5 Examples of A Fair Divorce Settlements
5 Samples Cases of Fair Divorce Settlements:
Ken and Jan
Marital Profile:Ken and Jan have been married for five years and have no children. They both entered into the marriage with established careers, earning similar salaries.
Divorce Settlement:The marital assets are split 50/50 between the spouses. There is no spousal support or child support.
Both Ken and Jan are basically in the same position financially at the end of their marriage that they were before the marriage. Neither has given up their career or lost any income potential during the marriage.
With the advent of no-fault divorce laws, the courts will not take into consideration any bad behavior by either party unless one or the other has caused severe financial distress by spending liquid marital assets. That is not the case in this divorce scenario. It only makes sense that assets be split 50/50 and both spouses move on and rebuild their lives.
Joseph and Karen
Marital Profile:Joseph and Karen have been married for 14 years and have no children. Their marriage is a medium-term marriage where spousal support and an unequal division of marital property may be considered.
Divorce Settlement:The marital assets are split 60/40 in Karen’s favor.
There is no spousal support or child support.
Joseph and Karen both have high-paying careers. Joseph makes more than Karen though and has greater earning potential in coming years. Due to the fact that Joseph’s will continue to increase and Karen’s will stagnate, the judge awards her a higher percentage of the marital assets to offset the loss of benefits Karen enjoyed during the marriage.
Mark and Joan
Marital Profile:Mark and Joan have been married for 26 years and have no children. Both earn high salaries in well-established careers. Joan earns 1/3 more than Mark which makes her the higher earning spouse.
Divorce Settlement:The marital assets are split 50/50 and Joan is ordered to pay Mark rehabilitative spousal support for a term of five years. The long-term marriage established a lifestyle that both Mark and Joan had become accustomed to.
Mark's standard of living will decrease once there is a divorce due to the fact that he makes less than Joan. The two went to mediation and Joan chose to pay temporary spousal support that is deductible at tax time rather than splitting assets in John’s favor.
Jim and Claire
Marital Profile:Jim and Claire have been married for eight years and have two children under the age of six.
Claire is a stay-at-home mom who has not worked for six years. Jim has a manufacturing job and earns ,000 a year.
Divorce Settlement:Jim and Claire will share joint legal custody with residential custody awarded to Claire. Jim pays child support according to state guidelines which are based on the income shares method.
They agree to split 50/50 any expense of sending their children to college and all extracurricular activities while the children are still in primary school. There is a 60/40 division of marital assets in Claire’s favor and she is awarded short-term, rehabilitative spousal support for two years.
Claire will be attending a training program and agreed to be fully employed within a two-year period. At that time child support will be recalculated and lowered due to the increase in Claire’s income and spousal support will end.
Bill and Grace
Marital Profile:Bill and Grace have been married for 16 years with two teenage children. Grace has been a stay-at-home mom for fourteen years; Bill has an executive position and earns a six-figure salary.
Divorce Settlement:Grace is awarded the marital home and all equity in the home. The equity in the home is deducted from other marital assets and there is a 50/50 deduction of the remainder between both spouses.
Grace is awarded spousal support for a length of ten years. She is awarded half of Bill’s retirement benefits and since she will retain custody of the children is awarded child support according to state guidelines.
Grace wanted the marital home because the equity in the home is more than she could have gotten if there has been a basic 50/50 split in marital assets. She also wanted to remain in the home her children had grown up in until they graduated from high school. Since the home will appreciate in value Grace has an asset that she can one day liquidate.
Bill had no interest in the marital home. He was more interested in the assets that could be liquidated immediately should the need arise. They both agreed that Bill would continue to pay into their children’s college savings funds.
When negotiating a divorce settlement it's imperative that you understand that "equal" doesn't mean a 50/50 split. Equal means what is fair to both parties involved. You won't get everything you believe you are entitled to and, you will need to be able to compromise for the sake of all involved.
Lance and Katy
Marital Profile: Lance and Katy have been married for eleven years and have a small child. Katy is the CEO of a non-profit organization, she earns a substantial salary. During her career, Katy has done extensive traveling which made it necessary for Lance to quit his job and become a stay-at-home dad.
Divorce Settlement: Lance and Katy will share joint, legal custody with residential custody going to Lance. Lance was awarded the marital home and all equity in the home.
He was also awarded spousal support for a period of five years and child support based on state child support guidelines.
Katy fought for custody and against spousal support. Lance was able to give evidence during divorce court that showed Katy had little interest in her children and would not be able to care for them due to her work/travel schedule.
The marital assets were split 60/40 in Lance’s favor because the judge felt that Lance, being the lower income earner and caretaker of their children should continue to live the standard of living he and his children had become accustomed to.
Lance will have the opportunity to continue in his role as a full-time father, rebuild his own career and one day earn an income equal to or greater than that of Katy. Until then Katy is responsible for taking care of the people she left behind.
There can be a huge difference between an equitable divorce settlement and a fair divorce settlement. When negotiating your divorce settlement the outcome is based on many factors.
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