Category : Divorce and Taxes

Home»Archive by Category "Divorce and Taxes" (Page 2)

Physical Custody Issues with DIY Divorce

Physical custody section is made up of several activities and events all having do with the actual time lines in which each parent takes and acts as sole guardian of their children at a prearranged, predetermined date as agreed upon by the spouses.

Online Divorce Forms; Making Sense in an Nonsensical Time

The popular website will soon reach the 275,000th hit milestone as consumers and savvy, financially astute adults turn away from traditional divorce pathways towards a more amicable driven pathway.

Caught Hiding Assets During a Divorce

Going through a divorce can be an emotionally complicated matter. Every divorce scenario differs, but each is the literal split in which tension has been building for some time, and in truth it can entice people to make questionable decisions. Filing for divorce is not a simple situation, and can be a long and tedious process. It is essentially laying everything on the table for the spouses to sift through everything accumulated throughout their years of marriage.  When it comes to the legalities of the divorce process things can get a bit tricky, especially with finances. In many cases a spouses might not disclose all their assets, or try to hide sources of money so it is not included in the fair split between the spouses during the divorce proceedings.

Withholding Assets

Discussing incomes, money, and assets within the divorce procedure can lead some to attempt to hide their value, or purposely mislead the courts and the spouse as to how much they are worth. Even though this is not an uncommon thing, full disclosure is the law and subject to severe repercussions. These situations most commonly include, but may not be limited to:

  1. Hide, understate, or undervalue certain marital property;
  2. Overstate debts;
  3. Report lower than actual income;
  4. Report higher than actual expenses.

Proof of Deception

According to a recent study by the National Endowment for Financial Education, financial deception in the divorce process is still a common occurrence. Part of the study took a look at divorce across the country and surveyed a number of divorced couples, and found 31% of adults who combined assets with a spouse or partner said they have been deceptive about money. Also within the study were other prominent findings, such as:

  1. Nearly three in five of those surveyed (58 percent) said they hid cash from their partner or spouse.
  2. More than half (54 percent) hid a minor purchase from their partner or spouse.
  3. An additional 30 percent hid a statement or a bill from their partner or spouse.
  4. 34 percent admitted they lied about finances, debt, and/or money earned.

When it comes to finances, people can make some amazingly unwise decisions. Divorce often becomes a time when people use emotional ammunition to convince themselves this deception is not only warranted, but justified. Keeping perspective and a level head during divorce proceedings can benefit spouses in ways they probably had not imagined. Keeping a level head about your divorce helps you qualify for an online divorce, allowing you to handle the splitting of assets honestly and quickly with your partner and can save you thousands in legal costs. Visit today and learn how you can save thousands and get on with your life.

New York’s New Strange Divorce Law

New York has never played by common divorce laws adopted by basically every other U.S. state, so it’s no surprise the little stubborn state is making waves again. This time the Empire State is getting flack for their alimony laws. More specifically, the way New York divorce courts recognize degrees obtained during a marriage is under scrutiny.

Case in Point

In a Wall Street Journal article on the subject, an example of the unfair New York alimony laws was found in the divorce case between Tanya Finch and Kenneth Quarty. The couple married in 2000, around the time Finch started working on her nursing degree. The couple divorced in 2009, by which time Finch had received her nursing degree. During the divorce, Quarty requested and was eligible to receive a percentage of the money Finch would potentially earn as a direct result of the degree she earned during their marriage.

Quarty was able to obtain this “potentially” earned money upfront because of the New York divorce law that recognizes a degree or professional license as marital property. New York courts calculate the lifetime worth of the degree, and divide that value into two as a part of the marital estate. This practice and New York’s other strange divorce laws have been petitioned and submitted for review.

Who Really Owns Your Degree?

