Thursday, December 22, 2011
To sign up for the health care registry, visit https://www.virginiaregistry.org. People without access to a computer can still be a part of the registry by calling: 1-800-224-0791.
After your divorce is finalized by the court, there still may be tasks remaining before your divorce is really final. Some of these you can do yourself. Some may require professional assistance. This non-exhaustive list is designed to help you take all the actions that you need to protect yourself.
- Notify Your Employer. Your employer may have to change information in your employee record, change your health or life insurance plans, or any accounts that regard retirement or a 401(K) program.
- Finances. Implement a budget if you have not done so and monitor all of your income and expenses. Review all of your investments. Obtain a copy of your credit report and make sure that the accounts that you closed were actually closed so and that your credit agency file has been updated.
- Other Important Documents. All of your other important documents such as deeds to real property, automobile titles, stock certificates, bonds, treasury notes and other such items should be reviewed to show correct and accurate information. You may need to transfer ownership to be able to change information on these documents.
- Retirement and Estate Planning. If you have a pension, 401K or an IRA that was divided as a result of the divorce, make sure you obtain a Qualified Domestic Relations Order that was prepared by the attorneys, agreed by the court, and was submitted to the fund administrator and was implemented. Review your estate plan and update it if necessary. If you have a Civil Service retirement, an Order must be entered and sent to the Office of Personnel management in order to receive a portion of a Civil Service Retirement.
- Notify Your Financial Institutions. Make sure all of your joint accounts are closed and that your former spouse’s name has been omitted from all active accounts and financial records. Close any joint safe deposit boxes or post office boxes and if needed, open new ones.
- Military Benefits. If your divorce involved military benefits, you must send a certified copy of the Final Decree of Divorce to the Defense Finance and Accounting Service (DFAS). If there is a requirement of Protection of Survivor Benefit Plan (SBP), you must forward the Final Decree and appropriate form within one year, or the benefit is waived. If a Thrift Savings Plan (TSP) has been divided, the appropriate Order must be entered and sent to the TSP Board.
- Remarriage. If you plan to remarry, consider a prenuptial agreement.
-Cancel/Change Credit Card Accounts and Other Third Party Accounts. It is important to close all credit card accounts that have both of your names on it you need to make sure that your former spouse’s name is omitted from these accounts. Do not forget to change account information on department store credit cards such as JC Penny, Macy’s, etc. Update the name responsible for paying all utilities, auto insurance, mortgage loans, car payment, etc.
- Update Your Tax Status. Have your tax status changed since you are no longer married and/or change the number of exemptions you claim. If you use someone to prepare your taxes for you, make sure to contact them so they can change your marital status.
- Update Your Insurance Policies. Notify anyone you carry insurance with (health insurance, life insurance, disability insurance, etc.). Make sure your marital status is changed and that these policies have your correct names of beneficiaries and people who are insured under your policy. Obtain life insurance that names your former spouse and/or your children as the beneficiaries as required by the divorce decree. Be sure that you understand the terms and conditions of all insurance policies. You may need to provide a copy of your divorce decree. (If you are on your former spouse’s insurance and you want to pay for an extended amount of coverage, you must contact your insurance company and ask about COBRA rights that will allow you to pay for your own coverage for a period of time).
- Ensure the Accuracy of Your Will and Trusts. Make sure you remove your former spouse’s name as a beneficiary or executor on your will or removed from any trust accounts if you do not wish for them to be a beneficiary and make any other necessary adjustments.
- Powers of Attorney need to be revoked. If your former spouse has a Power of Attorney that was given by you, you will need to make sure that it is revoked in writing. Ensure all copies are destroyed. You will need to notify any third parties that previously relied on the power of attorney or may rely on it in the future that the power of attorney has been revoked. (If the power of attorney was recorded as part of a public record, a revocation should be properly recorded as well).
- Social Security Benefits. Your divorce papers and a copy of your marriage license should always be kept because you may be eligible to claim your former spouse’s social security benefits. If you are married for more than 10 years, or if your former spouse dies while making child support payments, you have the right to receive their social security benefits.
- Child Support and Custody. Make sure the Division of Child Support Enforcement has your correct address. You should make sure that you document the dates and amounts of any payments you make or received in child support. If you are the one making the payments, ensure it is being paid on time. Make sure that you give a receipt if you are the one receiving the support or you receive a receipt if you are the one that is paying. Keep all scheduled visitations with the children and if co-parenting is currently an issue or becomes an issue, records should be kept of how the other parent’s visits with the children went and be detailed on any specific issues that arise. Update all contact information for you and your former spouse with the children’s school, daycares or before/after school programs.
- Changing Your Name. If you decide to change your name, you are required to notify and update your records with: the Department of Motor Vehicles, the Social Security Administration, your employer (to make sure your W-2 is correct), your bank and other financial institutions (to ensure a correct W-4), and all credit card companies with whom you have credit. Get a new passport, driver’s license and social security card.
