Alimony: Federal Tax Code Changes

There’s a change to the tax code that could impact you.  If your divorce is final after December 31, 2018, then alimony will no longer be deductible in your federal taxes if you are the person paying the alimony.  It will no longer be included in your gross income if you are the person receiving alimony.

Where does the new rule come from?

The Tax Cuts and Jobs Act (TCJA), signed into law in 2017 will end the alimony-payer deduction and the payee’s income inclusion for agreements executed in after 2018.

Is there a “grandfather clause”?

Yes, alimony agreements executed on or before December 31, 2018, are grandfathered in.  Also, if you later modify an agreement that was executed prior to December 31, 2018, then you can choose to stay grandfathered in or adopt the new rule.

How is the new rule different than the old rule?

The old rule was that the alimony was tax deductible and the money paid to the spouse was included in income.  The new rule is that the party paying alimony no longer gets the deduction and the person receiving it now doesn’t have to report those amounts as income.

Does this change California State tax?

No, the new rule relates to federal taxation but not state taxes.  Your California state tax rules will remain the same.

What’s the practical effect of this change?

The general impact is that overall more taxes will likely be paid because previously the payor spouse received a tax break through a reduction of their gross income, and the receiving spouse was at a lower income. For each couple, though, the practical impact of this may vary.  There may be other strategies that can be employed that have tax advantages to both parties, so consult with a Fairfield lawyer to find out the best options for your particular circumstances.

 

Filed Under: Fairfield Attorney, Fairfield Lawyer

Tips for Working with a Custody Mediator

There are different types of custody mediation.  In one instance the court may order mediation to resolve contested issues.  In other cases, the parties may participate in a private mediation with a retired judge, attorney, etc.  In either case, there are some general rules of thumb that will help you prepare for a successful interaction with the mediator.

  1. Always look through the lens of the best interest of the children.

As you prepare for mediation, remember your focus:  the best interest of the children. Other motives such as your convenience, getting revenge for past wrongs, or being unyielding to send a message will not be well-received by the mediator.  As you consider what you want, always put the child first.

  1. Review important documents.

Brush up on any active orders or other important documents.  In order to focus the discussion on the right issues, it will be helpful for you to remember clearly the decisions that have been made already in the case.

  1. Organize your goals but stay open to other possibilities.

Consider what you want to accomplish in the mediation and focus on the big picture.  Walk in knowing what you would like to accomplish but be open to different solutions on how to achieve what is best for the child.  Try to stay reasonable and keep an open mind, but be organized enough to know what you would like to achieve.

  1. Try to stay logical and calm.

In a mediation, you can speak honestly about your position. Do not feel pressured to agree.  However, staying logical and calm is very important.  Disparaging the other party will only waste time.  Make your position clear and keep your focus on the best interest of the child when you explain that position.

  1. Take your turn to talk when you have the floor, but don’t interrupt others.

Listening is a skill often underestimated by many. Listen carefully to what the mediator is saying. Don’t be so concerned with your argument that you don’t take time to understand other points of view.  Interrupting others is an easy pitfall in a highly emotional situation, but it can put a mediator on the defensive. Listen to what he or she has to say and then respond at the right time, and your arguments will likely be better received and understood.

With the right preparation and attitude, you can have a very successful mediation experience. The bottom line is to always focus on the children and keep yourself professional, articulate and calm.

 

Filed Under: Fairfield Lawyer, Family Law

Common Questions To Ask When Going Through a Divorce

Divorces range from simple to complex, but almost everyone who is considering a divorce will ask some basic questions.  This article will walk you through five common questions, and provide the answers you need to start thinking about the best way to approach your divorce.

  1. What are the options for ending a marriage?

Divorce, legal separation and annulment are the options for changing a marriage or domestic partnership relationship.

  1. Does the person who gets to the courthouse first have an advantage in a divorce?

Know that the officer will write down everything you say, so don’t admit to wrongful conduct if it’s not true.  At the same time, you do not want to get into a heated debate with the officer.  Express yourself politely.  For example, if an officer asks you if you know you were speeding, you could respond with “No, I did not know that,” or you could say, “Thank you for letting me know why you pulled me over, but I did not believe I was speeding.”  You have a right to remain silent, and it is often the best course of action to avoid talking as much as possible.

  1. Does the other person have to agree to a divorce? Do I have to prove they did something wrong?

California is a “no fault” divorce state, so you do not have to prove that the other person did something wrong. The spouse or partner does not have to agree to the divorce. If that person refuses to participate, you can still get a default judgment which will allow the divorce to be final.

  1. Will a divorce affect my immigration status?

The answer to whether a divorce will affect your immigration status is very case specific.  The short answer is that it may or it may not, so it would be wise to consult with an attorney on the specifics of your situation.

