Albuquerque Divorce Lawyer Blog

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.

In the case of transitional or rehabilitative, the parties and/or the court can make the spousal support non-modifiable. In the case that the alimony is made non-modifiable either by agreement of the parties or judgment of the court, the amounts cannot be later modified.

In all but very rare and exceptional cases, this means that neither spouse can go back later for a modification. Neither the recipient spouse can ask for more nor can the paying spouse ask for less. It is inconsequential whether the payments of spousal support later become a financial strain. Likewise, the recipient cannot go back and ask for more due to economic necessity or hardship.

The resolution of non-modifiable support is final whether it comes by marital settlement agreement or order of the court. This means also that it is immaterial whether the recipient spouse gets remarried.

In case of agreement by the parties in the marital settlement agreement, the spousal support was a bargained for exchange. It is assumed that it was negotiated in the context of the remainder of the division or debt and assets. It is valued at the time of the divorce and it cannot later be changed, modified or renegotiated in the absence of an agreement between the parties.

Likewise, if the parties proceed to trial, and the court makes an order of non-modifiable alimony, this order would issue in light of the remaining issues of property, debt, income, and income earning potential of the parties. The court's order, right or wrong, is binding. "Non-modifiable" means non-modifiable in the absence of a successful appeal. This is one good reason for working out the differences between the parties in a marital settlement agreement.

Because these matters are except in rare situations irreversible, it is extremely important to work through these in advance. The issue of non-modifiable alimony can be very important and potentially burdensome on one or both parties. It should not be entered lightly.

On the other hand, there may be situations where such a non-modifiable alimony agreement makes sense in the context of the overall division or property and debt. To know if it does, you must first understand the overall picture of property and debt and how the issues might be resolved if left to the court.

This is best accomplished with the guidance of an experienced divorce and family law attorney.

Related Reading:
New Mexico Alimony: Til Death Do Us Part!
There are Many Options for the Payment of Alimony in New Mexico
Alimony and Spousal Support in New Mexico

Collins & Collins, P.C.
Albuquerque Attorneys

It is pretty well established that financial problems and stresses are one of the chief causes of divorce. In many cases, the financial issues are caused by both spouses. In others, it is only one of the spouses that is running up the debt of the family.

Community Property Means Community Debt
Many falsely assume that filing for divorce will stop the other spouse from continuing to accrue debt to the family. Because New Mexico is a community property state, this means that the innocent party will suffer the consequences of the financial irresponsibility of the other spouse unless he or she does something to protect him or herself.

When a divorce is filed in New Mexico, a Temporary Domestic Order (TDO) is entered. One thing the TDO is meant to do is to protect the spouses financially. The TDO basically orders the parties to maintain the status quo. For purposes of finances, this means neither party will run up the debt or begin exhausting or moving assets.

Though it does prohibit the parties from running run up debt, it does not provide much real protection to the innocent spouse where the other simply cannot control his or her spending. The innocent spouse is likely equally liable for the debt since it was incurred during the marriage. Worse yet, even if Marital Settlement Agreement or other court order allocates the debt to one or the other parties, it is not binding on third party creditors.

Though it can apply to any community debt, the problem comes up most frequently with credit card debt. As such, credit cards will be the focus though the same concepts would apply to other debt.

Terms of Divorce Not Binding on Creditors
Again, neither a court order nor Marital Settlement Agreement is binding on credit card companies. Though both may be enforced by the court in theory, actual enforcement of provisions can be very difficult and time consuming. It can take months to even get to court the first time and unfortunately these issues are rarely resolved if at all at the first hearing. As such, it can also be quite expensive in terms of attorney fees and costs. This is unfortunate since this is perhaps the worst possible time for incurring new expenses for the innocent spouse.

Steps to Protect the Innocent Spouse
Though the innocent spouse cannot really completely protect him or herself from community debt incurred prior to filing for divorce, there are some simple steps to protect against additional financial bleeding.

First, if possible, cancel the credit cards. This sounds easy enough. But remember the TDO which may disallow it. Therefore, it is best to get a court order to this effect.

At the very least, you should put the credit card company on notice in writing delivered by certified mail and faxed so there is a transmission report. Make it clear that you are no longer financially responsible for the card and that you want your name off the card. Insist on a written response and be persistent in getting one.

If neither of these options solves the problem, you may need to file for bifurcation of the divorce proceedings. This means splitting the divorce up by immediately issuing the divorce while continuing to resolve the financial issues.

There are not a whole lot of good reasons for seeking a legal separation instead of divorce. This is one good reason. If none of the above is available, then you may need to file for legal separation which will end the community property status of the marriage. This will prevent any new debt being incurred against the community following the final order of legal separation.

Act Quickly!
These are difficult issues to address. They need to be addressed quickly and decisively where present. Recovering from a divorce can be difficult in many ways. The debt run by your spouse following the filing for divorce does not have to be among them.

Related Reading:
Community Debt After Divorce - Few Remedies to Protect Yourself After the Fact!
Division of New Mexico Community Property: Agreement on Method Can be the First Hurdle
A Division of Community Debt in Divorce Proceedings Provides Little Relief from Creditors

Collins & Collins, P.C.
Albuquerque Attorneys

Legal separations are recognized and available in the state of New Mexico. Thus, an action for legal separation may be filed whenever both spouses have permanently and physically separated from each other.

