Laurie Schmitt Family Law

W. Michigan family law specializing in Collaborative Divorce

616.608.4634

Laurie Schmitt

I have filed for a Divorce, now what happens with the Marital Home?

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I have filed for a Divorce, now what happens with the Marital Home?

In any divorce situation, one of the most major and complex elements to be dealt with is the division of marital assets. As the marital home is typically the largest asset of divorcing couples, it’s important to know your options.

The most common dispositions of the marital home is that it will be sold, or one party retains it. There are other options. But, for the purpose of this blog, these are the two options that will be discussed.

SELLING THE MARITAL HOME: Often during a divorce, neither party is able to retain the marital home, and the home must be sold. It may be that neither party can afford the mortgage on their own, or neither party can afford to refinance to buy the other party out of their equity in the marital home. If you and your spouse have decided that selling the marital home is necessary, the first thing you must do is to agree on a date to list the marital home. Additionally, you must agree on a realtor, a list price, and eventually a sale price. Typically, the proceeds or deficiency would be divided equally between the parties. There are many exceptions to this rule, such as one party having special equity in the marital home, or one party receiving more than one half of the equity for various reasons.

ONE PARTY RETAINS THE MARITAL HOME: If one party will be retaining the marital home, then an appraisal should be completed by a licensed appraiser. That appraisal will give the parties and their attorneys a basis in which to appropriately value and make a division of the equity. Equity is determined by taking the current appraised value and subtracting the current outstanding loan(s) on the property, leaving you with the equity in the home.

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If one party is retaining the marital home, they will be required to “buy out” the other party’s one half of the equity. This can be accomplished by either refinancing the marital home, or providing the equity from another source in the assets of the marriage, such as retirement account. As a very simple example: Party “A” wishes to retain the marital home, and has a retirement account worth $100,000. Each party is to receive $50,000 of the retirement account. The equity in the marital home is $50,000. Party “B” is to receive $50,000 for their share in the retirement account, and $25,000 for the equity in the home. Party “A” would then pay party “B” $75,000 from their retirement account for payment of the retirement account and equity in the marital home. Of course, this scenario requires a retirement account balance large enough to accommodate payment of the equity, after the division of the retirement account.

Yet, another “buy out” option of the other party’s equity in the marital home would be to make payment of the equity over time. This would require the parties to agree to post-divorce installment payments, or a lump sum payment at a specific time.

As the decision regarding the marital home is a complex subject, it should be fully addressed with a qualified family law attorney.

Laurie Schmitt of Schmitt Law, PLLC is a West Michigan family law attorney specializing in collaborative divorce as well as separation, divorce, child custody and support, paternity, and other family law litigation. She is licensed by Michigan State Bar and the U.S. District Court for the Western District of Michigan, and has extensive advanced training in divorce mediation and collaborative divorce. Contact Laurie at (616) 608-4634 for a confidential consultation.

How to Prepare for the Initial Consultation with a Divorce Attorney

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How to Prepare for the Initial Consultation with a Divorce Attorney

You’ve made the decision to seek advice from a divorce attorney. You’ve made the appointment. What preparation should you take to use your time efficiently at the consultation? The initial consultation various from attorney to attorney. However, most divorce consultations include a discussion of the divorce process, custody, parenting time, financial matters, and attorneys fees and costs.

So how should you prepare for this consultation? There are many steps you can take to make sure your first meeting is as productive and useful as possible.

  1. Prepare a list of questions. Many clients are unsure what to ask, or are so overwhelmed they simply forget what they wanted to ask. The interview is much more effective if it can be tailored to your specific needs. That way, you are assured to leave the interview with the information you need. What are your concerns? Do you worry about how you will support the children and pay the bills during the divorce? Is your spouse telling you that you must move out of the marital home before the completion of the divorce?
  2. Compile your financial data to include your assets and liabilities. Be prepared for financial questions from your divorce attorney. Come to the first meeting prepared to tell the attorney what you own, and what you owe. Arrive with copies of your available financial records to include tax returns, mortgage statements, credit card statements, retirement account statements, paystubs, business records, and any other document relating to your financial situation. Do you know how much is in your spouse’s retirement account, or what your mortgage balance is? Do you know the names and balances of your credit cards?
  3. Prepare a list of background information. Your list should contain names, addresses, social security numbers, and employer information for both you and your spouse, the names and birth dates of your children, and the name of the medical insurance provider for you and your children. Do you know the name and policy number of the children’s medical provider? Do you know the children’s social security numbers?
  4. Prepare a goals list. Outline what you want at the conclusion of the divorce proceeding. It may be impossible to know your exact expectations prior to consulting at attorney. Hence, this list may not be all-inclusive. However, it is important to convey to the attorney your current expectations regarding custody, parenting time, and the division of the marital assets. Are you seeking custody of the minor children? Do you want to keep the marital home?
  5. Discuss a budget with your attorney. Every divorce is unique. However, a candid conversation with the attorney about fees and costs is necessary Your interview should include a discussion about the attorney’s hourly fee, their retainer fee, and any costs related to your case. To avoid disappointment, go into the relationship with a full understanding of your financial responsibilities. What is the attorney’s retainer fee? Will you be responsible to pay for travel costs, copies and postage?

