Pennsylvania Family Law Blog

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A discussion of family law issues, published by Mark E. Jakubik

April 20, 2009 • 10:01 pm 2

Recession and Divorce

With the recession hitting us hard and jobless rates up it has caused the divorce rate to increase. We all know that the economy is struggling and there are more pressures out there on each of us personally. How does this affect your marriage? I am sure you’re already feeling it, financially and emotionally. If your not then maybe you should prepare for it, finances are one of the number one reasons that couples get divorced or break up. With the added pressures of cut backs, foreclosures and other signs of recession it is bound to affect everyone somewhere in their lives and families. Let’s see if we can figure out some solutions that may help you and your relationship sail through this a little less tattered.

When the country is struggling to find a way to bail out businesses, cut costs and take care of it’s people, no matter how hard they try, they are going to loose some of them along the way. Jobs get cut, people get offended and they feel lost in a sea of millions. They start to feel like no one is hearing their woes and that they’re alone in this fight. They start to feel singled out, worthless and almost martyred sometimes. They start to take it personally. This is usually the first stone in the wall that gets built between them and a loved one who truly cares about what they’re going through. Overtime, without any help, they slowly add stones to this wall until eventually it’s so high they can’t see over it. Can’t see what is on the other side, their significant other has disappeared in their eyes. They stop talking and communicating because they no longer feel that anyone will understand their plight. One spouse is feeling alone and the other starts to feel left out and neglected. It isn’t that one spouse doesn’t want to help the other, it’s that they aren’t working together to fix it anymore.

How can you fix this or stop it from happening in your marriage? You would think that would be a simple, “don’t do it” answer but it’s not. Trying to help someone who is building a wall without you can be very difficult. It takes a lot of work and it is steady work, not just a quick fix. It takes sitting down to take on this fight together. You have to remove every stone as it is laid. It takes communication and reassurance. You have to realize that you are in this together; no matter if one of you feels like they are alone or not. Let your spouse know that this situation is happening to both of you, not just one of you. Let them know that you are feeling what they are, what happens to them effects you too. I know this is a time when you don’t have much money or adding anything else to the budget could add more stress, but if you are not communicating well, or not hearing each other, this may be a good time for communication counseling. If you can’t afford it, then still realize you need it and try to find a way to communicate. One good thing to try is writing love letters to each other. Tell each other on paper how you are feeling. That way you are not interrupting each other, you are getting it out and the other person has something to physically hold on to. Something read when they are down. You also need to realize that you are in this together. Marriages and relationship are built as a two person structure; there is a reason for that. You are not alone in this what ever happens, good or bad, it happens to both of you, together. Even if you are separating, you’re both at a loss at the same time. You’re still going through the same thing, having the same experience. You can use that to help support each other. We all like to be with people who understand and are going through the same things that we are.

Not having enough money to do simple things, like shop for groceries or pay bills can definitely slam a wedge between two people. Especially if only one person takes care of the finances. That causes added pressure on that person that could be relieved simply by doing it together. Don’t put one of you in a position where you are trying to hold up the lives that you built alone. Foundations are not built on one skinny stick; we are not made with one leg. We have two for balance. Foundations are spread across an area to that they can hold up the weight. How long can you stand on one foot? Don’t put all the pressure on one person. Stand together and weather the storm. Shore up any distance between you and hold on. Trust me, in the end, when the storm is over, you will be stronger for the next one. Together or not in the end, it will help to know you did everything you could and there will be no “should of, could of or would of’s.” You took every step and are entering into any kind of separation may be easier to handle. Stepping into one without taking every step you could of leaves unanswered questions and makes it harder to get through. Making the emotional strains and stages of divorce longer.

