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What are the most common financial mistakes in a divorce?

By Charles F. Vuotto, Jr., Esq. and Steven R. Enis, Esq.

“What are the most common financial mistakes in a divorce?”



The following represent the ten most common financial mistakes that people make as they proceed in a divorce action.


1. One of the most time consuming and costly aspects of divorce is the process of gathering information and documentation, commonly referred to as “discovery.” This process can be greatly reduced if a divorcing litigant would thoroughly inspect the contents of his or her home and make copies of all documents contained therein. Admittedly, this is a daunting task. Many people do not wish to engage in this task. It is time consuming and costly. However, the time and cost associated with inspecting one’s own home and copying all documents is far less than what will be spent if the same information and/or documents must be obtained through formal discovery in the course of the divorce litigation.


2. Another discovery related issue concerns a party’s obligation to fully and completely answer all interrogatories (formal written questions exchanged in the course of litigation) and respond to applicable document demands. Again, this is a tedious and time consuming task. Many litigants do not wish to take the time necessary to completely respond to discovery. This causes multiple problems, including, but not limited to increased costs when attorneys are required to work extensively with litigants to fill in the blanks. This also leads to the submission of incomplete information to adverse counsel, which may result in motion practice, sanctions, limitation of claims and possible counsel fee awards. Further, if all of the relevant information is not produced, a litigant’s individual claims cannot be fully presented to the court. One of the biggest tools that any attorney has is correct and updated information. Without that, it is virtually impossible to achieve a client’s desired goals within the litigation.


3. A divorce litigant must work closely with his or her attorney and conform his or her expectations to the law and facts that can be proven. Interjecting emotions or preconceptions as to one’s entitlement to alimony, child support, property or other financial issues will only serve to prolong the litigation, increase the costs and ultimately result in great disappointment by the litigant at the end of the case. These financial issues are assessed by a court based upon statutory factors as interpreted by case law. Therefore, the court must consider many different elements and factors before rendering a decision as to these financial issues. Emotions such as anger, fear, betrayal or revenge will not factor into the court’s decision. A litigant should not make decisions based on those emotions either.


4. The law in New Jersey has evolved to the point where fault has little or no relevance in divorce litigation. It is a common error for people to make decisions about financial issues in a divorce based upon their perception of why the marriage broke down. This is a serious error.


5. The most important document in a divorce case is the Case Information Statement (“CIS”). It is the document that a court will usually seek to review first when making any financial determination, whether it’s during the pendency of the case or at final hearing. It is the document that an Early Settlement Panel (“ESP”) will seek to review when giving recommendations as to the ultimate outcome of the case. It is also the document that a mediator will seek to review in assisting parties to resolve their case. It is essential that the divorce litigant take special care to thoroughly and accurately complete all portions of the CIS and, after it is completed, diligently review the CIS on a periodic basis to see if any information has changed and advise his or her attorney in a timely manner.


6. Failure to select the correct lawyer can be a problem. There are certain attributes that you should look for in a divorce attorney in general. For example, whether they are certified by the Supreme Court of New Jersey as a matrimonial attorney, whether they are a member of the Executive Committee of the Family Law Section of the New Jersey State Bar Association and whether they write articles and/or frequently lecture to the bench, bar and public. However, when there are complex financial issues, it is advisable to select an attorney who has written or spoken on related topics. If a divorce involves complex financial issues (such as the valuation of a business or other unique asset), it is not advisable to retain an attorney who concentrates his or her practice in child related issues.


7. One of the key factors or elements in most divorce cases is the “marital lifestyle.” An attorney needs need to adequately present how the parties lived during the marriage. Did they live in a low, middle or upper class lifestyle? A divorce litigant should, at a minimum, gather all spending records as to the parties’ personal spending during the last three years of the marriage. This would include bank, credit card and brokerage account records as necessary. These records should be summarized by the client to show the actual expenditures broken down by the various expense categories as contained within the Case Information Statement. This personal spending summary (with all documentary backup) can then be used to adequately complete the Case Information Statement and present the parties’ lifestyle to the court. Marital Lifestyle is critical to alimony, child support and other support obligations. Failure to do so is a critical error.


8. Divorce litigation requires strategy. An essential aspect of any strategy is a clear delineation of one’s goals. Assuming that the goals are reasonable and in accordance with the law (pursuant to the advice of one’s counsel), the goals then become the target at which all preparation is aimed. The preparation of goals will focus the litigation so that time, money and resources are not expended on activity which is not directed at the litigant’s goals.


9. Family members and friends can be great support systems for someone going through the emotional roller coaster of a divorce proceeding. Relying on those same friends and family members to sculpt your opinions on legal issues can be catastrophic. Use your support system to aid you when the emotions of the divorce are becoming too all consuming. But allow your attorney to advise you on the legal issues and principles.


10. The internet can be a wonderful thing when you are looking to buy an old big wheel, add onto your collection of original lego pieces or find a street map of a town you will be visiting. Do not however, allow the internet to guide you in your divorce proceeding, which is what you have your lawyer for.


Avoiding these errors will greatly improve the likelihood that a divorce litigant will achieve his or her goals in their case.

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