It is not uncommon for people to want a legal separation rather than a divorce. The thought of the permanency of a divorce is often difficult and people prefer to ease into it or to use a trial separation to decide whether or not to move toward divorce. Keep in mind that there are a few good reasons for wanting a legal separation rather than a divorce. Wanting to ease into the divorce is not typically one of them.

Disadvantages of Legal Separation

There are several drawbacks to a legal separation. First, most important perhaps, you should be mindful that a legal separation does not free you or your spouse such that you will be able to marry another person. Second, the legal separation process can take the same amount time, involve the same level of stress, require a comparable number of court hearings and most importantly entail the same level of attorney fees and costs as a divorce. So it is important to have reasonable expectations regarding the processes of legal separation as well as the outcomes and benefit.

Related to the last point, all of the issues that are determined in a divorce are determined in a legal separation, and either spouse may start proceedings in the district court for the determination of those various issues, such as custody, child and spousal support, and division of property and debt. Like a divorce, a legal separation can also be reached by settlement. A legal separation agreement is a written agreement that describes your rights and settles the above-mentioned issues along with any other issues deemed important to the parties.

On the whole, legal separations are the same in all aspect to a divorce, with a few exceptions. For instance, the marriage is not terminated. There are different names for the documents that will be used in this situation: for example, there is the petition that is filed with the court, which is called a "verified petition for legal separation," and the final decree that is issued by the court is called a "final decree of legal separation."

Advantages of Legal Separation

People get legally separated rather than divorced for many reasons, including religion or the need for maintaining marriage benefits that would be lost upon a divorce. There are also situations where one or both parties wish to separate their assets and liabilities. The emphasis is on liabilities and debt. This is not too uncommon and can arise in many situations where one party is running up significant debt to the detriment of the other. Keep in mind that the division of debt is prospective, and not retroactive. This means that the parties are equally responsible under the community property laws of New Mexico for debt incurred prior to the legal separation.

Know and Understand Your Options!

These are valid reasons for a legal separation. Easing in to the divorce or using the legal separation to decide whether to seek a divorce is not. If you are considering a divorce or legal separation, it is important to discuss your situation with an attorney experienced in New Mexico family law. Knowing and understanding your options can save a lot of time, stress and legal expense associated with making an uninformed decision.

Related Reading:
Common Misconceptions About Legal Separation in New Mexico
New Mexico Community Property Laws: Community Versus Separate Property
New Mexico Community Property Laws: Community Versus Separate Debt

Collins & Collins, P.C.
Albuquerque Attorneys

New Mexico is a community property state, which means that all of the property acquired by a couple during their marriage, or earned by either spouse, during the marriage is considered equally owned by both spouses. Accrued or vested retirement account benefits are considered community property, which means that, upon divorce, each spouse is entitled to one-half (1/2) of the retirement benefits earned or accrued during the marriage.

There are two primary types of retirement plans: defined benefit plans and defined contribution plans. A defined benefit plan promises a specific monthly benefit at retirement. In a defined contribution plan you (and possibly your employer) contribute a set amount into the account, which may be invested by the employee, the employer or the company that manages the account. Thus, the value of the account will fluctuate depending upon the success of the investments.

An Individual Retirement Account (IRA) is a defined contribution plan, usually an account with a bank or other financial institution. While an IRA is a retirement account, you may be able to access the funds prior to retirement, albeit with a penalty. IRA assets may be divided in a divorce decree and can generally be split in half, with equal shares going to each spouse.

A 401(k) plan is another form of defined contribution plan administered by an employer that an employee contributes to out of each paycheck. Employers can elect to match employee contributions, up to a certain point. There are special rules governing a 401(k) plan, including a limit of $15,000 per year in contributions. Like an IRA, you may be able to access the funds in your 401(k) account prior to retirement, but you will incur both tax liabilities and penalties for doing so. Also similar to an IRA, a 401(k) plan's assets can be equally split among the divorcing parties.

A 403(b) plan is a defined contribution plan, similar to a 401(k) plan, that is available only through certain employers, including governments, public education organizations, non-profits, cooperative health service organizations and self-employed ministers. A 403(b) plan will allow you to contribute up to $17,000 per year, more money than a 401(k). However, your investment choices are generally limited and expensive. In addition, often 403(b) plans restrict how frequently you can change your investments.

In contrast, a pension plan is a defined benefit plan administered by an employer where a set amount is awarded to an employee at retirement age, usually paid monthly. Pensions may be divided equally between the spouses. However, because pension plans are defined benefit plans, it can be very difficult to determine their value before they are paid out. Pensions are very expensive for employers to maintain in the long run, so they are becoming less and less common with more employers offering defined contributions plans or not offering retirement at all.