With the stress and strain of the economy, finances and other normal marriage strains, emotions can run high during a recession. People may turn to old bad habits to relieve that, such as alcohol, gambling or straying. The emotional instability and worry can cause relationships to feel like they are drifting worlds apart, when in reality there is no other problem than outside influences pulling you apart. Each person finding a reason to step farther away instead of finding the source and getting rid of it. I have repeated my friend Gordon’s comment over and over, “it takes more energy to get a divorce than it does the save the marriage.” Thank you again Gordon, it’s a wonderful statement and should be engraved into people’s minds. It does take more energy to pull apart two objects than it does to put them together. I’ve got two examples for you that you might understand.

1. Playing with magnets in school. I am sure that in some science class somewhere in school they had to play with magnets. This is a good life lesson that we don’t really think about. Some magnets repelled each other and you couldn’t get them together no matter what you did. Some pulled together and it was hard to keep them apart. This is like a marriage because at one point, you two pulled together. You were drawn to each other like magnets. Now with the added strain of the recession it is like trying to pull the magnets apart. They went together easily and were harder to pull apart. Think of outside influences as those two hands trying to pull those magnets apart.

2. The lid of a jar. When you first try to open that jar and let the contents out that lid is stuck tight. Sometimes they are hard to get off. You have to twist, pull, bang it on the counter, use other object to try and pry it open. This is like a marriage. The lid should be stuck on tight. The twisting and pulling being the outside influences that can open that lid and eat away at the contents.

Whatever your outside influences are during this recession and no matter if your marriage breaks apart in the storm or not, it is hard on all of us. Realize that right now there are a lot of outside influences affecting our lives. There is pressure on everyone. You are not alone; we are all here with you. We are not just one skinny stick holding up our whole worlds. We are a group of legs that need to shore up and stand together so that we can all make it through these high winds and rough waters.

Source: Examiner.com

Filed under: Divorce, Finances, Marriage

April 3, 2009 • 9:47 pm 1

5 Steps To Managing Your Money And Your Marriage

In our society, money represents power, success, and often even your value as a person. We say (misquoting the Bible,) “Money is the root of all evil,” or ”money is power;” or “he who has the gold, makes the rules.”  We consider it spiritual to take a vow of poverty, and we prosecute and convict people who get greedy.

Money is serious stuff. Some of us think people who make a lot of  money must lack character; others think poor people are morally deficient. These attitudes are not the way we want to think, they’re prejudices, acquired before we learned to think rationally. But these prejudices can cause huge troubles in marriage, including financial infidelity – where one or both parties spend money out of resentment,  jeopardizing the couple’s financial security.

Money issues couples fight about include: Who pays for what? Who keeps records, pays bills, controls budget, etc.? When, how and why do we spend money? One wants to save, the other wants to spend. How do we make big financial decisions? Or, perhaps, they can’t talk about money at all without arguing.

If you and your partner tend to think the business end of a relationship is not a romantic topic for courtship, you may not discuss it until you can’t avoid it, and then you fight. You may not think of your marriage as a business deal, but a huge part of it is just that. Just like a business, a marriage takes in income, pays expenses, and is supposed to have a little profit (savings) left over.

The business aspects of marriage are clear to me, because for 15 years before I went back to school and eventually became licensed as a therapist, I was an accountant in business. Just like a small business, your relationship has one or more sources of income, you have expenses, and, like a business, your marriage is supposed to make a profit — to create savings, investments and equity (which a business would call assets) and have money left over in the bank at the end of the month.

As partners in a marriage you have similar financial responsibilities to partners in a business. In fact, some businesses are called partnerships, and we often use the same word for relationships. Family members are somewhat like workers, when they do maintenance, chores and homework, and somewhat like clients, who receive services from the partners, Mom and Dad.

Mom and Dad are the Chief Operating and Financial Officers, who must figure out how to allocate the funds coming in, and how to provide the necessary guidance and services to their children and to each other. In business, there’s a lot of discussion about ‘corporate culture’ — the attitudes and practices within the business: how employees and executives deal with each other, the ethics of the company, and their focus, or lack thereof, on meeting goals and becoming successful.

