag differential, too, between contested litigation and mediated settlements is a factor for consideration that is not on the judge’s list.  It should, however, be on your list when are thinking about divorce.

[1] Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin, and Puerto Rico are all community property states.

This blog and its materials have been prepared by Graine Mediation for informational purposes only and are not intended to be, are not, and should not be regarded as, legal advice.  This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship.  Internet subscribers and online readers should not act upon this information without seeking professional counsel.

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Fear of Loneliness? Don’t Worry. You’ll Be Fine

October 15, 2012

Fear of loneliness is one of the biggest factors that prevents unhappily married people from moving on with their lives  and taking the big plunge – divorce. Though I don’t advocate divorce as a cure all for unhappiness (especially when there are children involved), it is sometimes the right thing to do.  When that is the case, fear of loneliness need not prevent you from doing so.  Don’t take my word for it, though.  Taking the plunge into solo living is supported by the first fully researched book that I am aware of on this topic, by Eric Klinenburg, an NYU Sociology Professor.

Prof. Klinenberg has done extensive research into the US’s exploding single population and, despite what many people believe, he has found that being single is often much sweeter than expected. In his book, “Going Solo”, Prof. Klinenberg implodes the myths of the sad and lonely spinster, the lost middle aged divorcé and the loveless widow and widower. After all, with one in seven adults in the US living the single life, could that many people possibly be miserable?  ”No”, says Prof. Klinenberg, as he explores “how solo living is exploding and becoming less stigmatized, how it’s a privilege as well as a liability and how, at certain points in our modern lives, living alone may very well be the more desirable state.” (Quote from the New York Times interview of Prof. Klinenberg “America: Single and Loving It” (2/10/12))

http://ow.ly/i/11ztt

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What Virginia Divorce Courts Consider When Dividing Property & Debt

October 13, 2012

Imagehttp://www.grainemediation.com

In Virginia, the courts are required to consider very specific statutory criteria when dividing property and debt pursuant to a divorce.  Like most states (all on the east coast), Virginia is in equitable distribution state.  That means that courts must make decisions on how to divide property and debt based on what the judge feels is “fair” (equitable) . . . and  ”fair” does not, necessarily, mean “equal”. In mediation, we consider the very same set of criteria, with emphasis on those areas that our clients feel are most important to their case.  This list is straight from the Virginia Code, Annotated §20-107.

  1. The contributions, monetary and nonmonetary, of each party to the well-being of the family;
  2. The contributions, monetary and nonmonetary, of each party in the acquisition and care and maintenance of the marital property of the parties;
  3.  The duration of the marriage;
  4. The ages and physical and mental condition of the parties;
  5. The circumstances and factors which contributed to the dissolution of the marriage
  6. The time period and circumstances of when and how specific items of property were acquired;
  7. The debts and liabilities of each spouse, the basis for such debts and liabilities, and the property which may serve as security for such debts and liabilities;
  8. The liquid or non-liquid character of all marital property;
  9. The tax consequences to each party under differing distribution options;
  10. The use or expenditure of marital property, by either of the parties, for a non marital separate purpose or the dissipation of such funds, when such was done in anticipation of divorce or separation or after the last separation of the parties; and
  11. Such other factors as the parties deemed necessary and appropriate to consider in order to arrive at a fair and equitable distribution of their marital property and debt.

This blog and its materials have been prepared by Graine Mediation for informational purposes only and are not intended to be, are not, and should not be regarded as, legal advice.  This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship.  Internet subscribers and online readers should not act upon this information without seeking professional counsel.

 

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In Divorce, Men and Women Suffer in Different Ways

September 17, 2012

Divorce affects men and women differently.   Men going through divorce are more likely to suffer emotionally.  Women are more likely to suffer financially.

Studies find that “men were six times more likely to be depressed following a separation or divorce than men who remained married. That was nearly double the likelihood of divorced or separated women undergoing a similar episode compared to women whose marriages were intact”1.  One reason for this seems to be the result of men losing daily contact with their children. Losing daily contact with one’s children is a huge source of anxiety, which can lead to depression.  Often times, even in cases where man has only been peripherally involved in the day to day activities during the marriage, losing that daily opportunity for contact with ones children can be overwhelming.

