Searching On-Line For Top Divorce Attorneys in Dutchess County- Buyers Beware!

February 22, 2018 by Kathryn Lazar

By:  Kathryn S. Lazar, Esq. and Brett E. Jones, Esq.

We recently ran a number of on-line searches for divorce attorneys in Dutchess County, New York using a number of different word searches.   The results were frightening!  These searches lead uninformed people seeking divorce lawyers to some of the worst divorce attorneys in our community.


Why did we take the time to search?  Partially because we were examining our own marketing practices, but mostly because we see that these irresponsible attorneys are getting lots of clients.  We are concerned by the number of clients we have whose spouse ends up with one of these bad attorneys and because some of our clients start off with one of these bad attorneys and then realize after spending some time with these lawyers that something is definitely not right about the attorney they hired, and then they are referred to us.  The involvement of these bad attorneys in our cases are detrimental and at times completely destructive in so many ways to present and future of the parties and their family.


When we characterize these attorneys as “bad” or “the worst attorneys,” what does that mean?  It includes:

– attorneys who do not educate their clients on the various options to get divorced including all of the process options to stay out of court;

– attorneys who just take people’s money but do not do any work for their client, and then won’t give any of the money back to the client when requested;

– attorneys who do not pay attention to their client or the client’s case;

– attorneys who do not return telephone calls to their client or to the opposing attorney;

– attorneys who either do not show up at court appearances or who show up late;

– attorneys who are unwilling to settle the case in an efficient, cost-effective, and productive manner;

– attorneys who want to bill their clients for as much money as they can without doing any work;

– attorneys who give their clients completely false and unrealistic expectations,  which makes it very difficult to settle a case and causes substantial unnecessary expense; and

– attorneys who violate the rules of professional responsibility and the professional ethics code in how they treat their clients and opposing counsel.


Unfortunately, what many people do not realize is that attorneys pay a lot of money in order to show up on the first few pages of these on-line searches, to repeatedly run television and radio advertising spots, and to be “rated” by on-line legal service providers/marketers.  The fact that they can pay the money to advertise in any of these mediums means nothing about their competence – it just means they are willing to pay to advertise.   Showing up in an online search or on the radio should not be considered as any indicator of their reputation, experience,  or ability to effectively practice matrimonial and family law.   In fact, highly experienced attorneys with very good reputations, including our firm, get most of their clients from a referral network of professionals, including accountants, financial advisors, medical professionals, mental health professionals, other attorneys, business owners, and religious leaders,  as well as from former and current clients.  These referral sources know and have experience with how a particular attorney or firm manages their cases, works with their clients, helps their clients, and gets good results for their clients. Recommendations from experienced professionals and satisfied clients are the main sources people should use when searching for an experienced and competent divorce attorney.


We understand the circumstances that people must be going through when they are searching for a divorce attorney- they are either considering divorce or are thrust into a divorce situation by their spouse.  Emotions run wild during that time in a person’s life – and the tornado of feelings can interfere with making good choices.  But we want to strongly caution people against hiring any attorney they find in an on-line search that only exists because the attorney paid money for it.  We encourage people to find out more about an attorney and a person’s actual experience with that attorney before consulting with them and retaining them.


What Happens When I File a Divorce Action?

February 20, 2018 by Melissa Rutkoske

Court Procedure in Divorce Cases


We hear a lot about the emotional aspects of divorce; feelings are not just a salient feature, but for many are the dominant feature of the process. But what, exactly, is the process? It may feel like a mess while it’s happening, but in procedural terms it’s actually pretty orderly.


In New York, the case (called an “action”) is commenced by giving legal papers named the Summons and Complaint to the other party, to let them know an action is pending against them and they must respond. This is called service of process. If you initiate the case, you are the Plaintiff and serve the other party; if the other party initiates the case, you are the Defendant and they serve you. The papers are also filed with the court, and the date of filing is called the “Commencement Date.”


