Posts Tagged ‘Things to do before you file for divorce’

We all know the expression, nothing is inevitable but death and taxes. Federal and state income taxes are not only inevitable, but complicated by a divorce proceeding. If you and your spouse are in the process of getting divorced, the question arises, how should you file your taxes? According to the IRS, so long as you are married, you must file as married. The choice is whether to file jointly or separately. One spouse cannot force the other to file jointly.

But the situation is trickier once the divorce has been granted. Assume that you were divorced in December. Can you then file jointly for the year, during most of which you were married? No, you must file an individual return for the entire year. The IRS is clear on this, stating in Publication 504 that one is considered to be single or unmarried for the entire year even if divorce was granted on December 31. What are the implications of this rule? When a married couple files a joint return, both spouses are held jointly and individually liable for all interest and/or penalties due on that joint return. It does not matter who earned the income; a spouse who did not earn any income may still be held liable for all due taxes on the other spouse’s earned income. Your Separation Agreement may even specify that your former spouse will be liable for any taxes or penalties due on your joint return, but the IRS under Publication 504 may still hold both parties jointly and individually liable for any amount owed.

What about claiming your child(ren) as dependent(s) on your return after the divorce becomes effective? Only one parent may claim dependency of a child, and there are any number of factors which play into this determination. Child dependency is normally declared in the Separation Agreement. If you and your spouse have more than one child, they may be divided between the households. Your Separation Agreement may specify alternating years as the custodial parent, so that one year you may claim your child, and the next year your ex can claim that child. According to the IRS definition, the custodial parent is the parent with whom the child lived with for a longer period of time during the year, counted by number of nights spent in that parent’s care. What if a child lived an equal length of time with both parents? In such a case, the IRS guidelines state that the parent with the higher adjusted gross income can claim the child as an exemption.

There are many other factors, including the language of the Separation Agreement, as for instance if the Separation Agreement declares that the “noncustodial” parent is supposed to claim the child on his or her tax return? In order to satisfy such an arrangement, the child dependency exemption has to be transferred from the “custodial” parent to the “noncustodial” parent, requiring that several conditions be met for the IRS to accept the change. Obviously, such details need to be worked out in advance with the advice and guidance of an experienced divorce attorney.

Generally, the finalization of a divorce will revoke a will or at least nullify any provisions in your will in favor of an ex-spouse. Depending on the law of your particular jurisdiction, it is unlikely that the mere filing of a divorce will abrogate the rights of your spouse. Therefore, if you have concerns about the estate planning ramifications of your divorce proceedings, you should discuss them with an experienced divorce attorney.

If you have a will, it may be a good idea for you to change the beneficiary clause, such that any proceeds will go not through your soon-to-be-ex, but instead go directly to your children (if you have any) or to the executor of your estate. Likewise update the beneficiaries for life insurance, IRA, or other financial instruments.

If you do not have a will, discuss with your attorney the benefits of preparing your will prior to the divorce. Your attorney may assist you in drafting the will, or it can be as basic as one you obtain online. Your will should in part designate who should care for your children should you and your spouse pass away at the same time. The will should be notarized, with witnesses as required. (Note that a notary public does not testify to the content of the will, but only to the fact that you have signed it.)

Preparing your will prior to your divorce is especially beneficial if you have minor children, which leads to the question of talking with your lawyer and with a good friend or relative about assuming guardianship of your children should you pass away before they reach the age of majority.

Also discuss with your attorney the benefits of having a living trust in addition to a will. Your divorce attorney, being a specialist in divorce and family law and not in estate planning, may refer you to a colleague who does. Generally speaking, a living trust avoids probate for those assets listed in the trust, but it does not avoid death taxes.

Joe and Cindy have been married for 12 years. They have two kids, ages 6 and 10, and bought a 3-bedroom ranch in a western suburb of Boston seven years ago. They have since remodeled, adding a porch, a car port, and expanding and redesigning the kitchen. However, they started having marital problems two years ago, as Joe spent more and more time at work and Cindy began donating ever more time for various causes, until both began feeling abandoned by the other. So Joe moved out of the house 10 months ago, months before they decided to seek a divorce, and now he finds himself angry at having to support his new home as well as the home he left, and feeling cut off at the same time.

Often the first spouse – in this case, Joe – to move out of the marital home is at a disadvantage. The spouse that remains in the home – such as Cindy – may have leverage as to obtaining more support to pay for the mortgage and support. The situation may worsen for the spouse who moved out in a case where the spouse who remained in the home seeks to buyout the first spouse, as that party will often delay to gain more leverage in negotiating a better deal. Often the process will drag on and the spouse who has vacated will settle for less to be able to move from their “temporary situation.” Other times, a better deal can be negotiated with a spouse who is unhappy (dare I say miserable!) to be still residing with their soon-to-be ex. However, the potential for a restraining order can also be a danger for a spouse who chooses to remain in the marital home during the pendency of a divorce. Bottom line – don’t make hasty decisions; your best bet is to discuss your particular case with an experienced divorce attorney that can advise you of the pros and cons of vacating a marital home.

We all know how rapidly technology, especially social media, is growing in today’s society. Everyone it seems is on Facebook, and one must protect one’s identity on Facebook in the face (no pun intended) of being “tagged” in a photo one would rather disappear, have new relationships “put on parade,” or have one’s secrets put on public display in any number of ways. This extends as well to divorce, which is also going high tech today. Spouses who would never dare to tell their soon-to-be-divorced spouse about new personal relationships, travel and their new personal lives are posting such information–often in great detail, accompanied by photos and comments from innumerable “friends”–all over web and particularly on Facebook.

Don’t assume that just because you’ve blocked your spouse they won’t be able to access this information, read the comments, and see the photos. Frequently, one of the first things divorce attorneys are advising their clients to do is to examine the Facebook pages of their spouses and their “friends” in order to gather information that will be useful in divorce proceedings. And it doesn’t stop at Facebook: one must consider all social media that one’s spouse engages in, including Twitter, Tumblr, Google+, LinkedIn, and more. With so many ways to interact online today, one must be careful indeed.

The information contained in this blog is for educational purposes only and is not legal advice. The use of this Blog does not create an attorney/client relationship between you and the Law Offices of Barry R. Lewis. If you are considering divorce or if you are involved in any legal matter, you should hire an attorney.

Massachusetts Divorce and Family Law
Attorney Barry R. Lewis — Divorce Law Specialist
Locations Throughout Eastern & Central Massachusetts :: 508-879-3262