Divorce: Divisions and Decisions Presented by UAW-FCA-Ford-General Motors Legal Services Plan May 30, 2019

Divorce: Things to consider Process Property Division Custody and Visitation Child Support Post-Judgment Checklist

Process Rules vary from state to state Consult with your Plan attorney for process rules in your state Divorce petition or complaint is prepared and filed with the court. It usually includes: - date of marriage - minor children, - reason for divorce In some states, proposed settlement is filed at this time This means parties don’t file with the court until they have worked out property division, etc. Protective orders: domestic abuse, prevention of disbursement of assets Interim support orders to maintain the status quo

Personal service if amicable divorce; give to the other spouse and complete and sign a form to file with the court May need to use a process server If spouse’s whereabouts are unknown, will need to use different service method as authorized by court in your jurisdiction Publication Mailing to the last known address Service on other party

If you are served with a complaint or petition There are time limits to file an answer; consult with your Plan attorney immediately if you are served An answer should be filed even if the divorce is not contested and you think you can work out a settlement; your Plan attorney will draft an answer for you If an answer is not filed and the time to answer passes, the other party can ask for a default; this means an order can be entered setting terms without your input If you are served with a complaint or petition

Waiting periods Most states have waiting periods between time of filing and granting final judgment. The time may be different if minor children are involved. For example, the waiting period is 60 days in Michigan. But the waiting period is 180 days if there are minor children of the marriage. Consult your Plan attorney for the waiting periods in your state.

While you are waiting Negotiate property division, custody and support issues In some states, this is in the judgment of divorce In other states, a separate agreement is drafted Both parties sign judgment or settlement agreement Default if other party does not respond Final Judgment of Divorce or Order of Dissolution is entered with the court, dissolving the marriage and detailing property division, custody, support

Property Division This includes real estate and personal property. Consider what assets you value most and what assets you can let go of. In community property states, property is evenly divided because both parties are considered to own the property equally. In most other states, property is divided equitably or fairly. The parties can negotiate and decide what is fair for them.

Real estate Marital home considerations: ability to make mortgage, tax, insurance payments ability to maintain the property if there are minor children, whether they should stay in the marital home Real estate – particularly the marital home – can be: Sold and the proceeds divided Consider mortgages, liens (impact net value) Calculate net proceeds (total sale price minus broker’s commission, closing costs, mortgage balance) Given or sold to one of the spouses If given to one party, the net value can be offset against other assets For example, Spouse 1 gets the house but releases all claims to Spouse 2’s pension One spouse can buy out the other spouse by refinancing and paying the other spouse their share of the equity (value of the home minus outstanding mortgage or other liens) Mortgage issue: Both names remain on mortgage unless refinanced

Personal Property Considerations Personal property includes: automobiles/trucks recreational vehicles tools collections  Considerations when dividing personal property: valuation: dollar value of each item or group of items liens: how much is owed, on a vehicle, for example furniture: do you want it or need it Collectibles: who spent time acquiring the items and appreciates them items of sentimental value: family heirlooms, for example how important the property is to you Personal Property Considerations

Personal Property Division The parties can agree The parties can “trade” one item for another expensive – court and attorney fees delays the completion of the proceedings can turn an otherwise friendly divorce into a battle may not be happy with the result The parties can let the judge decide, but: Personal Property Division

Bank/investment accounts Division considerations: How held? In one name only or jointly? Who deposited the funds? What is offset against other assets?

Factors to consider include: length of marriage, length of employment, total assets, ability of the parties to support themselves Division of retirement accounts can be complex and a QDRO may be needed. You will want to discuss valuation and the specifics of each spouse’s pension or 401(k) with your Plan attorney. Watch the Plan’s QDRO webinar on our website or YouTube channel. It details the division of pensions and 401(k)s in divorce. Retirement Accounts

In addition to dividing assets, think about who will be responsible for the debts of the parties. Debts include: Mortgages Other loans Credit card debt Things to consider: Is the debt in one or both names? What is the balance owed? What is the debt for and who is getting that property? Usually, the person who gets the property gets the debt. To take your name off a mortgage, loan or credit card, an agreement to refinance or pay off the debt can be included in the divorce settlement Marital Debts