The Commencement Date is an important date. Certain things change on that date:

  • Items acquired after that are, not always but often, each party’s separate property rather than being part of the aggregate “marital estate.” This can be important because the marital estate is subject to equitable distribution between the parties, but separate property is not.
  • Money earned by each party after the Commencement Date is each party’s separate property.
  • The Commencement Date is the date of valuation for most marital assets.
  • Future court orders, such as those determining spousal support and child support, may be retroactive to this date.
  • From the Commencement Date, neither spouse may obligate the other monetarily.

No judge is assigned when the action is filed; that happens later.


Service of process does not mean you have to appear in court right away. Instead, at this stage both parties prepare statements of net worth and other information about the case. If a net worth statement is inconsistent with what the other party knows or thinks they know, the party whose net worth is being questioned may be asked to produce documents to demonstrate the accuracy of the statement.


Also at this stage there can be exchanges of information and maybe negotiations to resolve the case on terms satisfactory to both parties, rather than letting the case be decided by a judge. This type of negotiated resolution is called “settlement.” If settlement negotiations are undertaken and then break down, either party may file a Request for Judicial Intervention (“RJI”), at which time a judge will be assigned. You will have to appear in court within 45 days of filing of the RJI.


Once at court, the parties complete and sign a Preliminary Conference Order, which sets dates for exchange of all financial information. The court will want to know which issues have been resolved and which still remain, such as child support, custody, retirement assets, marital home, etc. If children are involved, the children will be assigned an attorney.


During the weeks of implementation of the Conference Order, settlement negotiations may continue if the parties wish. If the case is not consensually settled, the court will schedule a trial, during which settlement negotiations may still continue. In fact, among cases that reach the trial stage, most are settled during trial.


The above is general and true in most cases, but there are still instances where a party commences an action for divorce and files the RJI at the same time, along with a motion for temporary relief, such as child support, attorneys fees, or spousal support.  If this happens, the other party must respond and appear in court on the date specified in the motion papers.


When you file an action for divorce, you have 120 days to serve the other party.  There are sometimes reasons to file the action and not immediately serve the Summons and Complaint.  In this and other strategic aspects of your case, consultation with an experienced attorney such as those at Lazar & Schwartz can add real value in deciding how to proceed.


Tax Treatment of Spousal Maintenance II

January 23, 2018 by Brett Jones

Will the new federal tax law alter application of New York’s spousal maintenance formula?


Last month when we posted about the tax treatment of alimony (called “maintenance” in New York), the new federal tax bill had not yet passed in both houses of Congress. Now it is signed into law. Good news and bad news.


Good news first. When we wrote December’s post, any change in tax treatment of maintenance would have been effective January 1, 2018. However, that is not what happened. This month, the law is passed and its provisions on this subject are not effective until January of 2019. So we have a year during which at least this can be expected to happen: those who are helped by the new tax treatment will  be trying to delay their divorces and those who are hurt y the new tax treatment will be trying to accelerate their divorces.  


The bad news is the same as the good news. 2018 will be a year of struggle to speed up and slow down divorce negotiations: spouses who are served by the new law will want to delay their divorces and those who are served by the present law will want to finalize them. So which of these parties are you, a delayer or an accelerator?


Let’s look at how this works. A writer named Ethan Wolff-Mann wrote an article (which you can read here) identifying some of the variables that will be in play during 2018. He gives an example of  a soon-to-be ex spouse who will be paying $100,000 a year in maintenance under the old law. This “monied spouse” will get a deduction off the top so that, in the highest tax bracket of 40%, he or she is only out $60,000. On the other hand, the person receiving that $100,000 pays tax on it, so assuming a 15% tax rate, nets about $85,000.  


Now take the same example in 2019. If the paying spouse has the same out-of-pocket cost of $60,000, that would mean the receiving spouse gets the $60,000. Period. On that basis who loses and who wins? It is certainly possible to argue both spouses lose. Because of the non-deductibility and the decreased income, can it be argued the government wins? As we discussed last month, maybe the IRS.