Some smaller employers may use simplified employee pension plans (SEPs). Under a SEP, the employee sets up an IRA and the employer can contribute up to 25% of the employee's pay, up to a maximum of $40,000 per year. Smaller employers can also set up SIMPLE IRA plans, which are sponsored by the employer and allow employees to contribute up to $10,000 per year with a voluntary employer matching contribution. In both cases, the plans are divisible in divorce as community property.

It is important to note that, while equally dividing a retirement account is an option, it is not the only way to apportion retirement assets in a divorce. You may opt to try to keep your retirement account whole, and offer your spouse other community property of comparable value instead. Given that retirement plans are often the most valuable community asset owned by a couple, it is essential that parties with substantial retirement assets consult with a family law attorney in order to ensure that the assets are being accurately valued and fairly divided.

Related Reading:
New Mexico Marital Settlement Agreement is Final, Binding and Very Hard to Modify
5 Tips From a Divorce Attorney For (Happily) Married People
Financial Recovery After Divorce: There is a Light at the End of the Tunnel

Collins & Collins, P.C.
Albuquerque Attorneys

Imagine spending your life savings on legal expenses to regain possession of a pet after a breakup. Well, that is exactly what some are prepared to do to maintain possession or custody over the family pet. Though this may seem extreme to some. It is not for dedicated pet owners who view the pet as a family member.

Pet custody battles may become more common as the underlying circumstances are becoming much more common as pet ownership increases. According to the 2011-2012 National Pet Owners Survey, 62% of the households in the United States own a pet. Because these companion animals are often considered members of the family, deciding who their ultimate owner should be after a breakup or divorce can be quite contentious just as high conflict child custody battles often become.

While the public's view of pets has evolved beyond mere property interests, the law continues to treat animals as exactly that--no different than furniture, vehicles, or other innate objects. In the event of a breakup, the legal owner of the pet can rightfully retain possession and the other party is left with little recourse. Similarly, during a divorce, the court does not hold custody proceedings or discuss visitation for the couple's pets. Instead, pets are addressed in the property settlement.

As a community property state, New Mexico distributes a couple's marital assets equally between the two parties. While the distribution of physical property is generally straightforward, allocation of a pet can be very difficult because its value to the parties is much more than monetary, yet the "best interest" standard applied to child custody does not necessarily apply to pets.

Unless, it is clear that one party owned the pet prior to the marriage, the question over who keeps the pet can become very contentious. Unfortunately, divorces are inherently antagonistic, and a dispute over a beloved pet can act as a conduit by which all disagreement between the parties is funneled.

Recognizing the need for a more holistic approach to these difficult questions, some courts are beginning to decide pet-related issues based on principles utilized in child custody proceedings. Although still uncommon, these courts ignore the long-standing distinction and delve into largely subjective issues--asking who the primary caregiver is, who can best meet the animal's needs, who has a stronger emotional bond, etc. However, such an approach is certainly not the standard and parties to a divorce or separation should not expect all courts to devote the same time and attention to deciding which party keeps a pet as they do devote to determining child custody issues.

Once entangled in a divorce or even a breakup, deciding who gets possession of your pets will become much more complicated and emotionally charged. In order to avoid added stress, these issues should be discussed and addressed well in advance. Whether you are considering buying a pet with your significant other or want to include pet ownership terms in your prenuptial agreement, consulting an experienced family law attorney can help you explore your options. In the event that a dispute arises, a legal professional can explain the best strategies to ensure your interest in your pet are protected to the degree possible throughout the break-up.

Related Reading:
Breaking Up In New Mexico May Be Harder Than Getting a Divorce
The Hight Cost of Conflict in Divorce

Collins & Collins, P.C.
Albuquerque Attorneys

According to New Mexico law, all debts incurred during a marriage are considered to be community property and will be divided equally between the spouses during a divorce. Separate property is individual property acquired before the marriage through purchase, gift, inheritance, and property that has otherwise been legally established as separate property.

What many people fail to understand is that while the New Mexico district court allocates portions of community debt to each spouse as part of a divorce decree, that district court order does not bind third-party creditors. Which means that, even though a divorce decree assigns a particular debt to one of the spouses, if that spouse does not pay on the debt the creditor continues to have a legal right to pursue the other spouse for payment of the debt. This can result in a spouse being pursued by a creditor for debts not contemplated under the terms of the divorce decree.

Since most creditors will not allow you to just switch the account holder designation from one individual to another, your recourse lies with the family court that handled the divorce proceeding. A claim can be brought against the ex-spouse for violating the divorce decree by not paying his or her share of the debt assigned to them and for restitution.

There may be some recourse for the innocent spouse in form of court ordered restitution. Restitution is repayment of any money paid by you to a creditor that should have been paid by your ex-spouse.

The divorce court can also assist you by ordering the ex-spouse to cooperate by completing necessary paperwork or signing documents that may allow you to have debt moved from one spouses name to the other. For example, the court may order one party to attempt to open a credit account in order to transfer the balance to that account. This would insure that the debt is only in the spouse's name that was assigned the debt in the divorce decree.

Also, the court can order a spouse to seek refinancing of a mortgage still held in both spouses name or to attempt to sell off property that was allocated by the decree to one spouse and for which the debt has become delinquent.