Women, on the other hand, suffer financially.  Women are about “three times more likely than men to suffer a substantial loss in household income after their marriage broke down.”2  Studies have reported that women “experience a 73 percent drop in their standard of living during the first year following divorce. Men, on the other hand, often fare better in terms of the financial effects of divorce.”2 According some statistics, men “enjoy a 42 percent rise in standard of living within the first year of divorce.”2  Although most women do receive child support, and in some cases spousal support, it still very expensive to run two households and, in most cases, men seem to fare better in these circumstances. As a result, most divorced women have to find a new means of establishing financial security.  This new financial stress and, often times complete upending of a women’s lifestyle (e.g. stay at home mom going back to full time work) can cause extreme anxiety.  Divorce is difficult for men and women for different reasons.

When mediating a divorce settlement, good mediators encourage parties to step in each other’s shoes.  Thus, when going through mediation, men will do well to think about the serious financial anxiety their soon-to-be-ex-wives are experiencing.  Women, on the other hand, would do well to recognize the extreme anxiety their soon-to-be-ex-husbands are dealing with as regards the children.

1http://divorce.clementlaw.com/divorce/psychological-and-economic-effects-of-divorce-men-and-women-affected-differently/

2http://www.divorce-lawyer-source.com/html/law/effects.html

Posted by Jessica Wilds, Graine Mediation Intern

This blog and its materials have been prepared by Graine Mediation for informational purposes only and are not intended to be, are not, and should not be regarded as, legal advice.  This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship.  Internet subscribers and online readers should not act upon this information without seeking professional counsel.

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Divorce Leave You Looking for a job? Read this comparison of Indeed.com and Monster.com

September 11, 2012

Monster.com and indeed.com are popular websites used to find employment, research jobs, and make career related connections.  Monster.com is a more robust site than indeed.com, but that doesn’t mean that it is necessarily better for all job seekers.  Monster.com receives much more traffic than indeed.com and has more job listings.  Both offer jobs that are primarily “office jobs”, such as administrative/clerical, business related fields, and sales/ marketing.   Monster.com however, is used significantly more than indeed by people who have graduate degrees.  Indeed.com appears to be used more by people without a college degree and people with undergraduate only.

Searching for a job on both websites provides different experiences.  Indeed.com gives a much more in-depth description of the job, including duties, qualifications, benefits, all on different tabs, as well as a link to the company website.  Indeed.com also provides step-by-step instructions about how to apply for the job.  Monster.com, on the other hand, provides only brief job descriptions, qualifications, and an excerpt from the company who is offering the job.  Monster.com also has a link to the company website.

Both websites are great tools to find out what types of jobs are being offered — where the needs are. Job seekers may prefer indeed.com because of the organized layout of the website. Indeed.com is useful for those looking for jobs and are not sure what to expect.  The details provided by indeed.com are in-depth.  Indeed.com could be great website to be used by someone re-entering the working world after years of not working.  Those reinterring the working world after a divorce may find indeed.com especially useful with the clarity it provides and the manner in which indeed.com makes it very clear what is expected of the applicant.  On the other hand, if the jobseeker has a higher level of education and has a well-established resume, moster.com may be the appropriate choice.   Also job seekers may prefer monster.com for its straightforward approach by keeping descriptions short and only providing the most important information.

Posted by Jessica Wilds, Graine Mediation Intern

This blog and its materials have been prepared by Graine Mediation for informational purposes only and are not intended to be, are not, and should not be regarded as, legal advice.  This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship.  Internet subscribers and online readers should not act upon this information without seeking professional counsel.

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Virginia Support Calculations – Comparing Child and Spousal Support

April 23, 2012

Divorce is extremely expensive. For most people in Virginia, raising a family in two separate homes (as many divorced people do these days) will cost one or both of you and your children plenty in terms of ability to maintain lifestyle and, even, to simply pay the bills. One of the primary ways that Virginia families make this all work is by the payment and receipt of support: Child Support and Spousal Support (Alimony).

Below is an outline to help you understand how these two methods of support work in Virginia.

(1) Child Support Calculations represent barebones, bottom line child support based on gross incomes, number or children, cost for health insurance and cost for work-related childcare.

- Parents can always choose to have child support be more than the calculations, and often do.

