Feeds:
Posts
Comments

Posts Tagged ‘Child support’

Personal Budget Plan

Personal Budget Plan (Photo credit: Wikipedia)

Divorce creates the need to gather and track lots of financial information.

  • Your assets make up one set of financials.
  • Your expenses as you go through the divorce make up another. These may include money that you’ve spent on expenses the you should not have paid.
  • A final set may be based on the budget you may create.

This means that there’s going to be lots of numbers and papers floating around. How do you keep track of all this necessary paperwork during a time when you have so much other things to deal with?

Well some of you may already be using a spreadsheet to track the numbers. Still, you have to take the time to put everything in.

And then some of you may be scanning receipts and other financial documents to keep them all on one place, but you still have to take the time to enter numbers into your spreadsheet.

Wouldn’t it be great if you all you had to do was scan and then have the data automatically be converted to your Excel spreadsheet?

Well, there is — with a PDF to Excel converter.

Now we just heard about this and haven’t tried it ourselves. But it sounds like a great productivity tool and a good way to keep track of all of the financial data that can play a big role in the divorce process.

It seems as if you can buy these converters or get free ones online.

Have any of you tried this type of product? What tools do you use to keep track of financial data?

Read Full Post »

Tax

Tax (Photo credit: 401(K) 2013)

Tax time is approaching and if a divorce is also approaching for you, there are some things that you need to think about.

Divorce lawyer Robin Roshkind , Esquire suggests that you consider the following (from Tax Issues in Divorce, The Palm Beach Post):

  1. Do you or your spouse owe the IRS monies? Who will get the debt in divorce court?
  2. Who will get the head-of-household exemption?
  3. Who will get the child exemptions?
  4. Will you be filing “married filing jointly,” or “married filing separately”?
  5. Alimony is taxable to the recipient as income and deductible to the payor.
  6. Child support is taxable to the payor and non-taxable to the recipient.
  7. Retirement plans can be divided between husband and wife by Qualified Domestic Relations Order (QDRO) without any tax consequences if rolled over properly.
  8. Transfers of property need to be done properly, with tax ramifications considered in advance.
  9. There may be capital gains tax on property you receive in a divorce settlement but sell-off later.
  10. Are there any deficiencies or tax penalties and who should get those — the husband, wife, or both?

Should all else fail, ask your tax advisor about the “innocent spouse” defense, which you can file with the IRS.

Read Full Post »

They may have sad faces on the screen, but when these children of divorce offer advice to the adults in their lives, it also is a way to help any parent and child in the thick of a split.

In a do’s-and-don’ts guide for divorcing couples called Don’t Divorce Me! Kids’ Rules for Parents on Divorce, HBO’s half-hour documentary tells it from the kids’ point of view. It debuts Thursday(6:30 p.m. ET/PT) and will be repeated several times through October.

The messages are very real: “Tell me it’s not my fault,” “Don’t put me in the middle,” and “Don’t take your anger out on me.” Child psychologists and divorce experts who were not involved with the documentary say kids have definite feelings about how the separation has affected them, but often parents’ don’t hear or heed the messages.

“We don’t listen to kids enough,” says Lisa Green, a psychology professor at Baldwin Wallace University in Berea, Ohio, who also is in private practice.

Cathy Chestler, 46, of Lake Bluff, Ill., says she was 7 when her parents divorced. She says those messages from kids ring true.

“I was the oldest, so I was put in the middle. I was the person who gave Mom the child support checks from Dad. I was the messenger,” Chestler says. “When I got divorced, I vowed never to do that.”

Chestler, the mother of two college students, also understands the parents’ perspective.

“When parents get divorced, it is so overwhelming for the parent,” she says. “Where am I going to live? The whole court process. The money to pay the lawyer. You lose sight of the kids in that because you’re so emotionally wrapped up in your own divorce.”

In 2009, Chestler co-founded DivorceCommunications.com, an encrypted, fee-based website that lets divorced parents exchange information, pay child-related expenses, download receipts and keep track of financial transactions and child visitation without direct contact.

The documentary, filmed last year, introduces more than two dozen kids whose common thread is divorce.

Among them are Grace Goss, 12, a seventh-grader in New York City. Her advice to parents: “When you’re traveling from house to house, make sure it’s very easy and you help your kids get all the stuff they need. We have a spot in the closet and anything that has to go to my Dad’s house gets put in the closet so it’s totally easy to go back and forth.”