Likewise, your marriage and family have a ‘family culture’ — how you interact as partners and family members; your mutual goals, hopes and dreams; and how successful or unsuccessful you are at meeting your goals. Obviously, a family culture that involves a lot of fighting about money will be less efficient and not as successful at meeting its goals.

No matter what your circumstances, creating financial security can make life easier. To do this, you must learn to manage your money wisely. The amount of money you bring in may not be large, but if you manage it well, it can be all you need. On the other hand, we have all heard stories of people who earned vast sums of money (lottery winners, celebrities or dot-com millionaires, for example) and who squandered it until they had nothing left.

The amount of your income will not determine the amount of your “family profit” unless you manage it well. When you work together to handle your finances intelligently, you can create the financial security you need to live life comfortably. When your partnership extends to making smooth financial decisions and meeting your money goals without struggling and arguing, you’ll find that everything else you do becomes less stressful.


USING BUSINESS SKILLS AT HOME

Viewing your family dispassionately as a business doesn’t sound romantic, but if you can step back from your feelings long enough to view your relationship from this perspective, your financial situation make more sense, money problems will be easier to solve, and you’ll be able to discuss financial decisions with less difficulty. Here are some guidelines for using business skills at home.

1. Don’t React — Respond.
As I said in the previous chapter, neither of you would argue with the boss, colleagues at work, or a child’s teacher the way you argue with each other. Even if your boss makes you angry, most likely you would use self-control at the office, and blow off steam in private to your co-workers or a friend. Then, when you had a chance to think about the situation, you’d develop a better way of handling it, and perhaps approach your boss with a considered solution. You can do the same thing with your spouse when you have a money problem.  Instead of saying the first thing that occurs to you, such as criticism or blaming, stop and think of a response more likely to lead to a discussion of the problem, rather than an argument.

2. Use positive manipulation.
We often think of manipulation as a bad thing, as dishonest. However, acting in a way that makes it more likely to get a good response is not always deceitful or insidious. When you present an idea or solution, think about what your spouse would like about it, and lead with that. ”Honey, you know that new car you’ve been wanting? I think I have a way for us to get it.. We could take out some equity on the house to renovate the kitchen, we could get your new car, and the interest would be so much cheaper than a car loan.” This is truthful, thoughtful, and clearly shows the husband how both of their wants can be taken care of, so it’s more likely to get a positive response.

3. Have a Formal Meeting.
Just as you would in business, sit down for a real meeting about important financial issues. Don’t expect to be able to discuss finances successfully while you’re on the run, when it’s late at night, or while watching TV. Instead, make a date for discussing finances, and take the time to sit down together, with all the proper information, and discuss your needs, wants and means. Follow a meeting method like Robert’s Rules of Order, to keep the discussion on track. If a difficult problem arises, use the problem solving skills at the end of this chapter.

4. Take Finances Seriously.
Healthy businesses keep a close eye on the bottom line. In marriage, this means being careful about your money, but also not using money as a weapon against each other, or being irresponsible about it. A successful, happy marriage requires that both partners act like grownups. It’s not surprising if you have disagreements about how much to save, when and what to spend and who makes financial decisions, because such differences are normal between people. If you take them seriously, and sit down to solve them together with mutual good will, your different points of view will become assets, not problems.

5. Check in Regularly.
As you do in business, have a brief check-in as frequently as possible. In the morning, or the night before, compare your daily schedules. Even if the things on your schedule don’t really involve your spouse, mention them, so that each of you will know if you’re facing anything important, or challenging in the day ahead. When you have an idea of what’s involved in each others’ daily lives while you’re apart, you will be much more able to respond in a helpful fashion to each other, especially when sudden changes or problems arise.  For example, you can say I have to pick up some clients at the airport today, and I don’t know what the traffic will be like, so I could be late tonight.”

When you follow these guidelines for handling money together, you’ll understand each other better, and you’ll both understand your goals and feel more motivated to follow the plans you make.