Wolff-Mann goes farther, pointing out that states like New York that use formulas to calculate alimony may or may not change them to comport with the new federal law. New York’s formula is relatively new, having come into effect only two years ago. This leaves any adjustments to the courts for the time being. New York courts can deviate from the formula if its application produces results that are “unjust and inappropriate.” This invites courts to deviate from the formula and set payments that take into account the increases in cost to the paying  party and the net income to the receiver.


Will New York courts respond to that invitation? Wolff-Mann quotes a New York lawyer who says  that some will and some won’t. If this happens, two couples could be divorcing in the same court under different judges and get different results, even if, hypothetically, they agree to the very same settlement terms. This does nothing for consistency in the law (but it does make 2018 a year in which the self-determination available to parties who choose divorce mediation or collaborative divorce is even more attractive than usual, but that’s another point).  


Time will tell the impact of the new federal law on New York divorces. While the dust settles, advice of counsel will be even more important than usual  because, at the very least, this aspect of divorce is less predictable than previously.


MEDIATION – Can I also have my own attorney?

January 5, 2018 by Brett Jones

The title of the children’s book It Takes a Village could apply just as easily to divorce. Psychologists, social workers and financial advisors all have perspectives that may be useful to divorcing spouses, and many practitioners in these disciplines have successful businesses as divorce coaches. However, one profession that’s often overlooked when choosing a coach is lawyers.


Most people think of lawyers as adversarial only. If a divorce is acrimonious, it’s common to want the “meanest matrimonial lawyer, one who eats raw meat for breakfast.” This is a stereotype, one that’s largely outdated and often ineffective. Increasingly, divorcing spouses are looking for better process options to divorce, including mediation.  Can a spouse in mediation also have their own attorney?  Does the attorney participate in the mediation?  How would this work?


We are often asked to coach parties through mediation which they’ve chosen as their divorce process.   This may help a spouse to feel more “protected”, and provides a spouse with their own attorney to provide legal advice and guide them through each step of the mediation process.  For example, the couple has reached agreement on a parenting plan, division of their household goods and who will pay for medical insurance coverage, but they’re stuck on division of a pension or a 401k. They’re not stuck because they disagree; they’re stuck because they don’t know if what they’re asking for is reasonable. They may experience diminished trust in each other and may be concerned they’ll be taken advantage of. Mediation has enabled them to agree on many things but progress has slowed because one or both parties, feeling uncertain, find themselves hesitant to discuss a few remaining issues. A lawyer as coach can jar these situations loose by providing knowledge and perspective.


To optimize a lawyer as your divorce coach, it works best to have the lawyer on board during all or most of the mediation. This does not mean your lawyer/coach needs to accompany you to every mediation session, although s/he can. Most times, lawyer/coaches are consulted between mediation sessions if a divorcing spouse has a legal question. Good mediators encourage this (though many mediators are lawyers, they would be ethically compromised by giving legal advice to either party in mediation). Therefore, if a legal question arises in the course of mediation, one or both parties may wish to check with their respective lawyer/coach between sessions. If you do not engage a lawyer/coach for the duration of the mediation, you can bring one into the process at any time.


One or both parties in divorce mediation may be coached by a lawyer. Lawyers who excel in this role are collaborative without being overly concessive, and have a grasp of the overall settlement picture. Experience in the role also counts for a lot. Lawyers whose experience is exclusively as an adversary or litigator may not adjust readily to representing or coaching clients who choose mediation for their divorce. A lawyer/coach must recognize that a client may be well satisfied without cleaning the spouse’s clock, so to speak; divorce settlement need not be punishing to work well.


We have coached a number of parties who’ve chosen mediation. Not only has it been helpful in expediting divorce, it’s also more economical and less adversarial. The experience has been not only effective but satisfying for lawyer/coach and client/coachee.