- Many parents, too, leave the basic child support calculation as is and share the cost at an agreed upon ratio (or have the wage earner pay) for particular items necessary for the children, e.g., expensive out of pocket medical care/therapy costs, extracurricular activities, camps, back to school wardrobes, Christmas Gifts, etc.

- Many parents also choose to have child support based on the guidelines and any additional support necessary for the family to be in the form of spousal support (tax deductible to the payer – more on this later)

(2) Spousal Support Calculations (pendent lite) are designed to be temporary amounts of spousal support to help get the non/lower earning spouse through that time period between separation and the actual divorce. (Courts do not want to have a full evidentiary hearing two times – once before trial and one at trial). However, many people chose to use these calculations as their spousal support amounts, particularly since they are calibrated for Fairfax County proper (unlike child support, which is state wide).

(3) Spousal Support is considered income to the receiver. It is taxable. It is deductible for the payer. It is important to understand that, when a parent receives spousal support, that amount is considered as her/his income for purposes of calculating child support; and, the payer of spousal support’s income is reduced by the spousal support amount. Thus, when there is an award of spousal support, the child support number changes (goes down).

(4) Child Support is always reviewable by the courts based on a “change in circumstances”, e.g. incomes go up, incomes go down, children’s needs change. (“The courthouse doors are always open for matters concerning children.”), whereas . . . )

(5) Spousal Support/Alimony may be reviewable depending on how the Settlement Agreement is written. Spousal Support is usually awarded for a specified period of time.

(6) Children receive child support for the duration of their minority (until they turn 18 years old, unless still in high school at 18. (In that situation, children continue to receive child support until they graduate, but not beyond their 19th birthday unless they have particular special circumstances. Adult children who are not able to live independent lives, too, may receive child support well beyond their 18th minority.), whereas . . .

(7) There is no set time for duration of a Spousal Support award. The “Rule of Thumb”, however, in cases where circumstances are such that spousal support is appropriate, is that it is awarded for 50% the length of the marriage (but that is not the law)

This blog and its materials have been prepared by Graine Mediation for informational purposes only and are not intended to be, are not, and should not be regarded as, legal advice.  This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship.  Internet subscribers and online readers should not act upon this information without seeking professional counsel.

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3 Golden Rules of Visitation

April 23, 2012

Check out The 3 Golden Rules of Visitation Vlog and learn what’s most important when spending time with your children.

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Is My Spouse Really Hiding Money . . . or Does It Just Feel That Way?

January 22, 2012

Unfortunately, it happens.  Spouses do conceal assets.  Some even spend the entire marital estate on untoward activities and ridiculous whims and weird mid-life crisis expenditures. Some spouses even run up huge debts without telling their husband or wife – especially if these debts are from gambling, drugs, girlfriend-related expenses, etc. It happens, but you should not assume, in every case, that this is what is going on.

Divorce attorneys and forensic accountants are the masters at figuring this out.  Husbands and wives who feel that they are being hoodwinked, when it comes to the family finances, need an attorney who has subpoena powers and the ability to take the equivocator (pretty much means “the liar”!) to court if he/she fails to produce the financial documents as requested.  A litigator’s toolbox and skills are also needed if a spouse repeatedly and inadequately explains why money is “missing”, why debts have mysteriously piled up, why the suggested values of the parties’ businesses and property are so much lower than expected and/or why there are suddenly expensive assets that both appear and disappear. Be careful, however, as this is an area of litigation where the fees can add up fast and, if the money is truly gone, it is just that: “Gone!” There may be other assets to offset the missing money, etc., but if there is not, you may be spending and awful lot of time and money just to prove it. Talk with your attorney, have a goal and consider capping your attorney fees at a certain dollar amount.

Be careful, however, when aligning oneself to the notion that your spouse is being shady with the family estate.  In today’s volatile economy, what may appear to be financial shenanigans may very well just be the manifestation of the sad truth that a spouse’s business is going downhill.  Also, the values of property and business are remarkably difficult to assess these days.  Not only that, but the old adage that “the value of a business or piece of real estate is only what a person would pay for it” has never been truer than in today’s market.