Unfortunately one spouse's failure to pay his or her debts as assigned by the divorce decree can have a negative impact on the other spouse's credit rating. While a negative credit reporting cannot be removed, you can annotate the negative reporting with a 100 word comment stating why the account was not paid pursuant to the terms of the contract with the lender. This may not likely improve your credit score, but if you do apply for credit in the future it will allow those future creditors to better understand your situation when they review your credit report.

While these type of post-divorce payment problems may not be completely avoidable, one way to mitigate the damage is to provide as much detail as possible in the marital settlement agreement and final decree of divorce. This would include very specific provisions regarding the legal and binding transfer of debt from one party to the other.

Most importantly, parties should be ordered to refinance debt whenever possible so that ongoing debts don't remain held in both parties' names. This provision should include detailed timelines for when and how debts will be repaid. It is very often worth the time and money required to discuss allocation and payment of community debt with an experienced family law attorney in order to ensure that things go as smoothly as possible once the divorce is completed.

Related Reading:
Protecting Your Credit Before, During, and After Your New Mexico Divorce
Financial Recovery After Divorce: There is a Light at the End of the Tunnel
New Mexico Marital Settlement Agreement is Final, Binding and Very Hard to Modify

Collins & Collins, P.C.
Albuquerque Attorneys

A divorce does not affect an individual's credit and credit score directly. However, shared or joint credit obligations often do. Joint credit obligations include bank loans, credit cards, finance and auto loans, mortgages, home equity lines of credit, and credit cards. Fortunately, there are several things that a person can do before, during, and after divorce to ensure that their credit and credit score is not negatively affected by divorce.

During marriage, many couples merge their finances, get a mortgage, open a joint bank account, buy a car together, etc. Under New Mexico law, all assets and debts accumulated during the marriage are considered to be community property. In the event of divorce, all assets and debts considered to be community property are divided equally between spouses.

However, many divorcing individuals fail to realize that a divorce decree assigns marital property and debt, but does not alter or break contracts with a lender. For example, if one partner is assigned a specific debt and subsequently cannot afford payments and the lender has not changed the contract, late payments will appear on both individuals' credit reports. In other words, regardless of the divorce decree, an individual is still responsible for joint credit obligations unless certain steps are taken.

• Close joint bank accounts. Joint bank accounts should be closed before the divorce is finalized. Since joint bank accounts are considered community property, spouses should close or cancel the account together and the funds should be divided equally.
• Close or remove one person from credit accounts. If there is no balance due on a joint credit account, the account should be closed prior to divorce. If there is a balance due on the account, it is not likely that the creditor will close the account without payment. However, certain credit companies will be willing to close a joint account and open two separate individual accounts and divide the balance due.
• Settle with creditors. Other creditors may be willing to close the account and settle for a lesser amount than what is due. In this case, individuals should obtain a letter from the creditor stating that the debt has been paid in full.
• Freeze accounts if they cannot be cancelled. If joint accounts cannot be closed, cancelled, or settled, it is important to put a freeze on the account to prevent any further charges from either party.
• Change names on utility bills. It is important for the person keeping the marital home to remove the other party's name from utility bills.
• Keep current on bills. Even though a divorce decree may assign a particular debt to one individual, if the debt is a joint one, the other party's credit score will be affected if the party responsible does not make timely minimum payments. In this case, it is often advisable to make the minimum payments even if the debt was assigned to the other spouse instead of risking damage to your credit score.
• Establish your own credit. Many spouses, for several reasons, do not have a credit card in their name. It is important to be aware that being an authorized user on another person's credit account does not build personal credit. When faced with divorce, some individuals find that they have not established sufficient credit to accomplish even the simplest tasks like obtaining a telephone line or renting a home.

These issues should all be considered early and throughout the divorce process. An experienced divorce attorney can help to avoid or at least minimize the potential negative consequences to your credit related to your divorce.

DISCLAIMER


Related Reading:



• Is Your Soon-to-be Ex Hiding Assets?


• 5 Tips From a Divorce Attorney For (Happily) Married People


• Financial Recovery After Divorce: There is a Light at the End of the Tunnel




Collins & Collins, P.C.
Albuquerque Attorneys

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.

Though New Mexico is a community property state, where all marital assets and debt are divided equally upon divorce, New Mexico does not recognize common law marriage, or cohabitation, except in the limited circumstance when the common law marriage was recognized in another state and then the parties moved together to New Mexico. This means that when an unmarried couple breaks up, property, assets, and debt acquired by one of the parties is generally considered the separate property of that party.

This can often be problematic, since, just like married couples, many cohabitating couples are in the situation where one partner is the major income earner. While for a married couple all income earned by either spouse is divided equally among the parties upon divorce, the same is not true of the couple that was cohabitating.

In order to obtain any kind of monetary relief after a break up, a formerly cohabitating individual must pursue a civil lawsuit asking that any jointly titled assets or debts be divided, much like the assets and debts of a business partnership are divided when the business closes. However, this relief does not extend as far as granting co-habitating couples rights to alimony unless, as noted above, they had a valid common law marriage in another state before moving to New Mexico.