How to Control the Cost of your Legal Fees

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How to Control the Cost of your Legal Fees

Every client has concerns about what their case will cost. Like all other professionals, attorneys do charge for their time. However, there are ways you can work with your attorney to control your legal fees.

You can reduce your legal fees by doing your own legwork by providing your attorney with complete financial information regarding your assets and debts. Gather documentation for your bank accounts, retirement accounts, credit cards, stocks, bonds, deeds, and titles. This saves the attorney from having to formally request the information from the other party or other attorney. There are times when you simply will not have access to the other party’s information. However, if the attorney can limit the requests to the other party, you save money.

Communication with your attorney is key in effectively working for you. An e-mail is an inexpensive way of keeping your attorney informed with necessary information about your case. An e-mail gives the attorney a chance to think about your concern before they communicate with you, and often takes less time than a telephone call. And frequent telephone calls add up quickly.

In most cases, you are billed for all time the attorney spends working on your case. You will save money by addressing simple issues such as working with your spouse to divide personal property or deciding who will pay for the household bills through the divorce. Of course, there will be times you simply are unable to negotiate with your spouse, or come to an agreement. But, making the attempt to do so prior to attorney intervention will prevent unnecessary attorneys fees.

Together, you and your attorney should discuss your unique situation, and find other ways to work efficiently. If you and your attorney are mindful of what needs to be completed in your case, and consider the cost and benefits of each task, your attorney can provide you with the best legal representation with the resources available to them.

Have you Received a Show Cause Hearing Notice?

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Have you Received a Show Cause Hearing Notice?

Have you received a notice to appear at a show cause hearing from a Michigan family court? Not sure what a show cause hearing is, or what can happen at that hearing?

When a party to a family court order fails to follow its terms, the other party can petition the family court to enforce the order, and secure the non-complying party’s compliance through a show cause action. VIOLATIONS: There are many actions that may lead to a violation of a court order.

Violations of court orders come in many forms, the most common are for failure to:

Provide information to FOC, the court, or the other party SANCTIONS In Michigan, if you are believed to have violated a court order, you may be sanctioned for your actions. Violation of a court order is a serious offense, one in which the judge can impose the following sanctions:

  • Grant you additional time to obey the order
  • Order that you provide make-up parenting time to the other party
  • Require you to pay a fine to the court • require you to pay the other party’s attorneys fees
  • Order that you go to jail
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THE PROCESS:
The party seeking relief from the court files a motion to show cause. This motion asks the judge to remedy the non-compliant party’s action. If the court believes that the party may have disobeyed a court order, then the court will issue a show cause order, and schedule a hearing requiring the party to appear in court on a specified day and time. At this hearing you need to be prepared to explain to the court why you should not be found in contempt of court for violating the order, and be able to explain why you have failed to abide by the terms of the court order.

REPRESENTATION:
If you have received a notice to appear at a show cause hearing, you should discuss your options with an experienced attorney. It is your right to retain counsel to represent you at this hearing. Don’t go it alone. Schmitt Law, PLLC will make sure you fully understand the proceedings and your options, and will advocate for your position to make sure you are heard during this process.

Financial Fragility – What will your future hold post-divorce

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Financial Fragility – What will your future hold post-divorce

The May 2016 issue of The Atlantic Magazine contains an article discussing the “financial fragility, financial insecurity, and financial distress” of Americans. It states that people have more debt than assets to divide, and insufficient income to support two post-divorce households. With the hollowing out of the middle class, even professionals struggle to get from paycheck to paycheck. What will your financial future hold after divorce?

The Secret Shame of Middle-Class Americans

Divorce “The New” Custody Case – Pets!

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Becoming ever commonplace are cases wherein parties fail to agree on who the beloved family pet should live with after the divorce. Enter the “pet custody” case.

In the State of Michigan, pets are considered mere property, and divided by the court as such. Needless to say, judges really despise making decisions regarding the split of pets.

As someone with a great love for animals, I understand how animals become a significant part of the family, and are certainly much more than just property. And I also understand the emotions that drive divorce clients to engage in a “custody” battle over the family pet.

So, how can a pet custody case be resolved? I have settled cases where parties agreed that the pet moves back and forth with the children. So, when the children spend time with one parent, the pet goes with them.

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However, how can we best settle this dispute when there are no children, and the only “child” is the pet. Courts will look at the bond of the parties and the pet, and who is the primary caretaker of the pet when deciding “custody”. In these divorce cases, judgments have been drafted to include a schedule similar to those for children, wherein custody is shared by the parties. The downfall of this arrangement is that it requires a high degree of cooperation between the parties.

