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Kentucky And Indiana Law Blog

Renewing a retirement plan after a divorce

Kentucky residents who decide to divorce may face more significant, longer-lasting financial changes that far outweigh the emotional issues that can accompany the end of a marriage. After years of building savings accounts, the division of assets that comes with divorce can lead to major changes in each partner's budget and approach to spending. One of the most significant asset types dealt with during a divorce is the couple's retirement savings. These funds are often a couple's largest single asset, and the distribution that comes with the divorce may spark each partner to begin saving intensively for the future.

While spouses often expect subconsciously to divide major marital assets like homes and bank accounts during a divorce, the psychological impact of dividing retirement funds can be more substantial. This is because they are usually held in only one person's name. There are also financial specifics to be aware of when dealing with the distribution of a retirement fund. Dividing certain types of qualified plans require following specific rules to avoid unnecessary and costly taxes and fees.

Student loan debt is ruining some marriages

The average student loan debt for new college graduates in 2017 was nearly $40,000. Unfortunately, those high levels of debt could lead some Kentucky couples to divorce. Research from Student Loan Hero shows that 13 percent of divorcees blame student debt specifically for their splits while more than a third said it was at least partly responsible. Some financial experts are surprised that the numbers aren't higher as outstanding student loan debt has more than doubled during the past decade.

A previous survey from Student Loan Hero found that nearly half of all married couples fight about money at least somewhat frequently. For some partners, however, nondisclosure is their preferred way to handle such issues. Nearly a quarter of student debt holders in marriages did not tell their spouses about debt, and a somewhat smaller percentage said that it's okay to lie to a partner about money.

A couple of things to consider on child custody and divorce

Child custody and parenting arrangements are two of the biggest issues that come up during divorce for many couples in Indiana. If you are getting ready to file the divorce paperwork, you may find the idea of your children living in a household other than yours terrifying. Though you may have your reasons for not wanting your spouse to receive a fair share of the parenting responsibilities and time with kids, you know the decision is based on much more than your wishes. 

Divorce does not mean custody arrangements must involve litigation. If you and your spouse can work the details out with minimal court involvement, you could spare yourself and the kids some divorce drama. Here are a few pointers to help you and your soon-to-be ex-partner create a custody arrangement that works for everyone. 

How to keep emotions in check during a divorce

Divorce can be an emotional time for Kentucky residents and anyone else going through it. Therefore, it can be tempting to try and win the divorce by any means necessary. Of course, the truth is that no one really wins in a divorce even if most people claim that their former spouses got the better deal in the settlement. This is because all parties to the end of a marriage have to adjust to their new realities.

During the divorce process, individuals should constantly ask themselves if they are making decisions in a rational manner. They should also consider why they are making a given decision and if it was made in a graceful and dignified manner. Consulting with an attorney may allow a person to ask questions related to the end of a marriage, such as how to handle joint credit cards or other accounts.

Divorce support obligations and bankruptcy

Divorced parents in Kentucky who get a divorce may be financially overwhelmed. In addition to debts like credit cards, they may also have past-due alimony or child support payments. While the bankruptcy process cannot be used to eliminate delinquent domestic support obligations, it may still be helpful with managing the past-due payments.

According to the bankruptcy code, a domestic support obligation is a debt akin to support, maintenance or alimony that is owed due to a divorce decree, property settlement agreement, court order, separation agreement or any other agreement that was established under non-bankruptcy law. The bankruptcy courts will closely examine the decrees and judgements issued from the family court to determine whether the provisions pertain to domestic support obligations or some other form of marital property. The distinction is important as domestic support obligations are not dischargeable while other types of marital property may be.

Divorce and finances

Women in Kentucky who get a divorce may already be aware that the process could have a negative impact on their finances. However, they should also be prepared for any unexpected financial developments that are likely to occur.

A survey of 1,785 women was conducted to determine how divorce impacts the finances of women. Forty-six percent of the women stated that they had experienced financial surprises as result of their divorce. The participants included women who had plans to file for divorce, were in the midst of a divorce or were already divorced. Women who were at least 55 years old made up 22 percent of the participants; the majority of these women were already divorced.

Making parenting schedules that work for all

Creating an effective parenting schedule is an important part of making sure children feel supported after a divorce. By working together to create a schedule, parents in Kentucky can demonstrate that they are putting the kids first.

Parents should try to see the situation from the children's point of view. When preparing the schedule, there are a number of factors parents need to take into account, including whether the children have special needs, how the kids will get to school, the distance between the parents' homes and any extracurricular activities. The parenting schedule may turn out to be inconvenient at times for both parents, but it is important to keep the focus on the child's needs. If there is a regular babysitter the child is used to, it may help if parents can continue to employ that person. This will help provide a little continuity.

Divorce can have an impact on a person's finances

When beginning divorce proceedings in Kentucky, there are a number of issues that a former couple may want to consider. With the change in the tax law code coming into effect in 2019, finances could be affected in many ways.

For example, tax deductions will be capped to just $10,000 per year for state or local taxes. This can make it far more expensive to maintain ownership of the family home. If finances will be tight after the divorce, it may be beneficial for the former couple to sell the family home and either downsize or rent. For those who are over the age of 62, a reverse mortgage may be available to allow each person to purchase a new home with reduced mortgage payments.

How much alcohol makes it harder for you to detect danger?

The laws concerning drinking and driving in the Commonwealth of Kentucky are tough, and with good reason. Even if you only have one beer before getting behind the wheel, driving is a risk because your judgment will be impaired.

Do you know what happens to your driving skills and cognitive abilities if you drink more than one beer—perhaps many more?

Changing an estate plan during divorce

When people in Kentucky decide to divorce, they can face a number of practical, emotional and financial challenges. There are many changes a person must make in his or her life after the end of a marriage, and these changes can be overwhelming at times. At the same time, these changes can be particularly important for protecting a person's assets and future, especially those related to estate planning. There are some estate plan changes that will need to wait for the divorce to be finalized, but there are other ones that people can make immediately to protect themselves even while the divorce is pending.

Some of the most important changes that people can make to their estate plans while the divorce is in the pending stage include changing their powers of attorney and health care proxies. These documents allow another individual to make critical medical care and financial decisions in case the creator of the documents is incapacitated. While these documents can provide peace of mind to many, most people will quickly want to name someone other than their soon-to-be ex-spouse to make these decisions. These documents can be updated at any time, and this can be important if tragedy strikes while the divorce is not yet final.