Source: Divorce360.com

Filed under: Finances, Marriage , , ,

January 27, 2009 • 9:17 pm 3

Work On Your Credit Score Before Divorce

On a couple’s wedding day, divorce is the furthest thing from their minds. At such a wonderful, joyous time in one’s life, it is difficult to consider the possibility that the relationship will end. However it does occur on occasion. Many people get married every day and over half the population has been divorced. In the beginning the bad credit of your partner can be overlooked, but not for long. Sometimes, the stress of dealing with financial issues can ruin the relationship before the couple takes their first steps down the aisle. Still others may become vengeful, wanting to place their ex deep in debt.

When you get married, you are only responsible for debt you incurred as a couple. Keep in mind that, as a couple, one person’s bad credit rating will affect the both of you when trying to get a loan or a line of credit. Don’t be surprised when these joint applications are turned down. It is essential that you both discuss your finances before you walk down the aisle. Many marriages break up because of financial difficulties. Many couples avoid discussing financial arrangements in hopes that the subject will not rear its ugly head. Unfortunately, that usually indicates that it will.

Keeping on top of a situation has never had a negative effect on any relationship, and open communication will only make the relationship stronger. You should each obtain a copy of your credit report, then sit and have an open conversation about finances. After speaking openly, enlist the aid of a professional and consolidate all your debt. You can alleviate any future problems if you consult with an expert who will be completely honest with you. If you and your spouse can’t come to an agreement regarding an issue, you should have your debt manager’s contact information close at hand to avoid an argument. Of course, this won’t work for divorcing couples. If by chance your divorce is amicable, get ready to hate each other at least some of the time and to disagree often. Truthfully speaking, if you really did get along so well, you probably wouldn’t be divorcing.

After a divorce, you must protect yourself. You should alert the credit reporting agencies when you separate or divorce. All the important information will then be recorded for each of you separately and the agencies will help you make individual transactions. You should make sure that anyone you still owe money to has your updated contact information. Even though it may seem childish, divorced people have a habit of tossing away their former spouse’s mail. Following a divorce, close all joint accounts and pay all balances if possible. If there was a substantial amount of debt acquired during your marriage, you should consult with your attorney about including a plan to resolve the situation during your divorce proceedings. As far as divorce is concerned, get everything in writing or it won’t hold water.

Although your marriage may not be forever, credit problems can be. Regardless of how much love you feel for your spouse, you need to protect your own interests. It sound awfully formal, but in the long run you will be thankful you did.

Source for post: Charles Sellestor

Filed under: Divorce, Finances

December 7, 2008 • 8:01 pm 1

Crash Causes Settlement Changes

When John and his wife divorced, they agreed to sell their home. But every time they come close, his ex stalls “because she wants to buy it.” With the real estate market in a tailspin and the nation in a recession, “She feels prices will go down further,” which would enable her to buy it from him at a cheaper price.

To complicate matters, John, not his real name, recently lost his job in the financial industry. With the house issue looming, he’s already asked the court in his state to award him attorney’s fees since his wife filed for divorce. In addition, he’s considering a change to his property settlement: he may return to court to ask his ex for alimony, something he never would have done before the layoff.
According to legal experts from around the country, John’s tale isn’t unusual. The recession that’s affected every other aspect of America is now affecting family court as well. Clients are returning to court as a way to deal with financial hardships that are affecting their property settlement agreements.

“It’s happening because retirement accounts have dwindled to nothing for some people and a decree that gives you half of what was a robust account now gives you half of not much,” said retired attorney Brette Sember, author of a number of how-to books, including “The Divorce Organizer.”

Los Angeles, Calif., family law attorney Kelly Chang Rickert said her clients want to modify their judgments because their financial circumstances have changed dramatically. “Due to the economy and loss of jobs, I am seeing a lot more modifications to child support – reductions for the payor if they’re laid off and an increase for the recipient if they’re laid off…”

Another big recession issue: “Alimony needs to be increased for folks who have lost jobs,” Sember said. In some cases, according to Chang Rickert, she’s even seeing changes in child custody arrangements because “parents who have been laid off have more time to spend with children.”