After determining “custody”, it must be decided how the “non-custodial” party will be compensated for the value of the pet. Courts value pets based on the purchase price, and do not compensate for the emotional value parties place on the pet.

As with any decision in a divorce case, don’t allow a judge to control the outcome. If you and your spouse are unable to reach an agreement regarding custody of your pet, consider an alternate dispute resolution such as mediation.

Again, this is a decision that is close to your heart. Do not risk handing over control to a judge.

Common Divorce Questions: What About the House?

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Common Divorce Questions: What About the House?

For most couples seeking a divorce, the house is their most valuable asset.  One or both of them may be emotionally attached to the house.  What I tell my clients from the beginning is that there are three options:

  • The husband gets the house.
  • The wife gets the house.
  • They sell the house and divide the equity.
    • It is important to understand why one party wants to stay in the house.
  • Is it emotional issues causing that desire?
  • Is it because that is where the children were born or raised?
  • Is this their first house?

There are generally a lot of emotional connections to the house, but you can make another connection to a new affordable home.  I try to help both parties to understand what is involved if one party insists on keeping the house and the benefit of selling it and dividing the equity.

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Can the Party Who Wants the House Afford to Keep It?

First Issue: If you or your spouse insists that for them keeping the house is the only option, we need to determine if you or they can afford the house after the divorce.  Meeting with a mortgage loan officer at a bank is the first step.  I want my clients to meet with a loan officer early in the divorce process to see if you can qualify for a mortgage loan on your current home.  If you cannot qualify, there is no sense in spending money on attorney fees fighting for a house that you cannot afford.  I also want to know if the other party that wants to retain the home will they qualify to ensure that, as my client, you get your part of the equity out of the house.

Second Issue: Even if the party can qualify for a loan in his or her own name and after removing the name of the other party from the deed, what about maintenance and upkeep?  Can a new budget accommodate the new loan payment and cost of maintaining the home?  Keeping the house but not being able to afford to maintain can make your post-divorce life miserable.  Ultimately, your goal for post-divorce should be to have a life that allows you to successfully move forward without an economic millstone around your neck.

Selling the House and Dividing the Equity

The best resolution is often to sell the house and divide the equity.  This should be decided early in the divorce process, so the house can get on the market as quickly as possible.  The couple may agree on the value of the home, but getting a professional appraisal is best.

Additionally, we do not want the house to go into foreclosure status, so the mortgage payments and upkeep must continue until the asset is sold.  We also must decide on what realtor to use.  If the parties cannot agree on these simple solutions, we will get the court involved.

For assistance in making this major financial decision, and assistance in moving on to a new chapter of your life, contact Schmitt Law, PLLC to schedule an appointment.

Common Divorce Questions: Is there Alimony in Michigan?

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Common Divorce Questions: Is there Alimony in Michigan?

Michigan law allows for spousal support, commonly referred to as alimony.  There is no set formula as to how the amount of support is determined.  Each case is decided according to its unique circumstances.

Factors Courts Consider for Alimony/Spousal Support

When one party requests alimony, the court considers many factors before deciding to order support, and if so, how much, and for how long.  Those factors include:

  • Past relations and conduct of the parties.  Although Michigan is a no-fault state, fault may be considered for the purposes of spousal support.
  • Length of the marriage.  The longer the marriage, the greater the likelihood support will be ordered.  A spouse in a short-term marriage, which is not defined in the law, will generally not receive support.
  • The ability of each party to work.  One party to the divorce who has not worked outside the home for a long period of time may not have the skillset to get a job.
  • Source and amount of property awarded to each one.  If the person requesting support is walking away with a lot of the assets, like equity in the marital home, an IRA, or retirement pension, the court is less inclined to award support.
  • Age of the parties.  This affects the ability of a party to find a job.
  • The present situation of each party.  This includes the earning potential of each party, whether there are minor children who need to be cared for, and other similar factors.
  • Health of the parties.  Does one spouse need to be cared for and the other one healthy and who has the ability to pay?
  • The standard of living while they were married.  The court does not want one spouse to be living quite well while the other one lives in poverty.  The court will fashion an order to equalize the standard of living of the party’s post-divorce.
  • Any other factor the court deems relevant.  This is a “catch-all” factor intended to allow the court to consider any factor to help make the decision based on the general principles of equity and fairness.
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How Schmitt Law, PLLC, Can Help

Although there is no set formula, at our Schmitt Law office we have a software program where we enter all the objective evidence.  It then gives us a ballpark amount of what we should request for spousal support, and for how long the client should receive support.  We work with these numbers to try to effectuate a settlement without court intervention.

If no settlement is forthcoming, we then prepare a trial brief that goes through all the factors in detail, so the court can see that our numbers are good ones.  We still understand that the judge has full discretion in determining the outcome of spousal support.

For more information and assistance with your divorce issues, contact us at Schmitt Law, PLLC.