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Possible divorce, advice to minimize financial loss. Any/all help appreciated.

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  • Possible divorce, advice to minimize financial loss. Any/all help appreciated.

    Long post, lots of details.  Any help appreciated please.  Questions at the end.  Identifying information has been changed.


    Female co-worker is considering divorce.  I’ve been privy to many of the details since they have met about 20 years ago.  Married about 16 years ago.  Looking for advice to minimize financial costs to her as a result, specifically alimony, division of assets.






    “Wife”, 37 years old, born & lived in NJ her entire life.  Currently working for private company for about 6 years, prior to that was working at teaching medical school in research department.  Currently making about $105,000 per year, has Master’s degree.  No arrest records.  No history of drug use.


    “Husband”, about 39 years old, born & lived in NJ his entire life.  Has been receiving SSDI (not SSI) due to mental health disability for about 22 years.  Approximately $580 per month.  History of substance abuse & incarceration for drug use & possession, physical altercations in the past, but no felonies.  Specifically one parent of Husband is somewhat defensive of Husband & his behaviors, is in charge of Husband’s SSDI, finances, & other state benefits, including Medicaid.  Husband has worked some in the past, not consistently.  For about past 15 years has been stay at home dad, with bouts of relapses requiring hospitalization.  Husband is on long term mental health medications which Husband says he no longer needs to take.  Wife believes Husband has been using marijuana for several weeks now, which as stated from Husband’s doctors is not okay to mix with his mental health medication.  Recently Wife assisted Husband in finding part time work to help with increasing housing & child expenses, but since then Husband has disassociated himself from home duties.  Within the past 3 days Husband & parent decided Husband should move back with his parents.  Verbal aggression towards Wife from Husband & parent at the time of his leaving, but nothing physical.  Husband took all his possessions (and some of her’s) with him from Wife’s & Husband’s home.  Wife says she will not allow him to return.


    “Daughter”, 18 years old, in last year of high school, also attends community college after hours (early college type program), applying for university now, strong possibility of going out of state.  As such looming high tuition costs with limited financial aid prospects.  Is fully aware of situation between Wife & Husband.


    “Son”, 4 years old.  Just started private paid daycare about 4 months ago.  Was home all day up to then.  No public free schooling or daycare available in town.


    Possibly pertinent: Wife obtained Master’s degree after birth of Daughter.  Wife & Husband married after birth of Daughter.  Wife has worked consistently since.  No pre-nuptial agreement.




    Assets & Liabilities:


    Condominium: New construction in development purchased about 12 years ago, in NJ near Philadelphia area.  Wife’s income was low enough at the time to qualify for affordable housing.  Is currently subject to affordable housing pricing rules until about year 2037.  Currently allowed to be sold for no more than $102,000.  Mortgage balance about $52,000.


    Compact car: was purchased new in 2013, currently worth about $9,000.  Owe about $3,300.  Was used by Wife, now used by Daughter.  Titled & registered & insured in Wife’s name.


    Minivan: new 2019, purchased & financed about 3 months ago.  As such, little equity. Used by Wife.  Purchased because Daughter needed a car to go to college classes in, so Wife gave Daughter the Compact.  Titled & registered & insured in Wife’s name.


    Sedan: 2005, purchased used for cash about 1 year ago for $1,500, estimated worth about $1,000.  Used by Husband.  Titled & registered & insured in Wife’s name.


    Wife has 2 traditional 401Ks currently, one from prior job, one from current employer.  Combined about $30,000.


    Wife & Husband joint bank account, about $6,500.  Not used for expenses.


    Wife’s separate bank account, about $17,000.  Used for paying all expenses including housing/food/children/medical.


    Wife is not aware of any cash assets held solely by Husband.




    Husband’s parents both work for NJ public school system.  The implication is access to resources like lawyer referrals (being state & public employees), as well as experience in divorce proceedings from family & friends.


    Wife says things have been unsettled for several years now.  As such would like to formally end marriage.


