Dividing the House at the time of Divorce: Protect Your Credit

Division of assets and debts at the time of divorce can be a tricky matter in the current economy.  Many assets don't have the value they once had, debts are higher and there are more of them, and some assets have negative value, especially many Nevada homes

Nevada is a community property state.  This means that all community assets and debts will essentially be split 50/50.  Any assets and debts acquired during the course of a marriage are subject to this equal split upon divorce. Most of the time, the home the married couple lives in was acquired during the course of the marriage and is therefore subject to a split. 

Dividing the home can be complicated by several factors.  Sometimes, if one spouse desires to remain in the home, that spouse can take over payment of the mortgage and costs associated with the home. However, that doesn't make the division of the home any easier.  The spouse leaving the residence will want to have his/her name removed from the mortgage, which can typically only be done through a refinance.  If the home has negative equity a refinance will be near impossible.  However, if neither spouse desires to remain in the home, and the home is in a state of negative equity, then the division can be complicated by having to short sell the home and have the negative consequences associated with that course of action.

Ultimately, whether you are staying in the home or moving on, you will want to protect your credit if at all possible.  A recent article by the credit info center discusses protecting your credit during a divorce, in which the home and mortgage is addressed.  The author suggests three ways for dealing with the division of a home:

1. Sell the home. Make sure the sale occurs before the divorce, especially if your ex is living in the house during the divorce proceedings. If you have an agreement to sell (the house has not yet sold) at the time of your final divorce, and your spouse is secretly opposed to selling it, he can make it very difficult for a realtor to show or list the home, dragging out the sale indefinitely. In the meantime, you are responsible for the payments and your credit is in jeopardy. It's actually best to have the house empty during the sale of the home; if possible, both of you should be out of the house before it goes up for sale.

2. Have one spouse refinance the home in his/her own name. If one spouse is to keep the house after the divorce, insist that your soon-to-be-ex obtain new financing in his own name. You can't just call up the mortgage company and say, "Hey, I'm getting divorced, can you take my spouse off the loan?" Your lender is going to insist on having your ex go through the formal loan process to qualify. Do not let the final gavel sound on your divorce papers before the house has been through the refinancing process. Having your spouse show you loan approval papers is not enough; last minute glitches that prevent loans from closing occur every day.

3. If selling or refinancing isn't an option. This is the worst possible option. Try to avoid it at all cost. If moving out of your joint home is going to cause hardship to your ex (and/or your kids), and he is unable to refinance the home on his own, here are some things you can do to protect yourself:

  • Don't take your name off the title. If you take your name off of title (using a quit claim deed), you are removing ownership but not loan responsibility, a very dangerous situation. This also means that you will not be able to split the equity in the home at the present time.
  • Place a limit on how long your ex can stay in the house before it will be sold or refinanced.
  • Notify the mortgage company of your change of address and have all statements and coupon booklets sent to your new address (also, see if you can get your ex to mail the payments to you). At the very least, inform the lender that you wish to be notified if the payments get in arrears. In this way, if your ex is late on payments, you will be notified and have the chance to make up the payments.
     

 

It's Time for Your Nevada Child Custody Check-up: Rivero v. Rivero

Last August, the Supreme Court of Nevada revisited and revised their earlier decision in the case of Rivero v. Rivero (PDF), and in the process created new law in Nevada for the determination of joint physical custody. New law that, depending on your current child custody arrangement, may give rise to a change in how your custody arrangement is categorized, and in turn, a change in child support.

In Rivero, the Supreme Court of Nevada created a bright line that basically states that if you have physical custody of your child at least 40% of the time, then you have Joint Physical Custody of your child.  If you have physical custody of your child more than 60% of the time you have Primary Physical Custody.  The Court calculates this percentage by looking back over the previous year and calculating the number of days you had physical custody of the child. Here is a sample of the % of time you have custody of your child under some of the more typical custoday scenarios:

  • Every other weekend = 14%
  • Two weekends per month and all 5th weekends in a month = 15%
  • Every other weekend plus two (2) weeks in the summer = Every other weekend (52 days), plus two weeks in summer (14 days), plus Mother’s Day or Father’s Day (1 day), plus Thanksgiving or Christmas (2 days), plus birthdays (2 days), plus a miscellaneous day (1 day) = 20%
  • Alternating extended weekends = 21%
  • Every weekend = 29%
  • 4/3 custody split = 43%
  • Alternating weeks = 50%

Under Rivero, the Court is not supposed to count hours, or partial days.  Instead, for days where custody is divided between parents, the Court must determine who had primary decision-making authority for the child that day.  This, of course, introduces plenty of wiggle room into the Court's calculation of primary or joint physical custody when the parties division is close to the 40/60 line.