Spousal Support Alimony Has become rarer over the years If awarded, is usually provided for a limited period of time Generally awarded as a set weekly or monthly amount Each party’s work history, income, assets and ability to earn income is considered A limited period of alimony may be a better option for some than giving up part of pension

Each party is often responsible for their attorney fees In some contested matters, the court may order one party to pay all or part of the other’s attorney fees, particularly if: there is a large disparity in income one party is deemed responsible for causing the other to incur additional attorney fees Can be awarded at different times in the divorce proceedings Attorney fees A party may want to restore their prior name In some states, this can be addressed in the judgment of divorce to avoid the need for additional proceedings Name changes Additional issues

Custody and Visitation Issues The custody of minor children is one of the most important decisions made in a divorce proceeding. Even if the parties agree, some courts require the parents of minor children to attend an educational class regarding divorce and its effects on children. The parties can agree to a custody arrangement and save time, money, and emotional upheaval. If the parties can’t agree, the court will decide who should have custody of the minor children. Custody and Visitation Issues

Custody: Legal and Physical Legal custody: Defines who has the right to make medical, educational decisions for the minor children. Many courts favor shared legal custody when possible so both parents play a role in the children’s lives. Physical custody: Defines where the minor children live. Physical custody may be awarded to one parent or shared by both. The parent with physical custody usually gets the dependent tax deduction. If joint physical custody, the parties need to negotiate. If shared custody, set a schedule to avoid future misunderstandings and conflicts. Example: Parent 1 has child from Sunday morning through school drop off on Wednesday; Parent 2 has child from Wednesday school pick up through Saturday night. The parent with physical custody may have to petition the court if he/she wants to move a distance away from the non-custodial parent. If one parent is awarded physical custody, both parents will need to agree on a visitation schedule.

Contested Custody Proceedings The court will consider the best interest of the child. Many factors are considered and weighted for and against each parent. Some factors are: Age of the children Each parent's living situation: appropriate housing, ability to support, clothe and feed the children Each parent's willingness to support the other's relationship with the children. Does the parent speak badly about the other parent, interfere in visitation, or support the relationship with the other parent? Each parent's relationship with the children before the divorce. Did the parent participate in the children’s activities, assist with school work and doctor visits, etc. Established custodial relationship: relationship with parent, extended family, community Substance abuse by or instability of one of the parties Children's preferences are not determinative A child may prefer the more lenient parent but this doesn’t mean the judge will agree. A child will be consulted depending on their age. This is often done in a private setting Contested Custody Proceedings

This sets the days that the non-custodial parent sees the children Visitation Schedules This sets the days that the non-custodial parent sees the children This can be for a couple of hours a week; for example, dinner every Wednesday This can be for days or weeks; for example: Every other weekend Alternate holidays (Parent 1 has children for Thanksgiving 2019 and Parent 2 has children for Thanksgiving 2020) Two weeks each July The custodial parent cannot interfere with the children’s visitation with the other parent.

Child Support Non-custodial parent is usually required to contribute to the support of minor children. The amounts are usually set in state guidelines. The state may require the parties to provide the court or “Friend of the Court” information (wage stubs, tax forms) for an investigation to calculate the appropriate level of support.    There can be variances or reductions for certain reasons. For example, if the child receives Social Security benefits through the parent. One or both parents may be required to keep the children on their employer’s health insurance . The parties may be required to divide medical or dental expenses not covered by insurance. The percentage each party is responsible for is specified in the judgment or settlement agreement.

Post Judgment Checklist Issues you’ll need to address once you are divorced Close any open joint accounts Transfer funds as agreed to and directed in the final divorce papers Change beneficiaries on: Bank accounts Life insurance 401(k) accounts Investments Refinance home to remove former spouse’s name and get payoff funds Record deeds to reflect new ownership status Review titles on vehicles and change if needed

Post Judgment Checklist (continued) Remove spouse from insurance and give employer ex- spouse’s address for COBRA notice Change beneficiaries on employment-related benefits, including life insurance, 401(k) Complete and return new beneficiary forms as directed by employer Change homeowner and auto insurance policies to the name of the party awarded the property Get QDRO if there are retirement benefits to be divided

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