Don’t Rush Into A December Divorce For Tax Reasons

cash moneyNobody likes to rush in a divorce, but frequently things happen that may make a couple want to get it done more quickly than usual.

This year, the reason may be taxes for some couples.  Since 1942, the person paying alimony got to take payments off of their income and the person receiving it had to declare alimony as income. This all will change with any divorce finalized on or after Jan. 1, 2019. After this date, neither party’s income will be adjusted for paying or receiving alimony.

Lawyers are expecting December to be a busy month for divorces due to the change.  Any case settled before the end of the year will continue to follow the old rule.

But that is not as important as taking your time to make sure everything about the divorce is properly handled.

“The few dollars somebody may or may not save on their tax bill is not a reason to rush a divorce proceeding,” says Pegotty Cooper, co-founder of Divorce Coaching Inc., (www.certifieddivorcecoach.com), which both provides divorce coaching and trains divorce coaches.  “Frequently, in complicated divorces, issues surface halfway through the proceeding that will take time to investigate.”

Cooper, a co-author of Taking the High Road in Divorce – Simple Strategies for Creating a Healthy Divorce, said it is in the best interest of both parties to focus on the divorce and make sure everything is done properly instead of trying to meet artificially induced deadlines.

Cooper offers the following tips for those about to enter divorce proceedings:

  • Don’t forget who the decision makers are. The decision maker in the proceeding is not the judge or your attorney – it is you. More than 90 percent of cases never make it to trial, so don’t think the judge necessarily will set all the issues straight.
  • “My way or the highway” is the wrong attitude. Taking this attitude will be more costly, emotionally draining and time-consuming than you realize. The only one that will benefit is your attorney, who will rack up legal bills fighting tooth and nail for everything instead of negotiating.
  • Don’t throw in the towel. You may want to quit early in the divorce proceedings just to get it over with. This may result in forgetting about important things that you wanted to be resolved.
  • Don’t bet the farm on another relationship. Don’t give up on negotiating just because you have met somebody new and you want to end the divorce as quickly as possible.  Your focus should be on ironing out the details of an equitable agreement with your spouse, no matter how long it takes.

“While it may be uncomfortable and even distressing to go through a divorce,” Cooper says, “it is rarely a good idea to try to speed up the process.”

 

Legal terms for divorcees

divorceThe rate of divorce may be declining, but those seeking to split up may have little to no experience with the legal system. Couples filing for divorce may be unfamiliar with the legal terminology that they’ll need to know as they navigate the process. Understanding the legalese they’ll be facing can help them be better informed and make better decisions. Glamour has created an A-to-Z list of legal terms for divorcees that you can find here. 

How to prepare for a divorce

divorceWhile making the decision to get a divorce can be heartbreaking and difficult, there are some things a person should do to prepare themselves for the process. One of the many things to consider is the impact divorce will have on your finances. HuffPost talked to five divorce attorneys for some tips on how to prepare to protect your assets in a divorce. They include knowing your assets, creating a budget, looking for an attorney (of course) and more. 

Who gets the dog in the divorce?

SmokeyWhen marriages fail, two people who were once in love can find themselves skirmishing over seemingly insignificant and petty things. But one possession can stir the same sort of feelings one has for his or her children: pets. According to HuffPost, only two states, Alaska and Illinois, don’t see pets as property that could potentially be sold in a divorce. Fighting over who gets the dog, cat or other pet can be as intense and divisive as any other divorce-related disagreement. And if the two sides can’t agree, a judge may decide who gets the pets and when the other ex can visit them. Read more about how these sometimes petty problems get solved at HuffPost.

Podcast: Love and divorce edition

divorceThe state of the marriage union is discussed by two top Chicago-area family lawyers in this podcast from The Chicago Bar Association on the Legal Talk Network featuring Miles N. Beermann and Kimberly Cook. Hosts Jon Amarilio and Jennifer Byrne ask about the current state of marriage and divorce in America, as well as their guests’ experiences on the front lines of this contentious area of the law. Beermann and Cook also talk about how they might have handled some high-profile celebrity divorces.

How the Trump tax plan could help divorce lawyers

divorceIf you or any of your clients have been considering divorce, the recently passed tax changes may provide another reason to file. The 76-year-old deduction for alimony payments will be wiped out next year by the Tax Cuts and Jobs Act. Losing that deduction has family lawyers telling their clients to act now. Politico takes a look at how:

Potential divorcees have all of 2018 to use the alimony deduction as a bargaining chip in their negotiations with estranged spouses. The deduction substantially reduces the cost of alimony payments — for people in the highest income-tax bracket, it means every dollar they pay to support a former spouse really costs them a little more than 60 cents.

Many family attorneys are criticizing the change, saying it has the potential to make divorce negotiations even more acrimonious. Eliminating the alimony deduction is forecast to generate $6.9 billion in federal revenue over the next 10 years. Read more about how the tax law will affect divorcees at Politico.

Divorce lawyers have 9 questions to ask on a 1st date

divorceWhen it comes to avoiding divorce, perhaps we should start at the beginning: the first date. According to HuffPost, divorce attorneys are especially keen at spotting red flags that could lead to trouble if romance blossoms into marriage. Perhaps a divorce attorney isn’t the first person one might think of seeking dating advice. But perhaps they should be among the first! Find out the nine questions singles should ask on a first date here (and see if you recognize any of these divorce attorneys offering advice).

Dating advice from divorce lawyers

More states considering shared custody

divorceThe tradition of a father getting once or twice-a-month weekends with his children following divorce may be changing. The Washington Post reports that more are agreeing to collaborative parenting in their divorce. Legislatures in 20 states will consider bills to encourage shared parenting or make it a legal presumption, even when parents can’t agree. It follows years of lobbying by fathers’ rights advocates who say divorced fathers feel estranged from their children and overburdened by child support payments. Read more about the trend in this story at The Washington Post.

How tax reform could affect the alimony deduction

CongressA House-sponsored tax reform measure making its way through Congress proposes to end the tax deduction for alimony. That would eliminate a tax break for the ex-spouse who pays alimony, and the tax hit for the ex who receives it, according to CNBC. Divorce lawyers may want to rush through any pending cases before the end of the year because of the uncertainty surrounding the proposal, according to one divorce attorney who said his phone started ringing as soon as news about ending the deduction made the news. Read more about how family attorneys are reacting to the possibility in this story at CNBC.

Not all assets are equal in a divorce

divorceDivorce can take a terrible toll on those who choose to end a marriage. But making financial missteps during the process can make matters even worse in the long run. Depending on how intertwined your finances are, you may want to hire a financial advisor as well as a family law attorney to help guide you through the process of unwinding your marital assets. CNBC has a list of five financial mistakes you’ll want to avoid if you’re going through a financially-complicated divorce.