Making
Financial Decisions
When Divorce Occurs
An Idaho Guide
Published jointly by the University of Idaho Cooperative Extension System
and the Idaho Women’s Commission
Making
Financial Decisions
When Divorce Occurs
Elizabeth Brandt, Linda Kirk Fox, and Kathleen Hardcastle
◆ ◆ ◆
an
Idaho
Guide
◆ ◆ ◆
◆ ◆ ◆
Making Financial Decisions When Divorce Occurs: An Idaho Guide
is the product of the work of numerous individuals throughout Idaho.
The authors acknowledge financial assistance from the following for
printing and distribution costs:
• University of Idaho Cooperative Extension System
• Idaho Women’s Commission
IMPORTANT
What is considered property to be divided at divorce, and the
guidelines for child and spousal support, differ from state to state.
This publication is based on Idaho law in effect as of July 1997.
However, the section entitled “Child Support” on page 11,
and Table 3, “Basic monthly child support guidelines schedule,” on page 19, are subject to revision. Contact the District
Court (look under County Government in the telephone directory
yellow pages) or request copies of the Child Support Guidelines
from Administrative Offices of the Court, 451 W. State Street,
Boise, Idaho 83720 (208) 344-2246.
Reprinted June 1992; revised 11/97
ii
Table of Contents
Disclaimer........................................................................................
Introduction......................................................................................
Do You Need a Lawyer? .............................................................
Hiring a Lawyer...........................................................................
Mediation.....................................................................................
Property and Debts ..........................................................................
Community Property — Separate Property.................................
Fair Market Value — Replacement Value ..................................
Division of Property ....................................................................
Division of Debts.........................................................................
If You Own a Home ....................................................................
Market Value or Estimated Sales Price ................................
Proceeds from Sale ...............................................................
Selling at Some Future Date .................................................
Income Tax Consequences ...................................................
The Cost of Staying in the Family Home .............................
Estimated Costs of Rental Housing.............................................
Household Appliances and Furnishings ......................................
Automobiles and Other Vehicles ................................................
Bank Accounts, Investments, Stocks, and Bonds .......................
Life Insurance..............................................................................
Who is the Insured? ..............................................................
Who Owns the Policy? .........................................................
Who is the Beneficiary?........................................................
What is the Face Value? .......................................................
Is There a Cash Value? .........................................................
Are There Any Loans Against the Cash Value?...................
Life Insurance as Property...........................................................
Life Insurance and Child or Spousal Support .............................
Retirement Accounts and Plans...................................................
IRA’s and Keogh Plans ...............................................................
Other Employee Plans .................................................................
Pension Plans...............................................................................
Debts............................................................................................
Proposed Property Division.........................................................
Child Support...................................................................................
The Financial Needs of the Child................................................
Child Support Guidelines ............................................................
Income Determination Under the Guidelines..............................
Gross Income ........................................................................
Gross Potential Income .........................................................
Computations...............................................................................
When Guidelines Apply........................................................
Other Adjustments.......................................................................
Shared Physical Custody ......................................................
Extended Visits .....................................................................
Split Physical Custody ..........................................................
Future Adjustments...............................................................
Medical and Dental Expenses...............................................
Post-high School Education..................................................
Timing and Method of Payments ................................................
Budgeting and Recordkeeping ....................................................
Spousal Support ...............................................................................
Social Security.............................................................................
If You Are Married ...............................................................
If You Divorce ......................................................................
ii
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◆ ◆ ◆
iii
Table of Contents (cont’d)
Health Insurance..........................................................................
Medicaid ......................................................................................
Estimated Income/Expense Statement ........................................
Other Financial Considerations .......................................................
Credit ...........................................................................................
Joint Accounts During Marriage...........................................
After Divorce ........................................................................
Credit Payment Priorities ............................................................
Creditors Options ..................................................................
Review Your Credit Report ..................................................
Should You Consider Loan Consolidation? .........................
Who to Talk to About Your Financial Situation .........................
If You Have No Credit Rating ..............................................
Child Care Assistance .................................................................
Food Stamps ................................................................................
Income Tax..................................................................................
How Divorce Affects Taxes .................................................
Before Divorce......................................................................
After Divorce ........................................................................
Earned Income Tax Credit ..........................................................
How to Receive EIC .............................................................
How to Receive the EIC in Your Paycheck..........................
Bankruptcy ..................................................................................
Wills and Estate Planning............................................................
A New Financial Life ......................................................................
Name Change........................................................................
Prenuptial Agreements ................................................................
Glossary ...........................................................................................
Additional Resources.......................................................................
Authors, Acknowledgments ............................................................
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45
Illustrations
Tables
1. Estimated annual family expenditures on a child
(overall U.S. from birth to age 18)........................................
2. Child support obligations based on both parents’ gross
income where only one parent has custody ..........................
3. Basic monthly child support guidelines schedule.................
iv
13
15
19
Figure
1. Affidavit verifying income ...................................................
18
Worksheets
1. Estimated Proceeds from Sale of House...............................
2. Estimated Cost of Staying in the Family Home ...................
3. Estimated Cost of Renting ....................................................
4. Summary of Life Insurance Policies.....................................
5. Summary of Debts ................................................................
6. Summary of Proposed Property Division .............................
Completed Sample Worksheet 6...........................................
7. Monthly Financial Needs of Children ..................................
8. Child Support Obligations ....................................................
9. Child Support Obligation, Shared Physical Custody............
10. Summary of Income of Husband and Wife ..........................
11. Projected Income-Expense Statement ..................................
31
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41
Introduction
Making Financial Decisions
When Divorce Occurs:
An Idaho Guide
The financial decisions you make at divorce have long-term economic impacts on
you, your spouse, and your children. One decision affects another, such as how your
property is valued and divided, how debts are paid, who provides child support, and
(in some cases) whether one of you provides support payments to your spouse.
The decisions may be made by you and your spouse; by you and your spouse with
assistance from a mediator, counselor, or the attorneys of husband and wife; or, in
a contested divorce, by the judge.
Economic information and an understanding of your financial situation are
critical as you make these decisions. It takes time and effort to become familiar with
your family financial situation. The purpose of this publication and the worksheets
is to help you analyze your financial situation.
The goal of the divorce proceedings is to arrive at a settlement that is “just” based
on the facts and circumstances of each case. What is just depends on the situation.
In some situations, dividing assets and debts equally would be just; in others, an
equal division would not be just. What is just in a short-term marriage will differ from
what is just in a long-term marriage.
In some divorces, decisions you make can be carried out immediately. For
example, if the only property to be divided is the bank account, it can be divided at
the time of the settlement. Other divorces may involve promises of things you will
do in the future: sell property, pay debts, or make payments to your spouse.
These promises need to be in writing. If they are not, enforcing the provisions may
be impossible. The written agreement is called a “property agreement,” and it
becomes a part of the divorce decree.
Do not sign a property settlement agreement you do not understand or one that
you feel contains unfair terms. Consult your own attorney — not your spouse’s
attorney — before you sign.
The period before divorce is difficult. You are expected to make rational decisions
at a time of emotional turmoil and in a setting that does not lend itself to rational
discussion. Most couples experience increased pressures due to separation and
pending divorce.
Do not let emotions result in missed payments, lapsed insurance, or unnecessary
additional financial pressures. Develop a temporary income and expense plan to
keep up to date with financial obligations and, if possible, avoid incurring additional
debt. You and your spouse should keep records of all expenses you’ve paid. If you
have no money for current living expenses or if you fear your spouse will sell or
dispose of assets, get legal help.
◆ ◆ ◆
The goal of the
divorce proceedings
is to arrive at a
settlement that is
“just” based on the
facts and circumstances of each case.
What is just depends
on the situation.
◆ ◆ ◆
Many of the legal terms in this bulletin are italicized bold in the text and
defined in a glossary on pages 42-43. For Worksheets, see pages 31-41.
1
Do You Need a Lawyer?
A simple divorce can be obtained without the assistance of a lawyer. For example,
when you and your spouse are on good terms, do not have children, do not own real
estate or other substantial items of property, and do not have extensive debts, a “doit-yourself divorce” may be appropriate. However, if any of the above factors apply
to you, the assistance of a lawyer will best protect your interests in the divorce
process.
This guide will help you whether you are represented by a lawyer or not. If you
are not represented, the guide will help you “cover all the bases.” If you are
represented, it will enable you to be an informed consumer of legal services and will
help ensure that you provide your attorney with accurate and complete information
on all aspects of your divorce.
◆ ◆ ◆
The period before
divorce is difficult.
You are expected to
make rational
decisions at a time of
emotional turmoil
and in a setting that
does not lend itself to
rational discussion.
Hiring a lawyer
◆ ◆ ◆
To find a lawyer to hire, you have several options. You may want to ask friends
and acquaintances. You may look for lawyers who advertise in the yellow pages of
the phone book. You may also call the lawyer referral service of the Idaho State Bar,
phone (208) 334-4500.
Idaho Legal Aid Services, Inc., handles a limited number of divorce cases for
people who have income below the poverty income guidelines. These cases must
involve either spousal or child abuse. Call your nearest Idaho Legal Aid office. The
Idaho State Bar also has a Volunteer Lawyer Program, phone (208)334-4510 which
assists individuals who cannot afford to pay for legal advice.
Mediation
Mediation is a nonadversarial procedure where you and your spouse jointly hire
a neutral, third-part facilitator (often a specially trained attorney) to help you work
out a fair and equitable divorce agreement together. Included in this agreement will
be the children’s living arrangement, visitation, the home, and other assets and debts.
When the mediator completes the draft divorce arrangements, both you and your
spouse should review it with your individual attorneys before agreeing to anything.
Mediation often is relatively quick and less expensive, but it’s not for everyone. The
alternative is litigation.
In some instances, the court may refer both parties to mediation to resolve custody
and visitation disputes. In many counties divorcing parents are automatically
referred to mediation. In this case the fee is split between the two parties. Trained
mediators charge by the hour for six to eight one- or two-hour sessions. To locate a
qualified mediator in Idaho, contact the Idaho Mediation Association, phone
(208)389-9211.
2
Property and Debts
If you are considering divorce, you need to determine how to divide community
property and who will pay debts incurred during the marriage. Before doing this, you
need a list of the property owned, its estimated value, and a list of debts. This list
should reflect which property is community property.
Property is both real estate and personal property. Real estate is land, buildings,
and crops growing on the land. Your home is considered real estate. Personal
property is all property that is not real estate — automobiles, furniture, appliances,
bank accounts, stocks, bonds, life insurance, IRA’s, pensions, etc.
Community Property — Separate Property
Community property is any property acquired by you or your spouse during the
marriage with the following exceptions. Property is separate if it was acquired by
assets you or your spouse owned before you were married. Also property acquired
by you or your spouse as a result of a gift to one of you, or through inheritance, is
separate property. A gift to both of you, however, is generally community property.
Your earnings during marriage and things purchased with those earnings are community property. Furthermore, in Idaho, the rents and profits of the separate property
owned by you or your spouse are community property. For example, if you owned
stock before marriage, the dividends paid on the stock during marriage would be
community property; but the increase in value of that stock would not be community
property. Interest is another example of rents and profits of separate property that
would be community property.
Fair Market Value — Replacement Value
Estimate the dollar value of your property. Before you start estimating value, it is
important to differentiate between fair market value and replacement value.
Fair market value is the price at which a willing buyer will buy an item and a
willing seller will sell an item. “How much could I get if I sold my car?”
Replacement value is the cost of replacing the property with similar property. “If
I don’t get the car, how much will it cost me to buy one to get back and forth to work?”
As you and your spouse discuss property values, whichever one of you plans to
keep the property may think in terms of fair market value, while the other (who will
be replacing the property) may think in terms of replacement value. For example, if
you keep the furniture, you might think, “This stuff is 10 years old and almost
worthless; I couldn’t even sell it.” That’s fair market value. Your spouse might think,
“I have no furniture, and it will cost a lot to get my apartment furnished.” That’s
replacement value.
Both fair market value and replacement cost are considerations. But property has
to be valued the same way by you and your spouse; the most common way to value
property is fair market value.
◆ ◆ ◆
Community property
should be divided
equally unless there
are compelling
reasons for making
an unequal division
of property.
Division of Property
Community property should be divided equally unless there are compelling
reasons for making an unequal division of property. Generally, separate property is
not divided at divorce and you and your spouse may keep your own separate
property. An equal division of property does not mean that each of you must receive
one-half of each asset. Instead, an equal division means that the total value of the
property distributed to each of you should be equal.
◆ ◆ ◆
3
The decision to make an unequal division of community property is within the
discretion of the court. While an equal division is most common, a court will consider
the following factors in making an unequal division of community property:
1. the duration of the marriage;
2. any pre-nuptial agreement between the parties;
3. the age, health, occupation, amount and source of income, vocational skills,
employability, and liabilities of each spouse;
4. the needs of each spouse;
5. whether the property settlement is in lieu of or in addition to maintenance
(alimony);
6. the present and potential earning capability of each spouse;
7. retirement benefits including Social Security, civil service, military, and railroad
retirement benefits.
