The Finances of Joint Custody Agreements: 10 Things You Must Know

 

Ending a marriage, especially when a child (or multiple children) is involved, is challenging on so many levels. In this excellent article, Andrea Browne Taylor discusses the personal finances of co-parenting. There’s a lot of money at stake -- and she’s betting that you don’t want to be on the losing end of any financial dealings with your ex. In addition to splitting assets accumulated over the years with your soon-to-be former spouse, you’ll need to find some common ground to map out a plan to fund the care and support of your kids until they’re at least 18 years old.

The state court system steers divorcing couples toward a divorce decree, which is a court order detailing the agreed-upon conditions of your divorce. It establishes alimony and child-support payments, sets a visitation schedule for the noncustodial parent, establishes new beneficiaries for financial assets, and divides any shared debt.

“It’s often hard for those going through a divorce to focus on the now -- and the future,” says Lazetta Rainey Braxton, a certified financial planner and chair of the Association of African American Financial Advisors (AAAA). You’ll need to be organized and transparent, and you must advocate for yourself and your family during the negotiation process. “The clearer you are about what you can afford, the better you’ll be able to negotiate your part in caring for your children,” Rainey Braxton adds.

Once the divorce decree has been finalized, it becomes legally binding. So if you decide a year or two later that you’d like to make modifications, that can get pricey because it requires going back to court.

 

Ms. Taylor talked with several experts about how to best navigate child-related money matters after a divorce -- from claiming dependents on a tax return to having financial check-ins with your ex. Here’s what they had to say.

What Happens to Co-Owned Property Upon Divorce?

Married people need to know that, upon divorce, by operation of law, they no longer own their home as tenants by the entirety. Upon divorce, their ownership interests automatically converted to tenancy in common. Remember: tenants in common do not automatically have rights of survivorship.

Let’s walk through an example of the most common marital property: the marital home.

Often in divorce, one spouse will remain in the home (Jane), while the other (Jack) sets up another residence. To conform with law, ownership rights are typically transferred to the spouse who retains the marital home, Jane, through a vehicle called a Quit Claim Deed. Typically Jane will “buy out” Jack’s interest in the home, usually equal to 50% of its value (calculated by subtracting the outstanding mortgage(s) from the appraised value of the property).

Now, in order to make Jack whole, he must not only be paid for his share of the property but be relieved of his liabilities associated with ownership — i.e. he must be removed from the mortgage. Usually the mortgage is in both parties’ names.

There are two ways to remove Jack from the mortgage. Some banks allow something called an “assumption” which is a somewhat less labor intensive and expensive option than the more typical choice of a mortgage refinance. Understandably, the holder of the mortgage (the bank) will not simply release a debtor from a loan. That would render the loan more insecure, causing it to be insured by only one individual rather than two. Refinancing the loan under Jane, means she pays off the joint loan signed by both her and Jack, and takes a new mortgage in her name alone. This process is somewhat time consuming. The property is typically transferred and new deed signed concomitantly with the “selling” spouse being removed from the mortgage. This is the most common scenario.

There are multiple ways to handle a similar fact pattern when the parties’ specific circumstances require creative solutions. In the event the parties will continue to jointly own the home (or any property) post- divorce, they should consider how to handle survivorship interests. Parties may need to modify the property deed to include “rights of survivorship,” or redraft their Wills (or add Codicils) to expressly bequeath the property to the surviving ex-spouse. It will be important to ensure that all attendant legal documentation reflects the intended ownership rights and interests. While this will be reflected in the Marital Settlement Agreement, other legal documents must be properly filed to coincide with the parties’ agreement and reflect the intended property rights, specifically those which are no longer secured by the legal status of marriage.

 

How Therapy Can Benefit Children Of Divorce

How divorce affects children of divorce is well documented. Although the amount of parental conflict kids are exposed to is more harmful than the actual event of divorce, the fact is that dealing with divorce is difficult. Your kids need your support now more than ever.

Fortunately, there are plenty of things you can do to help offset the effects of divorce on children, but you only have so much power. Depending on how your kids react, it might be worth enlisting the help of a counselor or therapist to aid in their divorce recovery.

In this excellent article, Sean Garrison writes about how to know if your child’s issues are likely to resolve over time or if you need outside help, how to find a child therapist, and what to expect from child therapy.

An Age-By-Age Guide For Helping Children Through Divorce

Research tells us that children of divorce face many risks. It is a major challenge for kids to cope with the drastic change that is inevitable after their parents split and that adjustment is even tougher if they are exposed to the conflict of divorce. 

 

How children of divorce respond to news of their parents’ split can also vary wildly depending on their age. Your 4-year-old toddler is probably going to take the news of your divorce a whole lot differently than your 15-year-old who is about to get their driver’s license.

In this excellent article, Shawn Garrison offers an age-by-age guide walking you through how children are likely to respond to your divorce. You also will find tips for how you can help ease this difficult transition for them.

No matter your child’s age, the best thing you can do to ensure a healthy adjustment after your divorce is ensuring that they have a strong and loving relationship with both parents.