A new mom herself, Chang Rickert has noticed “nannies and housekeepers are getting laid off because parents who have no jobs have more time” to spend at home.

California family law attorney David Pisarra said he’s seen so many clients dealing with this issue that he’s rolled out a new payment program – charging only a flat fee – “to address this new need”Sember said.

John’s not the only one in a quandary over the inability to sell his marital home. Many property settlements state that the divorcing couple will sell their home, but “Many people can’t sell and need to know what to do if they can’t,”said Pisarra .

Source for post: Divorce360.com

Filed under: Divorce, Finances

May 11, 2008 • 11:21 pm 2

Housing Reform Package May Not Help Divorcing Couples

The proposed housing reform package may offer some bail-outs for those who have experienced losses as a result of the downturn in the housing market, but it may not offer enough help for average families trying to get out from under overwhelming mortgages, especially if those families are trying to divorce and complete settlement negotiations.

The Foreclosure Prevention Act of 2008, a bipartisan bill proposed by Senators Chris Dodd (D-Conn.) and Richard Shelby (R-Ala.) is intended to head off the nation’s housing crisis. However, divorce financial analysts question whether it goes far enough to help families avoid foreclosure, especially divorcing couples trying to hammer out settlements.

The bill has yet to face a vote in the U.S. Senate. After that, a similar bill must make it through the U.S. House of Representatives. Some highlights of the Senate bill:

  • A $7,000 tax break, spread over two years, to homeowners who buy homes in or near foreclosure.
  • A tax credit for homebuilders who have experienced financial losses during the past two years.
  • A total of $100 million allocated to debt counseling to aid families in avoiding foreclosure.
  • Tax-free revenue bonds to help families refinance their mortgages.

But that might not be enough, said Stacy Francis, a certified divorce financial analyst and president of Francis Financial, in New York City. “It’s a great bill in the sense that it is moving in the right direction,” Francis said. “I have to say, though, I don’t think it goes far enough to remove the pressures that couples are facing like high mortgage payments and oppressive taxes.”

Divorce is one of the greatest triggers of foreclosure, Francis said, so many of the families in dire financial straits may be those who are also trying to navigate divorce settlements. ”It helps them give them the tools so they don’t necessarily have to forclose,” Francis said. “Sadly, it doesn’t do enough.”

She said that one of the elements of the bill that was denied was modifying mortgages to allow for lower payments. She said that the provision was removed to avoid mortgage lenders’ responses of tightening standards for granting mortgages, but the caution seems misplaced in light of the fact that the lenders are already increasing their requirements. “The days of the 100 percent financing… those days are gone,” Francis said.

SOME ASSISTANCE IN PROPOSED BILL

Some of the most positive elements of the proposed bill for divorcing couples are the tax deductions for new property taxes because they will offer help after the negotiations are completed and the spouses are setting out on their own, Francis said. The same is true for the tax breaks for those who have bought foreclosed properties, she said, if those buyers are coming out of a divorce.

Another positive allocation is to providing debt counseling services to those facing foreclosure, Francis said.  Divorcing couples whose homes may be near foreclosure can use the counseling to learn how to spend their money more wisely and to reprioritize where their money is going, Francis said. “I think anyone going through divorce, and anyone in general, can have better clarity about their expenses.”

Clients who are in the middle of divorce proceedings tend to respond to the emotional upheaval by spending more money during shopping sprees for nonessential items, Francis said. “It is one of the most traumatic times in your life,” Francis said. “One of the ways people deal with that is spending therapy. Deep down inside they have this unbelievable wound.”

For those people, financial counseling can help redirect their spending to the essentials in their lives, she said. “The number one place people need to be paying their money is paying down their mortgages,” Francis said. “Food is right there, too, and the basics of clothing.”

