Below are several points to consider when you are negotiating your divorce:

1. Make sure that you consider after-tax values when dividing marital assets – not all assets are created equal, some assets classes will be treated differently for tax purposes.
   
   
2. Take into account the disparity in Social Security benefits when allocating marital assets – the difference in benefits can be used to create compensating allocations with other marital assets.
   
   
3. Raise the issue of ‘indexing’ your marital support for inflation – the cost of living will continue to go up even if your support does not.
   
   
4. An insurance policy on the life of the Payor Spouse to cover future support obligations is a must – don’t forget that alimony ends at the death of the Payor Spouse. And although Child Support can technically be recovered from the Payor’s estate, from a practical standpoint this may not be feasible.
   
   
5. Child Dependency Exemptions are valuable tax deductions – don’t just give them away. The 1997 Tax Act linked the Child Dependency Exemption to a variety of tax credits and deductions that can be worth thousands of dollars in tax savings.
   
   
6. If the plan is to sell the marital home think about this – if you sell the home while it is titled in both your names you will be entitled to a $500,000 exclusion of gain. If it is transferred to your name and then sold that exclusion is reduced to $250,000.
   
   
7. Inquire about any ‘defined benefit’ pension plans – retirement plans that pay a participant a lifetime income commencing at some predetermined age, usually 65. These deferred assets don’t normally show up on quarterly statements or tax returns and therefore may be overlooked.
   
   
8. Ask about the existence of stock options too. These are rights to purchase company stock at a predetermined price. In many cases these assets will not be listed on financial statements, especially if they have no value at the time of the divorce. However, they may be worth a substantial sum in the future and in most cases you will be entitled to share in that windfall.
   
   
9. Determine now the approximate cost of your children’s college education and how those costs will be shared. This is a major expense that will require plenty of lead time in which to execute a plan.
   
   
10. If your Spouse owns a business get it appraised. It’s typically worth more than your being told and the discrepancy in value is usually more than enough to justify the cost of the appraisal.
    
    
11. Make sure you understand the type of health insurance coverage you will have post divorce. Whether your Spouse’s employer provided plan is ‘self-insured’ or ‘not self-insured’ can have a major impact on the cost and the duration of your coverage.
    
    
12. Inherited assets or assets acquired through a trust may become part of the marital estate and subject to division even if acquired after the separation. The certainty of receipt and the ability to currently value these assets are key elements in determining whether or not they will be included on the marital balance sheet.
    
    
13. Post divorce housecleaning should include, revising the beneficiary designations on all IRA’s, 401(k)’s, pension plans, life insurance, etc. Also make sure to retitle all joint assets including real estate, bank accounts and credit cards.
    
    
14. Pre divorce, think about establishing some type of credit in your name only. This may be difficult to do post divorce if you have no previous credit history.
    
    
15. Make sure you understand the distinction between those things within your separation agreement that ‘merge’ with the Court’s judgment and those that ‘survive’ beyond that decree. Items that ‘merge’ can be modified at a later date if there is a material change in circumstances, whereas those that ‘survive’ can only be altered under special situations.
    
    
16. Rewrite your existing Will or execute a new one. There are laws that specifically address the validity of pre divorce bequests and the impact that remarriage can have on your Will.
    

-Jim McCusker-