Tax Treatment of Spousal Maintenance – How Will the New Tax Laws Impact on my Divorce?

December 20, 2017 by Brett Jones



Alimony, now known in New York as maintenance, has as its premise in the idea that the so-called “monied spouse” in a divorce should make payments to the non-monied spouse in order to allow the non-monied spouse time to become self-supporting. Back in the day, maintenance awards were often forever. Now that is much less frequent, the concept being not only to give the non-monied spouse a “soft landing” in terms of lifestyle, but also to get on her/his feet economically, perhaps completing an academic degree or other job-qualifying training. For federal tax purposes, maintenance payments are currently deductible for the spouse who pays and taxable as income for the spouse who receives the payments.  But for how long?


As of the moment, the sweeping tax overhaul now proposed in Washington would stand this on its head. Maintenance would be paid with after-tax dollars, not deducted from taxable income, and would be tax-free to the recipient. For the spouse receiving maintenance, this makes sense, because the legislative rationale is economic rehabilitation. But for the spouse who pays, it’s more like an incentive to stay married. Maybe this is a good thing, socially speaking; after all, the divorce rate is approaching 50%. But where’s the social benefit from staying in a bad marriage? Does that help anyone? The spouses? The children?


Most seasoned family law attorneys I know are of the view that eliminating a tax deduction for high-income earners who make alimony payments would have unintended consequences not contemplated when the NYS legislature enacted the most recent legislation governing the calculation and payment of maintenance effective in 2016.  One of the reasons is because the current tax deduction for alimony payers creates an incentive for high-earning spouses to pay larger alimony payments than they would under the proposed new law, and often has a significant impact in negotiating the terms of the final agreement.


Why is this change proposed anyway? For one thing, it probably makes things easier for the IRS, which currently must determine the deductibility of maintenance payments by checking  to confirm they meet the following requirements, among others: the payment must be made pursuant to a written divorce or separation agreement; must be made to or on behalf of the ex-spouse; the obligation to make the payment must cease if the ex-spouse dies (failure to meet this requirement is probably the most common cause of lost alimony deductions); the payment must be in cash or cash equivalent; the payment cannot be considered child support, plus a couple of other requirements. With a 50% divorce rate, checking compliance is a big job! A second reason could be that this change in the law will increase taxes paid to the US government by $8.3 billion over ten years.


Interestingly, the legal headstand would return federal law on this point to what it was in 1917, when the US Supreme Court ruled that alimony was not taxable to the spouse receiving it. That was the rule until 1942, when Congress overruled the 1917 case, passing the Revenue Tax Act of 1942. Except for gender-neutralizing language, federal law on the point hasn’t much changed since then. An interesting short article about this history is available here.


If this tax legislation passes as it is written at this moment, it would be effective for agreements executed after December 31, 2018.  This and potentially other changes in the tax code will need to be closely considered going forward in divorce negotiations.


If you are divorcing or contemplating divorce, please speak with your accountant and your attorney to help you navigate through it.


Going the Last Mile in Divorce

October 26, 2017 by Kathryn Lazar

By Jane Cottrell, Guest Blogger:

Katherine Miller blogged last June (you can read her piece here) on the subject of why it’s so hard for people to finish their divorce. Kathryn Lazar wrote a blog this month (you can read it here) that struck me as a companion piece. When I thought about it, I realized that these two articles captured something I had experienced. On the chance that sharing this may give others confidence that their emotional state is not unique and there is nothing wrong with feeling as they do, I grabbed the pen from Melissa Rutkoske this month.

