Legal Forms For Divorce

According to a recent article appearing on Yahoo.com, people emerging from a divorce may not find much like in the dating department immediately thereafter. Though for some who had to go years without any new romance this is not only normal, it’s also healthier than a rebound relationship.

New York psychologist Leah Klungness, Ph.D. and co-author of The Complete Single Mother, says that while a divorcee may be experiencing pain and confusion following a divorce, it’s better to go through that then to numb yourself with an instant attempt to date. The distraction actually makes the healing process take longer.

As the single time drags on you may want to figure out why you’re dateless. Usually there are two main reasons for a post-divorce dating drought.

1.     You’re not ready to date yet

You may feel lonely, your friends and family may try to set you up with someone but that does not mean you’re actually ready to date again. “Emotional preparedness for dating doesn’t happen magically because the final papers have been signed,” says Dr. Klungness. “Anger, bitterness, thoughts about betrayal and infidelity can linger. If these feelings aren’t worked through, they quickly surface, even in casual dating situations, and can sabotage any chance of romance.”

The best rule of thumb according to Dr. Klungness is that, “When the thought of dating starts with an ‘I should’ instead of an ‘I want,’ it’s a red flag.” Rather than rush into something you’re not really ready for, regrouping and giving yourself time to heal is the best plan. Use the time to do the things you love, concentrate on yourself and put yourself first for once.

One sign that you may be ready to date is when people start to genuinely look attractive to you. “Repeated instances of being attracted to different people suggests the authenticity of your feelings,” explains Jerald Jellison, Ph.D., author of Managing the Dynamics of Change. According to Dr. Jellison, when you’re attracted enough to consider spending time with five different people you should be ready to begin dating again.

2.     Your approach to dating is outdated

If you’ve given yourself time to heal and still aren’t meeting the right kinds of people then maybe your problem is logistical. You’re likely meeting people at the wrong places or with the wrong group of friends. The same strategies you employed while you were young likely won’t work today, you’ve matured and so should your approach to meeting new people. Trying online dating, organized functions, engaging in activities you enjoy and meeting others involved are all possibilities.

Do things with a potential mate because you enjoy them and have common interests such as exercising, hobbies or professional activities. Dr. Jellison says that “After you identify people with whom you’re comfortable doing different things, then see if romantic feelings develop.”

Perhaps most importantly, avoid trying to recreate what you had with your former spouse. “The number-one cause of post-divorce dating disasters is the desire to regain what was lost from the social life of the marriage,” warns Dr. Klungness.

If you find yourself facing the emotional turmoil of family law problems, you need the help of an experienced South Carolina family law attorney to guide you through the messy process.

Source: “Why you’re stuck in a dating drought after divorce,” by Nina Malkin, published at Yahoo.com.

See Our Related Blog Posts:

• Family Courts in SC May Once Again Require Parents to Contribute Toward College Expenses
• Important Considerations for Parents in Child Custody Relocation Cases

By Henry Gornbein

In these tough economic times, where people are trying to save money and want to have an amicable divorce, an excellent way to do this is through a pre-divorce mediation package.  I have handled several of these successfully, and would like to explain how it works.

By  Henry S. Gornbein

9.   Find out as much about your financials as possible before you file a divorce, so that there will be no surprises.

8.   Try to find out as much as possible about your job security and if you aren’t employed, see what your options are for employment.

7.   Carefully consider all options, especially whether or not the marriage can be saved.

by Henry S. Gornbein

by Shelley Stile 

By Shelley Stile

This blog is part three of a three-part series discussing how a divorce could affect your taxes. You can read the first blog post in this series here, and the second here.

In 1962, the United States Supreme Court decided United States v. Davis, which created difficulties for divorcing parties and attorneys. Although, there was no sale and no money changing hands, the transfer of appreciated property in exchange for marital rights was considered to be a “sale” with the transferor liable for payment of capital gains taxes.  The gain was determined by the fair market value of the asset on the date of the transfer with the transferor deemed to have received the value equal to that portion of the fair market value transferred to the other spouse.  Conversely, the transferee was charged with neither gain nor loss because the marital rights relinquished were not “appreciated property,” even though these rights were considered to be equal in value to the value of the property received.  Thus, the transferee of appreciated property received it on a “stepped up” basis equal to the fair market value of the property received. 
 

