Is it possible to modify child support or spousal support after the Marital Settlement Agreement is finalized?

It is possible to change the amount of spousal support and/or child support after the dissolution judgment has been finalized, but only by filing a petition with the court. In either case, spousal support or child support, the petitioning ex-spouse must show that a "substantial change in circumstances" has occurred.

In Illinois, a "substantial change in circumstances" that justifies an increase of spousal support could include a significant increase in your expenses or decrease in your income. Conversely, it could include a decrease in your ex-spouse's expenses or increase in his or her income. In order to satisfy the test to modify support, you must show more than a minor change in your or your ex-spouse's financial condition.

The same definition for modifying spousal support applies to modifying child support in Illinois as well. Frequently, child support will be changed as the children grow older and their needs become greater or, as stated above, the ex-spouse's income increases, which allows him or her to contribute more to the payment.

Please note that if your original dissolution agreement stated that there could be no future modifications to support, then no change is possible. However, even in this case, the restriction only applies to spousal support, not to child support. The right to child support can never be given up.

Also understand that your ex-spouse is able to use the same criteria to decrease spousal or child support in circumstances in which his or her financial situation has changed for the worse. For example, if your ex-spouse lost his or her job or income has decreased, this would be cause for a petition to decrease support paid to you.

If you have any questions regarding post-decree modifications, please contact my office. I can help assess if your current situation meets the modification criteria.

Steps to a More Fair Divorce

Although it may be hard to imagine, there are many steps you can take to negotiate a more fair divorce. The more knowledge you have throughout the process, the better equipped you will be to navigate potential pitfalls.

1. Call a lawyer and financial professional: Do not delay in assembling your "divorce team". Experienced professionals are an invaluable asset in assuring your interests are looked after. The end result is well worth the upfront costs.

2. Remember, knowledge is power: Enhance your knowledge regarding the divorce process by reading books, consulting experts and talking to friends and family who have experienced a divorce. It is important to feel comfortable with terminology used by your divorce attorney and divorce financial planner. Learning as much as possible about divorce helps you to form realistic expectations from the beginning and you are less likely to feel intimidated if you have working knowledge of the process.

3. Know your current financial situation: If your spouse keeps track of the finances, it is imperative that you become informed of your current financial situation. Read the "Start Now" guide and see what documents you need before taking any action. You must know where you currently stand in order to assess a reasonable expectation of your post-divorce standard of living.

4. "Time" divorce, if possible: It may sound callous, but if you are close to hitting the 10 year mark in your marriage, it may be worth it to hold out. For couples married 10 years or more, you may be eligible for social security benefits based on your spouse's benefits.

5. Separate emotion from assets: It is important to keep your focus on the future! If you are dwelling on past hurts or memories, you are not able to see your current or future situation clearly. You will most likely base critical financial and legal decisions on these emotions instead of sound advice. For example, though your home may be a symbol of family and stability for you and your children, it is not always in your best interest to maintain the house. You must be able to step back from the situation and gain perspective in order to do what is best for you and your family.

6. Be honest and realistic: Although it may be tempting, do not manipulate financial information. This will only lead to distrust between you and your "divorce team" and between you and your spouse. Legal and financial decisions must be made based on accurate information. To do otherwise is counter-productive and will only be detrimental to you post-divorce.

7. Utilize your support network: Balance is important when dealing with the emotion involved in divorce. Talk to family, friends or a therapist and remember you are not alone! Your friends and family are there to support you and they have your emotional health at heart. If you need an outside perspective, a therapist would be a great resource. Although family and friends mean well, they can tend to tell you what they think you want to hear. A good therapist is unbiased and trained to provide you with healthy coping mechanisms.

How the new health care bill will impact the market...

Health Care and Market Impacts

On Tuesday March 23, President Barack Obama signed into law a major change to the U.S. health-care policy that will impact every American and affect one-sixth of the economy. The social benefits of these policies we will leave to others to debate, our focus is what this means for the markets.

Within the Health Care sector the impact is mixed. There are three categories of companies affected by the legislation with the Health Care sector. In general:

· The Managed Health Care Industry is negatively impacted by extensive new regulation limiting profitability.

· The Pharmaceuticals, Biotechnology, Health Care Equipment, and Health Care Facilities industries benefit from broader health care coverage leading to greater volumes, but these positives are offset somewhat by Medicare reimbursement cuts and higher industry excise taxes.