Sometimes, small suspicions of asset concealment and/or debts that seem to have accumulated out of no where, are often simply a manifestation of miscommunications, misunderstandings and a lack of knowledge about the family’s money situation by one of the spouses.  A good mediator can help clients to determine the difference between a case of “hiding the goods” and a case where there is simply a very uneven base of knowledge about the family assets and debts. The former is usually a cause for a referral to the court-based system; the latter is a situation where mediation is often the perfect forum to help both parties get a grip on their financial situation as part of the settlement of their divorce disputes.

The following list includes some common ways in which a spouse may hide, undervalue or disguise marital assets[1].

Disguising Marital Assets as Method of Hiding Assets

  • Antiques, artwork, hobby equipment, gun collections, and tools that are overlooked or undervalued. Look for antique furnishings, original paintings, or collector-level carpets in your spouse’s office.
  • Cash kept in the form of cash/travelers’ checks. You may be able to find these by tracing bank account deposits and withdrawals.
  • A custodial account set up in the name of a child, using the child’s Social Security number.
  • Investment in certificate “bearer” municipal bonds or Series EE Savings Bonds. These do not appear on account statements because they are not registered with the IRS. (The government is phasing out these bonds.)

Not Reporting Receipt of Money on Tax Returns, Delaying Receipt of Marital Money

  • Income that is unreported on tax returns and financial statements.
  • Collusion with an employer to delay bonuses, stock options, or raises until a time when the asset or income would be considered separate property (upon separation in Virginia; upon divorce in Maryland and Virginia)
  • Debt repayment to a friend for a phony debt.

Misappropriation of Marital Money

  • Expenses paid for a girlfriend or boyfriend, such as gifts, travel, rent, or tuition for college or classes.
  • Retirement accounts that your spouse never tells you about.

In addition, business owners may try to hide assets in the following ways:

  • Skimming cash from the business;
  • Salary payments to a nonexistent employee, with checks that will be voided after the divorce;
  • Money paid from the business to someone close — such as a father, mother, girlfriend, or boyfriend — for services that were never actually rendered (the money is given back to your spouse after the divorce is final); or
  • A delay in signing long-term business contracts until after the divorce.

If you are planning on filing for divorce, it would be a good idea to begin getting yourself educated as to the family finances.  If you do not think that there are a lot of games being played with the money, and if you are able to sit down with your spouse, you will want to start informing each other of:

  • the location and values of all assets;
  • your family’s spending patterns;
  • the costs of health insurance for family members;
  • job potentials for each of you (if necessary, post divorce);
  • impending big expenses; and,
  • your family’s debt situation . . .

. . . more power to you. Get to it!

But, if you need the help of a third party to get things moving along, this is a great use of a mediator’s expertise.  Mediators are trained in both helping divorcing couples communicate (without screaming!) and in helping them sort through the family finances and begin planning for their futures as they become financially independent from one another.

Remember, the family CPA, banker, money manager/broker and estate planning attorney has a fiduciary duty (duty of trust) to both of you.  You should feel free to ask that person questions about your taxes, investments, etc.  If you do not want to put up a red flag for strategic reasons (i.e., you do not want your spouse to know that you are preparing for a divorce because he/she might then close down all the accounts and disappear!), get an attorney, first, before you call your financial people.  But always remember this: Sometimes your accountant is just as good a “friend” during your divorce as is your lawyer.

For a free 30 minute consultation in Fairfax, Virginia, call Robin Graine at Graine Mediation: 571-220-1998 or email robin@grainemediation.com.  If you need an attorney or CPA referral, I can help you there, too.

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BEWARE: DIVORCE IS HAZARDOUS TO SINGLE MOMS’ CREDIT-WORTHINESS

January 19, 2012

PNC bank has a new policy, I have been told by a trusty loan officer in the higher ranks of that enterprise, that child support no longer counts as income for the purpose of obtaining a home equity line of credit or small business loan.  This is true even for very large amounts of child supports. I was told, straight-up, that married female applicants whose husband’s who have jobs, earning the same amount of money as an ex-wife’s child support allotment, are much more credit-worthy than single moms who are receiving regular, provable, court-ordered child support.  Is this prejudiced against single moms?

