Are you familiar with the term “discovery?” How about “dissipation?” or “prove-up?” Of course you’re not! You’re newly separated. When would you have ever come across these terms if you didn’t go to law school? This is a guest post by Kathryn A. McMahon, associate at Katz & Stefani, explaining some terms you are about to hear and what they mean. Remember that knowledge empowers people. In other words, don’t just nod your head and sign the documents your divorce attorney tells you to sign. Know what they mean!
OK…What Does That Mean? by Kathryn A. McMahon
Going through a divorce is an extremely difficult process. Aside from the intense emotional aspect, being newly separated is also stressful from a legal standpoint given that the process may be new and unknown to you.
At the beginning of the legal process, you may come across various legal terms you haven’t seen or heard before. Such “legalese” can be intimidating and confusing but it is important to understand the terminology in order to fully grasp what is going on and what you are agreeing to or not agreeing to in the divorce settlement.
Here are some common divorce-related legal terms and what they mean:
– Allocation Judgment: The Judgment providing the parties with child decision making responsibilities (previously known as custody) and a parenting time schedule for the children. Although this is typically entered early in the divorce case, this is a final judgment and will be incorporated into the Judgment of Dissolution of Marriage, which will also incorporate a Marital Settlement Agreement if a financial and property settlement is reached.
– Discovery: The formal process of requesting and obtaining information from parties and non-parties (i.e. banks, family members, business partners, accountants, or other individuals or entities with relevant information). Discovery can include using Interrogatories (written questions a party has to respond and answer under oath), Supreme Court Rule 214 Notice to Produce (written request for documents a party has to respond to under oath), Notices for Deposition, and Subpoenas. It can also include conducting appraisals and business valuations.
– Maintenance: Spousal support, formerly known as alimony (typically taxable to the recipient and tax-deductible to the payor).
– Unallocated Support: Includes maintenance and child support lumped together as one payment. Can be taxable or non-taxable (but is typically taxable where paid after the divorce in order to shift income to the spouse in the lower tax bracket, thereby maximizing the parties’ available net cash).
– Dissipation: A party’s improper use of marital funds on a purpose unrelated to the marriage after the marriage has undergone an irretrievable breakdown. Typically funds spent on a paramour (girlfriend/boyfriend); possibly on gambling, excessive living expenses after separation, or failure to maintain property.
– Grounds (Irreconcilable Differences): As of January 1, 2016, fault based grounds for divorce have been abolished (i.e. adultery, abuse, abandonment, etc.). The petitioning party must only establish that “irreconcilable differences” have led to the irretrievable breakdown of the marriage, that efforts at reconciliation have failed, and that future attempts at reconciliation would be impracticable and not in the family’s best interests (non-fault based grounds). After being separated for 6 months, there is an irrebuttable presumption that irreconcilable differences have been met (the other side cannot attempt to prove otherwise).
– QDRO (Pronounced QUADRO): A Qualified Domestic Relations Order (“QDRO”) is a Court Order required to divide qualified retirement plans such as 401(k)s and pensions. These are typically prepared by employee benefits specialists and signed off on by both parties.
– Prove-Up: The “final” court date when a settlement has been reached where the Court typically enters a Judgment of Dissolution of Marriage and dissolves the parties’ marriage. The Petitioner (the party who files for divorce) will appear and testify to present the proposed Marital Settlement Agreement and request that the Court find the Agreement fair and equitable and not unconscionable (sometimes the Respondent may appear as well).
As these and other legal terms may appear in documents you are reviewing and possibly signing, don’t be afraid to do further research or to ask your attorney for a more detailed explanation of the terminology.
If you are able to reach a settlement in your case, your Marital Settlement Agreement and Allocation Judgment (if you have minor children) may be among the most important documents you sign in your lifetime. Therefore, understanding in detail exactly what you are agreeing to is vital to the process.
Kathryn A. McMahon is an associate at the Chicago law firm, Katz & Stefani. To learn more, visit: http://www.katzstefani.com/kathryn-a-mcmahon
Like this post? Check out my blog, “Comparing Your Divorce To Others Could Be Dangerous.”