Because the type of physical custody determines how child support is calculated, this decision is critical, even if it has not made child custody determinations much easier.  Joint physical custody requires the incomes of the parents to be compared and child support, often in a minimal amount to be paid by the parent who has the higher income.  If incomes are equal there may be no child support ordered.  In circumstances where one parent has primary physical custody, Nevada's child support statutes apply and a percentage of the secondary custodian's income is due as child support each month, beginning with 18% for one child and increasing with each additional child.

As the difference in the calculation of child support between a joint arrangement and a primary/secondary arrangement can be substantial, it is important that parents review their physical custody arrangement in light of the Rivero decision, and decide if it may be time for a review of the arrangement in light of the Supreme Court's decision.

 

COPE Class and Your Parenting Responsibilities in the Wake of Divorce

Even though your marriage is coming to an end, your responsibilities as a parent are not.  In fact, your job as a parent will inevitably require a greater measure of effort on your part as you coordinate the parenting of your child or children with an ex-spouse.  Nevada's COPE class is aimed at helping you begin this process of co-parenting. 

Nevada law requires both parents in a divorce with children or any other child custody proceeding to attend the COPE class within 45 days of filing of the complaint.   The Cope class is a little over 3 hours long and emphasizes each parent's responsibility to continue to provide a nurturing, comfortable environment for children to live in despite the unavoidable effects of a divorce.  Each of these court-mandated seminars covers the different ways children react during the transition of a divorce, parenting approaches that will benefit children, and the roles other adults and relatives may play in the child's life, among other topics.  It costs $40 to attend the seminar and you must provide the Court with a certification of completion of the Cope class.

Admittedly, many of my clients have felt that the Cope class was a waste of time and didn't offer them any new guidance or help.  That said, I believe it is a good requirement for parties to family court proceedings involving children.  Whether the class is an actual benefit to your parenting plans or not, let the mandatory attendance serve as a reminder of the importance of the best interests of your child.  The guidepost for the Judge in your child custody matter is the best interests of your child and it should be yours as well.  Although you may not desire any further relationship with the other parent, your child needs every opportunity to have a valuable relationship with both parents.  Sometimes this may mean giving up a portion of your custody or visitation that you may not want to.  Almost always, this will mean maintaining a polite and cooperative relationship with the other parent.

So when you attend that Cope class, let those 3+ hours be a time of reflection on what you are going to do so that your child can have a meaningful relationship with both of his or her parents, as well as what you will do to help your child deal with the effects of divorce.

Speed Up Your Divorce in Nevada By Being Prepared for the Case Management Conference

Nevada is known for the short amount of time it takes to get a divorce.  You only have to be domiciled (to live) in Nevada for six (6) weeks in order for the state of Nevada to have jurisdiction over your divorce.  However, this doesn't guarantee your divorce will be a quick affair.  Your preparation for your divorce is an important part of making the divorce process as swift as possible.

Recent changes to the Rules of Civil Procedure in Nevada better enable you to move your divorce along at a quicker pace.  NRCP 16.2 provides a new framework for the early organization and management of family law matters through a Case Management Conference with the Judge, the parties to the divorce, and their attorneys.  The Case Management Conference gets the parties in front of the Judge within 60 days of the filing of the answer to the complaint, and allows for the discussion of what it is going to take to resolve the matter.  Child Custody and Support matters can be assessed and a plan put into place for the discovery and resolution of these issues.  Likewise, other issues such as alimony and asset/debt division can be analyzed and properly consolidated or even resolved.

It is important that you and your attorney be prepared to provide the Judge with the information necessary to resolve as many issues as possible at the Case Management Conference.  It is important that you have the required, completed financial disclosure form and your Initial disclosures of all witnesses and documents supporting your case.  Additionally, you and your attorney should have already discussed the discovery you believe will be necessary, and any other issues you believe need to be resolved in your divorce.  By compiling this information and conducting this analysis prior to the Case Management Conference, you will enable the Judge and the attorneys to speed up the litigation of your case, and in turn, reduce the costs of your divorce in Nevada.

I recently attended a meeting of family law judges and attorneys where most of the family law judges were willing to hold the Case Management Conference as early in the case as possible.  Some suggested that the Case Management Conference can be combined with any preliminary motion hearings.  Clearly, family law judges are interested in getting as many issues as possible resolved as quickly as possible.  If you are prepared to do so you divorce will be a much quicker process.

Save Money on Your Divorce by Participating in a Senior Judge Settlement Conference

Everyone is feeling the effects of the current recession, and going through a divorce can be a strain on your finances that are already feeling the pinch. One potential option for saving costs and attorney fees as you go through your family law dispute is the Senior Judge Settlement Conference.

