Your spouse just announced he or she wants a divorce and you do not know the next steps. Generally, there are multiple claims which can be made in the context of a divorce matter. Those claims include equitable distribution (distribution of assets), alimony (support of a spouse after the divorce decree is entered), and counsel fees.
In relation to the division of assets, there are three steps to that process – identify, value and divide. Identification of the assets in the pot for distribution often involves serving discovery. Discovery comes primarily in two forms, interrogatories and request for documents. As a practical matter, all assets acquired during the marriage (from the date of marriage to the date of separation) are in the pot for distribution. This includes the increase in value of any pre-marital property, gifted property or inherited property.
Once we have identified those assets which are in the pot for distribution, we must place values on them. To value assets, the court generally looks at fair market value. In light of the standard, your matter may require an appraisal of the house, other real property or even a business. Experts are used to placing value on those groups of assets. Other assets such as bank accounts, investment accounts, retirement accounts and the like are easier to value. For accounts that fluctuate in value due to market force, the court generally looks at the most recent statement to determine the value. For cash accounts that have been liquidated, the court would allocate the date of separation balance between the parties based on who took what from the account.
After placing a value on the assets, the assets must be divided. There is no presumption that the assets will be divided equally and instead it is mandated that they be divided equitably. There are a set of factors that must be considered when determining how to allocate the assets between the parties. In many cases, the spouse who earns less income will receive more of the marital estate as the person earning more has the ability to recoup more quickly. Other factors which are considered include who is going to be the primary caregiver for any minor children, the value of the marital estate, the value of any assets owned by a party that are not part of the marital estate and any tax issues which may impact the value of assets.
Alimony is also a consideration. If the marital assets are divided in favor of a spouse who earns less, then that spouse may not receive alimony. Conversely, if the assets are divided equally, then the spouse may receive alimony. Alimony is determined by reviewing certain factors, many of which are similar to the distribution factors. There are two components to alimony – the amount and the duration. The amount is the monthly payment and the duration is the length of time paid. There is a general rule of thumb used in the family law arena which is that a spouse who earns less wages will collect support for 1/3 the length of the marriage. For example, a 27-year marriage might yield an alimony term of 7 years. Alimony, however, is extremely fact-specific to each case. In some counties, the amount might be the equivalent of the support amount paid during the separation period while other counties may use the spouse’s unfunded needs to determine the amount of alimony. For example, if a spouse needs $5,000 per month to pay for his or her needs and only earns $3,000 per month, then the unfunded piece is $2,000 per month.
Counsel fees are rarely awarded in the context of a divorce action. While there may be a strategic reason to seek them, you should not get your hopes up that they will be awarded. An award of counsel fees is normally reserved for when one party behaves badly in the context of any divorce litigation.
All family law cases are fact specific and this article is meant to provide a basic outline of how matters are approached. You should contact one of our attorneys to set up a time to discuss the specifics of your family law matter.