◆ ◆ ◆
If you own a home
that was purchased
during your marriage, its value is
generally community
property to be divided
at divorce.
◆ ◆ ◆
Division of Debts
The division of property must also take into account the debts incurred by you or
your spouse during your marriage. These debts could include amounts owed on a car,
home, credit cards, home equity loan, unpaid bills, and unpaid taxes. These debts
must be considered even if you did not personally sign the agreement leading to the
debt or did not consent to incurring the debt. The material in the following sections
will help you begin to inventory and value property and to inventory debts.
This publication does not discuss valuation of closely held corporations, family businesses, and professional corporations. It also does not
discuss property rights in (and valuation of) professional licenses and
college degrees. If your divorce involves any of these issues, you need
technical and legal help beyond the scope of this publication.
If You Own a Home
If you own a home that was purchased during your marriage, its value is generally
community property to be divided at divorce. However, if the money used as a down
payment on the home belonged to one of you before marriage, is a rollover from the
sale of a house owned by one of you before marriage, or was given to one of you, the
house may not be community property.
In addition, questions regarding the community character of the house may arise
if only one spouse’s name appears on the deed to the property or the mortgage. If your
house is not community property, but you or your spouse made payments on the
mortgage using your income, you may be entitled to reimbursement of the amount
paid
If your house is community property, this value may be divided in several ways:
• You may sell your home and split the proceeds with your spouse.
• One of you may buy your spouse’s share of the house.
• One of you may retain the right to live in the house for a certain period of time
(while the children are minors, for example) and at some future date sell the house
and divide the proceeds.
• One of you may retain the home, and your spouse may receive other property and/
or income of comparable value.
When you make decisions about the house, carefully consider the economic
aspects of these decisions:
• What is the market value (estimated sales price) of the house?
4
• How long would it take to sell the house?
• How much equity do you have in the house? (Equity is the value of your
investment — what you could sell your house for, less the balance due on the
mortgage or purchase contract.)
• How much cash would be available after the house is sold?
• Are there income tax considerations?
• Can either you or your spouse afford to live in the house after divorce?
• What is the cost of alternate rental housing if you do not continue living in this
house?
Market Value or Estimated Sales Price — Market value is the amount of
money a buyer would pay for your house. Market value is not necessarily the same
as the price at which a real estate agent would list the house; houses often sell below
list price.
You might hire a real estate appraiser to determine the market value of the house.
Before you hire an appraiser, find out the cost. When you receive the appraisal, read
it carefully. Know what the appraisal includes (it usually includes the major
household appliances).
Your property assessment notice gives a dollar amount that the assessor’s office
considers market value. If you do not have the property assessment notice, you can
get one from your county assessor’s office for about 50 cents. Since market values
change continuously, the assessor’s figure may not be an accurate estimate of value.
For example, it may not reflect the current condition of the house or the current
condition of the real estate market.
Proceeds from Sale — When a house is sold, there are expenses paid by the
seller. The proceeds from the sale is the selling price less the selling expense.
Estimate your proceeds on Worksheet 1.
If you are planning to sell your home, talk to more than one real estate broker
because commissions and services differ. Check the real estate broker’s contract (the
listing agreement) carefully before you sign. Many of the terms are negotiable.
However, the negotiations must take place before you sign the contract.
An agreement for the sale of real estate must be in writing. The earnest money
agreement names the parties, describes the property, and lists the terms of payment
and the conditions of sale. Read and understand the earnest money agreement before
you sign.
Selling at Some Future Date — Some property settlements provide for the
sale of the family home sometime in the future; one of you will continue living in the
family home for a certain period of time. At the end of this time, the home is sold and
the proceeds divided. Sometimes, the parent with the custody of minor children lives
in the home, and the sale takes place when the youngest child is 18.
If you are considering postponing sale of the house, decide these points:
• Before the sale, who pays the principal? interest? insurance? taxes?
• Before the sale, who pays for major repairs such as a new roof? or a new furnace?
• Before the sale, who pays for routine upkeep such as lawn care? painting? minor
repairs?
• Are there income tax consequences to consider?
• When the house is sold, how will the proceeds be paid? Will one person have a
lien on the house that will be paid off at sale? Or will the sale proceeds be divided?
◆ ◆ ◆
Often one person
wants to remain in
the family home after
the divorce. Staying
in the family home
may provide security
and eliminate costs
and stresses associated with moving.
◆ ◆ ◆
5
Income Tax Consequences — When a home is sold and there is gain (the sale
price is greater than the purchased price), the gain is income and is taxable.
Generally, this gain is taxable in the year the home is sold. Moving to a smaller home,
relocating to a less costly area, or deciding to rent is an important decision. Starting
with homes sold after May 6, 1997, up to $500,000 of current and deferred profit
is tax free for joint filers ($250,000 for single filers). And the exemption can be
claimed every two years. Previously, many divorcing people who have sold their
homes have felt compelled to take advantage of a rule that let them defer tax on any
profit by buying a replacement home of at least equal value within two years or using
laws that applied only if you were over the age of 55. Ask a tax expert before you
decide whether to sell the house before or after the divorce or whether one or both
of you should sell the house.
Helpful tax publications are available from the Internal Revenue Office: No. 523,
Tax Information on Selling Your Home; No. 504, Tax Information for Divorced or
Separated Individuals; No. 551, Basis of Asset; and No. 555, Community Property.
The Internal Revenue Service is listed in your phone book under “U.S. Government”
or can be contacted by calling 1-800-TAX-1040.
◆ ◆ ◆
If you overestimate
the fair market value
of household
appliances and
furnishings, you also
overestimate both the
value of the property
to be divided and the
share of the property
of the person receiving the appliances
and furnishings.
◆ ◆ ◆
The Cost of Staying in the Family Home — Often one person wants to
remain in the family home after the divorce. Staying in the family home may provide
security and eliminate costs and stresses associated with moving. Worksheet 2 will
help you estimate the monthly cost of living in the house. Is this affordable on
after-divorce income? If it isn’t affordable, staying in the house will not provide
security or eliminate stress.
In addition to monthly costs, consider the household work. Who has been doing
the repairs, maintenance, yard work, and housekeeping? If you have been doing all
or some household work before your divorce, will you be able to continue to do it
after you divorce? If after divorce you will be employed for longer hours, you will
have less time for household work. If your spouse has been doing some household
tasks, can you do them or can you hire someone to do them?
Estimated Costs of Rental Housing
Is rental housing available as an alternative to staying in the family home? If
several children live with you, rental housing may be difficult to find. If rental
housing is available, use Worksheet 3 to estimate monthly rental costs.
In addition to the monthly rent, there are some one-time costs: moving costs,
security deposits, pet deposits, telephone and utility deposits, and hookup costs. And
you may have to pay the first and last months’ rent when you sign the lease.
As you look at the cost of renting, think of other factors related to changing
housing location. Will you be closer to or further from work? Will you be closer to
or further from child care or schools? If you will be further from work, child care,
or schools, you will spend more money and time driving.
Household Appliances and Furnishings
Household appliances and furnishings acquired during your marriage are generally community property and should be divided at divorce. You need to determine
who gets which appliances and furnishings, and you need to establish the fair market
value of this property. If major appliances were included in the appraisal value of the
house, do not list them separately. Don’t forget to include the value of coins, stamps,
guns, and collectibles.
The fair market value of property is the price someone would pay for the item.
Even though it may be costly to replace existing household appliances and furnishings with new ones, the fair market value is often very low.
6
If you overestimate the fair market value of household appliances and furnishings,
you also overestimate both the value of the property to be divided and the share of
the property of the person receiving the appliances and furnishings.
Estimate the fair market value by looking at the price of similar items of the same
age at second-hand stores and garage sales, and in newspaper ads. You could also
hire an antique dealer or a second-hand dealer to appraise your household goods.
Another way to determine a value for household items is to determine depreciated
values. Depreciation is a decrease in value over a period of time due to wear, tear,
and age. To determine depreciation you need to know the age and original cost of the
item and its life expectancy. When thinking about life expectancy ask yourself,
“How much longer will this last?” That, added to how long you’ve owned the
appliance, is its life expectancy. Local appliance or furniture dealers may also be able
to help you determine life expectancy.
Automobiles and Other Vehicles
Cars, campers, trucks, motorcycles, etc., acquired during marriage are generally
community property to be divided at divorce. The same exceptions that applied to
determining whether your house was community property also apply to vehicles.
You need to determine the value of the vehicle, who gets the vehicle, and who pays
any debt owed on the vehicle.
Automobiles and most other vehicles depreciate in value over a period of years.
The estimated fair market value of a car may be found in a used car guide. Reference
books on values of used cars are published by the National Automobile Dealers
Association (N.A.D.A.) and by Kelly Blue Book and are available in most libraries.
Banks and other lenders often have these books and can give you an estimate of a
vehicle’s value.
A car dealer can also tell you the high and low book values for a particular make,
model, and year of car. The high book value is an estimate of a car’s retail value —
what it would sell for to a consumer. The low book value is an estimate of its
wholesale value — what the dealer would pay for it. These, of course, are estimates.
Cars in very good condition or with extra features may be sold for more, and cars in
poor condition or with high mileage and few features may be sold for less.
If money is owed on the car, you need to decide who will pay this debt. In some
instances, it may be possible and desirable to refinance the vehicle so the loan is only
in the name of the spouse who is keeping the car. If the debt is not refinanced, one
of you (often the person keeping the car) will usually agree to pay the debt owed by
both of you. This agreement should be in writing. The property agreement should
state which person “assumes the obligation” and agrees to “hold the other party free
from liability” or “hold harmless the other party.” This means that one of you agrees
to pay the debt.
However, the creditor (the person to whom the money is owed) may be able to
require payment from either you or your spouse even if the loan was not in both
names. If that happens, whichever one of you was to be held free from liability pays
the creditor and then may bring legal action against your spouse, who agreed to pay
the debt.
If you continue to have responsibility for the debt on a car even if you don’t have
possession of the car, be sure that the car remains properly insured.
◆ ◆ ◆
If the policy was
acquired after
marriage and
premiums were paid
with community
property, then the
policy is community
property and owned
by both spouses, even
though just one of
you is named as
owner.
Bank Accounts, Investments, Stocks, and Bonds
If you or your spouse owns bank accounts, stocks, bonds, and mutual funds that
were acquired during marriage, these are generally community property to be
considered in the property settlement. Even if the stocks and bonds themselves are
◆ ◆ ◆
7
not community property, the interest and dividends are considered community
property. Determine current value using annual or quarterly statements. If you do not
know what assets you own, look at Schedules B and D of your Federal income tax
return for the past 5 years.
Schedule B of the Federal income tax return shows if you have had interest and
dividend income. If interest income or dividend income exceeded $400, the schedule
indicates the financial institution that paid the interest. This gives you some idea of
the accounts and other assets of you and your spouse.
Schedule D of the Federal income tax return reports gains and losses from the sale
of investment assets such as stocks and real estate. If assets have been sold in earlier
years, the proceeds may have been reinvested into new assets.
If you do not have copies of past Federal income tax returns, they are available
from the Internal Revenue Service. To order, use IRS form 4506, Request for Copy
of a Tax Return. It takes at least 2 months, and returns are available for the past 5 years
(in some instances, for earlier years).
◆ ◆ ◆
At divorce, you need
to decide who is to
own the insurance
policies.
◆ ◆ ◆
Life Insurance
Life insurance purchased during marriage may be community property and is
considered in divorce agreements if:
1. it has cash value; and/or
2. it is needed to provide protection against the early death of a person obligated to
pay child support or spousal support.
Use Worksheet 4 to list the following information about current life insurance
policies:
Who is the Insured? — The insured is the person on whom death benefits will
be paid. The policy will state the name of the insured.
Who Owns the Policy? — This is the person who pays the premium, names
the beneficiaries, and can cancel the policy. The person to whom the bill is addressed
is the owner. The policy states the name of the owner. If the policy was acquired after
marriage and premiums were paid with community property, then the policy is
community property and owned by both spouses, even though just one of you is
named as owner.
Who is the Beneficiary? — The beneficiary is the person(s) who receives the
benefits on the death of the insured; his or her name is stated on the policy.
What is the Face Value? — The face value is the amount of money that will
be paid to the beneficiaries upon the death of the insured.
Is There a Cash Value? — Cash value is the amount of money the owner of
the policy would receive if the policy were cancelled before the death of the insured.
Typically, whole life insurance has cash value; term and group life insurance
policies do not. Look for a Table of Cash Value in the policy or contact your agent.
Not all insurance policies have a cash value.
Are There Any Loans Against the Cash Value? — Cash value may be used
as collateral for loans. Loans reduce the death benefit of the policy.
Life Insurance as Property
If you own life insurance with cash value, that cash value may be community
property. At divorce, you need to decide who is to own the insurance policies. The
owner receives property, and the value of the property is the policy’s cash value —
not the face value. The owner has the right to name the beneficiary and to decide
whether the policy will continue.
8
Life Insurance and Child or Spousal Support
The reason for life insurance is to provide income should the insured person die.
