Divorce can be devastating financially as incomes are split, property is sold at a loss and the financial burden of single parenting takes effect. For this reason, the financial toll must always be considered when couples are considering a divorce. According to a recent article on findings by the Census Bureau, a study over a period of 15 years showed that couples who remained married during that time built up nearly twice the net worth of people who remained single. Considering the visible toll on finances caused by divorce and the findings by the Census Bureau, a stark picture is painted for those that end their marriages. Of course, situations differ among couples and a thorough evaluation of your finances is a critical component in understanding the pros and cons of divorce and reconciliation.
Archive for the ‘Joint Accounts’ Category
Marriage and Money
Thursday, August 19th, 2010Mississippi Divorce and Estate Planning
Wednesday, February 10th, 2010When people divorce, one of the often overlooked items are such things as life insurance beneficiary designations, retirement account beneficiary designations and pay on death designations on financial accounts. These are not things that people deal with on a regular basis and therefore forget that the designations were ever made. If these issues are not addressed promptly and properly, a very unfortunate situation could erupt at your death between your family members and a former spouse.
Sometimes death and divorce sometimes nearly coincide. Time Magazine recently wrote an article titled “Facing Death and Divorce at the Same Time.” While focus was placed on Dennis Hopper filing for divorce from his current wife, while at the same time attempting to fight terminal cancer, a valuable lesson may be taken from the article – know what you have and speak with an attorney early. As the article states, spouses are normally not allowed to disinherit their spouse. Mississippi follows the same law, making it very difficult to prevent your spouse from receiving a certain portion of your estate. Of course, this becomes particularly important once a decision is made to divorce, as not too many people want their estate to go in part to a spouse that is in process of divorcing them.
The reason it is important to discuss estate issues with you lawyer as soon as you begin a divorce proceeding is that divorces take months, not days, to finalize. A husband and wife are often living completely separate lives, including with new significant others, while the finalization of the divorce is far away. A lawyer knowledgeable in the area of estate planning can walk you through some steps that will minimize the problems that would occur should you pass away during that period. If a divorce case is pending, you may be limited in what you can because of court restrictions. However, that does not mean that you can’t take steps to preserve as much of your estate as possible for your heirs. At minimum, you can come to a plan on what to do as soon as your divorce is final. You do not want your new wife to find out years later that the ex-wife that ran off with the pool boy just received all of your life insurance because you forgot to change the beneficiary designation.
Talk to your lawyer early and ask questions. Be aware of areas where you may have designated your spouse as beneficiary to an account or insurance plan. Finally, as soon as you are divorced, have a new Last Will and Testament prepared.
The Money Grab
Monday, October 5th, 2009It is nearly impossible to read the news and not see something about Jon and Kate Gosselin, their divorce and their television show, Jon and Kate Plus 8. The television show follows the Gosselins as they raise sextuplets. While you cannot help but feel bad for the children as their publicity-hungry parents divorce in the public eye, it is nevertheless interesting from a divorce perspective to see how the dissolution of a marriage in the public spotlight mirrors those of people who quietly divorce without publicity - all are driven at some level by self preservation, the need for security, the need to “win” and greed.
One of the headlines today is “Kate Accuses Jon of Taking $200,000.” Apparently, Jon and Kate maintained over $200,000 in a joint account and after being notified that he would no longer be part of the show, Jon withdrew all but $1,000 of the money. Perhaps Jon had a good reason for the withdrawal, but his “reason” had the effect of leaving his spouse and children with very little to make ends meet.
When two people separate and anticipate divorce, it is natural to be wary of the other’s intentions and to be mindful of your own financial security, especially when children are involved. However, it is important to remember that in Mississippi, when money is withdrawn from an account held jointly with your spouse, that the money also belongs to your spouse. This does not mean withdrawing money is improper (unless a court has prohibited any withdrawals), but you may ultimately have to account for the money if a court decides that you overreached and withdrew more than your share of the marital funds. In the Gosselin matter, Kate withdrew $100,000 earlier this year and was ordered to return the money. Now that Jon has done the same thing, it is hard to imagine a court not ordering him to return some or all of the funds to his wife, especially considering she is now raising their eight children alone.
When withdrawing funds from a jointly held account while a divorce is pending, it is important to be reasonable and know that you may be ordered to return all or some of the money, even if it has been spent. While winning the race to the bank may be beneficial, the benefit may only be temporary.
Grounds for Divorce in Mississippi
Tuesday, September 15th, 2009To get a divorce in Mississippi, spouses must either agree on a divorce on the ground of irreconcilable differences or prove that one of the causes for divorce that are specified in Miss. Code Section 93-5-1 exist. The causes for divorce listed in Section 93-5-1 are:
1. Natural Impotency
2. Adultery
3. Being sentenced to any penitentiary, and not pardoned before being sent there
4. Willful, continued and obstinate desertion for the space of one (1) year
5. Habitual drunkenness
6. Habitual and excessive use of opium, morphine or other like drug
7. Habitual cruel and inhuman treatment
8. Mental illness or mental retardation at the time of marriage, if the party complaining did not know of that infirmity
9. Marriage to some other person at the time of the pretended marriage between the parties
10. Pregnancy of the wife by another person at the time of the marriage, if the husband did not know of the pregnancy
11. Either party may have a divorce if they are related to each other within the degrees of kindred whom marriage is prohibited by law
12. Incurable mental illness
Obviously, some of the divorce grounds are going to be more frequently used than others. For example, adultery and habitual, cruel and inhuman treatment are the most commonly asserted grounds for divorce while others like natural impotency and being related to one another are very seldomly asserted.
In later posts, we’ll discuss in more detail the individual grounds for divorce and what constitutes each ground. If you are considering a divorce, a quick review of the allowable divorce grounds should provide an overview of what circumstances need to exist in order to get a divorce without the consent of your spouse.