For most of us, divorce isn't something we think about for older adults. Indeed, for many years, sociologists and economists didn't focus their research on middle-aged and elderly adults who sought divorces.
However, in recent years, scholars have begun turning a closer eye toward divorce trends in these couples. Jay Lebow, a psychologist who works at the Family Institute at Northwestern University, has emphasized the sharp increases in late-life divorces, or "gray divorces," as they're often called.
When older couples divorce, a number of issues arise that don't tend to affect younger couples as drastically. One such issue for late life divorce is the financial consequences of property division. What happens when retirement assets are divided? Who gets social security benefits and health insurance? And where did all the time go in which to recover from the financial losses of a divorce?
Recently in Alimony/Spousal Support Category
For most of us, divorce isn't something we think about for older adults. Indeed, for many years, sociologists and economists didn't focus their research on middle-aged and elderly adults who sought divorces.
Alimony is often a hotly contested issue in a New Mexico divorce. The Second Judicial District Court in Albuquerque has established alimony guidelines. However, disputes still arise. The most common disputes involve the calculation of income and the duration of spousal support.
The recent New Mexico Court of Appeals case of Clark v. Clark addressed just these issues. In that case, the Court had to decide whether non-W-2 revenue from a Subchapter-S corporation is included when calculating spousal support, and whether limited-duration spousal support was appropriate here.
Many couples are choosing to live together without the trappings of marriage. When these couples break up, the legal issues can be better or worse depending on the circumstances.
First, it should be noted that New Mexico does not recognize common law marriage. There is one exception. New Mexico will recognize a valid common law marriage from another state under the Full Faith and Credit Clause of the U.S. Constitution. However, for those couples cohabiting in New Mexico, no common law marriage will be recognized.
This means that the community property laws of New Mexico do not apply to these break ups. In other words, there is no protection under the New Mexico Family Law code for either party related to the division of property and debt. On the other hand, all laws related to child custody and support applies.
It is often assume or perhaps hoped that alimony automatically terminates upon the marriage of the recipient of the support. This is not necessarily the case.
Spousal support may be ordered for a variety of purposes. It can be transitional, and/or rehabilitative. This means that it is by definition temporary in nature. It might be indefinite. It might also be in the form of a lump sum.
In the case of lump sum payments, whether in one payment or a schedule of payments, the alimony is fixed and cannot be changed. This includes the remarriage or even the death of the receiving spouse. In essence, it is vested property interest.
Clients often begin representation assuming that, when a couple is divorced, the husband will automatically pay the wife child support, and in some cases, alimony, which is in New Mexico is often called spousal support. The logic behind this belief is quite simple.
Historically, the husband was typically the "bread winner" or "provider" of the family and was routinely relied upon to provide the financial support for his family. This responsibility generally continued through divorce proceedings in the form of child support and alimony payments to the wife. However, as more and more women have entered the workforce during the past few decades, more and more wives have to pay child support and, at times, alimony after a divorce.
A 2002 study from The National Survey of Family Growth found that nearly 50% of women between the ages of 15 and 44 had cohabitated at some point in their lives. Cohabitation has become a normal way of life for many people.
However, as many cohabitating couples find out--often when it is too late--by choosing cohabitation over marriage, especially in states like New Mexico, individuals give up a lot of the rights and protections afforded to married couples, including the right to spousal support or alimony.
These days more couples are delaying marriage and many opt for living together unmarried. As more and more couples decide not to marry, but buy property and have children together, the process of breaking up has moved into the courtroom. New Mexico does not recognize common law marriage, although couples with a valid common law marriage from another state may be eligible to divorce here if they meet jurisdictional requirements. However, more and more couples are finding themselves dealing with a break-up in court than ever before.
In some states, couples who cohabitate for an extended period of time and "hold themselves out to be married," are granted all the legal protections and responsibilities of marriage through a common law marriage. New Mexico, however, does not recognize common law marriage. In New Mexico, to obtain the rights and responsibilities of marriage, like the right to community property, a couple must be formally married by a civil magistrate, judge, clergyman, or authorized representative of a federally recognized Indian tribe. This is true regardless of how long a couple has lived together or whether or not they have children.
Couples who were married under common law in another state and later moved to New Mexico may be the only exception. A common law marriage recognized in another state will generally be recognized in New Mexico for purposes of divorce, child custody and child support. Although these couples will first have to prove that they were indeed married under the laws of their previous home state.
However, many legal issues may still apply to break-ups between unmarried couples.
