Don’t Panic Yet

Businessperson Hand Pressing Emergency Button

When I was teaching at West Point (US Military Academy), we used to give a pass/fail writing test which determined if a cadet moved on to his or her junior year. It was a high stress moment for the cadets, and one year a cadet burst into tears during the test over his fear that he might fail. A fellow instructor in disbelief said, “Good God, man, stop that, no one is shooting at you.”

Most of us can emphasize with that cadet; we fear the unknown, and we fear the consequences of a possible change in our lives. This is often the case with those facing divorce, particularly in those cases in which parenting time, child support and a division of marital property are contested.

We are all familiar with the stories of unjust outcomes in which one party is left with nothing or a father is left with little access to his children. These things can happen, but by and large a good guide can help someone navigate the legal system. This is why I always counsel meeting with an attorney whose practice is in this area. Doing so can alleviate the fear of the unknown.

For example, I see people who fear that after years of not working they will be left with nothing. Fortunately, in most cases this is not the case. A court can award maintenance or property to ensure a spouse is not left destitute.

Let’s take the following example. A couple purchases a home but one party’s name is not on the deed or the mortgage; to whom does the home belong? The answer is that if the home was purchased during the marriage and there is no agreement to the contrary the court is likely to find that the home is marital property. Every situation is different, but the general rule is that if there is any marital equity that equity is divisible between the parties. Marital equity is nothing more than the equity in property which was accumulated during the marriage. So, if an investment grew by a $100 during a marriage the $100 growth might represent equity that could be divided by the Court.

Similar rules apply regarding parenting time. If you have been involved with your children and there is no conduct to warrant otherwise, judges in Colorado are going to ensure you get time with your children. Again, circumstances in each case are different, but Colorado is one of the better states with regards to parenting time because the Colorado state legislature has determined that both moms and dads are important to their children. This is good news for fathers who often fear they will be shut out from the lives of their children.

Bottom line: Don’t panic; talk to us and we can give you advice based upon your circumstances.

We Don’t Know What We Don’t Know

 

Businessman

So, the last of the wedding festivities are over. We had a reception for our daughter and her husband at the local Dinosaur Museum; all I can say is that while it was quirky it was a lot of fun. As my daughter said when we were discussing venues, “Why wouldn’t you want a reception in a dinosaur museum?” Which kinda, not really, leads me to the subject of this week’s blog. While in the Army I had a friend who would always say, “We don’t know what we don’t know.”

When you think about it this makes sense because if we are not trained in a particular area it should not be surprising that our ignorance is compounded by what we don’t know. Take for example a recent client I met with. She and her business partner bought documents from a well-known online document provider. Now her relationship with her business partner is ending and there is a fight brewing over who owns what.

Like many, this person thought lawyers just created documents and forms. This is partly true, but what lawyers provide is knowledge. The documents this client and her partner signed all have meaning, and each document will have an impact on the outcome of her situation; however, neither she nor her partner know what they mean.  I was able to tell her this much when we met: it will cost a great deal more to figure what these documents mean now than it would have if she had come to see me prior to signing everything. But she got exactly what she paid for. She bought forms from a company that advertises it is not a law firm, and she got exactly that. What she didn’t get was the legal counsel she needed.

There is no doubt legal advice can be costly, but would you order a do-it-yourself brain surgery kit? Sometimes, what we don’t know can hurt us, and when it does it will invariably cost more.  When you buy exactly what you need you are never disappointed, but when you buy a cheap substitute you pay twice. No difference here. If we can help let us know; if we can’t or you don’t need our help we will tell you.

Military Divorce and Pensions

 

 

Military uniform with faded boards painted in American USA flag

I am going to pick up the blogs on Elder Law issues again eventually, but for the moment I want to touch on a few family law issues. Before I do so I am happy to note that my youngest child got married over the weekend. She was married in South Carolina, and this next Saturday we are having a reception in Colorado. I am so happy for her. Yay!

An issue I am asked about time and again is how military pensions are divided in a divorce. This is an important subject because military pensions are incredibly valuable. So, if you are a military member, or the spouse of a military member, you need to get legal advice if there is a question concerning who gets what. Do not be like the woman who came to me after she waived her rights to a portion of her then husband’s military retirement; she lost thousands of dollars because she did not know her rights.