“We split school breaks and holidays. For Halloween and Easter, it’s whoever has (us.) For Christmas and Thanksgiving, we switch off and on. We wake up at one house and then later go to the other house. All the breaks are split up evenly. It works out really well. You know ahead who has what break and it’s much more organized.”

Erin Delaney, who turns 12 next month, is a seventh-grader in Greenbelt, Md.:

Her advice: Parents should “spend a lot of time with the kids and do their best to make sure the kids know it’s not their fault. I personally did not think it was my fault, but I know people who have. At least two or three of my friends had parents get divorced and at least one of them thought it was their fault.”

Psychologist Green also has some advice direct from the kids.

“One of the biggest things I hear is ‘Don’t make me choose, ‘ ” Green says. “It can be as large as which one they want to live with or as small as which one comes to the parent-teacher conference.”

She cautions that parents need to respect their kids’ belongings: “Their stuff is their stuff.”

“If they get a birthday present, they should be able to take it to both houses,” she says. “A lot of times, parents make them take off clothes they bought because they don’t want those clothes going to the other parent’s house. Once a child gets clothes or toys, it’s the kid’s. Parents shouldn’t say ‘You cannot take your iPod to Dad’s house because it will get ruined.’ “

Child psychologist Ben Garber of Nashua, N.H., says that in most divorces, kids don’t require counseling. It’s the 10%-20% that he terms “high conflict” that end up in his office. Garber, author of the 2008 book Keeping Kids Out of the Middle, says it’s not just the divorce but rather “long-term exposure to this polarizing dynamic” that can harm kids when parents divorce.

“It impacts their ability to succeed academically and occupationally,” he says. “In particular, it impacts their ability to make and maintain healthy adult relationships.”

Carissa Carmichael, 10, a fifth-grader in the Cleveland suburb of Independence, Ohio says she and her two brothers are adjusting to their parents’ divorce, which became final in July. Although they weren’t part of the HBO program, she does have some advice for parents.

“Don’t tell them a bunch of things about the divorce at once,” she says. “Don’t just blurt it out and expect them to handle it all right and not start crying. It takes at least a week to try to get used to it.”

Source

Read Full Post »

Welcome to money-issue Wednesday.

Maybe this post should fall under the “don’t try this at home”category. We’re posting it anyway because if nothing else, it shows how critical it is that you get the right wording in your divorce decree.

Are Divorce Attorneys Trying to Wipsaw the IRS?

By Peter J. Reilly

Broadly speaking there are three types of payments connected to divorce. They are property settlements, child support and alimony. The first two do not create taxable income or deductions. Alimony, on the other hand, is deductible against adjusted gross income to the payer and includable in the income of the payee. If the payer is in a higher tax bracket than the payee, characterizing payments as alimony can be a win-win, provided the net tax savings are shared. There are rules to prevent payments that are, in essence, child support payments or property settlements from being characterized as alimony. Suffice it to say, that the rules are a little complicated.

The rules are not so complicated that divorce attorney should not understand them. There are enough Tax Court cases, where people are blind-sided, though, to make me think there are quite a few divorce attorneys who don’t understand them or even have a vague idea that the rules exist. On the other hand, cases like that of Sharon Schilling make me wonder whether there might be divorce attorneys, who are playing the rules to draft deliberately ambiguous agreements to whipsaw the IRS.  Wouldn’t it be great if the payer could deduct without the payee including in income ?  Talk about a win-win.  Here is the story:

Neither the separation agreement nor the divorce decree specified that petitioner’s ex-husband’s monthly support payments to her would terminate upon her death.

On her 2006 Federal income tax return petitioner reported zero taxable alimony income.

The agreement specified zero child support, which as you might expect is less than the guidelines.  The long term spousal support accounted for the variation from the guidelines.  Now the portion of the spousal support that turns off when a child turns eighteen is clearly disguised child support.  So the IRS went along with Ms. Schilling only being taxed on $1,925 per month.  How did she get to zero though ?

She got to zero because there was no specification that the payments cease in the event of her death.  That makes the payment stream look like a property settlement.  Former Major League baseball player, Dave LaPoint was denied alimony deductions under that theory.  The lack of a death termination clause is not determinative, though.  Under the law of the state of Ohio, spousal support payments terminate on death, which is good enough to preserve alimony treatment.

I think somewhere deep in my heart there is a natural naivete that makes me think that people want to have clear and unambiguous agreements.  That inner good doobie thinks that the divorce attorneys should be drafting an agreement that has a single unambiguous number that is deductible to the payer and taxable to the payee.  Much of my time is spent on partnerships, which can have rather challenging agreements to interpret, but I know when I am done, that all the income and deductions will be allocated to somebody. 