When you have young children, you may want the insurance policies on one or both
of you to continue. One common way this is done is to have a paragraph in the
property agreement or divorce decree that states:
(Name of husband or wife) shall maintain insurance on (his or
her) life in the total sum of $________ as long as (he or she) is
required to pay child support. The insurance should be payable to
_______________________ as trustee for the children. If such
insurance is not in force at death, the children shall have a claim
against the estate for $_________.
There are other ways to assure that insurance benefits will be available for the
support of your children. If you have young children or a child with special needs and
presently have insurance, ask your attorney about ways to ensure continuation of the
insurance.
When one of you is paying spousal support or a property settlement over a period
of years, you may want to continue the insurance policy on the spouse owing the
payments. One way of doing this is to include a paragraph in the property settlement
or divorce decree similar to the paragraph above. Another way is actually transferring ownership of the policy to whichever one of you is receiving the payments. The
new owner, however, should evaluate whether the premiums are affordable.
If there are either child support or spousal support obligations, the court can order
present life insurance policies to continue, the purchase of additional life insurance
coverage, or (if there is no insurance) the purchase of new life insurance policies.
Retirement Accounts and Plans
Many couples have substantial sums of money in retirement accounts or plans.
Money accumulated in these accounts during the marriage, and the future benefits
resulting from the contributions during the marriage, may be community property
and will be considered in the divorce settlement. A nonemployed spouse may be
entitled to a share in the future benefits of these plans.
There are many types of retirement accounts and retirement plans, including
defined benefit and defined contribution plans, Individual Retirement Accounts
(IRA’s), tax-sheltered annuities, Keogh plans, deferred compensation, profit-sharing, and employee stock ownership, 401(k) or 403 (b) plans.
Each of these is different. You and your spouse need to list all of these accounts
in the name of either spouse and gather as much information as possible about the
plan or account. Valuing the plans is difficult; in most cases, they should be valued
by a qualified person, such as an actuary. If you live in a metropolitan area, you may
find the heading “actuaries” in the yellow pages of your phone book. Or your
accountant or attorney may be able to recommend someone with actuarial training.
Before hiring the actuary, find out how much the evaluation will cost. In most
instances, there is one fee for the evaluation and another fee if the actuary testifies
in court.
After plans are valued, decisions need to be made about how these values will be
allocated to you and your spouse. In some cases, the value of retirement accounts/
plans is assigned to the employed spouse, and assets of equal value are assigned to
the other spouse.
In other cases, the present value of the future benefits of the retirement accounts/
plans is divided. And in still others, the retirement assets are not divided until the
benefits of the accounts/plans are actually received. The alternatives differ with the
type of plan and individual situations.
◆ ◆ ◆
Many couples have
substantial sums of
money in retirement
accounts or plans.
◆ ◆ ◆
9
Retirement accounts/plans come in all sizes and shapes. The following sections
have information about several common types of retirement accounts/plans.
◆ ◆ ◆
IRA’s and Keogh Plans
Check with
employers or labor
unions to see what
pension plans exist
for the employed
spouse.
If payments have been made to IRA’s or Keogh plans during a certain year, this
information will appear on page 1 of your Federal income tax return (Form 1040) for
that year. The accounts in which these payments were deposited issue annual
statements that indicate present value.
If the money is withdrawn from the account, there is income tax due and perhaps
penalties to pay. Therefore, the present value of the IRA or Keogh plan is the account
value less taxes and penalties due if money is withdrawn.
An IRA can be transferred from one spouse’s name to the other spouse with no
tax consequences. (If, however, you are not yet 59 1/2 years old and you withdraw
the money from the new IRA, there will be income tax due and a 10 percent penalty.)
A Keogh plan is harder to transfer because of income tax consequences. Before
terminating a Keogh plan to divide funds, carefully check the income tax consequences.
◆ ◆ ◆
Other Employee Plans
Employee wage receipts usually indicate whether an employee is participating in
deferred compensation, tax-sheltered annuities, profit-sharing, or employee stock
ownership plans. Gather as much information as possible about these from the
personnel office at the place of employment.
You need to know what rights, if any, the employee has to withdraw funds from
the account at the present time and, if the employee has such rights, what taxes are
due on amounts withdrawn.
Pension Plans
There are many kinds of pension plans, each with a set of rules on allowances.
Typical plans include Federal and State civil service retirement; military pensions;
and industry, company, and union retirement. Check with employers or labor unions
to see what pension plans exist for the employed spouse. Get copies of booklets
explaining the plans and benefits.
The information you’ll need includes the following:
• Termination Benefits — This is the amount, if any, the employee could
withdraw if he or she quits or is fired at the present time.
• Vesting — When the pension is vested, the employee has the right to some future
benefits from the plan, even if she or he quits or is fired.
• Maturity — When the plan matures, the employee has the right to the benefits.
Usually, this is after the employee has worked a specified number of years and
reaches a specified age.
• Amount of Future Benefits — This is the amount that will be paid when the
plan matures. It may be expressed as a percentage of the highest 3 or 5 years’
salary. It may be available in a lump sum or as a payment made monthly or
annually until death. Look for information about the benefits paid at early or late
retirement, and the benefits paid if the employee becomes disabled or dies before
retirement.
NOTE: This section doesn’t cover Social Security benefits. However, Social Security does
provide income at retirement age for an employed person and (under some conditions)
for a former spouse. This is discussed in “Spousal Support.”
10
Debts
In addition to dividing your property, you must determine who will pay which part
of the debts incurred during the marriage
List all of your and your spouse’s debts including home mortgage, car payments,
student loans, credit card accounts, unpaid bills, and unpaid taxes. Decide who will
be responsible for each debt or percentage of debt.
Usually, one of you “assumes the obligation” and agrees to “hold the other party
free from liability” or “hold harmless the other party.” This means that one of you
agrees to pay. If you do not pay, the creditor may collect from either spouse.
Creditors are not bound by any agreement between the spouses. If whichever one
of you who assumed the debt fails to pay, your spouse may be able to bring action
against you.
Summarize your information about debts on Worksheet 5.
Proposed Property Division
List all the property owned and debts owed. List the current fair market value for
property and amount owed on debts. Determine the net value (assets minus debts)
each of you would receive under this proposal. Use Worksheet 6 to record the
information.
If the property settlement or proposed divorce decree includes promises to pay
amounts or to sell property or provides for liens against real property in the future,
it must be in writing. This is called a “property agreement.”
Do not sign a property agreement until you understand it. If you are uncertain
about what it means or if you feel it is unfair, consult your own attorney — not your
spouse’s attorney — before you sign it.
Child Support
Both of you are responsible for the financial support of your minor children. If one
of you is unable to work because of family responsibilities or because of a physical
condition, it may be impossible for you to provide child support. However, a parent
who is employable must support his or her children. The court will determine your
obligations by applying the Child Support Guidelines discussed on the following
pages.
Your support obligation continues as long as your child is a minor or until the child
is emancipated. A child becomes emancipated at age 18 or earlier if he or she marries
or enters the military service. If a child continues high school after reaching the age
of 18, the court may order child support to continue until age 19, or until the child
discontinues his or her high school education, whichever is sooner. A court may also
order support continue for a child with special needs.
A court will not order child support past age 19 unless the parents agree in their
divorce settlement that support will continue while a child is receiving post-high
school training or attending college. Parents may choose to continue support
obligations for “emancipated” students; however, if both parents do not agree,
support is not automatic for children past age 18, but must be bargained for in a
negotiated settlement.
The two major questions in determining child support payments are: What are the
financial needs of the child or children? How much of this cost should be paid by each
parent?
◆ ◆ ◆
No charts or tables
tell exactly how much
it costs to raise a
child.
◆ ◆ ◆
11
The Financial Needs of the Child
No charts or tables tell exactly how much it costs to raise a child. As a parent, you
should be aware of the financial commitment necessary for raising children. Some
estimated costs are available. Table 1 on the next page gives you a general idea of
how much it costs to raise a child based on the annual expenditures on a child by a
two-parent family. For the most recent estimates, send a self-addressed, stamped
envelope to: Extension Family Economics Specialist, Niccolls Building, University
of Idaho, Moscow, ID 83844-3188. Use Worksheet 7 to help calculate the cost of
raising your children.
◆ ◆ ◆
. . . the new spouse’s
income and resources
would ordinarily not
be considered in
computing child
support.
Child Support Guidelines
◆ ◆ ◆
Idaho has adopted Child Support Guidelines that must be used in setting child
support unless one of you convinces the court that the guidelines would be unjust or
inappropriate. The guidelines are intended to promote uniform and adequate child
support awards; the Idaho Supreme Court will periodically review the guidelines to
keep them current. The information that follows is correct as of January 1992, but
the guidelines may be adjusted in later years and different amounts may be required.
The guidelines are based upon the following basic principles:
1. Both parents share legal responsibility for supporting their child. The amounts in
the guidelines are the same whether the parents are separated, divorced, remarried, or never married. The support responsibility should be divided in proportion
to each parent’s economic resources.
2. Child support is given priority over the needs of parents or creditors in allocating
family resources.
3. The sex of the custodial parent, the parent who will have the physical custody of
the child most of the time, should be disregarded.
4. If both parents are below the poverty level, support will be determined on an
individual basis, but rarely will be set at zero.
In the rare circumstance that the court doesn’t apply the guidelines, the following
will be considered:
1. the financial resources of the child;
2. the financial resources, needs, and obligations of both custodial and noncustodial
parents;
3. the standard of living the child enjoyed during the marriage;
4. the physical and emotional condition and needs of the child and his or her
educational needs;
5. the availability of medical coverage for the child at reasonable cost; and
6. the actual tax benefit recognized by the party claiming the federal child dependency exemption.
Should either you or your spouse plan to marry someone else immediately after
your divorce, the new spouse’s income and resources would ordinarily not be
considered in computing child support.
Income Determination Under the Guidelines
To determine child support under the guidelines, you must know the incomes of
you and your spouse. Income is defined as gross income of the parents; or, if one of
you is voluntarily unemployed or underemployed, your gross potential income.
Gross Income — This includes income from any source: salaries, wages, commissions, bonuses, dividends, severance pay, pensions, interest, trust income,
12
Table 1. Estimated annual expenditures* on a child by husband-wife
families, overall United States, 1995.
Age of
child
Total
Housing
Food
Transportation Clothing
Health
care
Child care
and
Misceleducation laneous†
Income: Less than $33,700 (Average=$21,000)
0-2
$5,490
3-5
5,610
6-8
5,740
9-11
5,770
12-14
6,560
15-17
6,460
Total $106,890
$2,100
2,080
2,010
1,810
2,020
1,630
$34,950
$780
870
1,120
1,340
1,410
1,520
$21,120
$700
680
790
860
970
1,300
$15,900
$370
360
410
450
760
670
$9,060
$370
360
410
450
450
480
$7,560
$630
710
420
250
180
300
$7,470
$540
550
580
610
770
560
$10,830
$440
430
470
520
880
790
$10,590
$490
470
540
580
590
620
$9,870
$1,030
1,140
730
480
350
600
$12,990
$830
850
880
910
1060
860
$16,170
$580
570
620
670
1,120
1,010
$13,710
$560
540
620
670
670
710
$11,310
$1,550
1,690
1,160
810
620
1,090
$20,760
$1,400
1,410
1,440
1,470
1,630
1,420
$26,310
Income: $33,700 to $56,700 (Average=$44,800)
0-2
$7,610
3-5
7,810
6-8
7,870
9-11
7,860
12-14
8,580
15-17
8,710
Total $145,320
$2,840
2,820
2,750
2,550
2,760
2,370
$48,270
$930
1,080
1,370
1,620
1,630
1,810
$25,320
$1,050
1,020
1,130
1,200
1,310
1,660
$22,110
Income: More than $56,700 (Average=$84,800)
0-2
3-5
6-8
9-11
12-14
15-17
Total
$11,320
11,540
11,500
11,430
12,270
12,550
$211,83
$4,520
4,490
4,420
4,230
4,440
4,050
$78,450
$1,240
1,400
1,690
1,960
2,060
2,170
$31,560
$1,470
1,440
1,550
1,620
1,730
2,100
$29,730
*Estimates are based on 1990-92 Consumer Expenditure Survey data updated
to 1995 dollars using the Consumer Price Index. The figures represent estimated expenses on the younger child in a two-child family. Estimates are
about the same for the older child, so to calculate expenses for two children,
figures should be summed for the appropriate age categories. To estimate
expenses for an only child, multiply the total expense for the appropriate age
category by 1.24. To estimate expenses for each child in a family with three
or more children, multiply the total expense for each appropriate age category
by 0.77. For expenses on all children in a family, these totals should be
summed.
†Miscellaneous expenses include personal care items, entertainment, and
reading materials.
Source: Family Economics and Nutrition Review, Vol. 9, No. 3, 1996.
annuities, Social Security and veteran’s benefits, welfare payments, judgments,
student loans, worker’s compensation, unemployment benefits, and disability payments.
The court may consider when and for what duration the receipt of funds from
gifts, prizes, net proceeds from property sales, severance pay, and judgments will be
considered as available for child support. Benefits received from public assistance
programs for the parent shall be included except in cases of extraordinary hardship.