Some states have created what is called palimony, which creates right to support in situations where there is no legally recognized marriage. Palimony suits arose from a 1976 California case, Marvin v. Marvin. Like New Mexico, California is a community property state and does not recognize common law marriage. In Marvin the California court found that when there is an enforceable oral agreement between cohabitating partners to share all property, the agreement must be enforced by a court. The difficult part is proving that there is an enforceable agreement in the first place. However, palimony has NOT been recognized by the New Mexico courts and couples breaking up in New Mexico should not expect to receive such relief.

So while the civil courts can grant some relief to couples who break up but were never married, the New Mexico courts have not chosen to grant the contract-based relief that led to palimony in other states. Thus, couples who choose not to get married should take steps to protect their assets and plan for their future in case the relationship does not last. If you have already reached the break up point, speaking to an experienced family law attorney should help identify your rights and responsibilities under the laws of New Mexico.

Collins & Collins, P.C.
Albuquerque Attorneys

According to the U.S. Census Bureau, in 2010, 45% of households in the U.S. were made up of unmarried couples. Even though the trend on a national level is for couples to live together instead of getting married, under New Mexico law the choice not to get married may have several unpleasant consequences when it comes to breaking up. Since New Mexico does not recognize common law marriage, many of the protections afforded to couples through the concept of community property are denied to those who choose not to get married.

New Mexico is a community property state, where all assets and debt acquired during the marriage are divided equally upon divorce. However, New Mexico does not recognize common law marriage. In New Mexico, to obtain the rights and responsibilities of marriage, like the right to community property and interim division of income and expenses, 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.

Like divorces, when a long co-habitation relationship ends, it may take months and even years to obtain a division of property and assets. During this time, mortgages and other bills still need to be paid on time, putting some individuals in a precarious financial position. Recognizing that one spouse may have been the couple's major or sole source of income, New Mexico family courts have routinely allowed the party whose income is lower to file a Motion for Division of Interim Income and Expenses. This motion essentially divides income and expenses equally for the duration of the divorce process. However, in New Mexico, the protection afforded by this kind of a motion is only available to married couples.

The idea behind a Motion for Division of Interim Income and Expenses is that couples are still technically married until the final divorce decree, and therefore income and debts are still community property. In the case of co-habitating couples, however, there is no community property and therefore neither party is entitled to an equal division of the couple's income or debt. For this reason, there is no right to interim division for parties who were not legally married under New Mexico law and are now seeking to end the relationship and divide the assets that they have accumulated together.

Since the New Mexico Family Court lacks jurisdiction over unmarried couples for property division purposes, when co-habitating couples break up and cannot agree upon a division of assets, they must pursue a civil suit. Civil suits of this kind may take a long time to resolve. They are very difficult to prove as they are based upon principles of contract law. Worse yet, the contracts are typically oral rather than written causing many evidentiary issues related to the burdens of proof. During this time a party is not entitled to interim support or division of income or debt.

If there are children involved, a family court does have jurisdiction over child custody and child support. The courts in New Mexico will both award interim custody and time-sharing as well as interim child support while the custody and support case is pending. However, for anything unrelated to child maintenance or support, the parties are unlikely to have to divide income and expenses while their civil property division suit is pending.

These cases can be quite complicated. In addition to the standard issues of child custody and child support, the contract issues can be very challenging. As such, when faced with this situation, it is advisable to seek the guidance of an experienced divorce and family law attorney.

Collins & Collins, P.C.
Albuquerque Attorneys

Parties to a divorce are required to identify all of their assets so that the Court can accurately characterize and divide all marital assets. Unfortunately, hiding of assets during a divorce by one or both spouses is not an uncommon practice. And, even more unfortunately, intentional hiding of assets is often difficult to discover and even more difficult to prove. However, there are ways that spouses can detect and protect themselves from partners who might be hiding assets during a divorce.

In community property states like New Mexico, all marital assets and debts are divided equally upon divorce. In some nasty cases, a spouse, usually the major earner, tries to hide a portion of their assets to avoid the legal obligation of having to divide them with their divorcing spouse. Often a spouse may suspect that their partner has hidden assets, however, the spouse who is charging their former partner with hiding assets must show proof of the act. Such proof can be in the form of bank statements, records, deeds, contracts, etc., all of which can be difficult to obtain.

Having a working knowledge of the family finances will enable one partner to detect and trace the hiding of assets. It is also important to know the location of important documents such as deeds, wills, and tax returns, not only in the event of divorce, but also should one partner die or become incapacitated.

There are some red flags that may help divorcing spouses, and even happily married people, determine that their partner may be hiding assets. Aside from being aware of the family's economic situation, there are several ways to spot asset-hiding:

• Changes in mailing addresses for financial and bank statements. Spouses must be attentive when bank and other statements that used to be mailed to your home are now being mailed to a spouse's office or post office box. If statements are no longer being delivered to your home address, you may want to contact the bank, credit card company, etc. to ensure that you obtain copies and that you keep these for your records.


• Large purchases. Beware of sudden purchases of items that could be undervalued or overlooked in a divorce, like expensive art, furniture, or collectibles.