Miller writes of a sense of entitlement at the beginning of a divorce that gives way to the question: “What is it I want?” From experience I would offer that this evolution takes different time for different people. I remember proposing in December a divorce settlement that my then husband did not accept until the following September. The intervening nine months were necessary, I believe, for him to accomplish mentally and emotionally what Miller describes: a coming to terms with oneself, one’s values and goals. For me, the same nine months were exasperating, not least because that period was the most intense, especially in terms of legal fees, of any phase of our divorce, which took two years. I could ill afford the delay, literally as well as psychically. But that was what happened, and it happened because human beings do not grow or change or make decisions in the same way or at the same speed.

What I should have done during that period was to take the advice in Lazar’s blog. I mean all of it. To my credit, I did have a counsellor, who reminded me that decision-making in divorce may not serve my best interest if it is not true to myself. That is, my self. If I fail to take care of me, who will? Divorce is emotional for sure, but the best decisions, as Miller points out, are not emotional. Sometimes — indeed, often — people make decisions based on habit, which may be thinking about what the other party would like or what the other party will think if the decision is this, or if it is that.
I remember taking all the Mahler CDs (yes, it was a while ago) because my husband didn’t like Mahler, and leaving all the Bruckner CDs, which he loved, despite the fact that I liked them too. That would have been a time to think, as Miller coaches, “What is really going on?” The answer could have been “We are dividing our music library.” That is a task that can be approached many ways, and I chose the way least connected to my interests. A small matter, perhaps, but it illustrates Miller’s point and Lazar’s at the same time: to make decisions that are true to yourself, you need to stand back and think about what’s really going on.

Doing so is not selfish; it is responsible, and adults –like it or not — are responsible for themselves.


Top Ten Strategies to Maintain Your Sanity

October 19, 2017 by Kathryn Lazar

Many clients who meet with us for the first time are stressed out and imagining multiple horrible possible things that might happen.  Most of those things won’t happen, but when anxiety takes over, it is hard to think straight.  We strongly recommend realistic thinking — which is neither overly optimistic nor overly pessimistic.  But it is hard to find that realistic place when your mind runs away with you.  We suggest the following


1.Take good care of yourself

2.  Learn to meditate or engage in whatever spiritual practice gives you a sense of peace

3.  Exercise regularly, eat right, get enough sleep

4.  Get a regular massage

5.  Center yourself in whatever way you can

6.  Talk to your sane friends and family, and tell the excitable people that you don’t need to get worked up, you need to think clearly

7.  Keep a journal in which you keep track of your questions for your lawyer as well as chronicling what is going on for you

8.  Don’t let your negative emotions take hold of you – someone said:  “I’ve experienced many terrible things in my life, a few of which actually happened.”

9.  Consider a good therapist — there are some who specialize in helping people through separation and divorce situations.

10.  Remember to breathe.



Proper courtroom behavior and attire

July 19, 2017 by Melissa Rutkoske


A British website,, says “When you see a judge or magistrate sitting in court, you are actually looking at the result of 1,000 years of legal evolution.” The US judicial system is descended from the English system and inherits some but not all of its characteristic decorum. This post discusses appropriate behavior and attire in New York trial courts such as Supreme Court and Family Court.


The key concept is respect. American justice is founded on respect for the rule of law, and when you go to court it is appropriate to bear this is mind. If you are making faces, speaking out of turn,  or doing other things that annoy the judge or magistrate, you are, essentially, attacking your own investment. You pay your lawyer’s fees with the expectation of professional representation. If your lawyer performs to that standard and you do something else, you run the risk of  cancelling out whatever  positive influence your lawyer may bring to bear on the matter at hand. In your own interest, be consistent with your lawyer’s professionalism.


First, attire and appearance: You can’t go wrong with business attire. No tank tops, short skirts, t-shirts or jeans.  If you have multiple body piercings, remove what’s in them (pierced earring are okay). If you have heavy tattooing, cover as much as possible. Know that first impressions do matter.