Imposing a tax on the transferor of property incident to a divorce was largely viewed as a perverse tax consequence since the transferor, who was parting with an asset like the marital residence (and often reluctantly so), considered the imposition of a tax in addition to the taking of an asset to be punitive. 
 

The Domestic Relations Tax Reform Act of 1984 changed the Davis rule so that divorce related transfers after July 18, 1984 are treated as gifts which result in neither gain nor loss to either party and thus have no tax consequences.  The transferee receives the asset at the original basis rather than the stepped up basis and is taxed on the gain when the property is ultimately sold.  The transfer is not a taxable event since no tax is immediately imposed on the transferred property. 
 

With regard to transfers of appreciated property, such as real estate or stock between spouses incident to a divorce, prior to 1984 these were considered to be taxable events.  The transferor was subject to capital gains taxes on the gain from the original basis of the property to the fair market value on the date of transfer.  The theory justifying the tax was that even if the transferor received no money, the consideration for the transfer was “money’s worth” in exchange for the transfer.  Again, the transferee took the property at the new “stepped up basis”.  The Domestic Relations Tax Reform Act of 1984 likewise changed the law by providing that the property would pass to the transferee at the original basis with no tax imposed.  Of course, the transferee was required to eventually pay the capital gains taxes or qualify for an exemption when the property was ultimately sold. 
 

The shift of the tax burden from the transferor to the transferee was temporarily rendered more onerous with the passage of the Tax Reform Act of 1986 that eliminated preferential capital gains tax treatment and imposed tax on capital gains at ordinary income tax rates.  The Taxpayer Relief Act of 1997 eliminated taxes on capital gains of up to $250,000 realized from the sale or exchange of the taxpayer’s principal residence. 
 

Deferred compensation payments from non-qualified plans and stock options transferred incident to divorce do not trigger an immediate tax consequence to the transferor.  The tax liability is imposed on the transferee upon exercise of the options or receipt of the deferred compensation.  However, cashing out a retirement account and transferring the proceeds results in an imposition of tax to the transferor.  To avoid an immediate tax consequence, the transfer must be made of the transferor’s interest in the account by way of a rollover directly into the transferee’s account or by changing the name on the account. 
 

With regard to dependency exemptions, prior to 1984 a parent could claim a child if he or she paid more than 50% of the child’s support for the year in question.  Application of this test generated disputes between parents and significant administrative problems for the IRS.  In cases where both parties claimed the dependency exemption, they were required at an audit (usually years later) to produce proof of their expenditures for food, clothing, medical care, shelter and so on.
 

These provisions were changed in 1984 to entitle the primary custodial parent to claim the child absent a written waiver to the other parent.  This was an important feature because as  personal exemptions were phased out for high income taxpayers, it cost little or nothing for a payor in a high income tax bracket to grant the exemption to the other party for whom the exemption actually confers a benefit. 
 

Congress created an additional benefit to parents in 1997 in the form of a child tax credit which acts to offset actual tax liability.  The child tax credit is an addition to the dependency exemption and is available only to the parent entitled to claim the exemption. 
 

An additional credit, the Child and Dependent Care Credit, is available to a custodial parent even if he or she waives the dependency exemption in favor of the other parent.
 

From a simple concept one hundred years ago to provide a source of revenue for the Federal Government by taxing income, federal tax law has steadily evolved and expanded.  Despite periodic expressions of intentions to simplify the tax Code, it has grown ever more complex.  Changes in tax law over the past fifty years have generally been modifications that are responsive to the needs of divorcing couples and their children.  When considered as a whole, such changes have, almost without exception, been improvements. 
 

Divorce lawyers have used their experience in applying the tax consequences of transactions incident to divorce into catalysts for change.  The current state of the tax law as it applies to divorce remains a work in progress; however, it improves with each change.          
 

This blog is part two of a three-part series discussing how a divorce could affect your taxes. You can read the first blog post in this series here.

Alimony comes in many forms, including permanent, rehabilitative, limited duration, reimbursement and temporary (pendente lite) support. It is important to recognize that whether payments qualify as alimony under federal tax law is determined by the characteristics of the payment and not by how they are labeled under state law.