- Taxes. Get your former spouse’s and children’s social security numbers as they may be needed for tax returns. You should consult an attorney and other experts involved in the divorce to provide something in writing that indicates the portion of fees that may be tax deductible under the IRS Code §212. Make sure you record and copies of all tax returns and supporting documents for at least 3 years. If your former spouse gave you assets in the divorce, request tax basis records immediately after the divorce is finalized.
Sunday, November 27, 2011
Getting a divorce is a painful experience for your client, but you can help ease the pain by ensuring that the settlement will protect your client's tax interests. The following ten tips, when used correctly, can save your client, and sometimes both sides, money in a divorce action.
Tip 1: Negotiate the Tax Exemption
If the divorce decree is silent regarding the dependency exemption, it remains with the custodial parent (I.R.C. 152(e)). The custodial parent is defined as the parent who has physical placement of the child for the greater portion of the calendar year (Treas. Reg. 1.152-4(b)).
The exemption is often one of those frustrating issues that has more emotional than financial significance. Much as the custodial parent does not want to give up the exemption, for example, it is not worth the attorney fees to litigate. One suggestion for reaching a settlement: Many states will allow the award of the exemption to be conditional on payments being current by the end of the year. The custodial parent may agree that getting the support on a regular, timely basis during the year is well worth the price of giving up the exemption. Try this language in the decree specifically making the award conditional on support obligations:
Tax Exemptions and Deductions. The wife shall be entitled to claim the youngest child, John, Jr., as an exemption, dependent, and deduction for all tax purposes, state and federal. The husband shall be entitled to claim the oldest child, Linda, as his exemption, dependent, and deduction for all tax purposes, state and federal, provided all support payments provided herein are current and timely. Each party shall duly execute Form 8332 of the Internal Revenue Service to reflect the foregoing.
Please note that support obligations can be read broadly enough to include medical expenses and other child-related obligations.
Tip 2: Don't Waste the Tax Exemption
The tax exemption is wasted under one of two circumstances: If it goes to a parent with not enough income or the one with too much income.
Quite simply, if there is no income, there can be no deduction. For 1996, if the income of a single person is less than $6,400 per year or if the income of a person filing as head of household is less than $8,250 per year, the extra exemption is wasted.
Similarly, don't waste the exemption on the rich. For taxpayers whose adjusted gross incomes for 1996 exceed $114,700 for a single taxpayer, or $143,350 for head of household, personal exemptions phase out by 2 percent for every $2,500 of income over those amounts. The phaseout is complete at $237,200 for a single taxpayer and $265,800 for head of household (I.R.C. 151(d)(3)). It is a waste to give these taxpayers the extra exemption.
Tip 3: Two Can Be Head of Household (Sometimes)
Under IRS rules, head of household status follows placement of children and cannot be negotiated or allocated by a court (I.R.C. 2(b) and Treas. Reg. 1.2-2(b)). However, when there are two or more children and equal placement, parties can arrange for both parents to claim head of household status.
Sample divorce language: Tax Filing Status. For the purposes of tax filing status, the parties agree that Catherine lives the majority of the time with the husband and Laura the majority of the time with the wife. The parties agree not to assert any contrary position with any taxing authority.
The parties may wish to arrange one special day at the end of the year for each child to spend with his or her "tax parent." In fact, this could become a game; parents could spend some of their tax savings on a special activity with their "tax child." How's that for an "everyone wins" scenario? The parents save money on taxes and the kids have a good time.
Tip 4: Some Attorney Fees Can Be Tax Deductible
People hate to pay their divorce lawyers, perhaps more than they hate to pay other types of lawyers. Criminal defendants usually have publicly paid lawyers. Personal injury litigants pay their lawyers with "found" money from their recovery. Business clients treat attorney fees as a cost of doing business. Divorce clients, who are at a financially disadvantageous time in their lives, pay lawyers with personal funds that could be used for other things more enjoyable than a divorce..
Some of the sting can be taken out of attorney fees by maximizing the deductibility to the client. Plus, due to the 2 percent floor, it may encourage the client to pay the fees on a timely basis to save money on taxes.
While the costs of getting the divorce are personal and are not deductible (I.R.C. 262; U.S. v. Gilmore, 372 U.S. 39 (1963)), some of the costs of the divorce are deductible if the client itemizes deductions and the total miscellaneous deductions exceed 2 percent of the payor's adjusted gross income. Deductible costs may include:
- Fees for tax planning.
- Fees for obtaining taxable income.
- Fees for securing interest in qualified retirement plans.
Tax planning will be necessary to maximize the advantage of deductibility. Other tax deductible costs, such as paying for tax return preparation, should be paid in the same calendar year as the attorney fees.
If the attorney fees are paid over more than one year, which is frequently the case when the retainer is paid at the beginning of the action and the balance of fees at the end, the deductible portions of the fees may have to be prorated over the years paid.
Tip 5: Some Attorney Fees Can Be Capitalized
While attorney fees in relation to conservation of interest in property are not deductible, clients may be able to add these costs to the capital basis of the property. Although there may be no immediate tax gain, such capitalization can increase depreciation (if the property is depreciable) or decrease the gain (or increase the loss) when the property is sold.