When people enroll in any college, university, trade or skilled craft course, they anticipate the moment when they will receive a certificate of completion with their name on it. However, based on the New York law, that certificate or diploma might as well be reprinted to state the alumnus’s spouses’ name as well as the alumnus’s. In fact, any employee may as well include their spouses name on their payroll account because the state of New York also views any profits from any career as marital property.

New York’s law is not unfounded completely because any spouses income is in theory supplemented and supported by the other spouse’s support, which can be as menial as washing dishes while the student spouse is studying.

Why, Oh, Why?

However, New York lawyers and divorcees are not fighting the order to pay spousal support or maintenance. New Yorkers are astonished by and fighting the courts’ ability to grant “potential income,” which is money a person has not earned yet. New York citizens are frozen stiff at the sheer amount of money they “owe” their divorced spouse, most of which they are not even expected to have at the time of ruling.

The New York alimony regulations were originally fashioned to level the playing field for low-income, dependent spouses of a divorce. Yet in these changing times, the inequality of the laws and regulations have been exposed. Currently, New York law makers are waiting for the Law Revision Commission report before taking measures to change this piece of legislature.

DOMA & The New Marriage Frontier

supreme court divorce decisionLove, marriage, and matters of the heart are a highly personal matter. However, due to the governmental role in monitoring society’s well being and maintaining a census, marriage (and subsequently love and matters of the heart) are of governmental and federal concern. Currently, the Third Section of the Defense of Marriage Act (DOMA) is being challenged as unconstitutional. Solicitor General Donald B. Verrilli Jr. will be spearheading the Supreme Court case of the United States v. Windsor, which is scheduled to begin on March 27th.


In 1996 the Defense of Marriage Act (DOMA) was passed, and unleashed a fervor of debate throughout America that has lasted even until today. DOMA defined and solidified “marriage” as a union solely between a man and a woman. DOMA has a two-pronged approach: First, it does not legally recognize same-sex marriages, and secondly, it allows each state to either recognize or not recognize same-sex marriages as well.

The ratification of DOMA means the federal government cannot legally recognize same-sex marriages, and consequently denies legally married same-sex couples federal benefits, like survivorship. Survivorship allows married couples to pass ownership of property and benefits of a deceased spouse to their surviving spouse.


In 2011, the Obama administration made a policy decision to no longer protect DOMA’s constitutionality in court because “. . . this discrimination cannot be justified as substantially furthering any important governmental interest . . .” According to the General Solicitor Verrilli Jr.’s case, DOMA violates the Fifth Amendment’s Due Process Clause that states “all persons similarly situated should be treated alike.”

DOMA is challenged by Edith Windsor, a woman 83 years old. Edith Windsor was married to Thea Spyer, after a 40 year engagement, in 2007. Two years later in 2009, Ms. Spyer died and left her estate to her spouse, Ms. Windsor. Due to DOMA, Ms. Windsor has spent $600,000 to pay state and federal taxes on the estate left to her by Ms. Spyer. So in 2012, Ms. Windsor mounted a mission to strike DOMA from federal and state law, and that journey has brought about the case of the United States v. Windsor.


Earlier this month on February 19th, journalist Jonathan Capehart published an article, “Americans are done with DOMA,” in the Washington Post discussing the recent poll findings about the American public’s position on DOMA. The poll, held by The Respect for Marriage Coalition, found that 75% of voters believe same-sex marriage is a Constitutional right.

This belief is held across political party lines. 91% of Democrats, 75% of Independents, and 56% of Republicans support the idea that same-sex marriage is a Constitutional right. Furthermore, the poll discovered that 83% of the American public, regardless of personal opinion, believes same-sex marriage will be nationally legal in the next 5 to 10 years; 77% of the American public believes same-sex marriage will be nationally legal in the next couple of years.

The purpose of Capehart’s article is to bring to light how Americans of all political affiliation are seemingly aware of the discriminatory nature of DOMA, and have accepted the place same-sex marriage has in society, whether or not they personally agree with homosexuality. Capehart’s article brings up the point that people are aware that because a law or life choice exists, opponents can peacefully coexist as non-participants.