In the most recent edition of the Nevada Family Law Report, we are treated to a viewpoint analysis of the Senior Judge Settlement Conference. Jason Stoffel, Esq. presents the attorney's viewpoint, while Senior District Judge Terrance P. Marren gives us the judge's view. The consensus between both commentators is that participation in a Senior Judge Settlement Conference saves time, money, and preserves relationships between the parties to a family law dispute - an important consideration since you will, in most cases, need to be able to continue to communicate with your former spouse after your legal dispute has ended.

During these settlement conferences, the attorney and the judge take a back seat in the process of resolving a family law dispute, and the parties to the dispute are in control. As Judge Marren stated,

The clients are in charge in that they must agree to the terms of settlement. The clients are the stars; the lawyers and settlement judge are there as the supporting cast.  The rule of confidentiality (nothing may be disclosed from the settlement conference unless settlement is reached) means the settlement judge may discuss the issues of the case with the parties openly and fully.  Settlement offers may even be discussed with the settlement judge during the conference or in private session. I have been amazed at how comfortable the clients are in discussing the details of their case in the presence of the settlement judge. They even get to express, either in group session or privately with the settlement judge, those things you don’t want them to say in open court.

With senior judges conducting these settlement conferences, parties to a family law dispute have the benefit of an actual judge talking to them about their positions in a case and whether they are likely to succeed with such positions.  

If you are looking for way to reduce the expense of litigation, the Senior Judge Settlement Conference is a great avenue to consider.  The Family Division has a "marathon" of these settlement conferences scheduled for January 11, 2010 through February 16, 2010.  The conferences occur during a three hour block in the morning or afternoon.

The Tonopah Formula: Determining Alimony in Nevada

Tonopah isn't just a little town in middle Nevada. It's also the name of the formula that can provide a guide for determining alimony in Nevada. The Tonopah Formula is so named because the Family Law Section of the Nevada State Bar created the formula while at a meeting of the state's family law attorneys in Tonopah, Nevada.

Spousal support, otherwise known as alimony, is often the most difficult aspect of a divorce to analyze.  There is extensive case law in Nevada that addresses which factors the Court considers when determining alimony. There is no consensus, however, as to which factors are controlling in any given scenario. The Court is always going to make the alimony determination on a case-by-case basis.  That said, it is possible for an attorney and his or her client to sit down and, using the Tonopah Formula, make a reasonable projection of whether alimony may be awarded and, if so, how much alimony could be awarded.

There are two versions of the Tonopah Formula.  A gross version, and a net version.  Regardless of which version is used, the formula attempts to take the multitude of case law on alimony and convert it to a mathematical calculation by assigning different weights to the factors the Court has used. The goal of the formula is to provide an objective review of this very subjective aspect of a divorce.  Therefore, it is far from precise, but it is a starting point for attorneys and judges to determine whether alimony is appropriate and what the appropriate amount should be. 

As you approach this aspect of your divorce, review the Tonopah Formula and be prepared to provide your attorney with the detailed information necessary to produce a reasonable projection of alimony.  In so doing, you can reduce the complexity of alimony and have a better grasp on the effect that the Court's alimony determination will have on your divorce.

Don't Let Your Social Networking Sabotage Your Divorce

Do you tweet? Facebook? Youtube or myspace? These social networking sites have subscriber's numbering in hundreds of millions, and 2009 saw major growth in the use of these sites. Earlier this year, Time magazine included an article on "Five Facebook No-No's for Divorcing Couples" and as more and more people join Facebook and other social networking websites, these No-No's become more and more important to avoid because you don't know who will be reading the things you post.

If you are going through a divorce or preparing to go through a divorce, you are going to want to avoid the following:

  • Showing off - Pictures or discussions of new purchases or vacations are fun, but they might color the court's view of your finances and affect your settlement.
  • Letting it all hang out - If you're in a custody battle, your ex's lawyers would love to present you as the nonnurturing type. Delete all the crazy party photos.
  • Getting tagged - IIt's not just your page you have to worry about. Make sure your friends' photos of you can't be used against you either.
  • Venting - Don't talk smack about the lawyers, the judge and especially your spouse — on your page or anybody else's. (You think your kids never use a computer?)
  • Cutting off everyone at once - Don't "defriend" in-laws or your ex's friends right away. People need time to adjust. Unless it's really high-conflict. Then go for it.

As you embark upon a divorce or other family law litigation, or any litigation for that matter, it is important that you check your social networking habits and make sure you aren't sabotaging your case. There is a good chance your judge, spouse, and the opposing attorney will be checking your posts.