For income from self-employment, rent, or ownership of a business, gross income
is defined as gross receipts minus ordinary and necessary business expenses.
Deductions, such as depreciation or investment tax credits, are excluded. The
amount claimed by a self-employed parent as income for tax purposes may differ
from the amount of income used for computing child support.
◆ ◆ ◆
Whichever of you
can obtain your
child’s health
insurance at the least
cost should provide it.
◆ ◆ ◆
13
In-kind payments, such as the value of a company car, free housing, room and
board, will also be counted as gross income. See Worksheet 8.
Gross Potential Income — If one of you is voluntarily unemployed or
underemployed, child support is based on gross potential income. For example, if
you quit a job, or decide to work only part-time, the amount of child support may be
set as if you were still working full time. Potential income is based on your work
history and qualifications, and also on employment opportunities. You are not
considered underemployed while staying at home to care for a child not in school.
The guidelines allow an adjustment from gross income for pre-existing courtordered child support currently being made for children from another relationship or
for maintenance of a former spouse. Also, an adjustment to gross income is made for
the cost of health insurance coverage for those children. See Worksheet 9.
Whichever of you can obtain your child’s health insurance at the least cost should
provide it. Only the child’s health insurance premium is deducted, not the amount of
the premium for the entire family. The Guidelines provide that any of the child’s
health care expenses not covered by insurance should be shared equally by both of
you over and above your child support obligation.
The basic child support amount does not include the cost of work-related childcare
expenses. These expenses are ordinarily shared equally by both parents and are
included in the child support order. The amount to be added is the net childcare cost
(actual childcare costs minus childcare tax credits) up to an equal sharing of the
expenses.
◆ ◆ ◆
Your child support is
computed by multiplying your child
support obligation by
the percentage of
time your child
spends with its other
parent.
◆ ◆ ◆
Computations
The basic child support obligation (without considering health care insurance or
childcare costs) is based on the gross income of both parents, according to the rates
in Table 2 on the next page.
Where both of you have gross income (either actual or potential), the amount of
child support computed above is prorated between both of you in proportion to your
gross incomes.
Example: Let’s say you have two children but they do not live with you (that is,
you do not have custodial care); rather, they live with your spouse. If you earn
$25,000 a year and your spouse earns $10,000, child support would be based upon
your combined gross income of $35,000. By looking at Table 2, you can see that the
first $10,000 of your gross income would accrue child support at the two-child 25
percent rate ($208 per month), the second $20,000 would accrue child support at the
two-child 23 percent rate ($383 per month), and the final $5,000 at the two-child 20
percent rate ($83 per month), for a total child support obligation of $674 per month.
You and your spouse would divide that amount in proportion to your own gross
income. That means you’d wind up paying $479 ($25,000/$35,000 or 71 percent) to
your spouse as your share of child support.
Another way to calculate child support is to use Table 3, a schedule of monthly
child support amounts. Go down the first column until you find your combined gross
monthly income. Read across to see the child support amount for the correct number
of children you have. Multiply that amount by the percentage of your total combined
gross monthly income earned by whichever one of you does not have custody of your
children to determine how much that parent must pay in child support.
When Guidelines Apply — As you can see from the computation chart and
from Table 3 on page 19, the Child Support Guidelines only apply when your
combined annual income is between $6,000 and $150,000. Child support must be
computed on a case-by-case basis if your combined income is below $6,000 or
above $150,000.
14
Table 2.
Computations for Basic Child Support.
The basic child support obligation shall be based upon the
Guideline Income of both parents, according to the rates
set out in the schedule below: (the amounts are rounded off
to the nearest dollar).
Number of children and parent's income
1 child:
17% of the 1st $10,000 of combined Guideline income
15% of the next $20,000 of combined Guideline income
13% of the next $20,000 of combined Guideline income
10% of the next $20,000 of combined Guideline income
7% of the next $20,000 of combined Guideline income
4% of the next $20,000 of combined Guideline income
3% of the next $20,000 of combined Guideline income
3% of the next $20,000 of combined Guideline income
2 children:
25% of the 1st $10,000 of combined Guideline income
23% of the next $20,000 of combined Guideline income
20% of the next $20,000 of combined Guideline income
15% of the next $20,000 of combined Guideline income
10% of the next $20,000 of combined Guideline income
7% of the next $20,000 of combined Guideline income
6% of the next $20,000 of combined Guideline income
6% of the next $20,000 of combined Guideline income
3 children:
29% of the 1st $10,000 of combined Guideline income
27% of the next $20,000 of combined Guideline income
24% of the next $20,000 of combined Guideline income
20% of the next $20,000 of combined Guideline income
13% of the next $20,000 of combined Guideline income
10% of the next $20,000 of combined Guideline income
9% of the next $20,000 of combined Guideline income
9% of the next $20,000 of combined Guideline income
4 children:
31% of the 1st $10,000 of combined Guideline income
29% of the next $20,000 of combined Guideline income
26% of the next $20,000 of combined Guideline income
21% of the next $20,000 of combined Guideline income
16% of the next $20,000 of combined Guideline income
13% of the next $20,000 of combined Guideline income
12% of the next $20,000 of combined Guideline income
12% of the next $20,000 of combined Guideline income
5 children:
34% of the 1st $10,000 of combined Guideline income
31% of the next $20,000 of combined Guideline income
28% of the next $20,000 of combined Guideline income
24% of the next $20,000 of combined Guideline income
19% of the next $20,000 of combined Guideline income
16% of the next $20,000 of combined Guideline income
15% of the next $20,000 of combined Guideline income
15% of the next $20,000 of combined Guideline income
Per month
Per year
142
250
217
167
117
67
50
50
1,060
1,700
3,00
2,600
2,000
1,400
800
600
600
12,700
208
383
333
250
167
117
100
100
1,658
12,700
4,600
4,000
3,000
2,000
1,400
1,200
1,200
19,900
242
450
400
333
217
167
150
150
2,109
2,900
5,400
4,800
4,000
2,600
2,000
1,800
1,800
25,300
258
483
433
350
267
217
200
200
2,408
3,100
5,800
5,200
4,200
3,200
2,600
2,400
2,400
28,900
283
517
467
400
317
267
250
250
2,751
3,400
6,200
5,600
4,800
3,800
3,200
3,000
3,000
33,000
Other Adjustments
Shared Physical Custody — If you are the noncustodial parent and have
your child more than 35 percent of the year (not counting periods of less than three
consecutive overnights), then an adjustment is made in child support. Your child
support is computed by multiplying your child support obligation by the percentage
of time your child spends with its other parent. The child support obligations are then
offset, with the parent owing more child support paying the difference between the
two amounts. See Worksheet 9.
◆ ◆ ◆
15
Extended Visits — If you are the noncustodial parent and have your child for
an extended visit of 30 days or more, then child support is usually reduced by 50
percent during the time of the visit. For example, if your child spends 2 months of
his or her summer school vacation with you, then you would pay only one-half (50%)
of the usual child support payment to your spouse, the custodial parent, for those 2
months.
Split Physical Custody — Split custody refers to the situation where each of
you has custody of at least one of your children. The Child Support Guidelines dictate
how much you owe each other for child support. Whichever of you owes more pays
the difference to the other. To figure child support for a split custody arrangement,
the support obligations shown in Table 2 must be pro-rated among all children in the
household. For example, if there are three children due support, two of whom live
with you and one lives with the other parent, support is calculated using the schedule
for three children, with one-third of the amount being used to determine the support
obligation for one child and two-thirds of the amount for two children. See
Worksheet 10.
◆ ◆ ◆
The amount of child
support set by the
Court will not
ordinarily change
with an increase in
the cost of living
unless you include a
provision for future
adjustment.
◆ ◆ ◆
Future Adjustments — The amount of child support set by the court will not
ordinarily change with an increase in the cost of living unless you include a provision
for future adjustment. This might be done with a provision that child support will be
reviewed periodically when there are changes in your incomes. Or child support
could change based on a change in the Consumer Price Index, or could change by a
certain percent each year. You might agree to change support when your child
reaches a certain age. Without a provision for future adjustment, a change in the
support amount will not be granted unless you can show that there has been a
“permanent, substantial, and material” change in the circumstances of either one of
you or your child. It is best to plan ahead and consider future needs of the children
when making your initial child support determinations.
Since the guidelines became effective in July 1989, the court will require that the
party seeking child support file an Affidavit Verifying Income with the court. A
sample of the Affidavit is attached as Fig. 1.
In addition to using the worksheets to determine the amount of parental support,
you also need to consider the following issues related to the children: medical and
dental expenses, post-high school education, the timing and method of payments,
budgeting and recordkeeping of future changes in support, taxes, life insurance, and
estate planning.
Medical and Dental Expenses — Medical and dental insurance for children
is important. Review carefully any medical and dental benefits available for children
through your employment or your spouse’s. Obtain from your employers the cost of
health insurance for the children, information about when and how the children may
be covered, and when and how claims must be made.
The determination of child support takes into account routine, uninsured medical
and dental expenses. There may at some time be nonroutine, uninsured medical and
dental expenses. Examples of expenses that might be nonroutine and uninsured
include orthodontia, counseling, long-term physical treatments, or special care for
a disabled child. Discuss how these expenses will be divided between you and your
spouse.
Post-high School Education — Education beyond high school is important
and expensive. The determination of the child support obligations does not include
any saving for the expenses of post-high school training and education.
Give some consideration to financial support of your child’s post-high school
education. What portion of the child’s education do each of you anticipate paying?
16
How will the cost be divided between you? What part, if any, is the child expected
to pay? Will the child be eligible for financial aid?
If your children are very young, post-high school education is years away. But the
earlier you start to save and accumulate funds, the easier it is.
If you have teenagers, discuss these issues with them. You and your child need to
understand what education expenses you will provide and under what conditions.
Timing and Method of Payments
After support has been determined, you must decide how payments are to be
made. Most of the time, if you are responsible for paying child support, you will write
a check to the other parent. You will then have to forward that check to your local
prosecuting attorney’s office. They will record that you paid and send the check on.
If your child is in college you may agree to pay support directly to the other parent
or directly to the child.
As you consider the date of payments, think about when whichever one of you
pays support usually receives your income. Is it convenient to have payments due
about the same time as income is received? If income is irregular, you must set aside
money for support payments in those months when there is reduced or no income.
Budgeting and Recordkeeping
Budgeting and recordkeeping is important for both parents. If your children live
with you most of the time, you need to estimate the cost of routine expenses and
nonroutine expenses. Nonroutine expenses are those that occur only once or twice
a year, such as the expense for clothing, medical examinations, and supplies at the
start of the school year. If your child lives with you, you must set up a system to set
aside money for these nonroutine expenses.
If you are making child support payments, you need to keep records of all
payments made. Always make payments by check; the cancelled check is proof of
payment. Likewise, if you are the parent receiving support, you need records of all
payments received. Both of you should keep records of money you spend on your
children. These records will be helpful for future planning.
◆ ◆ ◆
Always make
payments by check;
the cancelled check is
proof of payment.
◆ ◆ ◆
17
Fig. 1. Affidavit verifying income.
__________ DISTRICT COURT, STATE OF IDAHO
IN AND FOR THE COUNTY OF __________
----------------------------------------, Plaintiff.
vs.
----------------------------------------, Defendant.
)
)
)
)
CASE NO.: _________
AFFIDAVIT VERIFYING INCOME
I hereby state under oath that the following information is true:
A. GROSS INCOME
1. Wages, salary, commissions, bonuses, etc.
2. Rent, royalties, trade, or business income, etc.
(Net of ordinary & necessary expenses)
3. Interest, dividends, pensions, annuities, etc.
4. Social Security, worker's compensation, unemployment
benefits, disability, veterans' benefits, etc.
5. Public assistance, welfare for ❑ self or ❑ children
6. Alimony
7. Grants, distributions from trusts, etc.
8. Other
9. SUBTOTAL
B. ADJUSTMENTS TO GROSS INCOME (I.C.S.G. Sections 6 and 7)
1. Straight line depreciation on assets
2. One-half of self-employment Social Security taxes
3. Child support & alimony from another relationship
4. Support for child of another relationship living in the home
5. ADJUSTMENTS SUBTOTAL
C. GROSS INCOME, AS ADJUSTED (line B5 subtracted from line A9)
D. IN-KIND BENEFITS (I.C.S.G. Section 6(b))
(Housing, food, transportation, recreation)
E. POTENTIAL INCOME (I.C.S.G. Section 6(c))
Potential earned income, Potential unearned income
F. GUIDELINES INCOME (C+D+E)
G. MONTHLY ICSG INCOME (F+12 months)
FATHER
________
________
MOTHER
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
Spouse’s Social Security Number
Signature of Party Submitting
Notary
Social Security Number of Party
Submitting Affidavit
Subscribed and sworn to
before me on_________________, Year______.
Note: This is an example of a document used in an Idaho court. Actual copies can be obtained from your local
Clerk of the Court’s office.
(I.C.S.G. refers to Idaho Child Support Guidelines)
18
Table 3. Basic monthly child support guidelines
schedule
Table 3.