If a number of assets are involved in the litigation, the fees must be specifically allocated among them, or the IRS can apply a prorated allocation of the costs (Bernard D. Spector, 71 TC 1017, rev'd on other grounds, 641 F.2d 376 (5th Cir. 1981)).
Of course, there must be a basis for deductibility in the legal services performed in the case. Careful billing records should be kept that delineate services on behalf of a particular asset.
Tip 6: Just Calling a Payment "Maintenance" Doesn't Necessarily Make It Tax Deductible
I.R.C. 71, which defines alimony and maintenance payments, applies to any interspousal payments intended to be deductible whether they are labeled spousal support, section 71 cash periodic payments in lieu of maintenance, or family support. If your client intends the payments to be deductible, the requirements of this section must be met. They are:
- Payment must be in cash (I.R.C. 71(b)(1)). Services or a transfer of property other than cash cannot be considered alimony.
- Payment must be made pursuant to a divorce or separation instrument; that is, a decree of divorce or separate maintenance or a written instrument incident to such decree, a written separation agreement, or a decree requiring payments for spousal support/maintenance (I.R.C. 71(b)(2)).
- Payment must be to or on behalf of spouse (I.R.C. 71(b)(1)(A)). Payments to third parties (medical or dental payments, health insurance, rent, mortgage payments, or tuition) may qualify. They cannot be voluntary and must meet all other requirements of I.R.C. 71. For example, payment of a mortgage obligation qualifies only to the extent of the recipient's ownership interest in the property. If in the divorce, title to the real estate was transferred to the recipient spouse, the entire payment may be deductible. However, if the payor has any ownership interest in the property, only part of the payment may be considered alimony, as the payor would be satisfying his or her own obligation on the mortgage and not paying the entire amount on behalf of the recipient.
- The divorce or separation instrument cannot designate the payments as nontaxable and nondeductible (I.R.C. 71 (b)(1)(B)). Parties can elect whether payments shall be treated as taxable or nontaxable or the court can so decree. The I.R.C. indicates that in the absence of language to the contrary, it can be assumed that the intent was that the payments are deductible to the payor. Whenever there are interspousal payments, it is much better practice to specifically designate the intended tax result of the payments.
- . Payor and payee spouses cannot be members of the same household at the time the payment is made (I.R.C. 71(b)(1)(C)).
- The payments must terminate upon the payee's death (I.R.C. 71(b)(1)(D)). There can be no liability to make any payment for any period after the death of the payee (no mention of payor); and there can be no liability to make any payment (in cash or property) as a substitute for such payments after the death of the payee spouse. Don't rely upon state law providing for termination of payments upon death. Specifically provide in the final settlement agreement that the payments terminate upon the payee's death. (See Treas. Reg. 1.71-1T Q/A-11 and Q/A-12.)
- Don't disguise child support or property division payments as maintenance (I.R.C. 71(c) and (f)).
Tip 7: Avoid the "Child Support" Trap of 71
I.R.C. 71(c) requires that no portion of the payment can be fixed as child support. The word "fix" means that a reader would be able to precisely determine what portion of the payment is alimony and what portion is child support. Reference to a specific dollar amount need not be made in the instrument for a payment to be fixed as child support. (See Sperling v. Commissioner, 726 F.2d 948 (2nd Cir. 1984) and Abramo v. Commissioner, 78 T.C. 154 (1982).)
The IRS recognizes that the laws of most states allow for payments that are a combination of maintenance and child support. In Wisconsin these payments are called family support. With the passage of child support percentage standards, over the years practitioners have heard frequent rumblings from the IRS as to whether these percentages would be imputed in the family support payments, making such portion of the payment nondeductible, as that portion is for child support. If the instrument does not specifically provide a mechanism for determining what portion of each payment is actually for child support, the entire payment will be treated as alimony (Neu-Kraemer v. Commissioner, 52 T.C.M. (CCH) 363 (1986)).
No portion of the payment can be identified as "child support." However, even if the instrument does not identify a portion as child support, if the instrument specifies that the payment is to be reduced upon an event related to a child (such as the child attaining a specific age, marrying, dying, leaving school, or similar contingency) or at a time that could clearly be associated with such contingency, the IRS will treat that payment as child support; it will not qualify as alimony and will not be deductible to the payor. This provision frustrates many family support agreements that provide for automatic step downs as each child reaches the age of majority.
Even if the payments would otherwise qualify as alimony and the instrument does not explicitly provide for a reduction in the payment contingent upon an event related to a child, there are two situations in which the reduction of payments will be presumed to be clearly associated with events relating to a child:
- 1. The payments are reduced not more than six months before or after a child is to attain the age of 18, 21, or the local age of majority.
- The payments are reduced on two or more occasions that occur not more than one year before or after a different child of the payor spouse attains a certain age between the ages of 18 and 24 inclusive. (Treas. Reg. 1.71-1T Q/A-18. See example in the temporary reg.)
Note that a payment may be treated as fixed and payable for the support of a child of the payor even if other separate payments are detailed in the instrument for the support of the child (Treas. Reg. 1.71-1T Q/A-16).