Manners: Don’t speak unless your attorney asks you to do so. Minimize shows of emotion unless it is pleasant. Don’t roll your eyes, grimace, sigh, giggle or laugh. Pay attention to the judge. Don’t tug at your attorney’s sleeve or interrupt him or her. Instead, write down your comments and pass your lawyer a note. Understand that the judge is observing your behavior closely even if you think he or she is not and making casual judgments about you based on your behavior.


Of course, a court will not decide for or against you solely on the basis of your appearance or behavior. Courts decide legal questions based on the law. But judges and magistrates are human, and like the rest of the human race, they can be distracted, irritated and even angered by inappropriate behavior.


Recordings of children – can they be used in court?

June 19, 2017 by Melissa Rutkoske



Lately my work in custody cases has got me focused on the use of recordings of minor children as evidence in court. It’s so easy to record anything these days; just whip out your smartphone. But maybe using that smartphone isn’t so smart.


When it comes to recording phone calls and conversations, New York is a “one-consent state,” meaning a recording is legal if at least one party to the call or conversation consented to its being recorded.  Stated another way, for a recording to be legal, it is not it is not necessary to have the consent of both parties.  However, merely being a legal recording does not necessarily mean that it will be admissible in evidence.


In custody cases it usually comes up this way: a parent or guardian makes the recording, either of the children on the phone with their other parent or when the children return to him/her and report happenings at the other parent’s home.  When the recording is offered in evidence at a trial, the legal test of its admissibility in evidence is whether making the recording was in the best interest of the child.  A parent or guardian can consent vicariously for a child.


However, consent is not to be had simply by using the magic words. The parent or guardian can’t just say, “I did it in the best interest of the child.” That’s not enough for vicarious consent. Instead, a court will consider whether the adult making the recording did so in good faith, with an objectively reasonable basis to believe it was necessary for the welfare of the child. In addition, there are other factors a court considers in deciding whether the recording was necessary to protect the child’s best interest: what was the recorder’s motive, and is the child mature enough to make well-reasoned judgments about what is in his/her own best interest? The answer for a 16-year-old may well be different than for a 6-year-old.


So, making a recording of your child doesn’t necessarily mean you can use it in court or that a recording made by your ex can be used in court against you. Moreover, if a recording of a minor is inadmissible in evidence, the person who made it may be guilty of illegal eavesdropping, a criminal offense.  As New York State’s highest court has said, “eavesdropping has grown more simple and yet infinitely more complex in the modern communication age.”


That’s the legal side. But isn’t there a more important question, namely, what is the effect on the child(ren)? The Washington Post says kids these days don’t even need to be taught how to engage with video recorders; they do it intuitively, on their own social media channels. But this is different. When kids have their own YouTube channel they know it. When kids are recorded by adults who intend to use the recording in a court battle that will have an effect on the kids’ lives, that’s a whole different ball game.


For starters, the BBC reports that kids behave differently when they know they’re being watched. Is recording any different? Imagine how uncertain you would be if you understood that sometimes you’re being recorded and sometimes not, but you don’t know when.  Can you imagine doing that to your child?


It’s not surprising, then, that courts take a dim view of parents recording their children.  Courts are focused on the welfare and best interests of children affected by judicial proceedings.  How is that served by recording your children? Recording your children fosters distrust and parental alienation. It puts children under the impression that their parents are building cases against each other and inevitably, they (the children) will be stuck in the middle. Talk about stress! Therefore, generally speaking, it’s a bad idea to record your children and it is never a good idea to let them know they are being recorded.


Of course, when there is abuse happening that a parent can’t prove without a recording, this may be a sound act.  Parents should seek legal advice and perfect a plan with counsel in order to ensure that this recording would be legal, proper and admissible.   Additionally, if you do choose to go down this path, remember that your voice may very well be on that tape for all to hear.  Your words AND your tone will be scrutinized by the judge and by the other side.  Choose your words carefully; an intimation that you are coaching the children or placing them in a position where they have to comment on the other parent’s behavior, will not be helpful to your case or your children’s well-being.  For instance, if a child comes home to you and states, “Mommy spanks me when I won’t eat my vegetables.”, a proper response would be, “Let me speak with Mommy about that so I can understand it more, but don’t you worry.  We’ll work it out.”  An improper response would be, “I’ve told your Mommy that we don’t ever hit.  That is wrong and I’ll tell her again.”  As you can see, this is tricky business.


