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

Child support payments may either be ordered by the court in a divorce decree or legal separation agreement or mutually agreed upon by the parties. Several laws exist which are designed to make child support orders readily enforceable across the United States. However, despite such efforts, “dead-beat dads,” or parents who consistently fail to make support payments in full or at all, continue their delinquencies. As a result, there are further measures available for the collection of child support payments.
Continue Reading Consequences of Falling Behind on Child Support Payments

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 Related to Qualified Domestic Relations Orders and Divorce

In July 2001, the United States Department of State began to implement a new law regarding passport application procedures. Under the Two-Parent Consent Law, both parents are required to execute the passport application for a minor U.S. citizen under the age of 14. By putting this new law into practice, the Department of State seeks to decrease the likelihood that a U.S. passport will be used to facilitate an international parental child abduction.
Continue Reading Children Under Age 14 Need Two Parents’ Consent for U.S. Passport

For federal income tax purposes, there are five tax “statuses:” single; head of household; married filing jointly; married filing separately; and qualifying widow(er) with dependent child. Status affects tax credits and deductions, and therefore also affects the amount of taxes owed. This article focuses on married persons filing jointly or separately.
Continue Reading Taxes, Filing Returns and Married Couples!

A premarital (or prenuptial) agreement is a contract entered into by a couple prior to marriage with the terms becoming effective when they marry. Generally, premarital agreements specify the property rights of each spouse should their marriage end in death or divorce.

There are several advantages of a premarital agreement including protection of separate property, supporting estate plans, defining community property and establishing procedures to decide future matters. However, premarital agreements may still be attacked as being invalid if they fail to meet certain requirements.
Continue Reading Grounds to Challenge a Premarital Agreement