Combined gross
monthly income
Combined gross
monthly income
1
Number of children
2
3
4
5
Annual
Income
500
600
700
800
900
85
102
119
136
152
125
150
175
200
224
145
174
203
232
260
155
186
217
248
278
170
204
238
272
304
6,000
7,200
8,400
9,600
10,800
1,000
1,100
1,200
1,300
1,400
1,500
1,600
1,700
1,800
1,900
167
182
197
212
227
242
257
272
287
302
247
270
293
316
339
362
385
408
431
454
287
314
341
368
395
422
449
476
503
530
307
336
365
394
423
452
481
510
539
568
335
366
397
428
459
490
521
552
583
614
12,000
13,200
14,400
15,600
16,800
18,000
19,200
20,400
21,600
22,800
2,000
2,100
2,200
2,300
2,400
2,500
2,600
2,700
2,800
2,900
317
332
347
362
377
392
405
418
431
444
477
500
523
546
569
267
612
632
652
672
557
584
611
638
665
692
716
740
764
788
597
626
655
684
713
742
768
794
820
846
645
676
707
738
769
800
828
856
884
912
24,000
25,200
26,400
27,600
28,800
30,000
31,200
32,400
33,600
34,800
3,000
3,100
3,200
3,300
3,400
3,500
3,600
3,700
3,800
3,900
457
470
483
496
509
522
535
548
561
574
692
712
732
752
772
792
812
832
852
872
812
836
860
884
908
932
956
980
1,004
1,028
872
898
924
950
976
1,002
1,028
1,054
1,080
1,106
940
968
996
1,024
1,052
1,080
1,108
1,136
1,164
1,192
36,000
37,200
38,400
39,600
40,800
42,000
43,200
44,400
45,600
46,800
4,000
4,100
4,200
4,300
4,400
4,500
4,600
4,700
4,800
4,900
587
600
612
622
632
642
652
662
672
682
892
912
930
945
960
975
990
1,005
1,020
1,035
1,052
1,076
1,098
1,118
1,138
1,158
1,178
1,198
1,218
1,238
1,132
1,158
1,182
1,203
1,224
1,245
1,266
1,287
1,308
1,329
1,220
1,248
1,275
1,299
1,323
1,347
1,371
1,395
1,419
1,443
48,000
49,200
50,400
51,600
52,800
54,000
55,200
56,400
57,600
58,800
5,000
5,100
5,200
5,300
5,400
5,500
5,600
5,700
5,800
5,900
692
702
712
722
732
742
752
762
772
780
1,050
1,065
1,080
1,095
1,110
1,125
1,140
1,155
1,170
1,182
1,258
1,278
1,298
1,318
1,338
1,358
1,378
1,398
1,418
1,434
1,350
1,371
1,392
1,413
1,434
1,455
1,476
1,497
1,518
1,536
1,467
1,491
1,515
1,539
1,563
1,587
1,611
1,635
1,659
1,679
60,000
61,200
62,400
63,600
64,800
66,000
67,200
68,400
69,600
70,800
6,000
6,100
6,200
6,300
6,400
6,500
6,600
6,700
6,800
6,900
787
794
801
808
815
822
829
836
843
850
1,192
1,202
1,212
1,222
1,232
1,242
1,252
1,262
1,272
1,282
1,447
1,460
1,473
1,486
1,499
1,512
1,525
1,538
1,551
1,564
1,552
1,568
1,584
1,600
1,616
1,632
1,648
1,664
1,680
1,696
1,698
1,717
1,736
1,755
1,774
1,793
1,812
1,831
1,850
1,869
72,000
73,200
74,400
75,600
76,800
78,000
79,200
80,400
81,600
82,800
19
(cont.)
1
Number of children
2
3
4
5
Annual
Income
7,000
7,100
7,200
7,300
7,400
7,500
7,600
7,700
7,800
7,900
857
864
871
878
885
892
896
900
904
908
1,292
1,302
1,312
1,322
1,332
1,342
1,349
1,356
1,363
1,370
1,577
1,590
1,603
1,616
1,629
1,642
1,652
1,662
1,672
1,682
1,712
1,728
1,744
1,760
1,776
1,792
1,805
1,818
1,831
1,844
1,888
1,907
1,926
1,945
1,964
1,983
1,999
2,015
2,031
2,047
84,000
85,200
86,400
87,600
88,800
90,000
91,200
92,400
93,600
94,800
8,000
8,100
8,200
8,300
8,400
8,500
8,600
8,700
8,800
8,900
912
916
920
924
928
932
936
940
944
948
1,377
1,384
1,391
1,398
1,405
1,412
1,419
1,426
1,433
1,440
1,692
1,702
1,712
1,722
1,732
1,742
1,752
1,762
1,772
1,782
1,857
1,870
1,883
1,896
1,909
1,922
1,935
1,948
1,961
1,974
2,063
2,079
2,095
2,111
2,127
2,143
2,159
2,175
2,191
2,207
96,000
97,200
98,400
99,600
100,800
102,000
103,200
104,400
105,600
106,800
9,000
9,100
9,200
9,300
9,400
9,500
9,600
9,700
9,800
9,900
952
956
959
962
965
968
971
974
977
980
1,447
1,454
1,460
1,466
1,472
1,478
1,484
1,490
1,496
1,502
1,792
1,802
1,811
1,820
1,829
1,838
1,847
1,856
1,865
1,874
1,987
2,000
2,012
2,024
2,036
2,048
2,060
2,072
2,084
2,096
2,223
2,239
2,255
2,270
2,285
2,300
2,315
2,330
2,345
2,360
108,000
109,200
110,400
111,600
112,800
114,000
115,200
116,400
117,600
118,800
10,000
10,100
10,200
10,300
10,400
10,500
10,600
10,700
10,800
10,900
983
986
989
992
995
998
1,001
1,004
1,007
1,010
1,508
1,514
1,520
1,526
1,532
1,538
1,544
1,550
1,556
1,562
1,883
1,892
1,901
1,910
1,919
1,928
1,937
1,946
1,955
1,964
2,108
2,120
2,132
2,144
2,156
2,168
2,180
2,192
2,204
2,216
2,375
2,390
2,405
2,420
2,435
2,450
2,465
2,480
2,495
2,510
120,000
121,200
122,400
123,600
124,800
126,000
127,200
128,400
129,600
130,800
11,000
11,100
11,200
11,300
11,400
11,500
11,600
11,700
11,800
11,900
1,013
1,016
1,019
1,022
1,025
1,028
1,031
1,034
1,037
1,040
1,568
1,574
1,580
1,586
1,592
1,598
1,604
1,610
1,616
1,622
1,973
1,982
1,991
2,000
2,009
2,018
2,027
2,036
2,045
2,054
2,228
2,240
2,252
2,264
2,276
2,288
2,300
2,312
2,324
2,336
2,525
2,540
2,555
2,570
2,585
2,600
2,615
2,630
2,645
2,660
132,000
133,200
134,400
135,600
136,800
138,000
139,200
140,400
141,600
142,800
12,000
12,100
12,200
12,300
12,400
12,500
1,043
1,046
1,049
1,052
1,055
1,058
1,628
1,634
1,640
1,646
1,652
1,658
2,063
2,072
2,081
2,090
2,099
2,108
2,348
2,360
2,372
2,384
2,396
2,408
2,675
2,690
2,705
2,720
2,735
2,750
144,000
145,200
146,400
147,600
148,800
150,000
Spousal Support
This support is payments made after divorce by one spouse to the other spouse.
It is sometimes referred to as alimony or maintenance. There is no automatic right
to spousal support, and support is not favored by Idaho Courts, since it is presumed
that under a community property system each spouse receives one-half of the marital
property. When it is awarded, it is usually for a temporary period to give the spouse
time to become employable or when one of the spouses has no means of adequate
support.
In determining the amount of spousal support the court must consider the
following factors:
1. the financial resources of the spouse seeking maintenance;
2. the spouse’s ability to meet his or her own needs independently;
3. the time necessary to acquire sufficient education and training to enable the
spouse seeking maintenance to obtain employment;
4. the duration of the marriage;
5. the age and the physical and emotional condition of the spouse seeking maintenance;
6. the ability of the spouse from whom maintenance is sought to meet his or her needs
while meeting those of the spouse seeking maintenance; and
7. the tax consequences to each spouse.
In deciding whether one of you should pay your spouse support, consider each of
your past, present, and future earning capacities.
Did one of you decrease earning capacity during the marriage by staying home to
care for children? Did one of you decrease earning capacity during the marriage by
quitting a job to move when your spouse was transferred? Did one of you increase
earning capacity by acquiring additional education?
Look at present earnings. If both of you are employed and have similar incomes,
there is most likely no need for spousal support. If one of you is not employed, could
you become employed? Will your health and family responsibilities allow employment? If so, estimate your probable salary by checking the local newspaper, or
talking with an employment counselor at the State Employment Office.
If you are unemployed or underemployed, could you increase earnings by
attending school or participating in a training program? If so, how much would this
cost, and how long would it take? Your spouse could help support you while this
“employment rehabilitation” is taking place.
In addition to each of your present earnings, consider what these earnings will be
in 5 or 10 years — are they likely to increase or decrease? Estimate also the income
from pensions, Social Security, and investments that will be available for each of you
after retirement age.
Use Worksheet 11 to summarize this information.
◆ ◆ ◆
If you divorce, you
may still be entitled
to Social Security
benefits under your
spouse’s work
record.
◆ ◆ ◆
Social Security
If You Are Married — If either you or your spouse has worked under Social
Security coverage, you have retirement benefits either as worker or as spouse of the
worker. If both of you worked all of your adult lives and had high earnings, both will
receive benefits as workers.
If one of you (usually the wife) never worked, stopped working for several years,
or had low earnings, you will receive benefits as the spouse of the worker.
20
If You Divorce — If you divorce, you may still be entitled to Social Security
benefits under your spouse’s work record, or vice versa.
As of January 1, 1985, a divorced person who is at least 62 years of age is eligible
for benefits based on a former spouse’s earnings, even if the former spouse is not
retired. If the divorced person has been divorced at least 2 years, was married at least
10 years, and is 62 years of age, benefits will be paid under the former spouse’s
earnings record.
If a divorced person has his or her own pension based on work in public
employment not covered by Social Security, the Social Security benefit payable on
account of the former spouse’s Social Security may be reduced by the amount of the
public pension.
If you are approaching retirement age, you need to consider what Social Security
and retirement benefits will be available for each of you after the divorce.
Health Insurance
If one of you is presently insured under the other’s health insurance policy, you
need to determine how health insurance coverage can continue after divorce.
If you both are employed, do you have health insurance coverage available
through your own employment, and if so, when could you transfer to your own
policy? Some health insurance policies have specified periods for changes and
enrollment.
If one of you is not covered by health insurance, it is sometimes possible to
continue coverage under your spouse’s employer’s policy. Check with the employer
to see whether coverage is available and how much it will cost. Which spouse will
pay the premium?
Under the federal law known as COBRA (Consolidated Omnibus Budget Reconciliation Act), divorced spouses may be entitled to continue group health insurance
for at least 18 months. Although the cost of this coverage cannot exceed 102 percent
of the premium the company pays, it is usually considerably less expensive than
buying individual coverage. Added protection under COBRA can remain available
for up to 36 months for divorced spouses and for children who lose their status as a
dependent. These provisions apply as long as persons are not eligible for coverage
under another group plan. This law also applies only if the company employs 20 or
more workers. Also be aware that if you wish to be covered under the COBRA law
there is a time limit of 60 days after the divorce is granted to notify the insured’s
employer of your interest in continuing health insurance coverage.
If one of you is presently unemployed, would you be able to obtain your own
coverage? Group insurance and individual insurance policies are two options. Many
individuals are eligible for group insurance through places of work, unions, or
fraternal organization.
Whenever group insurance is available, it generally costs from 15 to 40 percent
less than the same insurance through an individual plan. There may be other
advantages to group insurance such as no requirement of a physical examination to
qualify for coverage, no exclusion for a preexisting condition, and no canceling of
a policy unless the policyholder leaves the group.
◆ ◆ ◆
Under federal law
divorced spouses may
be entitled to
continue group
health insurance for
at least 18 months.
Medicaid
Medicaid provides medical benefits for children in families where the income is
133 percent below poverty guidelines. Benefits can include vital health care
including hospital care, visits to the doctor, preventive care, medicine, dental care,
immunizations, and eyeglasses. If, in the event of divorce your income drops
significantly, don’t forgo health care for your children. A single parent with two
◆ ◆ ◆
21
children under age six can have income at twice the minimum wage and the children
are eligible for Medicaid. If the children are over age six, they may still be eligible
for Medicaid depending on total family income. Children can get Medicaid even if
their family has a car, a house, and a savings account. And a family with some health
insurance can still get Medicaid.
To obtain Medicaid coverage for children, an application must be filed providing
information such as the family’s income and social security numbers for the parent(s)
and children. A family can apply at their local Department of Health and Welfare,
and, in some counties, they can apply at a regional hospital, a health department, or
a rural health clinic.