And if it seems as if foreclosure is on the horizon, then they must consider selling their homes, Francis said. It is one of the most difficult decisions a divorcing couple may have to make, she said, but it may be unavoidable. ”If it’s bad now, what’s it going to be like for you in a few years? I think that’s a real frank discussion that you need to have. A hard one, but a frank one,” Francis said. “People like to keep the home, and you have to make sure you truly can afford it.”

SELLING A HOME TO AVOID FORECLOSURE

For couples who find they can’t afford their mortgages either together or alone, selling is probably the best solution, said Linda Leitz, a certified divorce financial analyst with Divorce Solutions, Inc., in Colorado Springs, Colo. She said she often sees couples in which one spouse wants to keep the house, and needs help doing so, and the other wants to sell the house and get out from under the mortgage. She said the question becomes: Which spouse will bear the heaviest burden and take on an overwhelming mortgage? ”Both people have to share the asset and share the pain,” Leitz said.

She said she is conflicted about the proposed legislation because she doesn’t want to see couples financially ruined by their mortgages, but then she also wants people to take responsibility for the financial straits in which they find themselves. So when divorcing couples are facing the difficult decision about whether to try to save the house or cut their losses, Leitz said, she said the only answer may be to sell.

“I think if they are concerned about it, they may need to do what is considered the worst case scenario for many of them, which is to sell the house right now,” Leitz said. “If they can’t agree on how to share that burden, that that’s what they are going to need to do.”

TOO LATE FOR DIVORCING COUPLES

The proposed package may not even be relevant to divorcing couples, said Rita Medaglio-Barrera, a certified divorce financial analyst and collaborative divorce financial specialist with Paragon Divorce Management, LLC in Smithtown, N.Y. “I don’t think that its going to do much for couples that are in a house that is currently foreclosed,” Medaglio-Barrera said. “That package is really helping the builders, more than the consumers. I don’t see it impacting divorcing couples.”

She foresees the housing rescue package becoming an issue to couples after they have completed their divorce settlements, they have sold their joint home, and they are looking to buy homes on their own. After the divorcing couples have waded through their own debts, when they have split their equities, then they will be considering buying or renting their own homes. She said the lower housing costs, especially the costs of homes nearing foreclosure, will become an asset at that point.

But during that process, Medaglio-Barrera said, the Foreclosure Prevention Act will not offer much assistance. “It’s unfortunate that it won’t be helping as many people as it should,” Medaglio-Barrera said.

Source for post: Divorce360.com

Filed under: Divorce, Finances

April 16, 2008 • 5:17 pm 0

Is April 16 National Divorce Day?

April 16 is National Divorce Day, according to Beverly Pekala, a Chicago divorce attorney who specializes in family law. She maintains that more people file for divorce the day after the federal tax deadline than any other day of the year. Money, she said, is at the heart of the problem.

That’s because on April 15, the deadline for federal tax returns to be filed, many spouses learn about a partner’s financial worth by latching onto his or her tax returns, she said. “What I’ve learned, along with everyone else in this business, is that people wait until their taxes are filed to get a divorce,” Pekala said.

“Lots of times what happens, people who want a divorce come in right after the first of the year and ask their lawyer what they should be doing? “Their lawyer tells them they need financial information and suggest they wait until their taxes are filed. Once their taxes are filed that gives us a starting place. It may not be 100 percent accurate, but it still a good place to start,” she said.

The tax information gives women, in particular, helpful information. “Even in this day an age I had a women the other day that came in to see me about getting a divorce who told me, ‘I have no clue what my husband makes,’” Pekala said. “That’s not so strange because there are still women who take care of the house and kids and their husbands take care of the bills.”

The problem today is that, with direct deposit, online checking and payments and other paperless methods of hiding money, there is no longer a paper trail for the spouse who doesn’t pay attention to the financials. she said. “I had a client who came in yesterday to see me with a joint tax return. I took a look at it and told her, ‘You didn’t tell me you owned property in Florida?’ Her reply was, ‘I don’t.’ ‘Yes you do,’ I told her, ‘according to your joint tax return.’