 The individual returns of divorced couples are usually not prepared by the same person though.  Closing a deal where one could arguably deduct payments that the other might arguably not report might not seem like such a bad result.  Maybe those divorce attorneys are smarter than I thought.

Original Article

Read Full Post »

What do we think about this advice? Well, in our opinion, the most important takeaways are:

1) Keep emotions out of the process; and

2) Have your documentation ready (so you won’t waste time having the other side searching for information). If you haven’t been keeping good documentation or track of what is going on financially start doing so as soon as the idea of divorce pops in your head or you feel that your spouse may be thinking of it. Research shows that, as if was with Katie Holmes, people start thinking of divorce long before they tell their spouse that they want one. And even though some spouses are completely shocked, in retrospect, some say that they had a feeling that it was coming.

*****

Charlotte, North Carolina (PRWEB) July 22, 2012

Celebrity marriages are extremely different from “civilian” marriages – and though that’s no surprise to most people, the speed with which celebrities can divorce is almost shocking. There are several reasons celebrities are able to slice through red tape more quickly than the general population, and Charlotte divorce lawyer David Self delved into them in an exclusive interview with Lee Rosen, host of Divorce Talk Radio. Self also provided inside tips on speeding up any divorce during the twenty-minute podcast.

Like celebrity divorce, including Hollywood’s most recent split between Tom Cruise and Katie Holmes, ordinary divorces can be accomplished much more quickly than most people believe. While a two-week, in-and-out deal like the Cruise/Holmes divorce isn’t possible for everyone, nor is it allowed in some jurisdictions, divorce doesn’t have to be a long, drawn-out process, according to Self.

“They’re going to disclose documents, they should have the retirement [and] bank statements, all of that available so it can be provided to the other side… and then there’s (sic) going to be negotiations back and forth. One attorney will draft the paperwork and send that to the other attorney… and there’ll be, more than likely, counteroffers back and forth, and they’ll narrow the issues until they reach a resolution,” said Self when Rosen asked what it would take to get a divorce at celebrity speed.

Self suggested that people can speed up their own divorces by hashing out the emotional details during North Carolina’s yearlong waiting period before filing for divorce; once each party has agreed on touchy subjects, the case can make its way through court without encountering legal hitches. Rosen and Self also discussed the differences between ordinary divorces and high-asset celebrity divorces, like alimony, custody and child support issues.

Each week, Divorce Talk Radio host Lee Rosen invites both local and national professionals to discuss legal and financial issues that arise during divorce. Recent podcasts include “How to Convince Your Spouse to Collaborate” and “Do it Yourself Divorce.”

About Rosen Law Firm

Rosen Law Firm has offices in Charlotte, Raleigh, and Chapel Hill where North Carolinians can get professional legal representation regarding divorce, alimony, custody, separation agreements, property distribution and domestic violence relief. Using cutting-edge technology, friendly and helpful staff, and innovative solutions, Rosen Law Firm has become of North Carolina’s premier family law firms.

Original Article

Read Full Post »