Tip 8: Avoid the Recapture Rules of 71
The recapture rules in I.R.C. 71 are meant to discourage front-end loading and thus discourage disguising property divisions as deductible alimony payments. Unless you're consciously doing some tax planning utilizing this vehicle, you should avoid the recapture rules.
Note that over the past dozen or so years, various minimum term and recapture rules have applied. The 1986 act contained a provision allowing spouses to modify pre-1987 instruments to take advantage of the new legislation (T.R.A. 1843(c)(2)(B)(1986)).
The 1986 act that applies to instruments executed after December 31, 1986, provides for a three-year look back; recapture occurs only in the third year; and the reduction cushion is $15,000. In year three, recapture occurs if: (1) alimony paid in year two exceeds payments in year three by more than $15,000; or (2) alimony paid in year one exceeds the average annual alimony paid in years two and three by more than $15,000. In both cases, the excess is recaptured.
There are exceptions to this rule: When the payment ceases upon the death of either spouse or remarriage of the payee spouse, or when the payments fluctuate and are not within the control of the payor spouse (i.e., payor pays a fixed portion of income from a business or property, or employment compensation).
Tip 9: Transfers of Property Between Spouses Tax Free
The Deficit Reduction Act of 1984 enacted I.R.C. 1041 and sought to alleviate many problems and inconsistencies relating to the transfer and taxability of appreciated property under the Davis case (Davis v. U.S., 370 U.S. 65 (1962)).
Property transfers between spouses are governed by I.R.C. 1041. The general rule is that no gain or loss is recognized on a transfer of property from an individual to a spouse or former spouse; but in the case of a former spouse, no gain or loss is recognized only if the transfer is incident to a divorce. A transfer of property is incident to a divorce if the transfer (1) occurs within one year after the date on which the marriage is dissolved, or (2) is related to the cessation of the marriage. The temporary regulations provide that transfers related to the cessation of marriage must be pursuant to the divorce or separation instrument (including modifications) and must occur within six years of the date the marriage ends.
The transfer is treated as a gift and the transferee spouse acquires the transferor spouse's basis. Likewise, the holding period of the transferor will carry over and "tack" and become the holding period of the transferee. I.R.C. 1041 nonrecognition treatment applies to losses as well as gains.
Note that transfers of property prior to marriage are not covered by I.R.C. 1041. Premarriage transfers of property pursuant to the terms of a prenuptial agreement will result in the recognition of gain or loss.
The sale or transfer of the marital home, however, requires special considerations. Timing of the sale can save the parties significant taxes and benefits. You should be familiar with the I.R.C. sections relating to deferment of recognition if the proceeds are reinvested in a new residence within two years and the one-time exclusion of $125,000 of gain under I.R.C. 121. For more information, consult the many excellent articles written on this subject and enlist the advice of a good accountant familiar with tax law in this area.
Tip 10: U.S. Savings Bond Interest Accrued Must Be Recognized on Transfer of Bonds
Generally, transfers of publicly traded securities pursuant to a divorce instrument result in no recognition of tax at the time of transfer. U.S. Savings Bonds are an exception. The transferor must report as income all interest on the bond that has been earned up to the date of transfer that has not been previously reported. The transferee spouse will be taxed on interest earned after the transfer, which can usually be deferred until the bond is cashed in or matures.
Sidebar: For More Information
There are many excellent publications available from the IRS free of charge that contain a wealth of information, including:
Publication 503: Child and Dependent Care Expenses
Publication 504: Divorced or Separated Individuals
Publication 523: Selling Your Home
Publication 554: Tax Information for Older Americans
Publication 555: Federal Tax Information on Community Property
Sidebar: Alimony Recapture Worksheet
Step 1: Calculate Recapture for Year 2
1. Alimony paid in year 2 $______
2. Alimony paid in year 3 $______ plus $15,000 ______
3. Subtract line 2 from line 1 (not less than zero)______
Step 2: Calculate Recapture Base for Year 1
4. Alimony paid in year 2 ______
5. Amount from line 3 above (year 2 recapture) ______
6. Subtract line 5 from line 4 (not less than zero)______
7. Alimony paid in year 3 ______
8. Add lines 6 and 7 ______
9. Divide line 8 by 2 ______
10. Floor for recapture 15,000
11. Add line 9 to line 10 ______
Step 3: Calculate Recapture for Year 1
12. Alimony paid in year 1 ______
13. Amount from line 11 above ______
14. Subtract line 13 from line 12 (not less than zero) ______
Step 4: Calculate Total Recapture
15. Amount from line 3 ______
16. Amount from line 14 ______
17. Add line 15 to line 16 ______
Line 17 is the total recapture amount
This article, was NOT written by Law Offices of Commander & Carlson, but is placed in our web to avoid you having to jump to www.abanet.org/genpractice/compleat/su96herm.html to get it The article is still current even after all these years . It was written BY SHARON DREW AND GREGG HERMAN of Milwaukee. and originally appearred inThe Compleat Lawyer, Summer 1996, Vol. 13, No. 3
- Divide all property according to divorce decree.
- Re-title ownership of assets, including your home and all motor vehicles, and inform mortgage company, if any, of changes in ownership of real estate.