Then there was the woman who was seeking a divorce and learned for the first time her husband was a high roller in Vegas. “On tax returns today, gambling winnings are shown. Casinos are required by law to report an individual’s winning to the IRS,” Pekala explained. “This client’s tax return showed that her husband had won substantial sums of money in Los Vegas. I said to the wife, ‘You must have enjoyed going to Vegas?’ ‘I’ve never gone to Vegas. I didn’t know anything about my husband having been there before,’ she told me.”

Ginita Wall, director of the Women’s Institute for Financial Education in San Diego, Calif., said Pekala’s comments ring true with her. “Oftentimes I’d find that people who were trying to hid financial information would get an extension and delay filing their tax returns until Oct. 15 to avoid having to produce the damning evidence.”

When an I.R.S. media relations spokesman in Washington, D.C., was asked about the divorce rate increasing the day after the tax deadline, he was clueless. “It’s not something we track,” he said.

He wasn’t the only one flummoxed by Pekala’s opinions. Elizabeth Lehane, a divorce financial planner and tax consultant from Oakdale, N.Y., said, “I’ve been in the financial planning and tax business for 28 years, and April 16, the day after taxes are due, means nothing to me as far as an influx in divorces are concerned.”

{Asked whether she felt, after 25 years as a divorce lawyer she had seen it all when it came to marital relations, Pekala said, “I woke up today and looked on Youtube and discovered someone had made a movie about their divorce. I knew then I hadn’t seen it all.”

Source: Divorce360.com

Filed under: Divorce, Finances, Taxes

April 12, 2008 • 11:24 pm 0

Life Events Can Cause Problems With the IRS

Did you know that changes in your lifestyle could affect your taxes? When these changes happen, you will need to make adjustments to avoid creating IRS Problems.

Have you recently gotten married? If you have changed your name, you will need to notify Social Security to get your name changed on your card. You will also want to check out community property issues.

Have you recently divorced? Again, if you have a name change, make sure you contact Social Security. You also need to be aware of innocent spouse relief especially if your ex-spouse has IRS Problems. There are child custody tax issues, alimony issues, and community property issues you need to be aware of.

If you have had a change of address, it is important to notify the IRS so you will continue to receive its correspondence. Use Form 8822 (Change of Address) for this notification. If you fail to do this, you might miss a correction notice, an audit notice, or notification of asset seizure. Remember to keep track of your moving expenses, as these may be deductible.

Have you had a child recently or adopted a child? You will now be able to receive child tax credit. Also, did you know you are allowed education credits?

A change in jobs or loss of a job will also affect your tax return. If you work in a job that allows you to receive tips, these need to be reported. If you use your home or car for business purposes, there are specific allowances for these. You will also want to check into cafeteria plans and medical savings accounts.

Have you become a first time homeowner or have you sold a house recently? Both of these processes will give you added tax allowances.

If your life has been affected by a disaster or theft, you may be able to receive tax relief. People with disabilities have specific allowances that apply to them.

If you have retired recently, your IRS status has changed. You will want to check out the allowances you are now able to take.

If you have experienced IRS Problems in the past and have chosen to file for bankruptcy, this will change how you prepare your taxes.

Source: IRS Problem Solver blog

Filed under: Finances, General Family Law, Taxes

• 11:12 pm 0

Divorce and Life Insurance Planning

Divorce is never easy, and fear of one’s financial future often looms large. Property division, alimony, child support are usually negotiated. Then, if either or both spouses remarry, two or three sets of kids complicate matters.

Careful advisers always delve into the question of life insurance early in the process. What will happen, for example, if the person responsible for the alimony or child support dies? Here are some considerations for clients and their advisers:

Check and adjust beneficiary designations of all relevant policies. Then, six months or a year later, check them again to make sure no mistakes were made. Be sure to include group-life insurance in all such reviews. Do not assume the employer will take care of that. Only you can do so.

