Sunday, April 12, 2009

Divorce and The Recession

Family Law and the Economic Crunch from lexisONE makes some good poitns for clients and lawyers to think about with our current economic situation:
Tax-deferred assets present a slightly different issue. Often the parties offset a 401(k) against some other asset. 401(k)s have suffered significant losses in value but have a high probability of recovery within a relatively short period of time. It might be more fair to both parties to divide the 401(k) in kind in order to give each party the same risk/benefit opportunities. It doesn't help a divorced couple to continue to coparent if one party sees that, after three to five years, the other party's share of the community has increased at a much greater rate.

Both child and spousal support are also affected by the economic uncertainty. Even assuming that both parties continue to be employed in their respective jobs, the fear of job loss is real. It is important that in crafting an overall support plan that practitioners look seriously at how they can help the parties work out a plan, rather than mechanically relying on the support calculation programs. Modification motions are relatively cumbersome (because of the overloaded court calendars), and expensive. It would be of real benefit to the parties if counsel can help the parties craft their own modification plan, for use in the event one or both parties become unemployed.

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