    Husband’s SSDI income is loaded monthly onto debit card in Husband’s parent’s name.  As verbally agreed upon by Wife & Husband’s parent for several years now, Wife keeps card in her possession & withdraws money from card from ATM & deposits into her separate bank account for all expenses, including Husband’s food/clothing/shelter/phone expenses.


    Wife’s & Husband’s state & federal taxes are filled Married Filling Jointly.  Yearly tax return is deposited into joint account.


    Wife says employer health insurance for Wife & Daughter & Son costs about $580 monthly from her paychecks.  Health plan is HSA eligible, as such high deductible, as such large out of pocket expenses.  Within the past year Daughter had orthopedic injury & surgery resulting in medical bills of approximately $5,000 that Wife is paying on payment plan.




    Wife’s worry is losing assets to Husband in possible Divorce.  Of note, neither Wife nor Husband own any other real estate or homes.  Wife says she would need to keep Condominium for housing.  Would sell Sedan due to being unused, but would keep Compact (for Daughter) & Minivan (for Wife & Son).


    With Husband’s prior arrests, substance abuse, & mental health concerns, Wife is planning for sole custody of both Daughter & Son (with supervised visitation if Husband desires).  As such would file for child support from Husband’s SSDI.  She recognizes it won’t help much, but “a little help is more than none”.  Wife says SSDI is can be subject to child support (as opposed to SSI, which cannot).


    However Wife is worried about alimony due to income discrepancy.  Wife says they do not live extravagantly.  Condominium is in need of cosmetic work due to being 10 years old & a Son “who likes to draw on walls with crayons”.  Within the past 12 months, Condominium has needed new water heater & washer & dryer which Wife had to coordinate replacements & financing of.  Family shops at Shop Rite & Walmart.  Vehicles are not luxury brands (Toyota, Hyundai, Chevrolet).  Vacation to Florida last month was for start of 12th grade for Daughter & first vacation in 3 years.


    Wife is most concerned about 401K balances.  Says she read would need to be divided at divorce.


    Wife was thinking about moving money from her separate bank accounts to another family member, which I advised her against until she receives advice regarding such.


    Wife says Husband’s $580 SSDI monthly allowance only covers Husband’s food/laundry/living/phone expenses.  All other expenses are paid from her job earnings.






    Wife was considering pursing “divorce mediation” with “no signature needed” as seen on various advertisements.  I know nothing of them.  Wife says service is guide on filling court papers for divorce.  Sheriff then serves Husband with court notice.  If Husband does not appear then Judge rules in favor of Wife.  However I told Wife what if Husband appears with Lawyer, & contests divorce.  Would she lose the opportunity to negotiate asset division?  Any one have knowledge about this process?  Is it a terrible idea (in that Wife would give up or lose certain rights by going this route)?


    Wife also stated she would be willing to pay Husband lump sum of no more than $10,000 for a release on all past/current/future claims of any earnings/assets.  As a “backup plan”.  Is this possible / legal?


    I told Wife if she was ordered to pay alimony, but then Husband ordered to pay child support, along with portion of housing costs & insurance & medical expenses & daycare & college for the children, I doubt she would actually have to send Husband any money each month.  Anyone have any knowledge about this?


    If Wife is ordered to pay alimony, could child support payments be “traded” for alimony if Husband agrees?  My thought process is alimony would go to the Husband’s parent & Husband would not have access to it until parent’s disburses it to Husband, while his SSDI is “his” to use.  That may entice him to drop any claims for alimony.


    Any tips on dealing with “troublesome” parent of Husband who may push for Wife’s assets?  Just throwing this out there…


    Would 401K balances be subject to division as they are solely from Wife’s earnings over the years?


    Since Wife & Husband maintain joint bank account, would Wife’s separate bank account be subject to division?  Can/should she move money out of the account?


    Are there any downsides to not filling for divorce?  If Husband (or his parent) does not, & Wife does not, & both remain “separated”, what could come of the situation regarding assets & custody of the children?  My thought process is maybe steps could be taken now so a future divorce could be more easily managed.


