Contemplating A Divorce In New York
When contemplating a divorce, people often have problems facing the prospect of paying alimony and maintenance, or they’re looking to get alimony and maintenance. So, there’s really a worry of how much they are going to get, and how soon they are going to get it.
If one is the prospective payer, one worries about how much of a bite it’s going to take out of their wallet. For example, in New York there are “maintenance guidelines,” which result in the “general rule” of an alimony award. Unfortunately, in some cases these guidelines are unfair. For example, in order to determine the amount that a payor will have to pay, the Judge will often look at presumptive guidelines based on the sheer calculation of their income irrespective of what expenses they have. Expenses largely do not come into the mix in calculating the presumptive maintenance that they will have to pay.
To clarify, in New York “maintenance” is another word for “alimony.” So, in some cases – especially once combined with a child support award – this can result in maintenance being approximately 50% to 60% of someone’s take-home pay. I often face cases where the person (and it’s usually the husband, though certainly not always) is either looking to move out, or has already established residence elsewhere. They are looking at the expenses they have to commit to – such as rent, food, utilities and things of that nature. Many people are spending an inordinate percentage of their income on housing, especially in the greater New York City area, which includes Westchester.
Oftentimes, housing comprises 30% to 40% of someone’s take-home pay in this area, and the problem is that a lot of people commit this percentage of income to a housing expense when they are living together as an intact family unit. When they get divorced and split up that family unit, each spouse is committing to a separate housing expense which separately comprises 30% to 40% of their take-home pay. Oftentimes, the numbers just don’t add up – resulting in both parties to a divorce feeling squeezed.
I review “monthly budgets” with clients in which they have committed to a mortgage on a marital residence – and they have to keep paying at least a percentage of that mortgage even when they move out. On top of that, they have to commit to paying rent or a mortgage someplace else. As such, many times when people do their budget as an intact family (i.e., before they split up consequent to the divorce) they have (maybe) about $1,000 to $3,000 left-over at the end of each month – just as spending money or petty cash.
That’s precisely where the problem comes in. Once they split up the family and they are no longer an intact unit, if the husband (and I use the husband which, again, is not always the case) begin living on his own by establishing residence elsewhere, he’s going to spend somewhere in the neighborhood of $1,500 to $2,000 a month on rent alone. If he only had $3,000 left over at the end of each month after paying the expenses when they were an intact family unit, one can see half of that money (or more) is now gone just in rent. So now, instead of paying 30% to 40% of his take-home pay for housing, he is paying more in the neighborhood of 50% to 60% of his take-home pay on housing for himself.
Once you add in a separate food bill, separate utilities, transportation, and (in some cases) credit card debt, they easily have to spend about $4,000 to $5,000 a month. Then, the problem becomes being able to afford the maintenance and child support payments.
Likewise, the person who stays in the home may very well have legitimate concerns about the spouse who has just moved out of the house, leaving them with expenses of $2,000-$3,000 a month for mortgage, food, utilities, and other basics for themselves and usually one or two kids. How will that spouse make ends meet if they are no longer receiving money from the spouse who moved out?
As a result, oftentimes there is extreme pressure on behalf of both the prospective recipient of maintenance and the payor to make ends meet on a basic level. On top of that, you have to figure out the appropriate amount of maintenance and child support.
A lot of times, I suggest right at the outset of a case that my client draft a monthly budget, looking at what their net income is – and figure out from there what they can afford (if need be). On the recipient’s end, they need to determine what they need in order to make ends meet. Doing a monthly budget – which I often assist with – looks so much better to the matrimonial judge if a motion has to be filed on the issue. This is because you can literally put that on a spreadsheet right into your motion, and make it very visual for the judge. The judge will see that we aren’t asking for “pie in the sky” numbers; we’re actually asking for exactly what is needed for the recipient. In dealing with a payer’s budget, we are demonstrating exactly what they can afford to pay while still meeting basic minimum expenses on their end.
It’s rare that a judge will look someone in the face and say, “Look, you have these basic expenses, you can’t really cut them at all, but we are still going to make you pay a combination of maintenance and child support that is going to exceed what you need in order to pay rent and to eat.” So, a lot of times this is the tension, at least in regards to alimony on the divorce end. Certainly there are also property and asset issues, but oftentimes it’s not as urgent of an issue at the outset of the case.
However, you do have issues where one spouse is in the process of selling property that is only in their name, and the other spouse wants to stop that process or at least have the sales proceeds put in escrow pending completion of the divorce process. Luckily, in New York, we have automatic orders that go into place when a divorce case is filed, stating that presumptively marital property will not be sold or transferred during the process of the divorce case.
The tension then becomes defining the marital and separate property. Can someone sell premarital property or property that is clearly only in their name? If they purport to sell that property, it’s an arguable violation of the automatic orders which would then require litigation before a judge to decide the issue.
I’ve certainly had clients come to me where the parties have attempted to do things on their own. Let’s say they sold property and the sales proceeds get deposited into a joint account. Then, when one spouse or the other sees the divorce coming, they’ll go into that divorce account and take either their share of the amount, or the entire amount.
The problem – which is something I’ve faced – is that some judges will say that it is a trial issue. In other words, the one spouse who is now deprived of that money going into the divorce case, has to file an interim motion asking that the divorce judge divide that amount in half, giving each spouse one half. It’s completely discretionary on the part of the divorce judge to do that before a trial is held.
I had one case where the parties sold a condo in Manhattan and received approximately $200,000 to $250,000 in sales proceeds. They deposited that money into a joint account, and the wife took every penny out of that account and put it in her own account.
When the husband in that case hired me, we went in with guns blazing before the divorce judge and said we want half of that money. That’s only fair. Unfortunately, the divorce judge in that case said, “I’m not going to do anything about it before trial, that’s a trial issue.” The problem was further complicated because the wife had to pay $200,000 or more to her attorney, and my client had no money at all to pay me.
To make a long story short, he ended up having to settle for a less than ideal settlement because he ran out of money to finish the litigation. She continued to have plenty of money to fund the litigation.
So, if there is a joint account involved, I often advise my potential clients to withdraw their share as soon as possible, because you do not want to rely on the other spouse’s good faith. You don’t want to hope s/he will only take their fair share of the joint account. Sometimes it works like that and sometimes it doesn’t. It’s a huge gamble if it doesn’t work out that way.
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