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When mediation is helpful in the divorce process

Michigan couples may believe that going to court is the only way to resolve their divorce. However, it may be possible to resolve some or all outstanding issues by going to see a mediator. This may be true even if a divorce is an uncontested one. In some cases, divorces can become uncontested after mediation.

One of the best reasons to go to mediation is that each person is in control of what is discussed. Furthermore, each person is in control of the scope of any settlement that is reached during a session. Going to mediation may also be beneficial because it costs less asking for a judge to resolve a divorce dispute. Finally, resolving a divorce through mediation may be best because the results of a mediation session remain confidential. Anything resolved in court is generally made a matter of public record.

Key elements for spousal support awards in Michigan

During a divorce, two who have become one must become separate entities again. In certain divorce cases where one party financially supports the other, it may be necessary for such support to continue. In such cases, the judge will determine alimony.

Whether you will pay or receiving alimony, it is important you understand how it works. There are a few key elements for awarding spousal support in Michigan.

Financial planning for post-divorce life

Michigan couples who are ending their marriages and have a variety of assets might also need to carefully plan for financial changes during the process, after the divorce has been finalized and even in how the divorce might affect their estate planning. Anticipating these issues in advance might prevent some mistakes that might become very costly in the future.

In a high net worth divorce, a property settlement might include transferring of financial assets that might also have tax implications. Generally, for tax purposes, the transfer of cash and other assets between spouses has no taxable effect, as long as it can be shown that the transfer was a result of the divorce.

Alimony and tax deductions

When Michigan couples divorce, it is not unusual for one party to pay alimony to the other. These payments may only be required for a specific period of time, or alimony may be owed as long as the recipient is alive.

Unlike child support, alimony payments may be tax-deductible for the person who makes them. This can be good news to a person in a high asset divorce who must make substantial payments over a long period of time. There are, however, some standards that must be met before a spousal support payment can be deducted from taxes. Failure to comply with them may result in tax problems.

The affect of asset purchases during the divorce process

A divorce can be a trying time for all parties involved. Especially if the separation is not amicable, it can be hard to handle.

If you or your ex-spouse makes a new asset purchase, such as a new truck or furniture, how does that affect your divorce proceedings? There are certain factors that determine the answer.

Federal retirement plans can be part of a divorce settlement

When federal government employees and retirees are going through a divorce, there is an additional financial asset to consider when looking at property division. A federal Thrift Savings Plan can be divided by court order at the end of a marriage as part of a divorce settlement.

A TSP is not considered to be outside the bounds of marital assets, and it can be handled in several ways during a divorce. Both parties can come to a mutual agreement about how the TSP will be handled in the property division stage, or the court will divide it according to state law.

Closing a joint bank account upon divorce

Michigan spouses whose marriages are coming to an end may be concerned with the big questions about property division, splitting assets and spousal and child support. However, there are also the day-to-day financial matters that come hand in hand with divorce that may need to be addressed. One of the most common assets that will need to be divided is a joint bank account.

While the account is active, each account holder has full access to all of the funds in the account, and each account holder can close the account without permission from the other. A joint bank account may be used to handle regular monthly expenses and may not stand out as an asset to be distributed. However, it is important to keep this account in mind during the property division stage of a divorce.

Dividing car insurance important in divorce cases

Michigan couples who are ending their marriages must work to disentangle their finances from each other in the property division stage of their divorces. One thing that they should not overlook is separating themselves from their car insurance policies. There are several rules regarding this about which divorcing spouses should be aware.

People are not allowed to simply remove the name of their spouse from an insurance policy. Instead, they must obtain the consent of the other party. The spouses must also have separate residences so that they no longer share potential liability.

What to consider when asking for a marital home

It is not uncommon for Michigan residents or others going through a divorce to want to keep their marital home. In some cases, there is a sentimental attraction to the property. Parents may be concerned about providing a stable environment for their children during an uncertain time in their lives. However, it may not always be in a person's best interest to keep a marital home in a divorce.

It may be difficult for someone who has just gotten a divorce to get approved for a mortgage. Those who have just started a part-time or commission-based job may not use it as qualifying income unless it appears on two or more years' worth of tax returns. Those who are receiving alimony generally need to get it for at least three months to use it as qualifying income on a mortgage.

Financial pitfalls in divorce for baby boomers

Divorce may be on the rise among some Michigan baby boomers. A study by Bowling Green State University found that from 1990 to 2010, the divorce rate doubled for people 50 and older. The American Academy of Matrimonial Lawyers found that the most common areas of dispute in a divorce for this group are business interests, retirement accounts and pensions, and alimony.

People who are partners in a business might want to consider having all partners and their spouses sign buy-sell agreements. This may reduce the likelihood of a dispute over valuation. Splitting retirement savings may result in financial difficulties because it can be more expensive to maintain two households instead of one. Finally, if one person has to pay spousal support, this could delay that person's retirement.

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