    Wife does not know of any lawyers.  I told Wife she should start looking for one.  If anyone here knows of a good & honest divorce lawyer in NJ please, *please* private message me.


    Any other considerations or advice is appreciated.


    Please post questions.  Wife will be monitoring thread & I will query her for any information needed.
    $1 saved = >$1 earned. ✓

  • #2
    welp that was for a lawyer.


    • #3
      The answer is yes I would get a really good lawyer.. but


      • #4
        Tldr. Need to pay $300 per hour for me to wade through that


        • #5
          Getting a lawyer is the best way to minimize financial costs.


          • #6

            Most of the questions you are asking would be more appropriately directed to a family law attorney. There are few lawyers on this forum. I hesitate to offer what could be construed as legal advice in a public forum as it could be frowned upon, if you get my drift.

            Maybe start with Investopedia for clarity, as it tends to have helpful and practical advice. And I hope it goes without saying that they should not share an attorney to cut costs.

            Realize this is not “PC” but, as an advisor in a generation above most of you, I’ll say it. The decision to add another child to this mix 4 years ago is one I would strongly have counseled against. The only reason I’m interjecting my opinion at this late date is to encourage them not to go for a 3rd in an evening of reconciliation. I have absolutely no interest in attempting to scold over the choice to have a beloved baby who I am sure is delightful and brings the family much joy.

            Wife should start by seeking out a CDFA to help with the financial decisions. I wish them only the best.
            Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087


            • #7
              Lawyer.   Possibly a restraining order too may be in order if any concerns.

              For the daughter -- she really needs to take a look at her own finances and the realty that she'd be saddling herself with $80k+ debt easily vs local/state school


              • #8
                One of the more epic "asking for a friend" OP's I've seen in some time.  I barely know if most of my co-workers are married, let alone what their 401k balances are, whether their family members are on disability, what their vehicles are worth, who employs their parents, etc.  I understand legal advice is expensive, but you get what you pay for and this isn't something you want to cheap out on.


                • #9
                  I appreciate everyone's replies.  "Wife" needs to look for a lawyer which I agree with.


                  I should have posted a TLDR at the beginning of the post.  But it was a long shot anyways.  Thanks to all!
                  $1 saved = >$1 earned. ✓


                  • #10

                    One of the more epic “asking for a friend” OP’s I’ve seen in some time.  I barely know if most of my co-workers are married, let alone what their 401k balances are, whether their family members are on disability, what their vehicles are worth, who employs their parents, etc.  I understand legal advice is expensive, but you get what you pay for and this isn’t something you want to cheap out on.
                    Click to expand...

                    Totally agree and really a stretch for a forum focused on physician personal finance issues.

                    Perhaps there are some “family law” or “divorce law” forums that might help you/her flesh these issues out. I wish “the wife” good luck with all of this in the future. It sounds like getting out of this marriage will be worth it, no matter what the cost.



                    • #11
                      As an aside, and I'm not disparaging the husband in this case as he sounds like he truly has mental problems, but over the years working in the hospital, I observed a lot of young women especially nurses marry deadbeat husbands who they have to support the rest of their marriages.


                      • #12
                        "Married about 16 years ago...husband has been receiving SSDI due to mental health disability for about 22 years."

                        I think there's a lesson there. What could go wrong...


                        • #13
                          Retirement accounts usually do not get split, usually. Not much in the form of assets here. Do arbitration if both parties are adult enough to deal with that. Cheaper and faster and pretty much same end result as expensive litigation. Alimony will be the main sticking point but family courts tend to favor women so who knows. I’d settle for no alimony no child support. Do nothing now as far as selling assets and such. New car might have to go in the future. He might be entitled to half of the equity in the condo. Immediately open new separate bank account and stop flowing any money into shared one. Take half of the balance in shared bank account and keep documentation of such. Keep documentation of bills paid for the condo as this will all need to be shared if the condo equity is to be shared. Bad situation but things will improve greatly for her from now on.


                          • #14
                            I see lots of oppurtunity to get a fresh start.


                            • #15
                              One has to wonder about the original attraction here.