Archive for the ‘Uncategorized’ Category

How Will the New Tax Law Affect Me After My Divorce?

Tuesday, May 28th, 2019

Unlike in divorces that were entered prior to December 31, 2018, alimony payments will no longer be tax deductible for the payers moving forward, and the recipients cannot declare the amount they received as taxable income. The law also explicitly authorizes ex-spouses to regroup and modify an earlier divorce agreement, in order to append their agreement with the new law involved. If a pre-2019 divorce is not modified, the previous tax laws that were in place during the divorce are applied.

The new tax law has some positive benefits, such as bringing in nearly $7 billion to the IRS.  Unfortunately, there are serious speculations and concerns that it will inadvertently put the support-receiving party at a disadvantage. Women, who are statistically more likely to be the support-receiving spouse, and at a financial disadvantage during the divorce, are going to see a decrease in the amount of alimony paid.

Because of the new tax rules, there could be less money to go around, resulting in smaller alimony payments. For instance, the monetary amount you receive from alimony might not be taxable to you, but at the same time, the amount that’s going to be paid out may not reflect that at all.

As mentioned earlier, if you were divorced prior to the start of enforcement of the law, you can keep your alimony agreement and utilize the deduction allowed under the old tax rules. However, the option is still available, if desired, to restructure it with the new tax law applied.

3 Reasons Why You Should Get A Prenuptial Agreement

Saturday, February 2nd, 2019

Almost everyone has some type of asset: Regardless of whether an asset is personal or business owned, if it was acquired prior to the marriage, and you plan on continuing to own them during the marriage, it is advisable to get a prenup. In the event of a divorce, a prenup will dictate the distribution (or lack thereof) of premarital assets. A prenup also allows the original owner of said asset to retain it. In the event of a divorce, not only does this help to expedite the divorce process, since there is nothing to debate, but it also alleviates any stress or worry that you may not be able to keep the asset.

Divorce proceedings can take longer if finances need to be discussed: Since so many married couples end up co-mingling assets and other properties, it can be difficult to trace what is separate property and what is joint. A prenup can address whether or not there will be spousal support in the event of divorce, once again resolving a frequently battled topic without court intervention. Once again it helps to expedite the divorce process and alleviate any stress of ownership over the item. It is important to keep in mind, however, that the prenup must be deemed “fair” by the court at the time it is enforced.

Today, nearly half of all marriages end in divorce: Although it may not be the most romantic move, and brings into the realm of possibility that divorce can happen, it is important to protect yourself and your assets, since no one can predict how a marriage will turn out. Moreover, in the event of a divorce, you want to have some financial backing to fall on, as expenses and financial responsibilities can change drastically as a result of divorce.

Since the possibility of divorce exists, a prenup is a wise move because financial distribution is one of the most complicated and dragged out matters in a divorce, and having it figured out beforehand would be preferred. Ultimately, the prenuptial marriage agreement will spell out how the financial aspects of the marriage are to be dealt with, without the need for discourse in the courtroom, and removes all ambiguity.

Handling Marital Assets During A Divorce: Vehicles

Friday, April 20th, 2018

Similarly to homes and dwellings, vehicles, such as cars, trucks, vans, and even the occasional motorcycle, are often the subject of disputes in many, many divorce cases. Sometimes one spouse feels that they are entitled to keeping it, while the other wants to sell the vehicle and, very amicably, would be willing to split the profit, although sometimes there is a belief that they themselves are solely entitled to the money. Another scenario that is quite common is that one of the spouses will be paying a monthly lease for the car, yet it is their partner that is the one mainly driving the car, and since they will no longer be together, they don’t want to pay for their ex to have a car.

The courts use a very general set of circumstances to decide on how this problem will be resolved, with different situations resulting in a potentially different outcome. For instance, whether the vehicle was acquired during the marriage or before the marriage makes a big difference. If it was purchased prior to the couple getting married, then the purchaser would have a very substantial argument that the vehicle is not considered marital property. However, if the car was purchased during the marriage, there is a high probability that the court will deem it as marital property, and therefore it will most likely be subject to distribution in the divorce. While this does not necessarily mean you will lose complete ownership of the vehicle, it is now in the hands of the court to decide. If the car was a gift from one spouse to the other, then the courts find that gifts are considered separate property, and therefore it will not be subject to distribution.

The money used to purchase the car also makes a big difference to the court. For example, if the funds used to buy the car were separate funds of one of the spouses, then again, they would have a very compelling case that the car is not considered marital property, and not up to be divided. However, it also stands that if the funds used were deemed to be marital funds, then consequently the car is also going to be considered marital property.