• Underreporting income on tax returns or financial statements. When a financial analysis is performed in order to divide marital assets, unreported items may not be included.


• Overpaying IRS or creditors. Some spouses will overpay their taxes or creditors in order to get a refund after their divorce is settled.


• Sudden salary, bonus, or commission decrease. Some spouses may defer their salary, commissions, and bonuses until after the divorce to seem like they have a lower income.


• Sudden increase in debt. Many spouses create phony debt in order to seem less financially solvent.

It is important for divorcing spouses to be aware of these red flags. If contemplating divorce, many divorce attorneys recommend a lifestyle analysis be conducted at the outset of divorce negotiations. A lifestyle analysis is a financial study that determines your standard of living during marriage. It not only ensures that a spouse gets their fair share of the marital assets, it can also be a tool in discovering that the other spouse is hiding assets. If a family's standard of living exceeds reported income, it could be a sign of asset hiding.

It is extremely important that all spouses have a thorough knowledge of the marital assets, even if divorce is not on the horizon. Knowing what you have will make it easier to discover whether your partner has been hiding assets in anticipation of a divorce. If you fear that your partner is hiding income or property, it is important to obtain records and contact an experienced divorce attorney immediately.

Collins & Collins, P.C.
Albuquerque Attorneys

Divorce usually has significant impact on a person's finances .When you are happily married, it is easy to think that your relationship will last forever and that there is no need to plan for the financial fall-out from a divorce. However, according to the Economic Mobility Project (EMP) study by the Pew Charitable Trust, nearly 50% of both men and women fare worse economically after a divorce than they did when they were married.

A recent article featured in Smart Money contains advice by financial planners and attorneys on what to do during a marriage in order to avoid future headaches should the marriage end. Here are the top five suggestions for actions couples should take together, and individually, in order to protect themselves financially:

1. Don't neglect your retirement fund.

Many couples tend to overlook saving for retirement until they are older. Where one spouse is the sole or major breadwinner, the other spouse may take a backseat when planning for retirement. Often a non-working spouse will rely on the breadwinner to invest and plan for their joint retirement. However, if there is a divorce, the person who has not planned ahead may find himself or herself having to start their personal retirement fund from scratch at a later age.

Attorneys and financial planners suggest that each partner contribute as much as they can to their company's retirement plan, if employed. If unemployed, financial planners suggest that the nonworking spouse contribute to their partner's spousal IRA. Many wealth managers also recommend that couples and individuals make saving for retirement a major financial priority; Lisa Caputo, president and CEO of Women & Co., a division of Citigroup, even suggests spending a little less on a child's college fund if necessary.

2. Do not ignore your career

Another common mistake many people make after marriage is allowing professional skills to lapse. In addition to many women leaving the workforce to be stay-at-home mothers, according to the U.S. Census Bureau, there are an estimated 105,000 stay-at-home fathers. Both men and women who leave the workforce often make the mistake of completely leaving their careers behind and losing valuable expertise. When forced to go back to work, they find that they lack the skills to be competitive in the job market.

Many financial planners recommend keeping skills fresh by taking consulting jobs, volunteering for a charity, attending networking events, keeping current in the industry by signing up for newsletters and magazines, maintaining membership in business or industry organizations, participating in continuing education and keeping licenses or certifications up to date.

3. Become involved in household finance

In many couples, one person is often in charge of all of the household finances, which can be a real problem upon divorce. New Mexico is a community property state, where all marital assets and debt are split equally upon divorce. If only one partner handles all of the finances, he or she may be acquiring large amounts of debt that the other party may not know about. Additionally, as mentioned above, one partner may be relying on the other to save for their joint retirement only to find that their spouse neglected to save enough.

Steven Kaye, a certified financial planner (CFP) based in New Jersey, suggests that both partners attend meetings with attorneys, financial professionals, insurance agents, and accountants. Both spouses should get involved and be aware of the particulars of insurance policies, bank accounts, investments and debts. Moreover, Kaye recommends that all documents pertaining to the above be kept with other important documents like deeds and wills.


4. Maintain your personal credit

One of the biggest financial mistakes some individuals make when they get married is that they do not maintain a personal bank account or credit card. Many couples have only a joint bank account and a credit card in one spouse's name where the other spouse is only an authorized user. The, upon divorce, one spouse has no credit history and will have a difficult time finding a credit card at competitive interest rates and a larger line of credit. This can be especially difficult in divorce where that spouse is looking to rent or buy a home.

It is important to know that being an authorized user of s spouse's credit card does not build personal credit. Caputo advises married couples to maintain a joint bank account as well as two separate individual accounts, one for each spouse. She also recommends that spouses keep separate credit cards.

5. Obtain professional financial advice before divorce

Many people going through a divorce make the mistake of focusing on one issue; for example, getting custody of the children or retaining ownership of the family house. However, in doing this many individuals lose sight of the bigger financial picture, and end up agreeing to disadvantageous terms like low child support payments, little or no alimony, or a larger share of the marital debt.

If divorce is inevitable, Ginita Wall, certified financial planner and co-founder of Women's Institute for Financial Education, recommends that partners establish their future financial needs and ensure that their divorce agreement will meet these needs. It is often advisable to consult a financial planner to discuss these matters.