  • Never Disregard Your Children’s Feelings:
    Or allow yourself to believe that your children don’t need you in their lives. Don’t ever get to the point that seeing your children is more painful than not seeing them. If you are a non-custodial parent and are dealing with such pain then suck it up. The long-term consequences and negative impact of not having their parent in their lives outweighs the emotional pain you feel. (This is true even though we know that it is hard to do if you are dealing with a problem ex who uses the children as pawns in their plans for revenge. Always think of your children and take the high road no matter how hard it is to do so.)
  • Never Use The Family Court System To Do Battle With An Ex :
    There are adversarial attorneys who will take your last dime and help you use the system to get back at an ex. The need for revenge can be costly and the only one to pay, in the end will be you. (Word of warning for those of you who do…You know who you are.)
  • Never Refuse To Negotiate Or Mediate A Divorce Settlement:
    Negotiation and mediation are about settling the business end of the marriage. Put your emotions aside, take care of the business that needs to be taken care of and then deal with your emotions separately. (In the end you can end off with an even worse settlement and you would have wasted lots of money on legal fees).
  • Never Refuse To Communicate With Your Ex;
    Unless the relationship is abusive if you have children together, you should always be willing to communicate in a civil and respectful manner with your ex. An ex-spouse is not someone to be thrown away as if she/he is nothing more than trash stuck to the bottom of your shoe. If your ex reaches out to you via a phone call, email or in person with a need to discuss an issue pertaining to your divorce and marriage respond with common human decency. To not do so lacks character. (And remember that abuse is not just physical).
  • Never Play The Blame Game:
    Blame or causing anyone else to feel shame just because you are experiencing a negative feeling is unacceptable. Divorce hurts, it hurts all involved. Be as conscientious to the feelings of others as you are to your own feelings. To think you have a monopoly on hurt feelings and have the right to turn your back on others due to that is a narcissistic trait. Do whatever you need to do to keep your emotional pain from turning you into a raging narcissist.
  • Never Be Afraid To Hear The Truth:
    People take sides and at times tell us what they think we want to hear. Get outside, objective opinions on how you are handling the legal and emotional aspects of your divorce. Once you’ve gotten those opinions don’t disregard them just because they are not what you want to hear.
  • Never Believe You Didn’t Play A Role In Marital Problems:
    It takes two to build a relationship and it takes two to destroy one. Don’t tell yourself half-baked stories about who you did everything you could do. Get real with yourself about what happened. Getting real will keep you from getting stuck in a never ending game of blame.
  • Never Make Assumptions:
    Don’t assume your attorney has you covered legally. Don’t assume the judge is going to rule in your favor. Don’t assume your ex is angry and out to destroy you. Know the facts and base your actions on them. It might just keep you from making an ass out of yourself.
  • Never Fall Victim To Your Own Expectations :
    You may expect your ex to be civil and respectful. You may expect your attorney to do his/her job. You may expect your ex to follow the court ordered divorce decree. We don’t always get what we expect so the best thing to do is not expect anything and be willing to deal with what you get. In other words if you have no expectations you can’t be let down.
  • Never Allow Your Emotions To Rule Your Actions:
    If your spouse has left and filed for divorce it is time for you to take action. Don’t sit and cry in your beer hoping they will come back. Get yourself an attorney and do what you need to do to protect yourself legally. There will be plenty of time for crying in your beer later. Plus, if your spouse changes his/her mind they are going to come back no matter what actions you take. If they don’t return at least you will have protected yourself and will, more than likely have money to buy all that beer you will be crying in.
  • Never Pass Up The Opportunity To Forgive:
    An unforgiving heart is the biggest obstacle to moving passed divorce and onto a rich and fulfilling life. If you can’t forgive you will never be able to do anything but make do and suffer the consequences.I’ve written articles on what a person should do if they are going through a divorce. I’ve given information on how to protect your legal interest, how to cope with divorce and how to move onto a new life and new relationship after a divorce.This article is made up of a list of things a person should never do during a divorce. Every thing listed above I’ve seen done over and over by clients and witnessed it in my own experience with divorce. I hope the list helps you recognize any of the behaviors you are exhibiting and that you make needed changes so that your divorce does not turn into a long, drawn out litigious battle.

Original Article by Cathy Meyer

Read Full Post »

Welcome to money-issue Wednesday. Today we’re reposting an article highlighting something we’ve never really stressed before — it’s possible to be too nice during a divorce.

Think about business deals. When you’re signing a business deal, you want to be on good terms with your partner(s). That’s natural if you are going to have to work with them. But at the same time, you want to make sure your best interests are taken care of. The same is true with you’re dissolving a business deal. You may want to stay on good terms with the other party, but we’re sure you would also make sure you come out with a good deal.

The same is true with divorce. It’s the breaking of a contract. And while, for your sake (it’s a terrible thing to carry anger around with you) and the sake of any children who are involved, you may strive to keep things civil, put your business hat on during the process. As the last point of the article says, “Stay nice in spirit, but with open eyes.”

You’ve seen some of the other points mentioned before — like the house issue. But it often helps to be reminded of things.

Your Money — Divorce mistakes you can make by being too nice 

 
Tue Jun 26, 2012 10:56am EDT
By Geoff Williams

(Reuters) – Five years ago, Devon and Emily Reese decided to divorce. There wasn’t much discussion about saving their 10-year-old marriage: Devon had just come out of the closet.

It was a tumultuous time, but the Reeses, who live in Reno, Nevada, and have three children, went along with the conventional wisdom that it’s best to end a marriage as amicably as possible. As Devon says, “When you get on the other side of the divorce, you’re still going to parent-teacher conferences together.”

So when Devon, an attorney, lost his job after their breakup, and bankruptcy and a foreclosure followed, he suggested they file for divorce only after he found new employment. That way, Emily would be entitled to far more money in alimony and child support.