◆ ◆ ◆
Completing the
projected income/
expense statement
will help you
visualize your own
future financial
situation.
Estimated Income/Expense Statement
A projected income/expense statement shows estimated income and expenses in
the future. Use Worksheet 12 to estimate income and expenses for each of you after
divorce.
As you fill this out, list all sources of income in the income section. If you receive
cash that you will invest as part of the property settlement, list anticipated earnings
from the investment. If you will have custody of children and receive child support
payments, list them as income. If you will be making child support payments, list
them as expenses.
Usually it is difficult to support two households after divorce at the same level as
the one household before divorce. Completing the projected income/expense statement will help you visualize your own future financial situation. If you complete the
statement for both of you, it will help you understand and evaluate the fairness of your
proposed settlement.
◆ ◆ ◆
Other Financial Considerations
Credit
Your ability to borrow money is based on your creditworthiness. Your credit
history stored at the credit bureau tells a credit grantor about your past ability to
handle money. This credit history and your income are the two biggest factors that
determine creditworthiness.
Joint Accounts During Marriage — Look at your bill. If it comes addressed
to you and your spouse, you probably have a joint account. To be sure, check with
the financial institution. Since June 1, 1977, all joint credit accounts are reported in
the credit files of both you and your spouse.
Joint accounts that were opened before June 1, 1977, may still be reported only
in the husband’s file. To get these joint accounts reported in both names, write to the
creditor (the store or company granting the credit or credit card) and ask that this
information be reported in both names.
Before you do, decide whether the credit account was always paid on time. If it
was, transfer the record. If it was overdue on several occasions in the last 7 years, you
will be transferring poor credit history.
After Divorce — A creditor cannot close your account or change its terms unless
you’re unable or unwilling to pay. However, the creditor can require you to submit
a new credit application if your original credit account was based on your former
spouse’s income.
To get credit after divorce, you must be creditworthy — that is, you must have a
good credit history (including the years before divorce) and the necessary income.
22
You don’t have to include maintenance or child support payments as income unless
you want to have them considered as part of your income.
If you do include these payments as income the credit grantor must count them as
part of your income. The credit grantor may, however, verify the regularity with
which those payments are made.
In the event of a divorce, be sure to pay close attention to the status of your credit
accounts. It is important to make regular payments so your credit record won’t suffer.
As long as there is any outstanding balance on a joint account, such as credit cards
and consumer loans, both you and your spouse are liable for it. A divorce decree does
not relieve you from paying your bills.
Credit Payment Priorities
You need to look at your situation and make decisions about how much and when
you can pay. Not all of your debts equally impact your family. The list below contains
a list of priorities to establish in dealing with debts. Your priorities may differ.
Establish your own list and verify that you have contacted all of your creditors.
Checklist: Creditors to pay first
First priority:
√ Mortgage or rent
√ Tax liabilities
√ Second mortgages
√ Auto loans
√ Utility companies
√ Child support payments
Second priority:
√ Finance companies (secured loans)
Third priority:
√ Credit cards, Retailers
√ Doctors and Dentists
√ Hospitals
√ Finance companies (unsecured loans)
If the bills are still not paid, they will probably be turned over to an independent
collect agency. While the agency will try to get you to pay, the law protects you from
certain actions. Debt collectors are prohibited from harassing, oppressing, abusing
you, threatening to take your property without the right to do so, or from using false
statements (such as implying that they are attorneys or work for a credit bureau or
Social Security). The Fair Debt Collection Practices Act applies to any personal,
family or household debt and covers debt collectors who regularly collect debts for
others, but not the creditors themselves or their lawyers.
The law further prohibits debt collectors form contacting you at inconvenient
times (defined as before 8:00 a.m. or after 9:00 p.m.) or places. The collector may
not contact you at work if your employer disapproves and you notify the debt
collector in writing that you do not want to be contacted at work. They also must not
tell anyone else that you are behind in your debts and they cannot use obscene or
abusive language.
◆ ◆ ◆
As long as there is
any outstanding
balance on a joint
account, such as
credit cards and
consumer loans, both
you and your spouse
are liable for it.
◆ ◆ ◆
23
If a bill collector violates any of your rights under Fair Debt Collection Practices
Act, complain to the Federal Trade Commission, Washington, DC 20580, (202)3262222 or call the Idaho Attorney General’s Office Consumer Protection Unit 1-800432-3545.
◆ ◆ ◆
If you need to work
out an emergency
repayment plan with
your creditors, do so.
Creditors’ Options
Creditors can take several kinds of legal action against you. These actions are
often written into the sales contract you signed. If you fail to make payments, you will
receive letters from a creditor’s attorney or a collection company warning you of the
intended action. Here’s a list of possible actions a creditor might take.
◆ ◆ ◆
√ Acceleration—The entire debt is payable at once if you miss a
payment. The court can force you to pay by seizing your property and
selling it.
√ Repossession—the creditor can seize the item you bought or the
property you used as collateral. If the sale of the property brings less
than the amount you owe, usually you still must pay the difference.
√ Wage garnishment—a court order that requires your employer to
withhold part of your wages and pay your creditor.
√ Foreclosure—if you do not make your mortgage payments for at least
3 months, your lender takes possession of your home and sells it to pay
off the loan. You are responsible for the legal fees and difference
between the selling price and the amount owed.
All of these actions are very serious and could jeopardize your ability to get credit
in the future. If you need to work out an emergency repayment plan with your
creditors, do so. Missed payments will show that you were delinquent. This could
result in a poor credit record that will stick with you and you spouse for seven years.
“Fixing” your credit record is not possible. Don’t fall prey to scams that claim to
be able to do so. You can, however, write a 100 word statement explaining your
hardship and have that statement permanently entered into your credit report. Call
your bank and ask for the name of the credit agency which they report to. Send that
letter to all three of the major credit reporting agencies Experian, Eqifax, and TransUnion. By federal law, someone from the credit reporting agency must help you write
the letter if you need help.
Review your credit report
Request a copy of your credit report from one of the three credit bureaus listed
below. Usually credit reports cost $8. You can get a free copy only if you were denied
credit, employment, or insurance. However, you also are entitled to one free report
every twelve months upon request if you certify that: (1) you are unemployed and
plan to seek employment within 60 days, (2) you are on welfare, or (3) your report
is inaccurate due to fraud.
Experian (Formerly TRW)
PO Box 2104
Allen, TX 75013-2104
1-800-682-7654
24
Equifax
PO Box 105873
Atlanta, GA 30348
1-800-685-1111
Fax: 1-404-612-3150
Trans Union Corp.
PO Box 390
Springfield, PA 19064-0390
1-800-916-8800
Include the following information in your written request for your
credit report:
• Your first, middle initial, & last name
• Spouse’s name
• Current home address and zip
• Home address for the last 5 years
• Social Security number
• Date of birth
• Verification of your current address, such as a photocopy of a driver’s
license or a utility bill
• Sign your request
Should You Consider Loan Consolidation?
If you have a number of outstanding loans, a consolidation loan may be considered. You take out one loan, pay off all bills at once, and then have one debt to pay
off to just one creditor (usually extending over a longer period of time). Again, each
payment will be smaller, but you will commit yourself for a longer period of time,
usually at a higher total cost. Shop around, as you would for any type of credit, to find
the lowest interest.
Some of your smaller debts may carry no interest and may be unsecured (meaning
the creditor’s don’t hold any collateral). Some bill consolidation loans may require
you to put up your household goods, auto, and sometimes your house as security. Be
advised that non payment of this type loan could result in loss of the collateral!
Who to Talk to About Your Financial Situation
Consumer Credit Counseling Service (CCCS)
If you’d like to have a confidential chat with an expert on personal debt, find the
Consumer Credit Counseling Service in your area. Call 1-800-388-2227 (1-800388-CCCS). That number will connect you to the National Foundation for Consumer
Credit. They will give you the address and phone number for the CCCS in your area.
They provide counseling to families on debt problems. If you want, they’ll help you
work out a family budget, they’ll call your credit card companies and other lenders,
and they’ll help negotiate to get your payments reduced.
◆ ◆ ◆
If you’d like to have
a confidential chat
with an expert on
personal debt, find
the Consumer Credit
Counseling Service
in your area.
If You Have No Credit Rating
The best way to establish a credit rating is to establish a good employment record
and have a checking and a savings account. Then open a small charge account with
a local retail store, get a credit card with a low credit limit, or get a secured loan from
a financial institution. Make payments on these promptly as they become due, and
you will establish your own good credit history.
◆ ◆ ◆
25
Child care assistance
◆ ◆ ◆
Working parents, and especially single parents, know that the cost of child care
is big part of the family budget. However, your family can get assistance with the cost
of child care. The dollar amount of assistance depends upon the family income. For
example, in 1997, a family of three with income below $1,623 a month ($19,467 a
year) may qualify for child care assistance. Ask about the program at your local
Community Action Agency, child care Resource and Referral, or the Department of
Health & Welfare.
Once a joint return
is filed, either spouse
is liable to pay up to
100 percent of the
tax owed.
◆ ◆ ◆
Food stamps
If your income is reduced, you may be eligible for food stamps. Low income
families can qualify for food stamps while working full time. For example, a family
of three with income at one and one-half times the minimum wage may qualify for
assistance. If you want to find out if you are eligible for food stamps, apply through
the Department of Health & Welfare. Eligibility is determined by your family's
financial resources and family income.
When you apply for the Food Stamp program,
take this information along:
√
√
√
√
√
√
√
*
Rent receipts
House payment book
Utility bills
Proof if income for all working members of household, including all
benefits such as Social Security, public assistance and unemployment
benefits
Bank books or any papers showing what you have in savings
Proof of medical bills (doctor, hospital, etc.).
Proof of income.
Note: These are general guidelines. Particular details may be subject to
changes based on new state and/or federal regulations.
Income Tax
Divorce has income tax consequences. Some information is provided here. You
may also want to obtain Internal Revenue Service publication No. 504 Tax Information for Divorced and Separated Individuals. To order IRS publications, look under
“U.S. Government” in your phone book or call 1-800-TAX-1040.
How Divorce Affects Taxes
Idaho’s community property law makes both spouses liable for most debts
incurred while married. Once a joint return is filed, either spouse is liable to pay up
to 100 percent of the tax, interest and penalty, if any, determined to be owning, even
if additional amounts become due after divorce.
Marriage and divorce may affect your tax liability. If you marry someone who
already has a tax debt, at least one-half of what you earn or acquire after marriage can
be taken to satisfy that spouse's debt. This can occur because your wages and other
property acquired during marriage become co-owned by your spouse. In addition, if
you are married to someone who is not paying income taxes on what he or she earns,
when the taxes become due, the taxes may be collected from either or both of you.
In the event of a divorce, although the divorce decree may state that your exspouse is fully responsible for tax debts, the divorce decree will not stop a taxing
26
agency from collecting from you if you have income or assets which can satisfy the
liability.
Example: Your divorce decree states your ex-spouse is responsible for the tax
debts incurred during marriage. You file a tax return, alone or with a new spouse, and
expect a return. Your entire refund may be applied to the joint liability incurred
during your prior marriage. Your rights under the state law may allow you to sue your
ex-spouse for any money the taxing agency collects from you. Collection will
continue from one spouse or the other, or both, until the joint tax liability is fully paid.
Before Divorce — Your marital status on December 31 determines your taxfiling status for that year. For example, if your divorce was not final on December
31, 1997, you may file a joint return for 1997 even though your divorce is final when
you file the 1997 return in April 1998.
If you are divorcing, filing a joint return, and expecting a refund, determine how
to divide the refund. The refund is property that belongs to both of you.
If you are divorcing, filing a joint return, and owe additional taxes, determine who
will pay the tax. The tax is a debt you both owe.
If your divorce is not final as of December 31, you may also file as a head of
household if you meet all the conditions outlined in the Form 1040 instruction book.
After Divorce — If you were divorced by December 31, you cannot file a joint
return for that year. You file either as a single person or as a head of household. The
income tax booklet that comes with the Form 1040 explains who may file as a head
of household.
When you are divorced, you must file separate returns. You should determine in
the property settlement which of you claims the child as a dependent. Usually it’s
whichever one of you has major physical custody, regardless of the amount of
support the other parent provides.
If you are the custodial parent you can waive the right to claim the child as a
dependent in a given year, allowing the other parent to claim the child as a dependent.
If you do, your former spouse must attach to his or her tax return a signed statement
from you waiving the dependency exemption.
The new tax break is a $400 tax credit per child for 1998. Credits, which you can
write off directly against tax, are worth much more than deductions (a $400 credit
wipes out $400 in tax, but a $400 deduction trims $400 from income subject to tax;
in the 28 percent tax bracket, for example, it saves just $112 in tax). The credit, which
goes up to $500 for 1999, comes on top of the already existing deduction for a
dependent—currently $2,650. If you expect to claim several credits, you can lower
your withholding to enjoy the benefits of the break in each paycheck. The new credit
applies to children and grandchildren age 16 and younger, unlike dependency
exemptions, which can apply at any age. But to claim the credit, the child must
qualify as a dependent. Divorcing parents need to consider this tax break when
determining who gets to claim a child’s exemption as related to this new tax credit.