So, while it’s easy to record your children as a courtroom weapon against your spouse or your ex, ask yourself: is the negative impression it’s likely to make on the court and the negative effect it’s likely to have on your relationship with your child worth the advantage you hope to gain in litigation?  Think about it.



How is Your Mortgage Affected During Divorce?

May 31, 2017 by Brett Jones



The website Credit Marvel published an article titled “How is Our Mortgage Affected During Divorce?” that we comment upon here. The article’s text is in regular type; our comments are in italics. Here it is:


With all of the changes in the mortgage industry since 2008, divorce affects mortgage lending more than ever before. One divorce statistic that hasn’t changed since then is that about half of all marriages end in divorce. The United States has the 6th highest rate of divorce in the world. About 41% of first time marriages will end in divorce. The rate is slightly higher at 60% for second-time marriages. Couples that enter the altar for the third time are the most likely to divorce at a rate of 73%.

There is a growing trend in “gray divorce.” Couples age 50 and older are twice as likely to divorce now as they were in 1990. The rate is even higher for couples over the age of 65.

The good news is that if you are married for the first time and your marriage lasts longer than eight years, the odds are finally in your favor of staying together. Age at the time of the marriage is also a factor. Couples that wait until they are over the age of 25 have a better chance of staying married than younger couples. Wilkinson & Finkbeiner Family Attorneys have compiled a comprehensive list of divorce statistics that include a breakdown of statistics by religion, occupation, age, and other data.

The costs of divorce have an impact on making a decision to split. The average legal cost of getting divorced is $15,000. Many couples simply can’t afford to get divorced.  In our experience, the cost of divorce varies depending upon the divorce process utilized; it could cost much less for mediation, but could cost much more for litigation.  Please see our other blog posts which compare the difference divorce process options.

The Impact of the Financial Crisis on Divorce and Mortgages

The financial crisis of 2008 changed the economic climate for mortgage lending. Couples that got married before 2008, found it fairly easy to get a mortgage. Those were the days when lenders were happy to lend up to 125% of the value of a home.

Couples that look to get divorced after 2008 will find that it’s not so easy to get a mortgage as it was at the time they got married. The high rate of foreclosures and short sales have caused mortgage lenders to tighten up the criteria for mortgage qualification. This makes it more difficult for one spouse to buy out the other during a divorce.

Prior to 2008 most lenders considered owning a home to be a couple’s largest asset. It still is, but mortgage lenders are also keenly aware that a mortgage is a divorcing couple’s biggest liability. The responsibility for the family home and the mortgage payments that go with it are the responsibility of both spouses until the house is sold or refinanced.  This is true from the bank’s standpoint assuming that both spouses are names on the Note and Mortgage; however, this is not necessarily true from a divorce attorney’s standpoint or from the divorce court standpoint.  

Options for Managing the Mortgage During Divorce

It’s less likely that one spouse or the other will get the house in the divorce settlement. Regardless of what a judge decides, it’s more likely that a divorcing couple will make a decision about the house based upon which of them can actually qualify for a new mortgage.   We often see couples making decisions about the house based upon a number of  factors in additional to ability to qualify to refinance.

