Separation and assets


#1

My parents, are separating. Husband is cheating. They were married 37 years. They decided to split on 12/31/11. At present they are handling “amicably” and agreeing to split assets evenly. Husband will retain marital residence and “buy out” Wife. Wife is looking to buy new residence but they both current reside in marital residence. At present they do not even have a separation agreement in place. My questions are these: 1. If she moves out without a separation agreement in place does that constitute abandonment? 2. Can she purchase a new residence with the “buy out” cash while they are still married, but separated? I am concerned that would be considered marital property and Husband would have a claim even if they sign a separation agreement before her purchase. Is this the case and if so what can she do to make this a separate purchase free from joinder? A Free Trader Agreement? 3. Wife currently carries Husband on her work insurance (she works he does not, is of age to collect SS so he retired). He is eligible for Medicare so if he gets on that is she free from needed to take care of the insurance for him? I assume this can be stated in Separation Agreement. 4. Can she open bank accounts in her name only? All accounts are currently joint accounts and there is some concern that Husband would plunder them. Also, they have several investment accounts, to have been used for their retirement, in annuities and IRAs. Can those be split simply by clause in the seperation agreement? 5. What happens to the tax returns for this year? They were married through the entire year and usually file jointly. Would they do that for 2011 and have to split any return or payment required? 6. Is Wife entitled to any of his SS income or alimony? They both have relatively equal incomes so neither is necessarily “dependent” on the other. 7. Does Wife need to file divorce complaint or any papers with the court now to start the timeline or does all that happen after the year of separation? Thank you, sorry for the length but she cannot afford a lawyer


#2
  1. She should try to execute a separation agreement contemporaneously with her moving out. It’s always better to have a SA prior to moving out, but if that’s not possible then she should try to execute one as soon thereafter as she can. I wouldn’t worry too much about abandonment though, especially since he is the one buying her out.

  2. She shouldn’t buy a new residence until 1) a SA is executed which contains a Free Trader provision or 2) she’s able to get a Free Trader agreement done separately; or 3) the divorce is finalized. You are right that to buy the property before the divorce still creates certain inchoate property rights for her husband unless there is a Free Trader that cuts off those property rights. If she has to wait for the divorce to become final, she should rent in the meantime.

  3. She will need to call her plan and ask them about this. They are all different with their requirements but generally they will not let her remove him unless he is getting covered elsewhere or the divorce is final.

  4. Yes. She should go ahead and take out half of the values from each account and put them in accounts in her separate name. Half of the value would go to her in equitable distribution anyway, so this just keeps her from being destitute until ED is worked out.

  5. They should file jointly for 2011 as they were married the whole year. They can go ahead and split the return when they get it. This can also be put into the SA.

  6. If there is no dependent spouse, then there is no spousal support.

  7. No, the timeline for separation begins as soon as one of them moves out with the intention to remain separate and apart. So, they are still not even separated as of this moment. That’s why it is a good idea to move out as soon as possible, ideally with a SA in place or close to it, to get that one year clock started. After they’ve been separated for a year and a day, she can file for divorce.

Good luck to you and your family.


#3

Thank you so much! We appreciate it! This site is a wonderful resource!


#4

You are most welcome, we wish you and your family all the best.