Even though divorce may not happen, it is always important to be prepared financially. Taking a few preventive measures today can mean the difference between future financial security and bankruptcy. If divorce is unavoidable, it would be prudent to discuss these issues early with an experienced divorce attorney.

Collins & Collins, P.C.
Albuquerque Attorneys

Divorce usually has adverse effects on a person's financial situation--particularly in the short term. However, there are ways in which divorcing individuals can bounce back financially after divorce. The advice applies to all those who face financial hardship after divorce, both men and women.

Get involved in your investments, retirement planning, and insurance.

Many couples tend to split the financial decision-making. While one partner, usually the chief wage earner, focuses on investing and major financial decision-making, the other partner focuses on day-to-day budgeting and bills. After a divorce, it is usually the spouse who did not focus on the bigger picture who suffers most financially.

Establish personal credit and check your credit report for inconsistencies.

Many couples have a single joint bank account and credit card. In these situations, one spouse is usually not building up a personal credit history. Being an authorized user of a spouse's credit card does not build personal credit. Upon divorce, the spouse with no credit history will find it difficult to secure credit in their name.

Another common problem faced after divorce has to do with debt and their credit report. Since New Mexico is a community property state, debt, like assets, is divided equally during a divorce. It is important for individuals to check their credit report to ensure that their debt has been divided and allocated correctly by creditors, in accordance with the divorce settlement. It is extremely important to check for and rectify these mistakes as soon as possible.

Determine a budget.

Budgeting becomes of vital importance after a divorce. Both partners have to be realistic and consider multiple issues when organizing a budget. First of all, both partners have to have reasonable expectations. In most cases, the cost of maintaining two separate homes will prohibit both partners from maintaining their former standard of living.

In planning a budget, divorcing individuals should make a detailed inventory of their income, including income from work, alimony, investments, and child support. However, it is important to account for child support, and possibly alimony, ending at a certain point in the future. There should also be a detailed list of annual expenses, including rent, mortgages, insurance, car payments, taxes, utility bills, food costs, etc. If thinking about returning to school or pursuing some sort of career enrichment, it is necessary that individuals also factor this transition period into their budget. This includes accounting for an income reduction while in school and an income increase when the training is completed.

Children are an important consideration when making realistic budgeting choices. In some cases, the custodial parent wishes to keep the family home. However, this may not make financial sense. It is usually the primary caregiver who fights to keep the children as well as the family home. It is important not to make the decision to own the family home an emotional one, because it may be financially unrealistic.

Save for retirement.

Many individuals find themselves having to begin saving and planning for retirement from scratch after divorce. For various reasons during marriage, one or both partners may neglect to plan or save for retirement. But no matter how late or how difficult, retirement planning must be addressed as soon as possible. It may be best to start investing or saving even a small amount every month which can accumulate with time or, if possible, to take a lump sum received as part of the divorce settlement to begin a retirement fund.

Separate completely.

Finally, many divorced couples neglect to separate their financial lives completely. As soon as the divorce is final, each spouse should ensure that assets are transferred to their name, as well as home and auto insurance policies. Individuals should also make sure that if they receive child and spousal support, then the paying partner has life insurance that will allow for a continuance of the support if they should die unexpectedly. It is also important to change beneficiary designations and to update wills and healthcare directives after divorce.

Even though divorce can be financially crippling, there are ways to get your financial life back on track. It is important, however, to get involved in your finances, be realistic, and make important changes that look toward the future. And if divorce is on the horizon, consult with an experienced divorce attorney early on to protect your financial interests.

Collins & Collins, P.C.
Albuquerque Attorneys

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.

Collins & Collins, P.C.
Albuquerque Attorneys

The idea of an uncontested divorce is commonly misunderstood. The idea of an uncontested divorce is obviously appealing but not always practical or achievable. A distinction must be drawn between contested and high conflict. There is a very significant difference between the two.

Divorce is generally difficult; even an amicable divorce can become complicated. Since divorce is often a costly transition, many couples seek to cut expenses by pursuing an uncontested divorce. However, an uncontested divorce implies total agreement on a wide range of issues that may not be obvious at the outset. While an uncontested divorce may be the right choice to dissolve a short marriage with no children and few assets, it is not generally a good choice for longer marriages, especially if there are children, property, assets and debt involved.

To obtain an uncontested divorce in New Mexico, at least one of the spouses must have lived in the state for the previous six months. The parties then must prepare, agree upon and sign a Marital Settlement Agreement (MSA), which a judge accepts. After acceptance, the duties and rights in the MSA become legally binding on both parties. For a flat fee, some divorce attorneys will prepare and file all of the necessary documents for an uncontested divorce.

However, it is seldom the case that parties have reached perfect agreement on every issue that may be pertinent to their divorce. There are several issues concerning property division, child support, child custody, tax, and debt that couples may overlook when agreeing to an uncontested divorce. In trying to obtain a fast resolution, many couples often avoid important conversations and decisions, only to be forced to revisit these sometimes difficult and then more pressing issues in the future, resulting in far greater cost.