Either of you can deduct medical expenses you paid for your child, regardless of
who claimed the child as a dependent.
For tax purposes, child support is not income for the parent receiving it and is not
deductible for the parent paying it.
Maintenance or spousal support payments you receive from your spouse are not
always considered taxable income and are not always deductible for your spouse.
They are taxable for you and deductible for your spouse only if they are within the
IRS definition of alimony. According to the IRS, such payments are alimony if:
• payments are made in cash or check (not property) and there is no responsibility
to make payments after one of you dies, and
◆ ◆ ◆
Your marital status
on December 31
determines your
tax-filing status
for that year.
◆ ◆ ◆
27
• payments are not scheduled to decrease when a child marries, leaves school, etc.,
and
• payments exceeding $15,000 per year continue for at least 3 years, unless one of
you dies.
If you are receiving maintenance that the IRS considers income for tax purposes,
you may be required to make quarterly estimated tax payments throughout the year.
Obtain IRS publication No. 505, Tax Withholding and Estimated Tax.
◆ ◆ ◆
Due to a potential
decrease in income
after divorce, the
parent who retains
physical custody of
the children may be
eligible for the
earned income tax
credit.
Earned Income Tax Credit (EIC)
Due to a potential decrease in income after divorce, the parent who retains
physical custody of the children may be eligible for the earned income credit on his/
her Federal income tax return.
The EIC is a "refundable" credit. This means that you can benefit from the credit
even if you owe no federal income tax. If you are eligible and owe no income tax,
you will receive a check from the Internal Revenue Service in the amount of your
credit. If you owe income tax, the EIC reduces the amount of taxes owed. If your
credit is greater than the amount of taxes you owe, your tax bill will be reduced to
zero and the IRS will send you a check for the remainder of your EIC.
◆ ◆ ◆
How to receive the EIC
If you are eligible, file a federal income tax return. Workers with qualifying
children may use either Form 1040A or 1040. Second, you must also file a tax form
called "Schedule EIC" with your tax return. You can choose to fill out just the first
side of "Schedule EIC." If you do, the IRS will calculate your EIC for you.
Workers not raising children may use the 1040EZ form, sometimes known as the
short form, to claim their EIC.
If you were eligible in the recent past but did not file for EIC, you may also file
for retroactive EIC payments from the last three years if you have not already filed
income tax returns for those years. In general, if the you did not owe federal income
taxes, no penalty will be assessed for filing late. A household's EIC payments do not
count as income in determining its eligibility or benefit levels for Temporary
Assistance for Families in Idaho (TAFI), Medicaid, food stamps, SSI, or public or
subsidized housing.
How to receive the EIC in your paycheck
If you earned less than $25,078 in 1996 you can receive a portion of the EIC
throughout the year in their paychecks. To apply, an eligible worker must fill out
Form W-5, called the "Earned Income Credit Advance Payment Certificate," and
give the bottom portion to his or her employer. The W-5 form is available from
employers or local IRS offices, or can be ordered by calling the IRS toll-free at 1-800829-3676. Eligible workers can file a W-5 any time during the year, but they must
file a new W-5 at the beginning of each year to continue receiving the EIC in their
paychecks. Workers not raising children are not eligible for EIC advance payments.
See Internal Revenue Service (IRS) Publication 596 for the requirements. You
can obtain free help from IRS operators during regular weekday business hours by
calling 1-800-829-1040. You can also listen to a recorded message on the EIC 24
hours a day by calling the IRS "teletax" service. To hear recorded "teletax" messages
on the EIC, dial 1-800-829-4477. Request topic 402 for the English message; for the
Spanish message, press * on a touch-tone phone, pause, then press 2, then finally
press 754. The IRS phone number for hearing impaired persons who have access to
28
TDD equipment is 1-800-829-4059.
Bankruptcy
Even though your property settlement agreement specifies who has the obligation
to pay certain debts, that agreement may not keep creditors from seeking payment
from you on debts your spouse assumed. The creditor will have the right to seek
payment from you on these types of debts under these situations:
1. you were personally liable on the debt — that is, you signed the loan papers or
contract;
2. the creditor has a security interest in property distributed to you under the property
settlement agreement; and,
3. your spouse received insufficient property through the property settlement
agreement to cover the debt.
The likelihood of a creditor seeking payment from you increases when your
former spouse has become insolvent or has gone bankrupt.
Wills and Estate Planning
Estate planning is deciding who will receive your property at your death. You may
already have done such planning —preparing a will and naming beneficiaries on
insurance policies, pension funds, IRAs, certificates of deposit, or government
bonds. When you are divorcing review these documents for necessary changes.
If you have minor children and want your property to be used for your children
when you die, you need to determine the best way to do this and to provide for
someone to manage the property for the children. Two alternatives are:
1. Write a will naming a guardian to manage the children’s property, or
2. Establish an estate plan that would pass your property into a trust for the benefit
of the children. The trust would be managed by a trustee you name according to
a trust agreement you prepare.
A New Financial Life
After divorce, you and your spouse will create a new life, including a new financial
life. Because you divided resources at divorce, each of you individually will have less
than you had as a married couple. It is important to develop an understanding of your
financial situation and a realistic financial plan including a budget and recordkeeping system.
If you have children and/or have financial transactions that continue after divorce
— child support or spousal support payments, property that will be sold and proceeds
that will be divided in the future — a relationship continues after divorce. This is not
the intimate relationship of marriage, but a business relationship.
Be businesslike with your new “business partner.” When there are issues you must
discuss, communicate directly. Do not send messages through children, relatives, or
mutual friends. If you need to talk with each other, set a meeting time that is
convenient for both of you. Limit the discussion time and topics.
If the child’s future dental treatment and expenses are the topic, talk only about
that. Share information. The parent who has talked with the dentist cannot assume
the other parent knows what the dentist recommended and why.
Record-keeping takes on new importance after divorce. If you are paying or
receiving child support, keep a record of all payments you made or received. Keep
records of what each of you spends on the children. These records are useful as you
budget and plan and if you consider child support changes. They help both of you
◆ ◆ ◆
Do not send messages
through children,
relatives, or mutual
friends.
◆ ◆ ◆
29
better understand the child’s financial needs.
Name change
If you choose to change your name when you divorce, for example, resuming the
use of your maiden name, you should notify the Social Security Administration
(SSA) You do not, however, need to notify the Internal Revenue Service (IRS) of
a name change. The IRS verifies the name used on a tax return with the records of
the SSA. If you file a tax return with a name other than the name on record with the
SSA, a delay will occur in processing your return and mailing your tax refund.
◆ ◆ ◆
When entering into
a prenuptual
agreement you and
your new spouse
must act fairly
toward each other for
the agreement to be
enforceable.
You and your new
spouse must disclose
the full extent and
value of all assets.
Your agreement
should also be signed
and acknowledged.
Prenuptial Agreements
If part of your new financial life involves plans for remarriage, you may want to
consider a prenuptial agreement to ensure that the assets you now own as your
separate property and any income produced by those assets remain your separate
property. A prenuptial agreement can also help to ensure that your property will pass
to your children when it is part of a well-planned estate. You can also specify how
the property acquired during your new marriage will be treated — that is, whether
you and your new spouse will share future property or whether you will own your
property separately. When entering into such an agreement you and your new spouse
must act fairly toward each other for the agreement to be enforceable. You and your
new spouse must disclose the full extent and value of all assets. Your agreement
should also be signed and acknowledged. If real property is involved, your agreement or a memorandum of your agreement should be filed in the real estate records
of each county in which you own property.
◆ ◆ ◆
30
Worksheet 1: Estimated Proceeds from Sale of House.
Estimated Sales Price
$_______________ (a)
------------------------------Selling Expenses
Amount required to pay off loan(s) in full
_______________
Fix-up costs connected with sale
(paint, minor repairs, etc.)
_______________
Realtor’s commission (often 6% of Sales Price)
_______________
Seller’s portion of closing costs
(often 1% of Sales Price)
_______________
Other sales costs
_______________
Total Selling Expenses
_______________ (b)
-------------------------------
Estimated proceeds from sale (a minus b)
_______________
◆ ◆ ◆
31
Worksheet 2: Estimated Cost of Staying in the Family Home.
Monthly mortgage payment
$ _______________
Monthly insurance payment*
_______________
Monthly property tax payment*
_______________
Electricity, gas, heating oil
_______________
Water and sewer charges
_______________
Garbage pickup
_______________
Maintenance and repair
_______________
Yardwork
_______________
Homeowner fee, association fee
_______________
Other
_______________
TOTAL monthly cost
$ _______________
*These may be included in the mortgage payment. If not, divide the yearly expense by 12 to arrive at
the monthly cost.
Worksheet 3: Estimated Cost of Renting.
Monthly costs
Rent
$ _______________
Electricity, gas, heating oil
_______________
Water and sewer charges
_______________
Garbage pickup
_______________
Yardwork, if it is the renter’s responsibility
_______________
Other
_______________
TOTAL monthly costs
$ _______________
One-time costs
Moving
$ _______________
Deposits (security, cleaning, pet, key)
_______________
Utility hookups and deposits
_______________
Other
_______________
TOTAL one-time costs
$ _______________
32
33
Worksheet 5: Summary of Debts (Include all debts, credit card amounts, back
taxes, student loans, etc.).
Creditor’s
name
Balance
owed
today
Minimum
monthly
payment
Date at which
total debt will
be paid
34
Comments (Was the loan secured? If so,
by what? Who signed the loan agreement?)
Worksheet 6: Summary of Proposed Property Division.*
COMMUNITY PROPERTY ASSETS:
Fair market
value
Allocated to
the wife
Allocated to
the husband
1. __________________________
$ ___________
$___________
$___________
2. __________________________
___________
___________
___________
3. __________________________
___________
___________
___________
4. __________________________
___________
___________
___________
5. __________________________
___________
___________
___________
6. __________________________
___________
___________
___________
Describe item
TOTAL
$
$
$
DEBTS INCURRED DURING MARRIAGE:
Amount
owed
Describe debt
Allocated to
the wife
Allocated to
the husband
1. __________________________
$___________
$___________
$___________
2. __________________________
___________
___________
___________
3. __________________________
___________
___________
___________
4. __________________________
___________
___________
___________
5. __________________________
___________
___________
___________
6. __________________________
___________
___________
___________
TOTAL
$
Total ASSETS
$
minus Total DEBTS
$
equals TOTAL NET WORTH
$
$
$
*Remember each spouse usually is entitled to onehalf of the net worth. If the division of the property
reached on this worksheet is not what the couple
desires, the couple may either reconsider who
gets what property or adjust the allocation by
having one spouse make a payment to the other.
If cash is not available, the payment may be paid
in installments over time. Look to Table 1 on page
13 for an example of this type of a division.
35
Completed Sample Worksheet 6: Summary of Proposed Property Division.*
COMMUNITY PROPERTY ASSETS:
Fair market
value
Allocated to
the wife
Allocated to
the husband
1. __________________________
$ ___________
$___________
$___________
2. __________________________
___________
___________
___________
3. __________________________
___________
___________
___________
4. __________________________
___________
___________
___________
5. __________________________
___________
___________
___________
6. __________________________
___________
___________
___________
Describe item
TOTAL
$
$
$
DEBTS INCURRED DURING MARRIAGE:
Amount
owed
Describe debt
Allocated to
the wife
Allocated to
the husband
1. __________________________
$___________
$___________
$___________
2. __________________________
___________
___________
___________
3. __________________________
___________
___________
___________
4. __________________________
___________
___________
___________
5. __________________________
___________
___________
___________
6. __________________________
___________
___________
___________
TOTAL
$
Total ASSETS
$
minus Total DEBTS
$
equals TOTAL NET WORTH
$
$
$
*Remember each spouse usually is entitled to onehalf of the net worth. If the division of the property
reached on this worksheet is not what the couple
desires, the couple may either reconsider who
gets what property or adjust the allocation by
having one spouse make a payment to the other.
If cash is not available, the payment may be paid
in installments over time. Look to Table 1 on page
13 for an example of this type of a division.
36
Worksheet 7: Monthly Financial Needs of Children.*
Item**
Cost for
family
Cost for
children***
Comments
Food at home
Food away from home
Clothing (purchase, repair, upkeep)
Household operation (utilities, furnishings,
repairs, equipment)
Medical care (medical, dental, and eye care;
doctors; hospital; drugs)
Medical/dental insurance****
Education (tuition, fees, special lessons,
summer camp)
Transportation
Personal (haircuts, allowances, recreation)
Child care (babysitter, preschool, day care)
Other
TOTALS
* If expenses do not occur routinely each month, divide the yearly cost by 12 to get an average cost
per month.
** If you have items that are not in this list, add them.
*** If children will live in 2 households, include costs for both households.
**** If insurance is included as an expense, the parent paying the premium receives credit for the
amount of the premium.
Note: This is an example of a document used in an Idaho court. Actual copies can be obtained
from your local Clerk of the Court’s office.
