An increasingly large portion of the assets of married couples consist of rights to payments and stock from pension plans.  In many states such assets are subject to division during a divorce.  Divorce and division of property are generally controlled by state law, but pension plans are controlled by federal law in many respects.
 

Continue Reading Tax Issues Associated with Division of Pension Benefits in a Divorce

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.
 

Continue Reading Permitting Posthumously Conceived Children to Inherit From a Deceased Parent

Chicago Family Law Blog today received honors as a Top Divorce/Family Law Blog. It is with great pleasure and humility that we are happy to have achieved this honor for the 2009-2010 year and hope that others can appreciate our efforts to bring to the public the news and topics that concern their rights and

The number of couples living together without choosing to get married has more than tripled in the past two decades. Unless the cohabiting couple lives in a state which recognizes common law marriages, living together does not automatically provide them with the legal rights and protections of a traditional marriage. Accordingly, upon separation or death of one cohabiting partner, the law may treat the couple as complete strangers. To prevent such a result, unmarried couples can opt to legally define their relationship by entering into a cohabitation agreement, which will direct a court on how to divide property and assets among the couple.
Cohabitation Agreements
A cohabitation agreement is a legal contract which defines the partnership of an unmarried couple. The agreement is often necessary to preserve some important legal rights, obligations and protections that an unmarried couple necessarily foregoes. In other words, the privileged legal status of married couples, which is provided automatically through custom, statute and agreement, must be affirmatively contracted into by cohabiting couples. Although cohabiting couples cannot achieve all of the legal benefits of married couples (such as tax benefits), a cohabitation agreement provides a good start in defining the rights and responsibilities of each party. 

Continue Reading Establishing Rights and Obligations of Unmarried Couples

Divorce mediation, an alternative to traditional divorce proceedings, is a means to resolve the complex issues of a divorce. Mediation involves the services of a trained and neutral person who works with the parties to facilitate the settlement of disputed issues. Such person is known as the "mediator."

In traditional divorce proceedings, the judge ultimately determines child support, child custody, spousal support and property issues. Mediation, on the other hand, allows couples to control the outcome of their divorce. Additionally, the mediation process is non-adversarial in nature, which is especially important for couples with children, as like-minded parents can establish parenting plans with minimum disruption to the lives of their children. Continue Reading Successful Divorce Mediation

Many marital settlement agreements require one party to maintain a life insurance policy on his or her life naming the former spouse as the primary beneficiary. While this provides some financial security for the former spouse, it may also result in an adverse unintended tax consequence for the insured spouse’s estate.

For example, if the

It has been estimated that more than one half of all first marriages end in divorce; the number of failed marriages is even higher for second marriages. One major issue in most divorces is the division of property. Commonly, a large portion of the marital assets consist of rights in or payments from one or more pension plans.

Pension Plans and ERISA
Divorce and division of property are generally controlled by state law. However, when state law contradicts or is inconsistent with federal law, the federal law "preempts" the state law; federal law controls the outcome. In 1984, Congress passed the Employee Retirement Income Security Act (ERISA), which governs most private pension plans (government and some other plans are not covered).

Federal law prohibits the assignment of pension benefits in ERISA plans. This appeared to include transfers to a spouse during divorce, regardless of a state court decision on division. To remedy this, the Retirement Equity Act of 1984 (REA) established an exception to the rule through use of a "QDRO."
Continue Reading Qualified Domestic Relations Orders and Divorce Settlements

In most states, the age of majority (when a person is recognized by law as an adult), is 18 years of age or older. A "minor" is a person who is under the age of 18. When a minor breaks the law or causes damage or injury to another person, an animal or property, their parents may bear the liability. Many state statutes authorize courts to hold parents financially responsible for the damages caused by their minor children. Some states may even hold parents criminally liable for failing to supervise a child whom they know to be delinquent.
Continue Reading Parental Liability for Acts of Minor Children

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.
Continue Reading Deductibility of Divorce-Related Payments

Generally, a couple who divorces or legally separates must make a determination regarding the physical and legal custody of their children and visitation rights, either by mutual agreement or court order. When an established child custody arrangement no longer works or is no longer desired, one or both parents may seek to modify custody. Where a parent is seeking to modify custody through the courts, the parent must generally be able to show that there has been a substantial change in conditions which warrants the modification.
Continue Reading Grounds to Modify Child Custody