Honolulu Family Law Blog

Children in Hawaii may suffer when their parents go through a divorce. It is well-known that kids can feel alone and insecure when their parents separate. They may fear being abandoned themselves or torn between their loyalties to both of their parents. For some children, the psychological scars of a parental divorce can persist for years to come. However, parents can also take action to help support their children to emerge from the divorce with a relatively positive experience and strong relationships with both parents. When parents take the lead, they can help their children to deal with change in a healthy manner.

When parents divorce, they are not bringing their relationship to an end. Because of the children, they are transforming their relationship from a romantic partnership to a co-parenting agreement. When parents can put their differences aside to work together for the children, this can lead to better outcomes for everyone. Parents who cooperate in co-parenting can also help to lessen the damaging feeling of divided loyalties to their parents. Children can feel comfortable and safe expressing love for both of their parents without fearing that they will offend one parent by mentioning the other.

The simplest, best way for couples to ensure their assets are protected in Hawaii may be a prenuptial agreement. Millennials are agreeing to prenups more frequently than before, as is the population overall. Keeping assets separate has become easier and millennials are doing that too. Among people from that generation, 28% do not have joint bank accounts with their spouses and do not commingle their assets. Apps like Zelle and Venmo make it easier to split things down the middle in real time, and many millennials have seen the difficulties that can arise when dividing assets in divorce.

Separate bank accounts and even separate ownership of assets may not mean separate legal ownership if the couple divorces. Most of the states divide assets between former spouses based on an equitable distribution. This means the couple's assets may be pooled together, even if they've been keeping them separate, and divided fairly, which may not be equally. Cases vary widely based on the facts, and the judge has wide discretion.

There is no true consensus as to whether an inherited IRA can be included in an divorce settlement. However, this doesn't change the fact that inherited IRAs have been a part of divorce settlements in Hawaii and throughout the nation in the past. Often, they are allowed by courts to be split tax-free as long as it is done pursuant to a court order. Once a court has made such an order, an IRA administrator is not likely to defy it.

Changes to the tax treatment of alimony have made inherited IRAs popular bargaining chips in divorce settlements. However, it is not clear if they should be labeled marital property to begin with. This is because inherited items are generally considered to be separate property even if they were transferred during the marriage.

For anyone ending a marriage in Hawaii, there are many emotional, practical and financial considerations involved. Because of the complexities of divorce, it's surprisingly easy to overlook insurance-related matters. However, it's still important for couples separating to be aware of how no longer being legally wed can affect their various insurance policies.

It's usually life and health insurance policies that come into play as a marriage ends. With health insurance, it's typically the higher-earning spouse who covers the other one on a plan they have through their employment. A non-income-earning spouse can also continue to be covered on a former spouse's policy for up to three years because of the Consolidated Omnibus Budget Reconciliation Act, or COBRA. Another option is for spouse without their own coverage to see what's available on exchanges established under the Affordable Care Act.