What are your thoughts on the DOMA law and the current actions to strike the DOMA’s 3rd Section from federal law?

A Little Lesson About Taxes and Divorce

200264112-001Oh, tax season. The time of year when you can hear the clickety-clack of calculator buttons, and smell the nervous sweat on men and women alike. The only thing that could improve this glorious season is divorce.

…Said no one ever, not even tax specialists. In fact, the only thing that makes tax season worse is divorce (or is it the other way around?). But it doesn’t have to be all doom and gloom, taxes can still be relatively simple as long as you know the basics. Where divorce is concerned, the tax basics are: deciding on a filing status, navigating the exemptions, and figuring out the tax refund.

Find Your Filing Status

Filing statuses are fairly cut and dry, so there isn’t too much confusion or misinformation about how to file your taxes. However, there are a few options available to couples who are separating or staying together.

Generally, a person’s legal filing status goes by what their status was at the end of the tax year. If you were legally divorced, or legally separated by or on December 31st, 2012, or living separate and apart for the last 6 months of 2012, then you will file as single or head of household. If you were still legally married by or on December 31st, 2012, then you will file as married.

However, married couples do have the option of filing taxes together or separately. So if you were still legally married by December 31st, and your and your soon-to-be-ex don’t want to file together, you may file as “married filing separately.” Just note that by opting to file married but separately, you are opting out of the tax benefits of filing as married; so if you and your spouse can tolerate each other it might be beneficial to give filing taxes together one more go.

Catch a Tax Break or Exemption

The most common and plentiful tax exemptions are for married couples with children; and the most common misconception divorced couples have about taxes is that they can both take exemptions for the child. Divorced couples can divide the exemptions, but there cannot be two people claiming exemptions for one child.

Most couples choose to alternate years claiming the children on their taxes. For example, the mother would claim the children on even years, and the father would claim the children on odd years. However, the parent with primary custody of the child usually claims the child every year. If the other parent pays for the child’s medical expenses, that parent may take those deductions.

Just as a little disclaimer, one child expense that is not tax deductible is child support. The parent paying the child support cannot take deductions for the payments made because child support is considered tax neutral.

The Tax Refund Raffle

That night, after filing taxes, everyone goes to bed with dreams of a big, fat tax refund dancing through their mind. Divorce does not dissuade this pipe dream of swimming in your tax refund, but here are ways to increase your little neat refund pile. As tax refunds go, married people with children they can claim as dependents have it pretty good.

As a divorcee, you may be hanging your head, but don’t despair for too long. Divorcees can get better tax refunds if they pay alimony, if they can claim any children as dependents, and more.

Have any more pressing tax questions? Leave a comment below and we’ll get to the bottom of it for you.

4 Divorce Mistakes to Avoid

When life-changing events occur, there is a list of udivorce mistakessual suspects who always have advice to spare, and spare said advice they do. Mothers, fathers, sisters, brothers, best friends, grandparents, coworkers; it’s almost as though there isn’t a single person you know who doesn’t have some advice they must share with you. But in the realm of divorce advice, if you listen to anything, listen and learn from these 4 divorce mistakes.

1) Only think about the immediate future. In the throes of a divorce, it’s easy to be distracted by thoughts of the here and now. Things like where you’re going live, how you’re going to pay bills, buy groceries, and survive are heavy in your mind, and that’s understandable.

However, when dividing the assets and property don’t forget about how things are going to weigh on you in the future. After divorce is finalized, there are going to be taxes to be paid, maintenance to be done, and the unforeseeable future to deal with. So when mulling over which assets to retain, think about how much that brand-spanking new car is going to be worth, say, 10 years from now. (Hint: Cars depreciate in value)

2) Don’t study up on marital finances. It’s fairly common in a marriage for one spouse to become the keeper of the finances. But when divorce comes barging in, that dynamic crashes to a halt. Many a wife or husband have been shortchanged in the divorce process because they didn’t know what to ask for.

