Carol Ann's Newsletter
February 2016
Table of Contents
1.  Living Together During the Divorce - A Nightmare Or a Necessity?
2.  13 Important Things to Know About Dividing Pensions in Divorce
3.  From the desk of Carol Ann
4.  Costs Going Up
5.  Humor
6. Thought for the Day
Living Together During the Divorce - A Nightmare Or a Necessity?

While a divorce is proceeding in court, there are several potential scenarios concerning the disposition of the real estate: (Please consult a lawyer / attorney concerning your legal options)

A.) Husband and wife reside together while the divorce is pending with or without children

In many instances, husband and wife live together while the divorce is pending. In some cases, husband and wife live together out of financial necessity because the parties cannot afford to live separately. Other divorcing couples live together because they believe it is in the best interest of the child /children. Some people live together because both husband and wife refuse to leave the marital domicile.

If husband and wife are living together while the divorce is pending, they often reach an agreement as to who will pay the mortgage, taxes, insurance and other real estate related expenses.

In the event that husband and wife cannot reach an agreement then both parties have the right to file motion for temporary orders, asking the court to intervene and determine who will pay the mortgage taxes, insurance, utilities and other expenses for the marital domicile.

If the parties are not civil towards each other there is constant arguing or there is domestic violence / abuse it may become unworkable for the parties to continue living together. If either party is abusing drugs, alcohol or gambling then cohabitating during the divorce process may be unworkable. Either party has the right to file a motion for temporary orders asking for exclusive use and possession of the marital domicile while the divorce is pending.

If one of the spouse has no income and no ability to earn income then it is possible that the spouse who has income or earning capacity could be ordered to pay 100% of the expenses for marital domicile while the divorce is pending. This is especially the case if the unemployed spouse has minor children living at home.

One of the risks of living together while the divorce is proceeding is the that other party will file a restraining order or a complaint protection from abuse.

B.) Husband or wife vacates the marital domicile and there are no children.

If husband or wife voluntarily leaves the marital hime and the other party is residing on the premises then the parties have two options:

1.) Husband and wife reach an agreement, or
2.) Husband or wife files a motion for the court to determine who pays for the house.

The person who vacated the house may be ordered to contribute towards the mortgage taxes, insurance and upkeep etc., if any.

If the parties cannot agree then either party can file a motion for temporary orders seeking contribution towards the mortgage taxes, insurance, and upkeep for the marital domicile. The Rhode Island Family Court will then make an equitable determination of who should pay the mortgage taxes and insurance for the marital domicile. How the Family Court decides this issue, depends on several factors including perhaps most importantly, the income and earning capacity of each of the parties. One Judge in the Rhode Island Family Court consistently rules that the spouse remaining in the marital domicile must pay the 1st 0.00 of the mortgage as rent and the parties split the remaining mortgage taxes and insurance 50/50.

C.) One spouse vacates the marital real estate, while the other spouse resides in the marital real estate with a child or children.

The parent who has temporary physical placement (physical custody) of the child/children will have the right to receive child support as well as the potential to obtain contribution to the mortgage taxes, insurance, and upkeep for marital domicile.

If the parties can agree to the correct child support amount and the contributions towards the mortgage, taxes, insurance for the property then a motion for temporary order may not be necessary.

If the parties cannot agree, the court will determine the correct child support amount using the Rhode Island Child Support Guidelines. The cost of daycare and medical expenses is factored into the Rhode Island (RI) child support guidelines. The court may also order that the spouse who vacated the property contribute to the mortgage, taxes and insurance for the marital domicile.

The courts main purpose is to preserve the marital domicile until the divorce trial can be heard. The amount of the child support and contributions to marital domicile will be highly dependant on the income and earning capacity of the parties as well as a particular circumstances of a case. If the spouse who lives with the children has no job and no ability to earn income and no earning capacity it is possible that the other spouse may be required to pay over and above the child support amount to maintain the status quo so that the other spouse is able to maintain the marital domicile.

The primary goal of a Rhode Island (RI) Family Court Judge is to preserve the marital assets until either a complete settlement is reached or the divorce can be decided after a full trial on the merits.

To look at past newsletters, go to: and click on Newsletters.

2. 13 Important Things to Know About Dividing Pensions in Divorce
1.  In most states, most pensions are treated as marital property to be divided in divorce.
2.  In order to make an intelligent decision on how to divide a pension, it is necessary to understand the nature of the pension, how it is funded, and how it pays out.
3.  In most states, a pension can be divided three ways:  value it and trade off assets; divide it now using a formula approach; or reserve jurisdiction and divide it when payout to the retiree starts.
4.  Different laws and rules apply to dividing corporate pensions and government pensions.
5.  You'd be smart to gather information about the pensions as early in the divorce process as possible.
6.  Unless your attorney is very knowledgeable about dividing pensions in divorce, use an expert who specializes in that area.
7.  Do not merely follow the pension division order form provided by the plan.  It rarely offers all of the choices that you might want to consider in dividing the pension.
8.  If a pension division order is not in place when the parties divorce, the nonemployee former spouse has no more rights to the pension than would a total stranger.
9.  Have the pension division order in place at the time of the divorce.
10.  Plan ahead.  Many plan administrators take months to review an order and give feedback on whether it can be implemented.
11.  The pension division order should provide for what happens if the employee or nonemployee dies before or after the retirement.
12.  Have your attorney take responsibility to prepare the pension division order, even if it means hiring an expert.
13.  If you are the nonemployee, make sure you understand the plan's rules about continued coverage under the health care plan.

3.     From the Desk of Carol Ann

  The following is an actual verbatim conversation I had with an attorney some time ago, which illustrates why I sometimes want to pull my hair out!  My client is the wife.  The proposed property division they sent me showed the value of his 401k to be $154,000.  They showed him getting $77,000 and her getting a cash payment of $40,000.
Carol Ann:   I don't understand what the $40,000 cash payment is for her part of the 401k.
Attorney:   She decided that rather than wait until he retires in ten years to get $200 or $300 per month, she would rather take a cash payment today.  And that is what we figure the present value is.
Carol Ann:   I didn't know there was a defined benefit plan.  Do you know what he will receive per month when he retires?
Attorney:   No, there isn't a defined benefit plan.  We don't know exactly what his 401k will pay out when he retires - we are just estimating.
Carol Ann:   Well, she can take her half now and transfer it to an IRA and get the whole $77,000.
Attorney:   Oh, I'm sure she would like that!  But she really wants the cash.  She doesn't want it in an IRA.
Carol Ann:   Then if that's the case, she can take the cash up front, they will withhold for taxes and she won't have to pay the 10% penalty.  Then, she'll receive about $60,000, which is $20,000 more than $40,000.  To do that, you'll have to do a QDRO.
Attorney:   Oh, we don't want to do a QDRO.
Carol Ann:   Why not?
Attorney:   Because nobody over here know how to do one.
Carol Ann:  !!!!

4.     Costs Going Up

Our costs have gone up every year even though we have never raised our prices.
But now it's time. At midnight on February 29 th , you will see an increase in the price of our Certification course.  It will show up as a reduced savings.
So take this chance to sign up to Certified before the cost increases!

5.  Humor
We were very happily married for eight months.  Unfortunately, we were married for ten years!

Instead of getting married again, I'm going to find a woman I don't like and give her the house.
            -Lewis Grizzard

Marriage is the triumph of imagination over intelligence.

Second marriage is the triumph of hope over experience.

6.  Thought for the Day
The most important thing in communication is to hear what isn't being said.
-         Peter F. Drucker


Carol Ann Wilson
Carol Ann Wilson LLC