The trend in New Mexico, as in the rest of the U.S., is that couples are marrying later or not getting married at all. According to the U.S. Census Bureau, 45% of households in the U.S. in 2010 were unmarried. These couples often cohabitate for many years, acquire property and debt, and have children. What these couples may not realize is that not being married in New Mexico may complicate a break-up rather than make it easier.
While a family court will usually dispense with property, debt, and child custody and support matters in a single divorce decree, unmarried couples will have a longer, more complex road ahead of them. Common law couples cannot appear in family court for property division purposes because family court lacks jurisdiction over them. Division of property issues in these cases will be handled in civil court.
Even though New Mexico is a community property state, where both assets and debt are generally divided equally among spouses, there will be no community property claim unless there is a formal marriage. If property was acquired in a single name, the other party will have a hard time claiming ownership. The same rule applies to debt. If one party acquired debt in the form of a mortgage, car loan, or credit card, the other party will generally not be responsible for the debt absent a recognized marriage. If a couple is unmarried under New Mexico law, there will be no right to alimony or spousal support.
Issues pertaining to child custody in New Mexico are handled in much the same way regardless of whether the parents are married. However, there may be procedural differences that can be explained by an attorney.
In response to the trend of unmarried break-up disputes, several divorce attorneys have begun to advocate cohabitation agreements. Cohabitation agreements are legally binding contracts where couples can determine the issues pertaining to their property, debt, and parental rights and arrangements in advance. Cohabitation agreements can help avoid costly litigation should the cohabitation end.
Even though these agreements may not be the first thing to think about when a couple first moves in with each other, it may be wise to consider once the topic of joint property and children come up. And in moving forward, it may be a good idea as cynical as it may sound to seek the guidance of an experienced family law attorney.
For many facing economic hardship, bankruptcy may seem like an attractive option. Filing for bankruptcy often results in the elimination, or discharge, of a large variety of debts and often represents a second chance for those mired in overdue bills. However, some debts, including alimony and child support, are not discharged in bankruptcy.
Some people find themselves faced with the possibility of bankruptcy as a result of tough decisions and money management choices. Others find themselves in insurmountable debt due to forces beyond their control, like a serious illness, unexpected accident, job loss, or some other crisis. Bankruptcy laws and procedures try to balance the need of debtors for a new beginning with the interests of creditors in recovering their money.
Divorce can often lead to bankruptcy as a person finds him or herself unable to pay their debts or support two households on a single salary. Other spouses may try to avoid alimony and child support obligations by filing for bankruptcy. However, for important policy reasons, filing for bankruptcy will not discharge most domestic support obligations, including alimony.
There are two main types of bankruptcy relevant to this discussion, Chapter 7 and Chapter 13. Under Chapter 7 bankruptcy, debts are discharged; under Chapter 13, debts are only discharged after the debtor has paid a portion of what is owed. When a court orders a discharge, the debt is eliminated and creditors have no legal right to collect against the former debtor. However, neither Chapter 7 nor 13 discharge all debts.
The Federal Bankruptcy Code 11 USC § 523 exempts the discharge of "domestic support obligations" as well as debts owed to a former spouse or child acquired as the result of a court-ordered separation agreement or divorce decree. Moreover, the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), effective October 2005, gives domestic support obligations priority over other creditors, including tax debts. Domestic support obligations under BAPCPA include property distribution, alimony, child support, and other court-ordered debt incurred as a result of a divorce and separation. Domestic support obligations are automatically exempted from discharge in bankruptcy.
There are a few requirements for discharge to be exempted from bankruptcy proceedings: (1) the obligation had to have arisen out of a separation agreement, divorce decree or other order by a court, (2) the obligation must be in the nature of support, maintenance or alimony, and (3) if the obligation is to a third party, it must have the effect of supporting the former spouse. This includes paying a mortgage, child education, child medical expenses, and life insurance premiums where the child is a beneficiary.
There are a few differences in the possibility to discharge domestic support obligations between Chapter 7 "liquidation" and Chapter 13 "reorganization" bankruptcy. Under Chapter 7, virtually all obligations assigned under a separation agreement or divorce decree are not dischargeable. This is true whether the obligations take the form of support, property division, or other agreements. Under Chapter 13, a former spouse may not discharge past due support obligations and must pay these obligations in full during the duration of the Chapter 13 plan. The only obligations that may be discharged under Chapter 13 are those deemed not to be in the nature of support. Since most alimony and child support obligations are generally indeed in the nature of support, it is difficult to discharge any of these debts under Chapter 13.