The easiest option to manage a mortgage during a divorce is for one spouse to refinance the house under his or her own name.  At the start of a divorce action, statutory automatic orders go into effect which prohibit a refinance during the divorce action unless both spouses consent in writing.   How the mortgage is managed during the a divorce is an issue that may need to be addressed at the outset of the divorce action, either by agreement of the spouses through their attorneys or if unable,then by application to the Court and subsequent court order.  The attorneys will consider the value of the home when settling the rest of the marital assets. The spouse seeking the refinancing needs to have good credit and adequate income to be in a good position to have a new mortgage approved. This works provided the couple is not past due on any mortgage payments for the last 12 months and the other spouse agrees to let go of the house.   In our experience, banks are generally reluctant to release either spouse from a joint mortgage obligation until one or the other spouse formally refinances the loan in which process one spouse’s name will be removed from the Note and Mortgage .

When neither spouse is able to purchase the other spouse’s share of the home and the real estate market won’t support the full debt that is owed on the home, it may be possible to sell the home on a short sale. A short sale is where the bank agrees to take less than is owed on the mortgage to avoid a foreclosure. This would leave both spouses without a mortgage to worry over. The downside is that pursuing a short sale will negatively affect the credit of both parties.  

Another means of dividing the house is for one partner to sign a quit claim deed. This transfers the interest from one spouse to the other. It’s important to consider that it doesn’t relieve either spouse from the responsibility for the mortgage. If the responsible spouse defaults on a mortgage payment, the other spouse will still be liable for it.   Any properly prepared Settlement Agreement would address this scenario as well as all of the other scenarios regarding the disposition of the marital residence, including detailing the obligations of both parties and the ramifications if one spouse or the other defaults on their respective obligation(s).

Depending upon the rental market for the area, spouses may agree to rent the home to a third party. This means that they will need to work together on the financial aspect of renting the home.

The final option is for divorcing spouses to continue living in the home together until  the other is in a better financial position to secure a mortgage to buy the home.  This living arrangement is not often sustainable.

Making an Equitable Financial Plan for Divorce

What seems like a reasonable divorce settlement on the surface can have negative long-term impact on spouses. A Certified Divorce Financial Analyst (CDFA) can be of valuable assistance to divorcing parties and their attorneys. CDFA’s are experts at identifying marital assets, developing a post-divorce budget and analyzing the financial impact of the proposed division of assets.  CDFA’s take a long-term approach to analyzing after-tax cash flow and net worth for the future five years and longer.

The Institute for Divorce Financial Analysts (IDFA) gives a simple example of how CDFA’s can help. A married couple with a $165,000 home has equity of $77,500. Other financial assets total $165,000. The husband nets about $68,000 per year. The wife has not worked during the marriage and hopes to get a job for slightly over minimum wage. The assets are divided equally, including deeding the home to the wife. The husband agrees to pay child support, alimony, and child support (sic).  The CDFA performed a long-term analysis and determined that the husband’s assets would grow dramatically while the wife’s assets would be completed depleted within seven years. The CDFA made suggestions to the attorneys that would put the couple on equal financial footing now and in the future.

Considerations for Getting a New Mortgage During Divorce

Mortgage lenders will consider all assets and debts when deciding to approve a mortgage. The spouse that applies for a mortgage will need to provide the lender with all pages and schedules of the divorce decree. The lender will consider all payments for alimony and child support payments as a debt when making a decision to approve a mortgage.

Attorney, Katie Connell, cautions divorcing spouses against buying a house before the divorce is final. She cites a case where someone put $10,000 earnest money down on a home and then was not able to secure a mortgage and lost the earnest money. The other spouse sought to be compensated for half of the $10,000, since it was a marital asset before the divorce was final.

Final Thoughts About Mortgages and Divorce

Divorce lawyers do more than help divide assets and manage the legal paperwork. They know that divorcing couples are running high on emotion, especially those that have children. Divorce lawyers will help their clients identify all current financial marital assets and work with the other spouse’s attorney to divide the assets as equally as possible. Nearly every couple has emotional ties to their homes and communities. The best divorce attorneys will help their clients make decisions based upon logic, rather than emotion. They do this by helping their clients paint a picture of what their lives after the divorce will look like. Often that includes showing them how letting go of owning the family home puts them in a better financial position overall.