One of the most important issues couples must agree on is the division of property and debt. New Mexico is a community property state, where both marital assets and debt are divided equally upon divorce. In some cases, parties do not have a clear financial picture of their community property and may be agreeing to an arrangement that is not to their advantage. Many spouses may try to hide their assets to avoid giving their soon-to-be ex a fair share of the marital estate. A major issue is that in an uncontested divorce is that there is seldom discovery or disclosure of assets. If one spouse is indeed hiding certain assets, then clearly there is no real agreement on the division. And though a party can return to court to address the concealment of assets, it is a difficult and expensive process.

Child support is also a very complex issue in a divorce. If filing for an uncontested divorce in New Mexico, the couple must also submit a Parenting Plan with a child support worksheet. The Parenting Plan includes each parent's obligation for each child, which must comply with the New Mexico child support guidelines. Couples considering an uncontested divorce should also come to an agreement on custody, the possibility of one parent moving to another state, medical costs and insurance premiums, and educational costs. These can quickly cause an escalation of conflict when they have not been properly addressed.

Debt is an issue all its own and unfortunately, the debt often far exceeds any assets the couple may have.. In community property states like New Mexico, both spouses are equally responsible for debt acquired during the marriage, regardless of which spouse actually incurred the debt. As noted above, since there is usually no discovery or mandatory disclosure of finances in an uncontested divorce, it is important for both spouses to know the size of their debts both collectively and individually.

While uncontested divorce may seem attractive and less costly, it is often not the right choice. Some may wish to just get it over with which is certainly understandable in light of the stress of divorce. However, rushing through the process often leads to far more stress and costs in the future. Contested does not mean conflict. It may simply mean thoughtful and careful. Once it is done, it is very difficult to undo. Consulting an experienced divorce attorney before the process begins, even for an uncontested divorce, may cause avoid complications and costs in the long run.

Collins & Collins, P.C.
Albuquerque Attorneys

The Pew Charitable Trust recently published the results of its Economic Mobility Project (EMP) study. The study's findings of women's economic situation after divorce were interesting and encouraging. According to Pew, women today are more likely to come out of a divorce as financial winners than they were in the past.

The study was based on non-partisan data and was intended to spawn a discussion about individuals' ability to move up or down the economic ladder, as well as how government and private organizations can offer better economic opportunities to encourage upward mobility. Part of the study focused on the impact of divorce based on gender.

The EMP results show that 20% of divorced women's income will increase by 25% or higher after divorce, which is almost double the increase of only 11% in the early/mid 1970s. In contrast, only 16% of divorced men's income will increase by 25% or higher after divorce. This figure is also up from 14% in the early/mid 1970s. On the other hand, around 50% of both women and men are financially worse off after a divorce.

Commentators assert that these figures reflect a broad change in women's financial position and strength, for which there are several factors. One important reason is that the wage gap between men and women is closing. Women are also getting better education than women in the 1970s, which is leading to better, higher-paying jobs. Another factor is that women are more informed than ever of their marital assets. In the past, many women were unaware of their marital income, debt, and property. In contrast, women today have become more involved in family finances, thereby strengthening their position during divorce.

Family law attorneys have also reportedly seen a large percentage of women seeking prenuptial agreements. This was rarely the case 30 years ago. Today, women are getting a better education, better jobs, are waiting longer to get married and, thus, are accumulating more personal assets prior to marriage. Taking their cue from men, these women have sought better ways to protect their own wealth, with many turning to the prenuptial agreement.

The study also raises the question of what married couples can do to ensure that they do not suffer as much economic damage in the event of a divorce. Even though planning for a divorce while happily married may not be fun or seem necessary, it may end up meaning the difference between financial success and economic crisis in the future.

• Know the law in your state. New Mexico is a community property state. In New Mexico, any income, property, or debt accumulated during the marriage is generally divided equally among the spouses upon divorce.
• Be aware of marital income and property. Even though in many situations one spouse is often the sole or majority income-producer, it is important for both spouses to know the value and nature of family income and investments.
• Keep an eye on debt. Marital debt is an important topic in New Mexico. In New Mexico community debt is usually divided equally upon divorce. This may be true even if only one spouse acquired the debt, only one spouse has an income, or the other spouse was unaware of the debt. Therefore, in community property states like New Mexico, it is even more important for both spouses to be aware of all debts accumulated during the marriage.
• Establish credit. Many spouses, for several reasons, do not have a credit card in their name. When faced with divorce, some individuals find that they have not established sufficient credit to accomplish even the simplest tasks like obtaining a telephone line or renting a home. Even though divorce may not seem like a possibility, it is important for both spouses to have a personal credit card and to establish a credit history.

Although studies like EMP show that women are doing far better after divorce than they were 30 years ago, it is important to realize that women are faring better because they have taken steps to protect themselves and their assets in the event of divorce. Nobody goes into marriage thinking that they will ultimately separate. However, a little common sense planning now can go a long way in the future. And if divorce is unavoidable, women and men alike would do well to seek the advice of an experienced divorce attorney.

Collins & Collins, P.C.
Albuquerque Attorneys