Even though bankruptcy may make financial sense for other reasons, it is very difficult to use bankruptcy to discharge alimony and child support obligations. If a former or soon-to-be former spouse is planning on filing for bankruptcy, it is important to contact an experienced family attorney who will be able to guide you through the process of obtaining relief from a bankruptcy court.
A divorce or legal separation will always be difficult emotionally, however, it can be just as hard, if not worse, financially. Often it is not until the parties begin exchanging income information as part of their divorce action that they realize just how dire their financial situation is. Given that New Mexico is a community property state, each spouse is equally responsible for the debts incurred during a marriage. If those debts are substantial, the divorcing parties may want to consider filing bankruptcy.
Anyone considering bankruptcy should consult an attorney that specializes in bankruptcy to determine whether or not it is in their best interests, or if they even qualify to file. This is especially true when parties are divorcing because the parties need to decide whether or not they want to file a joint bankruptcy before the divorce or pursue other options. For example, the bankruptcy code prohibits individuals with incomes above a certain, state-specific threshold from filing bankruptcy and it limits what assets are exempt, or can be kept by the parties after filing. The intersection between federal bankruptcy laws and New Mexico's family law statutes and cases can be tricky to navigate, so parties should be cautious when going down that road.
If parties decide not to file a joint bankruptcy and proceed with their divorce, it is essential that the divorce settlement documents include language that addresses what will happen if one or both spouses decide to file bankruptcy after the divorce.
However, obligations to pay debts may be dischargeable depending on whether the spouse files a Chapter 7 or Chapter 13 bankruptcy. This becomes problematic if one spouse agrees to assume a community debt as part of a divorce, but then later discharges that debt. If that debt is community, or in both parties' names, then a lender may seek to collect the debt from the other spouse. Therefore, divorce settlement documents should include language that clearly identifies the parties' intentions when dividing debt. For example, if one party is taking a debt instead of paying spousal or child support, then language should clarify that the debt is in the nature of support to prevent dischargeability.
Of course, no one can predict what exactly will happen after a divorce. Sometimes a spouse has every intention of paying the debts they assume in the divorce, but then they lose a job or suffer some other setback that prevents them from doing so. The best the parties can do is consult with experienced family law and bankruptcy counsel in order to make educated decisions about property and debt division and to properly memorialize those decisions in the final divorce documents.
New Mexico does not recognize common law marriage, even if you and your partner have lived together for years and for all intents and purposes act as a married couple in New Mexico.
However, approximately sixteen states still recognize common law marriage for couples who have lived together for a significant period of time and hold themselves out to the world as a married couple. Some states are phasing out common law marriage and have enacted rules that only recognize such marriages if they occurred before a specific date.
If you moved to New Mexico from a state that recognizes common law marriage, and you are deemed to have been married under the laws of that state, New Mexico courts may recognize your marriage as a valid one. This happens because under our federal Constitution, each state gives full faith and credit to the laws of their sister states.
However, you would have to prove that you were legally married in the other state before you could have this recognition in New Mexico. This could be an expensive and difficult exercise in the court system. On the other hand, there are many considerations, particularly financial issues, that dictate this path. You should discuss the pros and cons of this kind of case with an experienced family law attorney and probably your accountant before you go down that road.
There are numerous financial issues that should be considered. One reason to consider pursuing this kind of case would be at the end of the relationship if you need and would qualify for spousal support. Spousal support is only available to couples who have been married. Another scenario where it makes sense is when one partner dies without a will and the other would be disinherited unless they were deemed to be a legal spouse. Likewise, there may be estate tax considerations upon the death of a partner. Finally, in case of a legal marriage, the division of property and debt will be governed in most cases by community property principles.
In short, common law marriage is generally not recognized. However, under full faith and credit provisions of the U.S. Constitution, it must be recognized under certain circumstances. The burden is on the couple or party seeking recognition of the marriage and this can be a difficult task.
Individuals contemplating divorce often, and rightfully, are concerned about the status of their health insurance. Health insurance is frequently carried by one or the other spouses through their employment. The question that most frequently arises is whether one spouse can cancel the other from their employer based health insurance upon filing of divorce.
The answer is probably not, at least not without violating a court order. Insurance policies are generally covered by a Temporary Domestic Order issued by the Court when you file for divorce. This "TDO" forbids the parties from canceling each other's insurance. In Bernalillo County, for example, the form TDO instructs the parties to "not drop or cancel any insurance policy, . . . including medical or dental or life insurance." These orders may vary from county to county, but the general intent of them is to preserve the status quo while a divorce action is pending.
