Many married couples file joint tax returns to take advantage of certain benefits offered by this filing status. This may result in the unfortunate and unintended consequence of one spouse being held responsible for the underreporting of income by the other spouse. Even when there is a divorce decree stating that one spouse will be

Prior to filing for divorce, various federal tax considerations should be reviewed due to their potentially profound implications. Among the major issues commonly covered in a divorce decree or agreement are: alimony, sometimes referred to as “spousal” or “separate maintenance” support; division of property; and child support. Each has its own tax treatment and implications.

Three major issues commonly resolved in a divorce decree or agreement are: alimony, or spousal support; division of property; and child support. Each has its own tax treatment and implications. In general, for federal income tax purposes, alimony is “deductible” from the income of the spouse paying it and considered taxable income to the spouse

 Several states refer to children who are born or adopted after the execution of a parent’s will and omitted from the provisions of the testamentary instrument as “omitted” or “pretermitted” children. In the interest of fairness, states that recognize the inheritance rights of posthumously born or adopted children have traditionally allowed “omitted” children to inherit under intestate succession (i.e., taking a share equal in value to what the child would have received if the testator had died without a will).

However, the law on the inheritance rights of posthumously conceived children (children conceived after the death of a parent) is less developed. This lack of any firmly established legal precedent for determining the inheritance rights of posthumously conceived children may be attributed to significant and ongoing advances in reproductive technology, which have made it possible for children to be conceived subsequent to the death of a parent.

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Prior to filing for divorce, various federal tax considerations should be reviewed due to their potentially profound implications. Among the major issues commonly covered in a divorce decree or agreement are: alimony, sometimes referred to as “spousal” or “separate maintenance” support; division of property; and child support. Each has its own tax treatment and implications.

Division of Property

Most divorces involve a division of the property owned by the couple. Such a division of property is not usually a taxable event, i.e., neither owes taxes nor gets a deduction from income because he or she receives certain property as a result of the divorce.

There are, however, tax implications following divorce that affect future taxes. More specifically, selling personal and real property in the future may require spouses who received such property (pursuant to a divorce) to pay taxes in connection to that property.

Continue Reading Divorce and Federal Income Taxes

 Although “loss of consortium” damages are traditionally associated with spousal relationships, modern cases have extended the right to recover them to parent-child relationships. Referred to as “filial consortium damages,” these awards are intended to compensate the parent for the loss of affection, love and companionship that results from a child’s injury or death.

Wrongful

  1. Keep it Simple.  Be realistic about your holiday commitments.  If you are over-extended, something will give…usually your temper.  Know your party (and alcohol) tolerance.  Have a party plan that works for you. RSVP to the ones you can enjoy and, when possible, avoid the ones you won’t.  Arrive late, leave early, and bow out

 Couples that seek to dissolve their marriages without the challenges of litigation often turn to alternative dispute resolution. Non-litigation settlement strategies are particularly effective for couples committed to maintaining respectful relationships with their spouses after the divorce, and may also minimize negative consequences facing the children. The following issues, among others, are typically amenable to such settlement strategies:

  • Property divisions
  • Spousal support
  • Interim living arrangements
  • Child support
  • Custody and visitation

Divorce Mediation and Collaborative Divorce, Generally

Two kinds of alternative dispute resolution models, often used by divorcing couples, include collaborative divorce and divorce mediation. In divorce mediation, the parties hire an independent neutral third party who brings the spouses together (with their attorneys if any were hired) to assist them to reach a satisfactory divorce settlement. In collaborative divorce, a relatively new form of dispute resolution, each spouse hires their own attorney, and the two attorneys and their clients negotiate directly with each other without resorting to litigation.

Although divorce mediation has become a popular alternative to litigation, collaborative divorce, available in most states, is also beginning to establish itself as a successful form of divorce dispute resolution. Further, just as the practice of mediation is common in numerous other areas of law, collaborative law is starting to be used for numerous non-family law disputes, such as employment and business disputes.

Same Goals, Different Approaches

The underlying goal of both divorce mediation and collaborative divorce is to allow couples to reach mutually satisfactory divorce settlements in lieu of facing the unpredictable results of judge-imposed decisions. While both resolution models have proved to be generally effective, numerous differences may affect a couple’s decision when deciding which would be most appropriate.

Fees and Experts

Although few comparison studies have been conducted with respect to the costs of collaborative divorce, the general consensus is that litigation, on average, is more expensive. One study indicates that collaborative divorce fees generally reach about 1/3 the cost of the typical litigated divorce. Expenses will increase when there is a need to hire outside professionals. For instance, if the attorneys reach an impasse or lack the expertise to address a particular issue such as the value of one of the spouse’s businesses, a financial expert may be retained for assistance. In collaborative divorce, the parties generally split all costs and fees.

Similar to collaborative divorce, in mediation the parties generally split the mediator fees. However, unlike collaborative divorce, the parties are not required to hire attorneys (although the option generally remains open). Mediator fees can range widely, being as low as $100 to $200 per hour and sometimes exceeding $400 per hour, often depending upon the type of law involved or the complexity of the issues. Many mediators have separate fee scales for couples who choose to schedule the whole day

Continue Reading Distinguishing Collaborative Divorce From Divorce Mediation