Review and adjust policy ownership as necessary. Policies that have built up cash value will be considered an asset that will figure into property division.

If one ex-spouse is entitled to payments for alimony or child support, he or she may want to insure that such benefits will continue even if the payer dies. Life insurance needs to be considered. If it is ordered by the court, it may be best for the beneficiary to own the policy on the life of the payer. If this is arranged, steps should be taken to be sure that policy ownership will revert to the payer at the end of the payment period.

There is often a concern in these circumstances that life-insurance benefits may never reach the children of the former marriage or, in other cases, the later marriage because the primary beneficiary does not see to it. It may be best for the concerned parent to set up a trust funded with life insurance to pay both the bills for these children as well as an intended inheritance.

On a related topic, if an older breadwinner marries for a second time to a much younger spouse, the children of the first marriage may be concerned that they will have to wait a long time for their inheritance that will come only after the death of the second, younger spouse. This can interfere with their relationship with that spouse. Life insurance on the breadwinner, payable directly to the children or to a trust for the children’s benefit, will negate that concern.

Source: The Cincinnati Enquirer

Filed under: Divorce, Finances

March 29, 2008 • 10:29 pm 0

Changes In Property Values Complicate Property Settlements

The Financial Times ran the below story in this weekend’s edition, looking at how shifts in the value of real estate can complicate property settlements. While the article focuses largely on how rising values – a thing of the past in most markets in the United States – can change how spouses approach their divorces and how such matters can affect timing, it is no doubt true that now declining values can have an impact, albeit perhaps in different ways, on such issues as well: Read the rest of this entry »

Filed under: Asset Distribution, Divorce, Finances

March 16, 2008 • 10:07 pm 0

More couples hiding wealth from each other

Honesty may be the best policy for a successful marriage. But when it comes to divorce, couples are becoming increasingly devious in concealing their wealth from each other.

One fifth of couples who divorced last year tried to conceal their assets or income from their spouse – a figure which has doubled since 2006 – a report has found.

The study – by the accounting firm Grant Thornton, which surveyed 100 family lawyers – found that husbands were much more dishonest when a marriage crumbled.

In cases where assets had been hidden, 88 per cent involved men concealing wealth from their wives. Just two per cent involved women hiding assets. In the remainder of cases, both partners tried to conceal wealth from one another.

Family law experts say a spate of expensive, high-profile divorce cases, such as that of Sir Paul McCartney and his wife, Heather Mills McCartney, is spurring couples to hide their wealth from each other.

John Charman, the insurance magnate, was forced by the courts to pay his ex-wife a record $48 million settlement last year.

The property multi-millionaire Stuart Crossley was involved in a dispute with his wife Susan after she alleged during divorce proceedings that he had failed to tell her about millions in offshore accounts. She later dropped her claim for a financial settlement.

Andrea McLaren, the head of Grant Thornton’s matrimonial practice, said: ‘The number of couples hiding assets from one another has increased by 100 per cent since last year, which is staggering.

‘High-profile, big-money cases have scared individuals into trying to hide assets and there is now the perception that women are receiving more favourable settlements than men.’

Vanessa Lloyd Platt, a specialist in divorce law, said she had seen a surge in the number of men trying to conceal wealth from their wives.

‘Men are seeing these huge settlements and they are terrified,’ she said. ‘If they think a marriage might break down, more and more men are panicking and trying to put their capital into trusts and offshore accounts or buy assets in a third party’s name so that they are hidden from their wives.

‘It is not unheard of for women to lie but, in my experience, men are more likely to be dishonest when it comes to matrimonial disclosure.’

The succession of high-profile divorce cases has also seen a surge in the number of couples drawing up pre-nuptial agreements. A survey of law firms found that 67 per cent reported taking on more pre-nuptial work in the past year.

SOURCE FOR POST: California Divorce and Family Law Blog
(Via Georgia Family Law Blog.)

Filed under: Asset Distribution, Divorce, Finances