- Change the name of responsible party on utility bills, and notify auto insurer.
- Update your mailing address with credit card companies, banks, state motor vehicle department and insurance companies.
- If your name was changed as a result of the divorce, get a new social security card, driver’s license, passport and credit cards.
- Review your budget by monitoring income and expenses.
- Update financial plan and review all investments.
- Change beneficiary designations on life insurance, 401ks, pensions and IRA accounts.
- Close joint safe deposit boxes and post office boxes, and open new ones, if needed.
- Obtain a new copy of your credit report to make sure that the accounts you intended to close were actually closed and that your credit agency file has been updated.
- If you were married for at least 10 years before divorce, you are entitled to make a claim against your former spouse’s Social Security.
Retirement and Estate Planning
- If a pension, 401k or IRA was divided as a result of the divorce, make sure a Qualified Domestic Relations Order was prepared by the attorneys, agreed to by the court, submitted to the fund administrator and implemented.
- Prepare new wills and trust documents.
- Review your estate plan, and update if necessary.
- Obtain life insurance naming your former spouse and/or children as beneficiaries to ensure continued support if you should die, if required by the divorce decree.
- Make sure you are covered by health insurance, either through COBRA benefits, through your employment or via self-insurance.
- Make sure you understand the terms and conditions of all insurance policies.
- Get social security numbers of your ex-spouse and children, as they may be needed for tax returns.
- Ask lawyers and experts involved in the divorce to provide a written document indicating the portion of fees that can be deducted under IRS Code §212.
- Retain all taxes returns and supporting papers for at least 3 years.
- If you received assets from your former spouse in the divorce, request tax basis records immediately after the divorce is finalized.
Child Support, Alimony and Custody
- Keep records of alimony and child support payments made to, or received from, your former spouse.
- Since alimony and child support are typically paid as a percentage of the former spouse’s income, spouses should request W-2s, Form 1099, Schedule K-1 and Form 1040 from a former spouse after January 1st to verify income and calculate proper support.
- Keep records of your children’s medical costs, including insurance claims, copays and unreimbursed medical expenses. Such costs are typically split in some percentage after the first $250.
- Custodial parent should maintain a record of the costs of raising the children and compare the costs with the child support being paid by the non-custodial parent.
- Track all costs once children enter college. Contribute to college savings and tuition payments in accordance with divorce agreement or judgment.
- If co-parenting is an issue in the divorce, keep records of how the other parent’s visits with children went and identify any specific problems that arose.
- Keep your scheduled visitation times with your children.
- Pay all support when due.
- Update children’s school records about contact information for you and your former spouse.
(This excellent Post-Divorce Checklist was distributed by WithumSmith+Brown, PC, Certified Public Accountants, at the 18th Annual Conference of the New Jersey Association of Professional Mediators (NJAPM).
Friday, November 25, 2011
It also is true that children who have not been abused rarely report abuse. It is difficult for them to come forward and talk about what happened because it does involve a person with whom they have a relationship. Often they are faced with disbelief and lack of support from their own family! When they do make a report, they need to be evaluated by an expert in the field and given the assistance that they require in dealing with the situation, even if it disrupts the family unit.
Tuesday, November 15, 2011
She had told me that Mr. B always had the boys sit on his lap to do their homework. He did not let the girls do that. He was "mean" to them. He would hug the boys and wrestle with them. He would go watch the boys sports practices at 6:00 a.m. every morning even though he wasn't a coach. He would like to be in the locker room. This is classic pedophile behavior.
I did not say anything because quite frankly I had a daughter, so I knew she was not at risk. I also was new to the school and did not want to look like a troublemaker. I was counting on someone else who had been there longer to take care of it. I assumed that if a child in kindergarten could spot the problem that a teacher, parent or administrator could see it too. Apparently not!
When the story broke, it was a media sensation because of the prestige of the school. There was television coverage, and a public meeting was held at which the Commonwealth's Attorney appeared to assure the parents that Mr. B would be locked up forever. School officials and parents spoke one after another about how crafty and sly he was to be able to ingratiate himself into the school community and cover up his pedophile tendencies without anyone knowing. Finally, in frustration, I stood and spoke and told them that that the problem was not how crafty he was but how people who saw something didn't say anything. That would include me. If a kindergarten student saw it. Others surely did too. I should have said something. They should have too! It was silence that allowed him to continue! I have changed a lot in 13 years. Today if I see something, I say something. Everyone should.
Sunday, November 13, 2011
I was hit and filed assault and battery, I was not able to drop charges afterwards. If I don't go to court will I get in trouble?
I was in an argument with my boyfriend's mom. She swung at me. I blocked her but she still hit my arm, I filed charges. I'm leaving state and haven't even been served yet but I 'want to go to court.
What people do not understand is that once they invite the law into their lives, they cannot say "never mind" when it no longer interests them to proceed. The bottom line is that you should not invite the law in unless you plan to follow through with what you began.