 

In 1954, the Internal Revenue Code added two key provisions, Section 71, which provided that alimony payments were includeable in the taxable income of the recipient and Section 215, which provided that such payments were deductible to the payor.  These provisions remain part of current tax law although they have been subject to revisions over the years.

Initially, to qualify as alimony, the payments have to be “periodic”.  Thus, installment payments of a principle sum did not qualify for periodic payment treatment unless the installments were payable for a period of more than ten years.  This ten year requirement was rigidly enforced.  Payments over a shorter period of time could qualify as periodic provided that the total sum was rendered uncertain by a contingency, such as the death of either party or the remarriage of the recipient.  Additionally, the payments must be in discharge of a support obligation, as opposed to payment for transfer of property or a property settlement.

 

Additionally, the payments must have made pursuant to a decree, court order or written agreement.  In the case of an agreement, the requirement was that it be signed by both parties. 

 

Thus, agreements for payment of support that were confirmed by an exchange of letters between lawyers did not qualify, nor did oral agreements between the parties.  Importantly, the requirement of a writing has remained unchanged despite subsequent amendments to the Internal Revenue Code.

 

The Domestic Relations Tax Reform Act of 1984 and Tax Reform Act of 1986 amended the Internal Revenue Code and dramatically changed tax law with respect to alimony. Most of the changes are beneficial to divorcing parties and have provided lawyers with previously non-existent planning possibilities.

 

For example, since1984, parties have been able to designate alimony payments as non-taxable to the payee and non-deductible to the payor and this designation is accepted without question by the IRS.  The concept of alimony “recapture” was also introduced to prevent “frontloading” or disguising property settlements as alimony to gain tax advantages.  To eliminate such problems, the new law placed limits on accelerated alimony by “recpaturing” excess payments in earlier years and adding that excess back to the payor’s income.  The recapture rules do not apply to temporary support or to fluctuating payments not in the control of the payor, such as an  obligation to pay a percentage of income.  Importantly, the rule is applicable only to qualifying payments in the first three post-separation years. 

 

Unlike alimony, child support payments are neither deductible to the payor nor taxable to the payee; however, payments that are “unallocated” between spousal support and child support are entitled to alimony treatment under the Internal Revenue Code.  Unallocated payments became a popular device which resulted in making additional funds available to the family assuming that the payor is in a higher tax bracket than the payee, he or she could afford to pay a larger amount, a portion of which would be retained by the payee rather than paid out in taxes.  This principle proved to be so popular that many states have adopted the unallocated payment structure. 

 

The next and final article in this series will deal with the tax considerations of property distributions, dependency exemptions and childcare credits.

In a previous post, I posed the question "are you a good candidate for a collaborative divorce?" Once we have determined that the collaborative divorce process is right for you and your spouse, and you have each retained a collaboratively trained attorney to help you through the process, it may be necessary to add other professionals to the team.

In addition to each party’s attorney, other trained professionals may be called upon to help you navigate through the issues in your divorce case.  Not all of these professionals are used in every case, but one or more may be helpful, depending on the issues in your case.

Divorce Coach: This is a licensed mental health professional who guides a party through the emotional issues that many times hinder the settlement process.  A divorce coach can help prioritize issues, aid with communication between the parties, and support that party through the emotional ups and downs of divorce.  Each party should have their own divorce coach to deal with their particular issues.
 

Child Specialists: These are trained professionals who work with children, parents and families in transition.  They advocate for the children in this process by communicating the children’s concerns to the parties.  The child specialist can make recommendations to the parents based on their education and experience as well as the children’s needs and desires.  The goal is to establish a workable parenting plan taking all family members’ needs into consideration.
 

Financial Specialists: This team member can aid the parties by analyzing assets, debts, incomes and budgets with the goal of having everyone understand the financial situation.  In addition, he/she can identify options in dealing with that situation.  Issues of cash flow, tax consequences, and net worth, fall within their purview, as well as determining true income for support purposes in the event there is a closely held business in the mix.
 

Appraisers: If the value of real estate, a business or personal property is at issue, various experts in these fields should be hired as neutral experts to value said property.
 

The above professionals are hired on an as needed basis and can greatly aid the parties in first understanding the issue and them coming to a workable settlement.