Posted on February 02, 2018 in Alimony / Maintenance

Spouses have until the end of this year to complete a divorce settlement with a spousal maintenance arrangement that will still qualify for the alimony deduction on federal taxes. As part of the recent federal tax reform law, the IRS will no longer offer the deduction for spousal maintenance agreements that are created in 2019 and later. This legal decision has tax implications for both the person who is paying alimony and the person who is receiving it. As a result, it may become more difficult for parties to agree on levels of spousal maintenance. This is the first in a three-part series on how eliminating the alimony tax deduction will affect divorces and why you may want to complete your divorce before the change starts.

Cost vs. Savings

On a basic level, the elimination of the alimony tax deduction is meant to be revenue neutral for the federal government. The IRS will collect more tax revenue from spousal maintenance payers, but spousal support recipients will pay less tax because the payments will no longer be taxable income. When putting the new law into practice, it becomes clear that spousal support payers may lose more in taxes than recipients will save. Presenting a specific example can help explain why this is the case. Because men are a majority of spousal maintenance payers, the example will follow those gender roles.

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 Posted on January 31, 2018 in Divorce

As discussed in a previous post, the federal tax reform law passed at the end of 2017 will directly affect divorce negotiations by eliminating the alimony deduction. For all people who create a divorce settlement after Dec. 31, 2018:

• The party paying spousal support can no longer claim the payments as a deduction; and
• The spousal support recipient does not need to report the payments as taxable income.

Taxes are an important consideration when reaching a financial settlement during a divorce. Parties who would pay spousal maintenance may be more reluctant to reach an agreement without compensation elsewhere in the settlement. There are other changes to federal tax law that will affect how divorcees negotiate their settlements and file their taxes.

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 Posted on January 25, 2018 in Child Custody

Though same sex couples are able to legally marry, not all couples take advantage of that right. Some couples committed to each other long before the change in the laws and do not see marriage as a necessity. Thus, the legal process of them splitting up is different from a divorce:

• On the positive side, they have the flexibility to determine their own separation agreement without worrying about complying with divorce laws; but
• On the negative side, they do not have the same protections that assure that their shared properties will be divided equitably.

However, unmarried same sex couples do not have flexibility when it comes to child-related issues. Child support and the allocation of parental responsibilities must comply with state laws, regardless of whether the parents are married.

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 Posted on January 23, 2018 in Prenuptial & Postnuptial Agreements

Despite the practicality of getting a prenuptial agreement, there is no avoiding that it is an awkward conversation to have with the person you plan to marry. Talking about a prenup means you are admitting the possibility that your marriage will end in divorce. It is particularly uncomfortable if you are the one who broaches the subject. Anger, distress and avoidance are all possible reactions. How you introduce the topic can determine whether you will be able to continue the conversation and create an agreement.

Framing the Conversation

Before you have your first prenup conversation, you should consider ways to present the subject that make it seem more benign. You can plan exactly what you will say to start the conversation, but everything beyond that should follow a broader outline. Sounding scripted can be off putting, and you must be flexible enough to respond to unexpected questions. You can expect that your significant other will ask why you want a prenuptial agreement. Prepare several answers that frame the idea as reasonable:

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 Posted on January 19, 2018 in Divorce and Finances

Divorce is an expensive process. Beyond what you may give up in the divorce settlement, you are responsible for paying attorney and court fees. You may need an alternative form of financing if your available income cannot pay for your legal fees. Establishing credit or liquidating assets involves its own risks. You must carefully consider the consequences of each form of financing before making your decision.

Bank Loans and Credit Cards

If you have a good credit rating, you can pay your legal fees by taking out a loan or charging it to a credit card. Naturally, you will pay more over time because of interest. However, you must also consider what level of payments you will be able to afford after your divorce. You, and not your spouse, are responsible for the debt you create after you file for divorce.

Personal Loans

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 Posted on January 11, 2018 in Divorce

Dating after divorce would be simpler if there was a set amount of time after which you knew you were ready to start a new relationship. Emotionally moving on from your marriage is a process, not a time period. Divorcees create arbitrary waiting periods because they know they should not immediately jump into a new relationship. However, you cannot predict how long your emotional recovery will take. Entering into a relationship too soon after a divorce can lead to impulsive decisions and unfortunate consequences.

Still Recovering

Divorcees may feel the desire to start dating again before they are emotionally ready for a new relationship. Dating fills a void left by the divorce and distracts you from addressing your underlying emotions. During a new relationship, you can tell that you have not moved past your divorce if:

• You measure your new partner against your former spouse;

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 Posted on January 05, 2018 in Order of Protection

When filing an order of protection in a domestic violence case, the petitioner may suddenly realize the various ways he or she is connected to the abuser. The victim must take steps to cut off access to properties and finances in order to shield him or herself from the abuser. However, both the accuser and accused may normally have an equal right to the shared properties. Illinois lawmakers included several remedies in the state's order of protection law that favor the petitioners’ rights to access and control various properties. A revision to the law went into effect at the start of the new year that extends those rights to cell phone accounts.

Phone Control

Under the revised law, a petitioner who has filed an order of protection may request that a wireless service provider move his or her phone number to a separate account. The law is meant as another way for domestic violence victims to be financially independent from their abusers. Domestic partners often share a wireless telephone service plan. If the abuser is the primary holder of the account, he or she has control over all phone numbers related to the account. With the new law, the petitioner

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 Posted on January 02, 2018 in Divorce

There is an important difference between feeling regret and feeling guilt during your divorce. With regret, you are thinking about the mistakes that lead to your divorce. It is best not to linger on regrets, but identifying them can help you learn from your divorce and heal. With guilt, you are blaming yourself for the divorce occurring, even though such a feeling is often inaccurate and unproductive. People who believe they are to blame for their divorces may want to punish themselves during the divorce negotiations. Divorcees must separate feelings of guilt from how they reach a settlement on financial issues and the allocation of parental responsibilities.

Reasons for Guilt

It helps to identify why you feel guilty when you are blaming yourself for your divorce. Understanding the source of your guilt allows you to rationalize whether it is fair to say you are at fault for the divorce. There are various reasons people may blame themselves for their divorces, including:

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 Posted on December 29, 2017 in Children and Divorce

New Year’s resolutions are about finding ways to improve yourself, with the noticeable passage of time as the impetus. If you are concerned about your deteriorating relationship with your children after your divorce or separation, you can resolve to be a better parent. You have a finite amount of time to form an emotional bond with your children while they are still at the age when they look towards you for guidance. Here are five tips that may help you improve as a parent for the new year:

1. Increase Contact: Your children need to notice your presence in order to develop a relationship with you. You can try to increase your share of parenting time, though it may be impractical depending upon distance and schedules. There are alternatives to physical contact with your children, such as phone calls, video chats and emails. Electronic communication allows continued interaction without worrying about transportation or clearing your schedule for most of the day.

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 Posted on December 26, 2017 in Divorce and Finances

When one person in a marriage is eligible to receive federal disability benefits, both spouses may come to rely upon the payments. The benefits are meant to make up for the spouse’s inability to secure employment. If the couple divorces, the disabled spouse will likely see his or her disability benefits unaffected or increased. The non-disabled spouse may individually receive benefits, depending on which program the disabled spouse is using.

SSI vs. SSDI

Any person age 65 or older or an adult with a qualifying disability may apply for Supplemental Security Income (SSI) and Social Security Disability Income (SSDI). The difference between the two has to do with work experience and financial need:

• Disabled adults earn SSDI benefits by accumulating work credits at jobs where they contributed to social security. A spouse and dependent children can receive auxiliary benefits; and

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