What date do spousal support arrears start - from date papers filed or dater party served
Ex filed a motion( papers in court) before I was served with paperwork. Wants to reduce spousal support. IF REDUCED- what date would reduction start from? Date I was officially served? OR date papers filed in court? Virginia
This statute provides:
A. Upon petition of either party the court may increase, decrease, or terminate the amount or duration of any spousal support and maintenance that may thereafter accrue, whether previously or hereafter awarded, as the circumstances may make proper. Upon order of the court based upon clear and convincing evidence that the spouse receiving support has been habitually cohabiting with another person in a relationship analogous to a marriage for one year or more commencing on or after July 1, 1997, the court shall terminate spousal support and maintenance unless (i) otherwise provided by stipulation or contract or (ii) the spouse receiving support proves by a preponderance of the evidence that termination of such support would be unconscionable. The provisions of this subsection shall apply to all orders and decrees for spousal support, regardless of the date of the suit for initial setting of support, the date of entry of any such order or decree, or the date of any petition for modification of support.
B. The court may consider a modification of an award of spousal support for a defined duration upon petition of either party filed within the time covered by the duration of the award. Upon consideration of the factors set forth in subsection E of Sec. 20-107.1, the court may increase, decrease or terminate the amount or duration of the award upon finding that (i) there has been a material change in the circumstances of the parties, not reasonably in the contemplation of the parties when the award was made or (ii) an event which the court anticipated would occur during the duration of the award and which was significant in the making of the award, does not in fact occur through no fault of the party seeking the modification.
With regard to the date of retroactivity, Virginia Code Section 20-74 governs. This statute provides:
"No support order may be retroactively modified, but may be modified with respect to any period during which there is a pending petition for modification in any court, but only from the date that notice of such petition has been given to the responding party."
Thursday, November 10, 2011
I have written before about how parents in custody cases make mistakes by bringing their children into the fray or by using their children as messengers, among other things. I also have suggested that you are ill-advised to invite the law into your home by initiating Child Protective Service Complaints or filing criminal charges, unless there is a compelling reason to do so.
The most unbelieveable actions, however, are in the financial area. People often are more than willing to take themselves down so long as their spouse goes down too. Jobs are quit. Businesses are lost. Houses are foreclosed on. Cars are repossessed. Everyone's credit is trashed!
It is true that nothing is certain but death and taxes. It also is true that the average non-corporate American pays plenty in taxes. Under normal circumstances, would anyone volunteer to pay extra? Probably not. In divorce cases, a still married, but separated, spouse will file an income tax return using the married filing separately status...just because he or she can. Even though it is the highest tax rate. Even though it costs them money! It is as if paying extra taxes themselves is worth it so that their spouse will have to pay too. Note that there are occasions when there are valid reasons (financial or legal) for using this filing status instead of filing a joint return. This should be a business decision, not an emotional one. Talk to your lawyer and your accountant about the best filing status. The goal should be to pay your fair share, but nothing extra, in taxes.
Sunday, November 6, 2011
Federal Adoption Tax Credit
Since 2003, families who adopted a child with special needs from foster care could claim a federal adoption tax credit even if they had no adoption expenses. Children who receive adoption assistance/subsidy are considered children with special needs. Other adoptive families are also eligible for the credit, but must have (and be able to document, if requested by the IRS) qualified adoption expenses.
The tax credit became refundable for 2010 and 2011. A refundable tax credit is one you get back regardless of what you owe or paid in taxes for the year.
Families who adopted from 2005 to 2009 may be able to benefit from the refundable credit because credits from those years can be carried forward until 2010. (Families who adopted in 2003 and 2004 may be able to take some limited advantage of the credit but will not benefit from refundability. Families who adopted earlier will not benefit from the credit if they did not take it already.)
The amount of the credit is based on the year the adoption finalized:
The credit is claimed one time for each adopted child with special needs.
Below, we explain the basics of the adoption tax credit.
To be eligible for the credit, you must:
- Have adopted a child other than a stepchild — Children who receive a monthly adoption subsidy payment have been determined by the state to have special needs, so these children are eligible for the full tax credit without documenting expenses. Families who adopted children without special needs are also eligible, but need to have (and be able to document, if asked) qualified adoption expenses.
- And be within the income limits — How much of the credit you can claim is based on income. In 2010, families with a federal modified adjusted gross income above $222,520 cannot claim the credit; families with incomes above $182,520 can claim part credit. Adoptions from previous years had different income limits.
You will need to prove the adoption by providing the IRS with a copy of the adoption decree. Families who adopted a child with special needs must also provide a copy of the adoption assistance agreement or a letter from the state determining that the child has special needs.
If You Adopted in 2011
You will claim the credit when you file your 2011 taxes, typically in early 2012. The forms for the 2011 adoption tax credit have not been released yet. Read our fact sheet for more information.
If You Adopted in 2010
To claim the credit, you complete IRS Form 8839 with your IRS Form 1040. On line 5 of 8839, which asks for qualified adoption expenses, enter $13,170 as long as your child receives adoption assistance. Others should enter their qualified adoption expenses. Read our fact sheet for more information.
If You Adopted before 2010
Read our fact sheet for more information.