In Colorado courts use what is called the Hunt/Gallo formula to divide military pensions, retirement accounts and other types of pensions. In the case of military pension benefits the court takes the months of marriage during which the parties were married while one of them was in the military. The court then takes this number and divides it by the total months of military service at the time of retirement. For example: If a couple were married for 15 years during which one of them was in the military the numerator equals the number of years of marriage x 12 which in this case = 180 months. If at retirement the military member had served 20 years the denominator would = 240 months. Consequently, the marital share (the part divisible by the court) would equal 180/240 = .75. The court then divides this number by two and the result equals what the non-military spouse is tentatively entitled to; in this case it would be 37.5% of the military member’s retirement pay. There are other factors which come into play, but the above outlines the basic starting point.

We do a lot of work for military members, and as I am retired Army I understand the nuances of the military and how it affects your legal goals.  If you have an issue involving a pension contact us; we would be glad to help.

 

 

Different Day, Same Tune

Vector Illustration of an Abstract Background with Music Notes

Wow. Yet again I cannot believe it has been months since my last blog post. Since I lasted posted I have continued to have health issues, but hopefully I am on the mend. This next week my wife and I leave to see my daughter married, and I am pleased with the young man whom she is marrying. He treats my daughter with a tenderness that pleases me.

Yesterday, I settled a case which was two years old. I was the third attorney for my client, but yesterday, after months of continued strife, we were able to resolve the case. Why did it take so long?

When this divorce began the parties were in agreement, and the attorney the husband hired indicated he would help the parties reach an agreement. Rightly, or wrongly, my client believed he was helping both parties, so when the case blew up she had to find an attorney. Unfortunately, there had been so much domestic violence in the marriage that my client had real difficulty addressing the issues in the case and finding an attorney she could work with was hard. When she finally contacted me it took some time to get her trust, but once we did we resolved the case in relatively short order.

What I am about to say I have said before; hence the title of this post. Finding an attorney is a lot like buying a pair of shoes; you will only like them if they fit. It is the same with lawyers. When you are looking to hire an attorney to handle a matter for you it goes beyond simply determining if they handle the area of law you require. You have to make sure you can work with the person you are hiring; additionally, you have to be sure their goals are the same as yours.

With the client I mentioned above the real issue was not the division of property; the case was really about making sure her spouse could not hurt her again.  Once she knew that was my goal too, she and I really clicked. So, kick the tires before you buy, and if you think we can work together contact us; we would love to help if we can.

 

Advice for Those Considering Going Through a “Gray Divorce”

This is an article I recently added to my website.

Argument of senior couple is no joke

The idea of getting divorced after 50 used to be considered taboo, but in recent years so-called “gray divorce” rates have grown significantly across the United States. As the Washington Post reports, the divorce rate for those 50 and older doubled between 1990 and 2010. As many Baby Boomers begin entering retirement, the prospect of a later-in-life divorce has both its upsides and its downsides. While a gray divorce can provide a level of freedom and emotional well-being to some, there are risks, particularly financial ones, of divorcing after 50. Below is a brief look at what makes gray divorce so unique.

Preparing for retirement

 Those going through divorce in their 50s or 60s have one thing in common that younger divorcees typically do not: they are often preparing for an upcoming retirement. Divorce can have a big impact on one’s finances and it could leave either spouse with half of what he or she was expecting for retirement. Furthermore, pension plans and retirement funds are almost always considered marital property, meaning they can be divided between both spouses. Dealing with a gray divorce’s impact on one’s retirement planning will depend on one’s unique circumstances. For some, taking an extra few years to work may be a necessity, while for others downsizing may be a more practical approach.

Spousal home

Speaking of downsizing, one asset that often causes plenty of consternation in a gray divorce is the spousal home. Instances often arise when one or both parties will insist on holding onto the spousal home, especially given the emotional attachment people often feel towards their home. From a financial perspective, however, holding onto the spousal home could be a mistake. Trying to maintain a home that was built for more than one person while also on a reduced budget could leave one spouse house poor and less able to enjoy his or her upcoming retirement. While keeping the home can make financial sense in some cases, for many people a better idea may be trading the home in exchange for something that will prove more useful during retirement, such as a pension fund.

What about the kids?

As U.S. News and World Report points out, although most gray divorcees do not have to deal with issues surrounding child custody and visitation, disagreements about providing financial support to grown children may still arise. Because it is more common today for parents to provide assistance to their children even into adulthood, a plan may need to be worked out between both divorcing spouses about dividing responsibility for helping any adult children get on their feet.

