When divorcing – either through mediation or litigation, couples need to figure out how to divvy up all of the assets -- cash, investments (401K, stocks, etc.) and property (house, cars) as well as the liabilities -- mortgage, loans, credit card debt. Some couples have a lot of different assets and the challenge is how to divide them in such a way that prepares them best for their new lives. Sometimes, it is best to divide the investments and property first, and then see how much actual cash is left over to live on, and then divide up the money. Other times, people start with the cash. They look at their life post-divorce and project how much cash they will need to finance their future new life. After dividing the cash, they balance out the spreadsheet by taking more or less of the remaining assets.
Two things to consider when doing these calculations are child support and spousal support. Child support may impact the amount of cash needed on a monthly basis. One parent needs more cash to pay the support amount and the other parent may need less monthly income because s/he is counting on the support money to supplement the bottom line. Child support is mandated by the state of New Jersey. You cannot opt out of paying child support.
In contrast, spousal support (aka alimony) is not mandated by the state of New Jersey. So, what to do about alimony is a big decision. First consider -- are you entitled to permanent alimony? Limited? None? Then, think about whether you should you forgo alimony even if you are legally entitled to it. Even if a spouse would be entitled to receive alimony, during the course of divorce mediation, a couple can create the terms of their agreement and opt out of alimony. In such cases, usually the spouse that is entitled to alimony receives a larger chunk of the assets than s/he would if alimony were in play.
Just remember, if you waive your right to alimony when you get divorced, you cannot reclaim it down the road. Once your divorce decree states that there is no alimony, then there is no alimony. Ever. Some people are very comfortable with this decision and others are too worried about their financial future to give up this right, and feel more comfortable with a consistent income stream from his/her ex-spouse, even if it lasts only for a limited time. The choice is yours, and the mediation process helps you arrive at the answer that works best for you.
-Michelle Weinberg, LMFT