If you Adopted between 2005 and 2009 and Claimed the Credit the Year You Finalized
If you finalized in 2005 or later, claimed the credit that year, and carried forward the adoption tax credit on each year’s returns, just carry forward the remaining amount of the credit from your 2009 return to 2010. You can claim the full amount remaining as a credit on your 2010 return.
If you claimed the credit the year you finalized, but didn’t carry it forward to subsequent years’ tax forms, you’ll need to amend returns for those years.
If You Adopted in 2008 or 2009 and Didn’t Claim the Credit
You must file for the adoption tax credit in the year you finalized the adoption, so you need to amend your tax return for the year the adoption was finalized and any subsequent years, carrying forward the amount of the adoption tax credit that you are not able to use each year. Any part of the credit not paid before 2010 can be used fully with the 2010 return.
If You Adopted from 2005 to 2007 and Didn’t Claim the Credit
Adoptions finalized from 2005 to 2007 are more complicated because the IRS allows people to amend returns to claim a credit only for the past three tax years. These are now considered closed tax years. The IRS has written, though, that these older credits can be accessed.
If you adopted in 2005, 2006, or 2007, you should amend your returns starting the year you finalized. Because it’s longer than three years ago, you cannot be paid a refund for any of the credit that you would have been due in 2005, 2006, or 2007. You must still complete the 2005, 2006, and/or 2007 return as if you are getting a refund for the credit used, but any credit that could have been refunded in these years will be lost. When you amend your 2008 taxes and forward, you can use any credit due that year. Whatever amount remains after you do your 2009 taxes can be carried over and refunded in 2010. Please note that the IRS may reject your amendment but we encourage you to appeal. A taxpayer advocate may be helpful in the appeal.
If you didn’t file in 2005, 2006, or 2007 and had sufficient tax liability in those years to use up the whole credit, you will not benefit. You need to have some credit carried forward to 2008 to get a payment.
If You Adopted in 2003 and 2004 and Didn’t Claim the Credit
If you finalized an adoption in 2003 or 2004, the issue about amending returns more than three years old applies so you are less likely to benefit. You cannot carry the credit forward to 2010 when the credit becomes refundable.
A family with significant tax liability may use up all of the adoption tax credit in the years before 2008, but they cannot get a refund for these years. Those families who have a moderate tax liability might be able to carry forward some of the credit to 2008 or 2009, when they could get a refund for whatever tax liability they had that year.
Below are links to a number of resources for adoptive families.
- NACAC's fact sheet on adoptions finalized in 2011
- NACAC's fact sheet on adoptions finalized in 2010
- NACAC's fact sheet on adoptions finalized from 2003 to 2009
- IRS Form 8839 for the adoption tax credit and the form to amend previous years' tax returns
- The IRS's frequently asked questions on the adoption tax credit (see question 13 for documentation of special needs)
NACAC's resources focus on adoptions of children with special needs from foster care, but may also be of use to other adoptive families.
North American Council on Adoptable Children (NACAC)
970 Raymond Avenue, Suite 106
St. Paul, MN 55114
|10 Things Every Foster-to-Adopt Parent in Virginia Should Know|
If a child in your foster home is not eligible at the time of adoption for federal Supplemental Security Income (SSI), then they may not be able to receive any adoption assistance payments or services once you take legal custody. While the child may not have any special needs at the time you are considering legal custody, please be aware that many times these special needs may not become evident for years. In addition, for a child to become SSI eligible after adoption is much more difficult for families. We know that adopting a child is NOT about the money, but the child may need some very special assistance that you cannot afford, so please weigh this option very carefully.
Another caution about legal custody if the parental rights have NOT been terminated, then you are the only person who will be working with the courts and the birth family. You will not have a local social services staff person able to intervene on your behalf, any more.
Saturday, November 5, 2011
Judge Williams will preside over the ceremony in the main courtroom, followed by the refreshments we will provide (including cupcakes with frosting hearts) and gifts for the children provided by the Norfolk Sheriff's Department.
Our office has been involved in many of these adoptions and takes great pleasure each year in coming to the celebration.
Foster care is a great place for those who are looking to adopt a child!
Thursday, November 3, 2011
Check out our Mediation Website at www.mediate-atcandc.com or call 757.533.5400 to schedule a convenient time to come in.
Saturday, October 29, 2011
Involuntary termination of parental rights and name change
My ex has had nothing to do with my now 13 year old child. He is on the birth certificate, and was sent to jail for domestic abuse, and a "peace bond" was ordered for a year. I know he had been released from jail, and I have been granted a divorce, with no child support ordered because I have no idea where he is. He has never made contact, or attempted to make contact with me. My child wishes tot take my last name, and I would like my fiance to be able to adopt and not have to seek "permission" from a non-existent party. I live in Virginia, and would like to find out if the time that has passed is considered abandonment.
Tuesday, October 25, 2011
Read the following Huffington Post blog for insight from another lawyer about the issue.
9 Questions To Keep Your Divorce Lawyer Honest
Plus, it's human nature to decide what you want to do, and then amass evidence supporting your position and discount evidence to the contrary. So we're going to help you do that, particularly at the beginning of your case.
Let's face it, nobody wants to hear bad news. But as an informed client, you need to be prepared for whatever might happen so that you can decide how to best handle your case.