· The Health Care Services and Health Care Distributors industries benefit from broader health care coverage leading to greater volumes with no direct cuts to pay for them.

Much of the impact has already been priced in to the stocks in the sector. In the near-term, Health Care sector investors are likely to be relieved that the period of uncertainty is now over.

A potentially negative longer-term outcome for the broader market stems from the tax and deficit impacts of the legislation. The legislation imposes a new 3.8% tax on investment income. This lowers the after-tax return on investments. It also adds a 0.9% tax on wages for those earning more than $250,000, set to take effect in 2013. The macroeconomic impact that may be most significant is the potential to increase the deficit despite the tax hikes.

Two important facts are necessary to understand the concern evident in the markets over the deficit impact of the legislation:

• The average cost of a family health insurance policy offered by employers was $13,375 in 2009, according to the Kaiser Family Foundation and the Health Research & Educational Trust. On average, employees pay about 20% of premiums with the employer making up the rest (an average of $10,700 per employee).
• The legislation establishes new insurance exchanges for the purchase of health insurance by those who do not have insurance offered through their employer. Under the exchange, the cost of a policy would be subsidized by the taxpayers for individuals and families with incomes up to 400% of the poverty level. This means that a family of four with the national average income of about $70,000 (at 317% of the poverty level of about $22,000) would have their spending capped at 9.5% of income which would be about $6,650. The other half of the cost of the insurance would be picked up by taxpayers.
  

The Congressional Budget Office, the agency that tabulated the budget impact of the legislation, estimates that about 25 million people would take advantage of the exchange to obtain subsidized health insurance by 2019. However, if employers that currently offer health insurance drop their coverage in order to save $8,700 per employee ($10,700 less the $2,000 penalty for employers with more than 50 employees that do not provide coverage) and shift that cost to the taxpayer, the number of people getting subsidized health insurance could surge well beyond the budgeted 25 million. After all, there are 127 million people with incomes between 150% and 400% of the federal poverty level. If a large percentage of these 127 million people were shifted to the exchange, with a typical annual subsidy around $5,000-$6,000, the annual cost of the legislation would soar and significantly worsen the budget deficit. While all of the potential effects of the health care legislation are unknown, market participants may focus on the risks.

While the passing of the uncertainty surrounding the health care legislation may be welcomed by many investors, it could contribute to higher interest rates as fears of the rising deficit combine with rebounding economic activity and excess money provided by the Federal Reserve. We expect Treasury yields to rise this year so we would caution against government bonds.

As always, I encourage you to contact me if you have any questions.

"Is it a bad idea to divorce in a recession like this?"

As in most things divorce, it’s complicated. Our houses won’t sell, our loan and credit options have dried up and our paycheck just doesn’t go as far as it used to. Add to that the strain of divorce and you could have a recipe for disaster. For those thinking twice about divorce, I’ve compiled a few tips to help you whether you decide to stay or go.

Issues:

House: You need to sell or refinance the house to remove the other spouse from the mortgage, but the housing market is at an all-time low and financing is difficult even for those with good credit.

Assets: All of the accounts are 40% of what they were…how do you divide the assets fairly when everything is down?

Spousal Support: One party has had to take a pay cut or even lost his or her job.

Bills: You will potentially need to afford two households instead of one.

Cost: Divorce can be expensive. Attorney’s fees are high and the stress of economic hardship could lengthen the process.

The “Sapient Solutions”:

The House: Try to re-finance the mortgage at a lower interest rate. If you are denied, contact your lender to see what your options are. If you want to stay in the house, contact a divorce financial planner to see if you can afford it. If you’re open to selling, explore the possibility of a short-sale.

The Assets: Try to negotiate a way to hold on to assets, rather than selling, until the market improves.

Spousal Support: Instead of waiving your right to spousal support altogether, try to negotiate a tiered scale based on future economic improvement.

The Bills: You must know where your money is going! If you don’t, track all spending for at least 3 months (try Quicken). Cut expenses, i.e. give up the expensive lattes and stop eating out. Also, prioritize spending. Don’t let your health insurance lapse due to poor planning.

Cost: Try mediation. Its focus is communication and is less expensive than litigation.

Be proactive!

If you decide to wait until the dust settles and the economy turns up, take this time to prepare. Consult a divorce financial planner to start laying the groundwork so you’re in the best possible position when you are ready to take that step.