37
Worksheet 8: Child Support Obligation
IN THE DISTRICT COURT OF THE ______________ JUDICIAL DISTRICT OF
THE STATE OF IDAHO, IN AND FOR THE COUNTY OF _____________
_______________________, Plaintiff.
vs.
_______________________, Defendant
)
)
)
)
)
CASE NO.:_________
STANDARD CUSTODY CHILD
SUPPORT WORKSHEET
Children
Date of Birth
Children
Date of Birth
____________________________________________________________________________________
____________________________________________________________________________________
____________________________________________________________________________________
____________________________________________________________________________________
____________________________________________________________________________________
Plaintiff
1. MONTHLY I.C.G.S. INCOME (from Affidavit)
Defendant
$
2. PERCENTAGE SHARE OF INCOME
(Each parent’s income on line 1 divided by
Combined Income)
$
%
%
3. BASIC CHILD SUPPORT OBLIGATION
(Multiply line 2 times line 3 for each parent)
$
4. EACH PARENTS CHILD SUPPORT
OBLIGATION (Multiply line 2 times line
3 for each parent)
5. RECOMMENDED CHILD
SUPPORT ORDER (Bring
down the amount from
line 4 for the non-custodial
parent)
Combined
$
$
$
$
OTHER COSTS TO BE CONSIDERED BY THE COURT:
a. Work-Related Child Care Cost
+ _______________
b. Health insurance premiums and uninsured health care expenses + _______________
c. Tax benefit for dependency exemptions
+ _______________
Comments, calculations, or rebuttals.
PREPARED BY:
DATE:
Note: This is an example of a document used in an Idaho court. Actual copies can be obtained
from your local Clerk of the Court’s office.
38
Worksheet 9: Child Support Obligation Shared Physical Custody
IN THE DISTRICT COURT OF THE ______________ JUDICIAL DISTRICT OF
THE STATE OF IDAHO, IN AND FOR THE COUNTY OF ___________
_______________________, Plaintiff.
vs.
_______________________, Defendant
)
)
)
CASE NO.:_________
STANDARD CUSTODY CHILD
SUPPORT WORKSHEET
Children
Date of Birth
Children
Date of Birth
____________________________________________________________________________________
____________________________________________________________________________________
____________________________________________________________________________________
____________________________________________________________________________________
Plaintiff
1. MONTHLY I.C.G.S. INCOME (from Affidavit)
Defendant
$
Combined
$
$
2. PERCENTAGE SHARE OF INCOME
(Each parent’s income on line 1 divided by
Combined Income)
%
%
3. BASIC CHILD SUPPORT OBLIGATION
$
a.Apply line 1 Combined to Child Support
Schedule
b.(Multiply line 3a by 14 (Sections 10d and 10f)
$
4. EACH PARENTS CHILD SUPPORT
OBLIGATION (Multiply line 2 times line
3 for each parent)
$
$
5. OBLIGATION ALLOCATION
(Line 4 divided by the number of children)
$
$
CHILD 1
CHILD 2
Plaintiff
6. PARENTS PERCENTAGE
OBLIGATION (Number of overnights
with other parent divided by 365)
If greater than 65% enter 100%, if less
than 35% enter 0%.
Defendant Plaintiff
%
%
7. PARENTS OBLIGATION
(Line 5a line 6 for each child)
$
$
8. TOTAL CHILD SUPPORT
PER PARENT (Total of amounts
for each parent)
$
$
9. RECOMMENDED CHILD
SUPPORT ORDER (Subtract lesser
amount from greater amount on line 8
and place result under greater amount)
$
$
%
$
CHILD 3
Defendant
Plaintiff
%
$
Defendant
%
$
%
$
OTHER COSTS TO BE CONSIDERED BY THE COURT:
a. Work-Related Child Care Cost
+_______________
b. Health insurance premiums and uninsured health care expenses+_______________
Comments, calculations, or rebuttals.
PREPARED BY:
DATE:
For example, if child 1 lives with defendant 80% of the time, “80%” goes under “plaintiff” for child 1.
39
Worksheet 10: Summary of income of husband and wife
Income
Husband
Wife
Earning ability at time of marriage
$
$
Present earning ability and annual income from
property and investments
$
$
Earning ability and income in 5 or 10 years
$
$
Income from pensions, Social Security, and
investments after retirement age
$
$
Comments:
40
Worksheet 11: Projected Income-Expense Statement.
Income
Salaries (before deductions)
Commissions, tips, bonuses
Investment income
Interest (taxable)
Interest (nontaxable)
Dividends
Profit from rental property
Profit from sale of assets
Other investment income
Alimony/child support
Cash gifts
Other income
Total income
Expenses
Taxes
Federal income
Social Security
State income
Property
Other
Housing
Rent or mortgage
Utilities
Property and other insurance
Furniture and other durables
Household maintenance
Other real estate payments
Transportation
Car payment
Gas, repairs, tires
Insurance, licenses
Food
Clothing, clothing care
Recreation, hobbies
Personal care
Health care
Services and medication
Health insurance
Education, publications
Life and disability insurance
Husband
$__________
__________
Wife
$_________
_________
__________
__________
__________
__________
__________
__________
__________
__________
__________
$__________
_________
_________
_________
_________
_________
_________
_________
_________
_________
$_________
$__________
__________
__________
__________
__________
$_________
_________
_________
_________
_________
__________
__________
__________
__________
__________
__________
_________
_________
_________
_________
_________
_________
__________
__________
__________
__________
__________
__________
__________
_________
_________
_________
_________
_________
_________
_________
__________
__________
__________
__________
_________
_________
_________
_________
For the period
from______________, year______
to________________, year______
Liabilities
Bank loans
Charge accounts
Charge cards
Other
Savings
Savings account
Investments
Pension contributions
Payments to others
Child care
Family allowances
Charitable gifts
Gift
Child support/alimony
Business/professional
TOTAL EXPENSES
Husband
Wife
__________
__________
__________
__________
_________
_________
_________
_________
__________
__________
__________
_________
_________
_________
__________
__________
__________
__________
__________
__________
_________
_________
_________
_________
_________
_________
$__________
$_________
$__________
__________
$__________
$_________
_________
$_________
Summary
Total income
Less total expenses
Difference
Notes
41
Glossary
actuary — a person skilled in calculating the value of life interests, annuities, and
insurance.
alimony — see maintenance in this glossary.
assets — money, property, and money-related rights owned by a person; property
of all kinds — real and personal, tangible and intangible.
community property — property acquired by either spouse during the marriage
including rents and profits of separate property, with the exception that any
property acquired by one spouse by gift, will, or inheritance is that spouse’s
separate property.
custody — may refer to legal or physical custody of children. Legal custody and
physical custody are different.
Legal custody refers to the decision-making authority with respect
to the child. The parent with legal custody has the right to make
major life decisions for the child — decisions about religion,
education, discipline, and medical care. Sole legal custody is
when one parent has this decision-making authority. Joint legal
custody is when both parents share the decision-making authority. Idaho courts favor joint legal custody unless strong evidence
shows that a parent should be deprived of such custody. Strong
evidence might include evidence of drug or alcohol addiction or
child abuse.
Physical custody refers to the parent with whom the child lives. One
parent may have physical custody and the other parent visitation
rights. That is, the child lives primarily with one parent and
spends certain, usually specified times (such as vacations and
specified holidays), with the other parent. Or physical custody
may be shared: the child lives at both parents’ homes.
Split custody indicates there is more than one joint child and at least
one child lives with each parent.
dissolution — commonly referred to as divorce, the legal act of terminating a
marriage.
divorce decree — restores the spouses to the status of unmarried persons. The decree
may include provisions regarding property division, spousal and child support,
and child custody.
earnest money agreement — a deposit paid by a buyer to commit a seller to a deal
and to show the buyer’s good faith; an assurance that the buyer is in earnest and
good faith.
estate plan — arrangement for the disposition of one’s property after death.
fair market value — price at which a buyer, who is a stranger to the seller, will buy
property at.
gross income — income from any source including, but not limited to, salaries,
wages, commissions, bonuses, dividends, severance pay, pensions, interest, trust
income, annuities, Social Security and veteran’s benefits, welfare payments,
judgments, gifts, student loans, and in-kind payments (such as the value of a
company car or free housing, room and board).
gross potential income — amount of income set by a court for a person who is
voluntarily unemployed or underemployed. For example, a person who voluntarily quit his or her job to go back to school would fall in this category.
◆ ◆ ◆
42
group life insurance — a form of insurance whereby individual lives of a group of
persons, usually employees, are covered by a single or blanket policy; such
insurance is renewable on a year-to-year basis and does not accumulate a cash
value (that is, no cash surrender value is built up).
lien — an interest in real or personal property given to a creditor to secure an
obligation. This interest gives the creditor the right to take the property through
court action to satisfy the debt.
maintenance — payments made under a court order or court-approved agreement
of the parties by one spouse to the other spouse to provide support; also called
alimony or spousal support.
market value — the amount of money a buyer who is a stranger to you would pay.
mortgage or deed of trust — a lien on real property voluntarily given by the debtor
to the creditor.
noncustodial parent — the parent without physical custody of the child or children
but who usually has visitation rights.
property settlement agreement (also called property agreement) — a written
contract between divorcing spouses that lists and divides the property and
financial obligations. It may also include plans for custody, child support, and
spousal support.
real property — land and things attached to the land, such as building, fences, and
plant material growing on the land.
replacement value — the cost of replacing the property with similar property.
security interest — a lien on personal property voluntarily given by the debtor to
the creditor.
separate property — property acquired by assets you or your spouse owned before
you were married, or property acquired by you or your spouse as a result of a gift
to one of you or through inheritance.
term life insurance — a form of insurance that promises payment only within the
specified term covered by the policy, though such policies are commonly renewed
each term. Term policies have no cash surrender value.
valuation — the act of determining the estimated monetary worth of something.
whole life insurance (sometimes called straight life insurance) — insurance for
which premiums are collected as long as the insured person lives. Whole life
policies build up cash value.
◆ ◆ ◆
43
Additional resources
◆ ◆ ◆
What to do When Your Income Drops CIS 1049, University of Idaho Cooperative
Extension System publication. Contact your local county Extension office or
University of Idaho Ag Publications, Moscow, ID 83844-2332, phone (208)8857985, http://info.ag.uidaho.edu/catinfo.html
Coming to Grips with Your Finances (five-part series on sound money management), University of Idaho Cooperative Extension System publication. Contact your
local county Extension office or University of Idaho Ag Publications, Moscow, ID
83844-2332, phone (208)885-7985, http://info.ag.uidaho.edu/catinfo.html
Women and Laws in Idaho is a 64-page resource handbook published by the
Idaho Women’s Commission. Contact the Women’s Commission at P.O. Box
83720, Boise, ID 83720-0036, phone (208)334-4673 or toll-free 1-800-643-7798.
For help in locating an attorney, call the Idaho State Bar lawyer referral service,
phone (208)334-4500.
To find the Consumer Credit Counseling Service in your area call 1-800-3882227 (1-800-388-CCCS).
You can obtain free help from Internal Revenue Service (IRS) operators during
regular weekday business hours by calling 1-800-829-1040. Federal tax publications
can be obtained by calling 1-800-829-3678 or downloading from the internet at
http://www.ustreas.gov.
44
About the authors
Elizabeth Brandt is professor of law, University of Idaho College of Law,
Moscow. Linda Kirk Fox is professor and an Extension family economics specialist,
UI School of Family and Consumer Sciences, Moscow. Kathleen Hardcastle is a
former member of the Idaho Women’s Commission and an attorney in private
practice, Moscow.
Acknowledgments
The authors gratefully ackowledge Alice Mills Morrow, CFP, J.D., Extension
family economics specialist at Oregon State University, for permission to adapt the
publication Making Financial Decisions When Divorce Occurs: An Oregon Guide.
Appreciation is also extended to the following individuals who served as
reviewers and/or contributors to this publication:
Carol Anderson, research assistant, University of Idaho.
Vicki Cade, research assistant, University of Idaho.
Ann Cosho, attorney at law, Boise, Idaho.
Susan Graham, attorney at law, Boise, Idaho.
Virginia Junk, associate professor, University of Idaho.
Hon. William C. Hamlett, magistrate, Moscow, Idaho.
Edith Miller Klein, attorney at law, Boise, Idaho.
Jack Miller, Dean, College of Law, University of Idaho.
Phyllis Ann Miller, member of Commission on Women’s Programs,
Pocatello, Idaho.
Marilyn Cross Bischoff, University of Idaho Extension educator,
Ada County.
Sheldon Vincenti, College of Law, University of Idaho.
◆ ◆ ◆
45
◆ ◆ ◆
Issued in furtherance of cooperative extension work in agriculture and home economics, Acts of May 8 and June 30, 1914, in cooperation with
the U.S. Department of Agriculture, LeRoy D. Luft, Director of Cooperative Extension System, University of Idaho, Moscow, Idaho 83844.
The University of Idaho provides equal opportunity in education and employment on the basis of race, color, religion, national origin, age,
gender, disability, or status as a Vietnam-era veteran, as required by state and federal laws.
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