Emily compromised as well. In 2009, when their divorce was official, instead of taking alimony ($1,245 a month) for the five years that Nevada law allowed, she accepted three, which meant giving up almost $30,000 over two years. She agreed because she planned to finish her master’s degree within three years, so she could get a job teaching English at a local college.

She didn’t plan for colon cancer.

Her illness sidelined her education and ability to earn money for a year. If Devon had wanted to be rigid about their settlement, she would have found herself in a heap of financial trouble, living off $2,000 a month in child support and trying to pay $1,325 in monthly rent. Emily says, “I would have been screwed.”

The Reeses’ story underscores a common dilemma. Even in an amicable divorce, financial mistakes can be made by either or both parties. In fact, experts say financial mistakes often occur precisely because both parties are trying to be friendly. “The undercurrent of being amicable masks the cold reality that your spouse is not in the position to protect or promote your interests,” says John Mayoue, an attorney who has represented high-profile clients including Jane Fonda and Marianne Gingrich.

“People seeking amicable divorces often come into these very naive,” says Mayoue, the author of several books about divorce with titles like “Protecting Your Assets from a Georgia Divorce.”

Many divorcing couples make poor financial decisions because they don’t want to rock the boat, say experts, and they gloss over details, only to be tripped up later. So if you’re striving for an amicable ending, here are some common financial mistakes divorcing couples tend to make.

KEEPING THE HOUSE

Even in the current housing market, it may not be the best idea. “I see that a lot, wives staying in the family home for the good of the children,” says Laurie Blazek, a certified divorce financial analyst based in Chicago. “They’ll take that asset and give up cash or liquid assets in exchange for equity, but nobody’s looked at the numbers to see if they can afford to stay in the home.”

 NOT HAVING THE ENTIRE FINANCIAL PICTURE

For instance, who gets to deduct the children when the couple files their taxes separately? “The number one thing I see is that people don’t get adequately informed regarding their financial family’s worth,” Mayoue says.

Sometimes that’s due to fear. Spouses hesitate to ask their once significant other for paperwork on retirement accounts or estate planning documents. “They’re afraid they might upset them if we ask them to prove what they’re saying,” says Mayoue.

 NOT GETTING PROFESSIONAL HELP

Since you’re doing everything amicably, why bring in the attorneys who are going to muck it all up? But Erica Gongloff, an early-childhood educator in East Calais, Vermont, saw the benefits of having a neutral third party decide how much child support she should receive from her soon-to-be ex-husband, Adam Piche, a veterinary technician in Essex, Vermont. She and Piche, who have two children together, separated in 2004 and divorced in 2006.

During their separation, Gongloff went with a “he pays me what he can pay me” attitude, because she wanted their relationship to be as argument-free as possible. But that made getting by a challenge.

Vermont’s Office of Child Support (OCS) worked it out for them. “It was a formula, and it came out of his paycheck,” Gongloff says, “and it relieved us from having to argue about it.”

While there is a lot of information on the Internet aimed at helping divorced couples decipher their finances – the Internal Revenue Services has a lot of helpful publications on divorce and taxes – there may be issues with IRAs, 401Ks, stocks and capital gains that can be challenging to comprehend.

As Blazek says, “You don’t want to make a mistake you can’t reverse.”

 BE CAREFUL WHO YOU BRING IN FOR HELP

“Make it clear to the lawyer that the lawyer works for you,” says Mayoue. “You’ll listen to and respect the advice, but you aren’t going to go down the path of scorched earth and literally prohibit them from doing so.” He adds that it can be a difficult conversation to have with a professional, “but I think it’s a necessary one if you want a friendly divorce.”

 STAY NICE IN SPIRIT, BUT WITH OPEN EYES

Emily Reese was fortunate. When she was sick from chemotherapy, Devon took the kids for several months and could have reduced child support for his ex-wife. He didn’t, and even though he isn’t legally obligated, Devon is extending the alimony time frame until his wife finishes her master’s degree and gets a job, which will probably be another year. The cost to him will likely be $15,000 more than he originally agreed upon.

The two recently started a blog together about being on the same side after divorce and have an easy rapport, although it wasn’t always that way.

“I had some anger to work through first,” says Emily.

But they discussed their finances and still do, which is the model behavior for divorcing couples, says Howard Markman, a psychology professor and co-director of the Center for Marital and Family Studies at the University of Denver.

“Too many couples don’t express as clearly as they can to each other how they feel about their financial situations. But it can be a double-edged sword,” he says. “Money is the biggest thing that couples fight about in the first place.”

Original Article

Read Full Post »

Older Posts »