Family law

 Divorce can bring up many contentious issues, especially later in life when the financial stakes tend to be much higher. A qualified family law attorney can help those who are going through a divorce, no matter their age. By providing strong legal representation, an experienced attorney can help clients negotiate a divorce settlement that will likely be most beneficial to them in the years after their divorce.

Planning for Old Age

Business partners

Wow. I cannot believe it has been almost two months since my last blog post. I wrote last time that I had herniated a disk in my back; however, that has not been the end of my woes. The first week in April I tore the Achilles tendon from my heel. Ultimately, both my back and my Achilles tendon required surgery. Currently, I am recovering from both procedures, and my right leg is in a non-weight bearing cast. Fortunately, the numbness from my herniated disk is mostly gone, and I am regaining strength in my left leg.  I am grateful to have good health care coverage, but even so the last months have been extremely stressful. I cannot emphasize enough how important it is to be prepared for the curves we all have thrown at us. I never expected to undergo what I have recently, but it happened nonetheless.

With this in mind now is the time to prepare for our later years. When most of us think of Medicaid we think of a program for poor people. The reality is that many of us will need it in the future because long-term care costs are so high. The problem with waiting until a need arises is that doing so places one’s assets at risk.

But before we get into a deeper discussion understand that Medicaid is a federal program administered by the states. Each state has enacted legislation governing its implementation of Medicaid, and the rules are changing all the time.  The reason for the constant state of flux is that as health care costs rise the states are seeking ways to cut their costs. The result is that strategies for protecting assets that used to work may not today.

Accordingly, the key when thinking about Medicaid is to plan early. As most are aware, there is a five year, or 60 month lookback period. What this means is that Medicaid will look back five years from the date of eligibility to determine if any assets owned by the applicant were transferred without receiving adequate compensation for the asset sold or disposed of. If it is determined that an uncompensated transfer did occur then Medicaid can impose a penalty period during which the applicant will have to fund his or her own care. Consequently, as noted, the key is to plan early so that any transfers necessary can be made early enough so they fall outside the look-back period so that no penalty is incurred. This generally means beginning Medicaid planning as one approaches retirement age.

Next time: What are countable assets and what constitutes an uncompensated transfer? Take care until then, and if we can help please contact us.

What to Do When Mom or Dad or Both Move In Redux

(As I mentioned in the previous blog this subject was suggested by a follower, so if you have an issue you want addressed let me know, and if I can address it I will try to do so.)

Herniated disc with pressure on spinal cord

26 years ago I fractured my back at the T7 vertebrae. I was participating in a training exercise and I had a partial parachute malfunction. I actually heard my back break when I hit the runway; it did not help that I was carrying 60 pounds in radios alone. Anyway, I recovered, but I have had back issues since then, and last week I blew out a disc in my back. I was doing something I should not have been: I was getting out of bed. I can only tell you the pain was excruciating; it went on and on for hours, and then around 3 pm it stopped. The negative to this was that I then had nerve impairment, and as a consequence I cannot make my left ankle and the associated muscles work.

I have a number of consults set up, but right now I do not know what will happen with my back and leg.

While I am optimistic, I would give a great deal to “know” that everything will be alright. So it is with most of you as you face the uncertainty of how to care for elderly loved ones. I can only say that the best advice I can give is to prepare now. Old age is coming for us all, and we all need to plan accordingly. Last week I talked about the importance of powers of attorney, and this week I will address advance planning.

Long-term care is incredibly expensive. Right now it costs around $7000 per month to provide the care my mother needs. She has received such care for nearly 18 months; as you can see this amounts to $126,000. My mother-in-law has been in a facility for over 3 1/2 years, amounting to over $315,000!I don’t know about most of you, but I don’t have this amount just lying about. This means you need to plan ahead. One tool for doing so is to invest now in long-term care insurance. I will not mislead you; long-term care insurance is expensive.

The principal advantage to purchasing long-term care insurance is that it will protect family assets in the event long-term care is required. It might be a better idea to think about a whole life policy that allows an individual to use the cash value for long-term care. I am not an expert in this area, but contact me and I can put you in touch with people who can give you more information. Candidly, most people fail to pursue either option, so next week we will talk about Medicaid and other planning options. Until then take care.