Going through a divorce can be an emotionally and legally complex time. With so much to consider, it’s understandable that some critical issues may be initially overlooked when drafting divorce settlements in New Jersey. However, failing to address these crucial matters can cause significant problems down the road.
Our New Jersey divorce lawyers have handled hundreds of divorce cases. We’ve seen firsthand the oversights divorcing couples often make when negotiating agreements. To help you avoid pitfalls, here are five things commonly overlooked in divorce settlements and why they matter.
1. Spousal Health Insurance Coverage
One aspect that frequently slips through the cracks during divorce negotiations in New Jersey is spousal health insurance coverage. Many people don’t realize that they may no longer be eligible for health insurance coverage under their spouse’s plan once the divorce is final. This can be a significant issue, especially if you’ve been relying on your spouse’s employer-provided insurance and haven’t budgeted for your own coverage.
In New Jersey, some insurance plans or resources like GoodRx may offer continuation benefits for a limited period after the divorce. However, this often comes at a higher cost and may only be a temporary solution. Addressing this issue during the divorce negotiations is crucial rather than waiting for the final decree. You may need to explore options like purchasing a private plan or looking into state-provided healthcare programs like NJ FamilyCare.
Failing to account for health insurance coverage can leave you financially vulnerable and without essential medical coverage. Therefore, it’s advisable to consult with our experienced family law attorneys to ensure you’re making informed decisions about your health insurance options as part of your divorce process.
2. Marital Assets Often Overlooked in New Jersey Divorces
When navigating a divorce in New Jersey, couples usually focus on the division of significant marital assets like homes, cars, and bank accounts. However, other marital assets often go unnoticed in divorce settlements, potentially leaving one or both parties financially disadvantaged. These can include everything from frequent flyer miles and club memberships to intellectual property and even digital assets like cryptocurrency.
In New Jersey, the principle of equitable distribution governs the division of marital assets. This means that all assets acquired during the marriage, regardless of who earned or purchased them, are generally subject to division. Overlooking less obvious assets can result in an unfair distribution of marital property that may affect your financial stability for years to come.
For instance, if one spouse has frequent flyer miles accumulated through work travel, those miles have value and should be considered in the asset division process. Similarly, if you or your spouse have written a book or developed software, the intellectual property rights are also marital assets that need division.
To ensure a fair and comprehensive division of all marital assets, it’s crucial to create an exhaustive inventory and consult with our divorce attorneys beforehand about any assets that may not be immediately obvious. This will help you avoid any financial surprises and ensure you’re adequately compensated in the divorce settlement.
3. Retirement Accounts and Pensions
The division of retirement accounts and pensions is often overlooked in divorce agreements. Many people focus on immediate concerns like the family home or monthly alimony, neglecting the long-term financial implications of their retirement savings.
Retirement accounts, such as 401(k)s, IRAs, and pensions, are often subject to division during a divorce in New Jersey, depending on various factors like the length of the marriage and each spouse’s financial contributions.
In New Jersey, the equitable distribution law governs the division of marital assets, including personal property like retirement accounts. However, splitting these accounts isn’t as straightforward as dividing other property types. Special legal procedures, like obtaining a Qualified Domestic Relations Order (QDRO), may be necessary to divide certain retirement accounts without incurring penalties or additional taxes.
Ignoring the division of retirement accounts can negatively affect your financial future. It’s essential to consult with our experienced family law attorneys to understand how your retirement savings will be affected and decide what steps you can take to secure your financial well-being post-divorce.
4. Parenting Time During Holidays and Special Occasions
Regarding child custody arrangements in New Jersey, most divorcing couples focus on the regular day-to-day schedule. However, they often overlook the importance of specifying parenting time during holidays, birthdays, and other special occasions. This oversight can lead to unnecessary stress and conflict, as both parents may assume they’ll have the children for significant events like Christmas, Thanksgiving, or even summer vacations.
In New Jersey, it’s advisable to include a detailed holiday schedule in your parenting plan. This schedule should outline which parent will have the children during each major holiday, alternating years if necessary, and specify the pickup and drop-off times. Including provisions for other significant days, such as the child’s birthday or family reunions, is also a good idea.
Addressing holidays and special occasion parenting time in your divorce agreement can prevent future misunderstandings and ensure a more harmonious co-parenting relationship. Make sure to consult with our family law attorneys to include these details in your separation agreement and parenting plan, so both you and your children can enjoy special times without any added tension.
5. Debt Division and Credit Score Impact
A commonly overlooked aspect of New Jersey divorces is debt division and its impact on credit scores. While couples quickly discuss the division of assets like homes and cars, they often neglect to consider who will be responsible for marital debts such as credit card balances, mortgages, and car loans. Failing to allocate these debts clearly can lead to financial complications and even legal disputes down the road.
In New Jersey, the equitable distribution law also applies to marital debts. Both parties are generally responsible for debts incurred during the marriage, regardless of whose name is on the account. However, when dividing debt, the court may consider various factors, such as each spouse’s earning potential and financial contributions.
It’s crucial to understand that even if the divorce decree assigns a particular debt to your spouse, creditors may still hold you responsible if your name is on the account. If your ex-spouse fails to make timely payments, this can negatively affect your credit score. To protect your financial future, consult our divorce attorneys about how to handle debt division best and consider removing your name from joint accounts whenever possible.
Addressing debt division explicitly in your divorce agreement can save you from future financial headaches and help maintain your credit standing. Always consult our experienced attorneys to ensure you’re making informed decisions about this critical issue.
Don’t Navigate Divorce Settlements Alone
Divorce is complicated, but you don’t have to tackle it alone. Contact us today to discuss your situation with our compassionate and strategic New Jersey divorce lawyers. We’ll help you negotiate a thorough settlement agreement tailored to your unique needs while avoiding common pitfalls.
With an iron-clad agreement in place, you can move forward after your divorce with confidence and peace of mind. Don’t let critical issues slip through the cracks—let us review the details with you today.
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