This does not mean that you can wait until your divorce is final to make arrangements for insurance following divorce, especially if you have a pre-existing condition that may impair your ability to obtain your own coverage. In fact, this is a very important consideration from the beginning of your journey through the divorce process.
If you are employed, first check with your employer to see whether it offers insurance and whether you qualify for the plan. You may need to work a certain threshold of hours per week to qualify for an employer plan. If you qualify, find out what the premiums are and what sort of coverage is offered. Most plans allow you to join upon certain major life changes, which usually include divorce, so you may not have to wait until a new plan year begins to obtain coverage.
If you don't have employer insurance available, you should apply for coverage with several insurers simultaneously to see whether you qualify for an individual policy. This is something to discuss with your attorney at the beginning of your case. If you are rejected, there are other possible options such as the New Mexico High Risk Insurance Pool and its federal counterpart. Some of the high risk insurance pool options will even cover pre-existing conditions if you satisfy strict plan requirements, so you definitely should not delay in consulting with representatives of these plans. There are also premium reduction opportunities for low income individuals.
Keep in mind that the Temporary Domestic Order is binding on the parties only through the finalization of the divorce. After that, not only may one party cancel the other from his or her insurance, it may not be possible to keep the ex spouse on the plan even if desired by both. This is in fact the most persuasive argument for a legal separation in lieu of divorce.
Health insurance is a major concern for divorcing individuals. The issue should be addressed very early since it may influence the course of the divorce, the marital settlement agreement, alimony issues and even weigh against filing for divorce at all.
In 2007, the U.S. began experiencing what is now called, the Great Recession. One surprising fact found during this period of economic hardship involved the steady decline of the divorce rate. In fact by 2008, this rate had dipped to its lowest level in 30 years in over 44 states.
Data collected by the National Marriage Project, based out of the University of Virginia supported these findings, actually finding that the stability of marriages was positively affected by the recession. Foreclosures, lay-offs and investment losses may be evidence that married couples pull together during such events. Yet, this stability and sense of togetherness may be short-lived.
Typically, financial conflict has been a top predictor of marital breakdowns. Yet, one of the statistics highlighted by the National Marriage Project involved the claim that many couples either put aside or postponed seeking a divorce during the recession. One major factor could involve the housing market collapse, as many divorcing couples cannot cash in on home equity when real estate prices have plummeted. Finally, in some housing markets it is near impossible to sell a home and even more difficult to get financing on another. Most families simply cannot take on the costs associated with running separate households.
There are many other issues as well that make divorce quite difficult in times of financial stress. Health insurance is a major issue. A divorce will often leave one party with no insurance which today can be quite disastrous. A division of property and debt is made more difficult in these financial times. The community debt in particular can be extremely problematic forcing one or both parties into bankruptcy. Then there is child support and alimony which for the paying party can simply put them over the financial edge. So while financial stress pulls couples apart, these same stressors actually bind them together for better and for worse.
The research appears to hold true. As the effects of the recession began to ease in 2010, statistics revealed an increase in divorce rates. This trend may be due to less financial uncertainty. Rebounds in employment rates and investment portfolios may alleviate the fears of those who want to go it alone. Others may find more creative ways to separate, continuing to share community property until the housing market bounces back.
Divorce can be a complex issue, particularly in today's unpredictable economy. Divorce has always been a highly stressful and uncertain time for couples. The recession has magnified the issues and often the complexities of a divorce. If you are considering divorce and the implications this may have on your financial future, it is important to consult an experienced divorce attorney. You can then better consider your options, having some certainty in uncertain times.
Each parent is still required to do what is necessary to ensure that the financial needs of their child or children are met, no matter how unique or complicated their financial situation may be.
A child support worksheet is a mandatory, often non-negotiable document that most judges require during divorce or paternity proceedings. Yet, it is also a valuable tool used to calculate the financial responsibility of each parent toward their child or children. This worksheet can be accessed through the New Mexico Courts website under the family law section.
This worksheet considers the gross income of both parents as a factor in determining the financial obligation owed by each parent. Gross income is reported from several different sources, including salaries, wages, bonuses, commissions, tips, interest, dividends, annuities, trust income, capital gains, severance pay and pensions.
