Sheehan & Associates, P.L.C.

Detroit Law Blog

What if you can't pay your child support next month?

It seems like financial crises are looming large these days, and many people are unsure how they're going to meet obligations like rent, utility bills, car payments and more over the coming months.

Divorced parents, of course, have an even bigger concern: They need to know what to do if they can't afford their child support next month.

Struggling financially? Bankruptcy is one option to explore

We are living in very uncertain times. Where what seemed sure and certain only a few months ago now appears quite shaky and unsubstantial.

Due to the worldwide pandemic COVID-19, many people who thought that they had no financial hardships are now facing a perilous future. Those who were already in dire financial shape now may be teetering on the brink of catastrophe.

Is your spouse hiding money from you?

When you and your spouse got married, it was "share and share alike." Well, the halcyon days of your relationship are past and you've developed a creeping intuition that your spouse is not being honest with you about money matters -- probably in preparation for a split.

How do you know if you're just being overly suspicious and paranoid or simply perceptive? Here are some of the signs that your spouse really is hiding assets:

  1. Your spouse isn't direct or clear about the taxes. If your spouse goes out of their way to keep you out of the tax papers, that's a sure sign the papers contain information about assets or income sources you don't know exist.
  2. Financial statements are no longer coming to the house. Your spouse is having them delivered to their office or somewhere else you can't intrude.
  3. Your spouse makes some massive and unexpected payments. That might be a huge overpayment on the taxes (in anticipation of the refund they can claim after the divorce) or they may suddenly "loan" their sibling money for some fictitious reason.
  4. Your spouse claims their business is in distress -- but it doesn't seem like it. When a profitable-seeming company suddenly develops a cash-flow problem for no reason right around the time its owner starts considering a divorce, it's time to be suspicious.
  5. Your spouse is still working just as much, but their salary has decreased. That may mean anything from deferred bonuses to the possibility that your spouse is funneling part of their wages into a private account somewhere.
  6. Your spouse has a sudden interest in cryptocurrency or offshore accounts. If your spouse seems to constantly be researching these but doesn't really discuss it, that may be where money is hiding.

Prince's estate encounters new complications

When music icon Prince died, people were shocked that the singer and songwriter didn't leave behind a will. His six siblings stood to inherit roughly $100 million. However, the licensing rights on many of his unpublished works could be worth much more.

Two of those siblings quickly divested themselves of much of their inheritance by selling their rights to the estate to the entertainment company Primary Wave. Since the estate has been held up in probate while various claims against it -- some clearer than others -- are settled, selling their rights may have been the best way they could find to access their inheritance quickly.

How the SECURE Act changes trust planning

The Setting Every Community Up for Retirement Enhancement (SECURE) Act went into effect at the beginning of 2020. Among other things, it changes some of the rules on certain kinds of trusts -- which means that you may need to revise your current estate plans.

In the past, you could direct your retirement accounts into a "stretch" trust after your death that would give your nonspouse beneficiaries (like your minor children) distributions over an extended period of time. That was usually the most favorable way to take advantage of tax deferrals, minimizing how much. Under the SECURE Act, however, your nonspouse beneficiaries only have 10 years from the time of your death to take the entire distribution.

Are you the only person without a savings or retirement account?

You've probably heard this before: You should have enough money set aside at any given point to cover at least three months of your bills. Six month's worth of income sitting in the bank, of course, would be better.

If you constantly have "too much week left" after your paycheck is gone and nothing more than moths fluttering around your savings account, are you a failure? Absolutely not. You're actually in pretty good company.

What kind of remedy is 'specific performance' in contract law?

Despite the old saying, promises are not meant to be broken -- especially when those promises are part of a contract. But what can you do when someone breaks a contract with your company?

If the breach is serious, or material, you have legal options. Depending on the situation (and the contract), you may be able to cancel the deal -- which, at least, ends any obligation on your part. You may also ask a court to order the other party to compensate you for your losses or even penalize them monetarily. But what if you really want the other party to come through on the deal, and you don't think that mere money will actually compensate you?

Understand the financial obligations and challenges of a divorce

Your marriage is unhappy, and you want out. Now, you just need to understand what it takes to make that happen. Part of that process is making certain that you fully recognize the financial consequences of a divorce and are prepared for them.

Here are some of the financial considerations you may need to discuss with an attorney:

  1. Your obligation for spousal support or child support. You may have a lot of worries where these issues are concerned, and those worries can be compounded by misinformation or lack of information. Your obligation may not be as unmanageable as you think. Nor is alimony likely to go on forever.
  2. Your right to the marital assets. Michigan is an equitable distribution state, so marital assets are divided up according to what the court finds "fair," which can be much different than "equal."
  3. The effect of a prenuptial or postnuptial agreement. If you and your spouse have such an agreement, you should review it carefully before you make the next step. You may have forgotten some of the terms over the years, and that could lead to mistakes.
  4. The tax consequences of your divorce. This isn't just about your filing status. It also has a lot to do with how you may be taxed on distributions from pension funds, who gets to claim the kids and more. It's often wise to talk to a financial planner, especially if you have complex holdings and multiple income sources.
  5. The best way to protect your credit. Disentangling yourself financially from your spouse can take a while. You need to know how to best protect your good credit during this time.

Bankruptcy happens for this reason more than any other

Think about why people file for bankruptcy, and what reasons come to mind first? Poor spending habits? Bad investments? Bad business decisions?

These things can and do play a role. But they are not the main reasons why people end up filing. The reality is that it's a bit more innocent than that, and it's something that people cannot really control.

How much does divorce cost in Michigan?

If you're facing a divorce, it's natural to think about your finances. It's expensive to split up and start over.

But just how expensive? According to the latest figures, Michigan's relatively low cost of living (which is 7% lower than the national average) also translates to a lower cost of divorce than in many states. A divorce without minor children will likely cost $12,900. Those with minor children can expect to pay $19,400. That makes divorce in Michigan less costly than in almost half the nation.

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Sheehan & Associates, P.L.C.
1460 Walton Blvd , Suite 102
Rochester Hills, MI 48309

Toll Free: 877-600-7891
Phone: 248-218-1473
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