In my line of work, I see lots of mother’s whose husbands leave the marriage — without warning.  Of course, those husbands take their jobs with them!  As a mediator, though, most of my clients are decent people that pay their child support obligations. Nevertheless, even women who have upstanding child-support paying ex’s, and are seeking a loan, can no longer count that cash-flow as part of their income.  This is absurd considering the same woman could have counted that same amount of family income as cash flow, for purposes of obtaining a loan, if she were still married to her children’s father – even if he spent that money foolishly and contributed nothing to the family.

I was also told, by my PNC informer, that no amount of money in the bank is worthy of consideration when it comes to approving a loan – unless that money is in PNC’s own coffers and can be used as direct collateral.  That means that people who are responsible and work hard to save their money and put it in the trusty hands of a good broker, are considered, at least by PNC Bank, to be a greater credit risk than people who spend every penny they have with no thought for the future. Essentially, PNC prefers loan applicants with a low-paying job, with no hope of putting anything away for the future, over a person who has a pile of dough at the ready.

This doesn’t make sense.  People are losing their jobs right and left.  There is no security in an individual’s employment.  However, if a person defaults on a loan, the bank can get a judgment against that person and garnish their bank or brokerage account.  When is the last time, though, you ever heard of a bank forcing an employer to keep a person on the payroll so that that person could pay off a loan?

And, finally, we all know that the equity in your home is worth nothing to the bank.  They don’t want your home if you default.  They have enough homes to keep them busy for a long time.  They have so many homes, that they cannot even afford to heat and cool them properly and residences across the nation are molding and rotting as a result.

So, if you want to start or grow a business with a home equity line of credit or a small business loan from your local bank – as was the norm for many, many years – forget about it, unless you have a regular paycheck, with at least a three year record of earnings– even if you have a hefty court-monitored source of cash flow, a flush bank account and tons of equity in your home.

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Posted by Graine Mediation

The Three Golden Rules for Visitation After Divorce

January 16, 2012

Spending uninterrupted time with your child or children after a divorce can be the only thing that feels right in the aftermath of  a divorce.  Though divorce is not recommended, it often wakes parents up to the idea that time with their children is precious and that their children’s youth is fleeting.  That’s a good thing. If you are divorcing and want to help your children become well-adjusted and able to handle to trials of their life ahead of them, it is important that you remember that children tend to learn from what they see, not what they are told.  They mimic what you do, not what you tell them they should do.  Therefore, in order to maximize good modeling for your children — assuming both parents are good role models — the children will need to spend time with both their mom and their dad.

There are Three Golden Rules, a far as I am concerned, as to why there should be liberal time spent with both parents post divorce:

First, time with your children will, hopefully, provide joy and pleasure for your children.  This is especially true if the non-custodial parent had been, before the divorce, sort of a “hands off” parent.  You can begin to “make-up” time not well spent in the past (at least as far as the children are concerned). Most children will just love the attention and they are very forgiving of an awkward parent learning how to cook, keep track of tiny clothes and navigate through a craft store for a last-minute school project.  Kids like to see grown-ups learning new things.  Keep your cool.  It’s fun to learn how to take care of the little things in your children’s lives and they appreciate it . . . eventually!  Beware of bigger kids, however, as they might find pleasure and joy only in things that do not involve either parent.  Be patient.  Maybe back off a little but always let your child or teenager know how much you love and admire them just as they are.

The second sound reason for  custodial care time with your child or children is to promote a parent-child relationship — a bond – that cannot ever be made up for if the opportunity is lost. Sometimes parent-child bonds do not take well.  That is a sad story.  However, if there is no opportunity presented for a bond to develop, that is beyond sad.  It is a tragedy.  The child is then without the support of one of his or her parents and that child is left to wonder why he or she has been so neglected.  Kids need both parents, if at all possible, for their developing sense of self.  Self-esteem, in other words, is very much wrapped-up in the child’s relationships with his or her parents.

Third is the ability to influence your children.  If you are a good person, this is good.  If you are bad, uh oh.  Still and yet, it is your natural right as a parent — and one of the primary reasons that people have kids in the first place: to raise them and influence their worldview, attitudes, tastes and values.    It is natural to want to have children grow up and have sensibilities that are similar to ours. Children learn by watching you navigate through your life. You are their most important teacher.

 

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Posted by Graine Mediation

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