If your lawyer is being honest, he or she will answer the following 9 questions:
- What is my best case scenario in this case? If the Judge agreed with everything I say, and nothing that my spouse says, what do you predict the outcome to be?
- What's my worst case scenario in this case? If the Judge doesn't agree with anything I say, but agrees with everything my spouse says, what do you predict the outcome to be?
- What's an optimistic, but realistic outcome?: Let's say the Judge agrees with a good part of what I have to say, and some of what my spouse has to say, what do you predict the outcome to be?
- What's a pessimistic, but realistic outcome?: If the Judge agrees with a good part of what my spouse has to say, and only some of what I have to say, what do you predict the outcome to be?
- Will you play devil's advocate?: Pretend for a minute that you are my spouse's attorney. What would you tell my spouse based on what you've heard today? Please do not sugar coat your "advice" to my spouse.
- What's the local reality?: I know you can show me copies of the law and legal cases. But based on what you're seeing down at the local courthouse, in the family court mediation and custody evaluation office, with the judges, and typical lawyer to lawyer negotiations, what are the realities of settling cases and trial outcomes? As a practical matter, what really goes on?
- Is it worth it to enforce my rights?: Can you quantify the amount of money which is in question? If I enforce all of my rights in this case, as opposed to settling for something less, how will that compare with the legal fees and experts' fees it will cost to get everything I'm entitled to?
- What's the range of cost?: If we went to court, what is the range of cost you'd see, given your experience with prior cases similar to mine, both high and low? Are you willing to put that estimate in writing?
- Will you put my money where your mouth is?: It sounds to me like you're pretty certain of the result you can get for me in my divorce case. Would you please put that in writing? And if you're not willing to do that, why not?
If this feels confrontational, you can feel free to print this out and hand it to your lawyer. Tell him or her that while you think it's crazy and overkill, your Huffington Post friend said to talk to them about this because it's really important.
Like I said above, there is overwhelming incentive for litigation attorneys to tell you what you want to hear. Read this "Open Letter from Your Divorce Attorney" for a real eye-opener, and the truth about why this happens all too often.
Diana Mercer is the co-author of Making Divorce Work: 8 Essential Keys to Resolving Conflict and Rebuilding Your Life (Perigee 2010). Join the conversation and community on our video blog and check out Diana's divorce blog on the Huffington Post
Follow Diana Mercer on Twitter: www.twitter.com/dianamercer
Monday, October 24, 2011
Will my daughter lose her son?
My 17 yr old daughter has an 11 month old son with a 16 yr old boy. My daughter and her son live in my home and my grandson has lived here since he was born. The father is now taking my daughter to court for legal and physical custody. My daughter works 30 hours a week and is a senior in high school with a 4.0 gpa and is in the honor society. My husband and I take care of our grandson 3-4 nights a week so our daughter can work. The father of my grandson works as well and he gets our grandson Friday evenings through Monday mornings (when he has to take the baby back to daycare.) Neither my daughter or the baby's father does drugs or are bad kids. Do I have anything to be worried about? We go to church and are good people and live life right. Help?
Attorney answers (1)
There is no way to predict the outcome of a custody case-even if you have actually met the parties. People say things in court that often are exaggerated or just plain untrue. It is difficult to anticipate everything that might be said.
Also, the judge must determine what is in the best interests of the child. While there are statutory factors that the judge is to consider, in the absence of any of these pointing strongly in favor or against one party, much depends on the impression that the parties make on the judge in court. The judge also could appoint a Guardian Ad Litem, an attorney for the child, who can make a recommendation to the judge about custody. Since this person has yet to be appointed, we do not have any idea what he or she may say.
For these reasons, settlement is always the best option.
Saturday, October 22, 2011
by Jayne A. Major, Ph. D.
Please answer unconditionally.
This is strictly for your own benefit.
If you answered "YES" to any of these questions, you need to evaluate to what extent you are engaging in parental alienation.
Children need to be free to love both parents. If you don't like the other parent or feel that they are inappropriate for your child, you need to solve the problem without resorting to destroying that child's relationship with this parent. Your child can make up his or her own mind about how much they love or even like the other parent without being unduly influenced by you.
Obsessed parent alienators will stop at nothing to damage or even sever a child's relationship with a parent. This is a serious form of child abuse where a child is not allowed to have loving feelings for the targeted parent, or his or her extended family and friends. These people represent half of the child's heritage. Most parents "slip up" once in a while, however, parents who really care about their child's best interest will do all they can to keep their children out of the middle and allow them to love both parents.
The best parent is both parents.
Jayne A. Major, Ph.D. is the founder of Breakthrough Parenting Services, Inc. and the author of Breakthrough Parenting: Moving Your Family from Struggle to Cooperation. She is nationally recognized as an award-winning expert in family education and parental alienation. She can be reached at (310) 823-7846. Visit her websites at www.breakthroughparentingonline.com and www.stopparentalalienation.org.
For more articles on Parental Alienation Syndrome , visit http://divorcemag.com/articles/Parental-Alienation-Syndrome/.