So word to the wise: Instead of spending all your time trying to figure out what happened, start using some of that time to track down where every single penny of the marital money and assets went. It’ll be hard work, and it’ll take lots of willpower, but you’ll rest easier knowing you won’t get fooled.

3) Lose sight of the big picture. From the moment someone says, “I want a divorce,” life is never the same for either spouse. Due to this stressful time, it’s easy to lose sight of what is really important in life.

We suggest taking a moment early in the process to sit down by yourself and calmly think about what you need to survive on your own after this divorce. During this time, create a list of the things you absolutely will need, and the main things you want out of the divorce. Your list can include anything from “peace of mind,” to “a parenting plan that works for my children and me,” to something as simple as “the house.” Keep this list and during the divorce process refer back to it to make sure you’re making decisions that will get you where you want to go.

4) Let emotions take over. As any good attorney will tell you, divorce should be treated as a business transaction instead of a personal matter. It’s certainly possible to use divorce as punishment for your ex, but for your sake and (if you have any) your children’s sake, don’t do it.

If your emotions are behind hiring combative lawyers, and hiding assets, then it’s time to revisit divorce mistake #3. To avoid falling prey to your emotions, pursue relaxing, expressive activities, like journaling, hiking, going out with friends, or even seeing a therapist.

Get Divorced On Other People’s Money

money for divorceThe average cost of a divorce in America is estimated to cost between $15,000 and $30,000; the scary part of this estimate is that the figures represent the average cost of a divorce and not the cost range of a divorce. For people long-embroiled in a divorce battle, this figure may seem like but a pleasant memory in comparison to the figure they are currently facing.

It is no secret that divorces can be the nastiest experiences in the world, especially when robust finances are involved. But what about those spouses whose separate finances are less than robust? What chance do they stand in getting a fair shake in this expensive legal system? These are the very questions that birthed a new business sector called divorce financing.

People Will Finance Your Divorce?

In case you were wondering if you had missed something in the business world, divorce financing is not a business with a long history. In fact, divorce financing has only been around since 2009. Currently, there are two major players who are solely in the divorce financing market, BBL Churchill and Balance Point, and they each take a unique approach to divorce financing.

The Church of Divorce

BBL Churchill basically loans clients the money needed to cover all the legal expenses incurred during their divorce, and any necessary living expenses. After receiving a money retainer, BBL Churchill will loan divorcees anywhere from $2,000 to $1,000,000 if the divorcee meets the requirements.

To take out a loan with BBL Churchill, a divorcee must be represented by a qualified divorce attorney, have a joint net asset pool of $400,000 or more, and must have been married for at least 12 months to the divorcing spouse.

The BBL Churchill loans have a fixed interest rate for the term of the loan, and do not have to be paid back in monthly increments. The loan is repaid in its entirety by the divorce settlement.

Finding Balance in Divorce

Balance Point Divorce Funding invests in clients’ divorces, rather than loaning money to clients. The money from Balance Point is used for hiring attorneys, forensic accountants, and asset investigators, and for the client’s necessary living expenses. Balance Point usually invests about $200,000 in their client’s divorce.

To be funded by Balance Point, clients must have combined marital assets of $2 million or more, must not have marital assets affected by pre- or post-nuptial agreements, and be in need of $200,000 or more in funding.

If Balance Point decides to invest in a client, the invested money will be returned in full and more upon reaching an agreeable divorce settlement.

With the cost of living inching up each year, it’s no wonder divorce financing and other legal financing became a thriving new market. Just two years ago, legal financing companies were estimated to have $1 billion invested in clients’ legal actions. Divorce financing may just be the future of divorce in America; we only hope other divorce financing companies that crop up operate ethically.

If you were in a divorce with a spouse who out-earned you, and you needed money to get a fair settlement, would you hire a divorce financier?