Other sources of income may be less common, including benefits from social security, unemployment insurance, disability insurance and workers' compensation. Even rarer, but still reportable, may be income from prizes, such as lottery and gambling winnings, as well as in-kind benefits that reduce living expenses, such as employer housing compensation. This often comes into play in military divorces with base housing.
Because each parent has a responsibility to provide for their child or children, potential income can be considered for those parents who are unemployed or underemployed. In self-employment situations, gross income is figured by calculating gross monthly receipts excluding the ordinary and necessary expenses involved in creating income. In self-employment cases, where financially feasible, it is often necessary to get an expert such as a CPA involved.
Though gross income for New Mexico Child Support Worksheet purposes seems to include every conceivable source of income, there are some sources specifically exempted by statute. Gross income does not include income from public assistance programs, such as Temporary Assistance for Needy Families (TANF), supplemental security income or food stamps. It also does not take into account the support paid by court order for alimony or prior children.
Once the gross monthly income sources are determined, they must be compiled into one total month gross income figure for entry into the Worksheets. In situations where a parent's income fluctuates, it is averaged over 12 months to reach a total gross monthly income figure. If the income is steady, it is recorded on the worksheet at the monthly rate.
The proper financial support of the children involved in divorce or paternity cases is an important goal of the New Mexico courts. Calculation of gross income can be highly contested even in seemingly straightforward situations. An experienced family law attorney should be able to help in the determination though the level of conflict is entirely up to the parties.
Important to Address Health Insurance in the Marital Settlement Agreement to Avoid a Lapse in Coverage
In New Mexico, one of the final documents (also called pleadings) filed with the court to complete a divorce is called a Marital Settlement Agreement, or MSA for short. An MSA should provide details as to the final division of the parties' property and debt, which may be the result of a settlement agreement between the parties or the order of the court.
The MSA does more than just assign debts and assets to the parties, it may also provide instructions as to how those debts and assets will be exchanged and protected. Health insurance is one asset to a marriage that may be addressed in an MSA. Generally, if one party to the divorce is providing health insurance for the family pursuant to his or her employment, he or she is not obligated to continue to provide health insurance for their former spouse, although they may be required to continue to provide coverage for their children. In fact,many insurance carriers will not allow continuation of coverage on the same policy for an former spouse.
However, some health insurance policies may allow the divorcing spouse to remain covered as long as they begin paying their own insurance premiums after the divorce. Also, parties can agree that one spouse will continue to pay the health insurance premiums for the divorcing spouse as a form of spousal support. The issue of health insurance coverage after a divorce is complicated because the coverage available will often depend on the terms of the policy in place at the time of the divorce and those terms can vary widely from policy to policy.
Parties to a divorce should consult an experienced divorce attorney who can counsel them as to the law regarding health insurance and can conduct proper discovery in order to explore the terms of the parties' policy. An attorney should also ensure that whatever agreement is reached regarding ongoing health insurance for the parties is properly included in the MSA.
Spousal support or alimony as it is more commonly known is neither mandatory nor automatic when parties get divorced in New Mexico. Instead, spousal support may be awarded by the Court or agreed upon by the parties to a divorce based on consideration of several statutory factors.
There are numerous factors that go into the award of alimony. They include factors such as the length of the parties' marriage, the education of both parties, the health and age of the parties, the employment and income history of the parties, and the ability of the parties to work following the divorce.
There are other factors as well depending on the circumstance of the parties. As such, the determination of whether or not spousal support is awarded will vary greatly from case to case.
The amount and duration of spousal support will also vary depending on the circumstances. The amount and duration of support will depend largely on the both the income and the income earning potential of the parties.
In some cases, support is paid only for a few months or years.. In others, it may be permanent in nature. Clearly, spousal support terminates when the paying party dies. On the other hand, many people often assume that spousal support automatically terminates when the receiving party gets remarried. This is not necessarily true. This is a negotiable term.
Parties negotiating a marital settlement that involves spousal support must be very careful to identify not only the amount of support, but when, if ever, that support will terminate. One thing the paying party will want to avoid is the use of any language suggesting that alimony is "non-modifiable." Of course, the party receiving it may take the opposite position.
Once the term "non-modifiable" is included in an award of spousal support, which is then entered by the Court, it is almost impossible to change. Therefore, it is essential that parties on either side of a dispute over spousal support consult an experienced divorce attorney or their rights to modify alimony may be forever waived.
The negotiation and drafting of the terms of alimony can have lasting and even permanent consequences. It is not something to take lightly.