  1. What types of issues typically arise in a divorce?

Each case is different, but these are the issues that often arise in a divorce situation, so you’ll want to discuss these topics with your attorney:

  • Division of your money, real property, investment accounts, etc.
  • Responsibility for paying debts
  • Spousal or partner support
  • Child custody and visitation
  • Child support

 

 

 

 

Filed Under: Fairfield Lawyer, General Legal Advice

Things You Need to File For Divorce with the Courts

If you are ready for a divorce, you may wonder about the essentials needed to get the process rolling and the steps that must be taken to reach your goal.  This article will discuss three essentials for getting a divorce in California.

  1. Time. There is a mandatory waiting period in California that prevents any couple being divorced in less than 6 months. The divorce can take longer, but it can’t take shorter.  The starting point is the date the person officially notifies the spouse or domestic partner about the divorce.  You can get your paperwork in sooner and get the judgment approved, but the divorce will not be final until the waiting period has run.
  • Summary dissolution. You may be wondering if you can avoid the waiting period by obtaining a summary dissolution instead of a divorce.  The answer is no, a summary dissolution does not have a shorter waiting period than a divorce.  Y
    • Summary dissolution criteria: You can qualify for a summary dissolution if you meet all of the criteria.  (A few examples of all the criteria include being married for less than 5 years, not having children together, not owning property together, etc.  A full list can be found at http://www.courts.ca.gov/1241.htm#How-To_Guide_for_Summary_Dissolution_for_a_Married_Couple).
  1. You will have to pay a fee to file the divorce papers with the court, unless you qualify for a fee waiver.  You can qualify for a fee waiver if 1) you are receiving public benefits, 2) if you household income before taxes is less than the minimum amounts designated by the court, or 3) if the court finds that you don’t have enough money to pay for your household’s basic needs and the court fees.
  1. Residency in California. A court has to have jurisdiction to hear your case, which is why residency is important.  It would not make sense if you and your spouse both resided in New York, and you asked a judge in California to have jurisdiction over a California divorce.  Either you or your spouse must have lived in California for the last 6 months and the county where you plan to file the divorce for the last 3 months.  If you and your spouse have lived in different counties for the last 3 months, then you can file in either county.  You can still file for a legal separation if you haven’t been in California for the last six months, and then you can file for divorce when the time has expired.

The essentials are fairly straightforward:  time, money and residency.  The details of the divorce can be more complex, so consult with an attorney on your specific facts.

 

Filed Under: Fairfield Lawyer

Top 10 Ways to Protect Yourself Financially in a Divorce

Regardless of whether your divorce process is adversarial or cordial, it is a wise move to protect your assets.  This article will highlight ten tips on how to protect yourself financially in a divorce.

  1. Evaluate Your Contributions.  Look at your contributions to health savings accounts, retirement, individual trading accounts, etc. Talk to your attorney to seek advice about whether to continue to contribute to these accounts.
  1. Consider Your Estate Planning. Is your ex the beneficiary to any assets?  Do they have the power to determine your health under a living will?  Do they have power of attorney?  These are important issues that can be inadvertently put on the backburner.
  1. Separate Assets. Do you have separate assets? For example, is there a bank account or property that you acquired before the marriage?  If so, keep separate assets separate.  Don’t comingle them during the divorce process as it might muddy the water.
  1. Get information about the tax consequences of alimony, capital gains on the sale of a home, etc.
  1. Change Your Passwords, Protect Your Privacy. If your ex has the passwords to any separate bank accounts, credit card, telephone accounts, etc., change the passwords immediately to protect your privacy. Also look to social media such as Twitter, Facebook, etc.
  1. Build Your Credit. Consult with your attorney about the advantages of taking out a credit card in your name only and starting a separate bank account. 
  1. Consider Moving Out. The decision of whether to stay or go involves many factors including your time with children, finances, etc., so there is no one right answer on this one, but seek advice as to whether moving out is a good idea.
  1. Live frugally. Divorce can cause a financial strain on both parties, so attempting to live a little smaller than usual may help you in the long run.  Try to cut spending where you can.
  1. Get organized. One of the best ways to protect yourself financially is to educate yourself on what you have and document it. Look in all checking, investment, and savings accounts to see what is there now and take screen shots to document. Get information and documentation on each party’s salary and other income. Find out how much debt you owe.  The more you know about your money, the better off you will be in fighting for it. 
  1. Keep records. If you aren’t one to keep financial records and receipts, now is the time to start this habit. Having records will help you verify facts and figures and will help protect your financial future.
Filed Under: DUI, Fairfield Lawyer

5 Strategies for a Successful Financial Divorce Settlement

You are probably new to the divorce process, so you may be at a loss on how to successfully negotiate the financial side of your divorce settlement.  This article will highlight five of the most important strategies for success in sorting out the money side.

  1. Be prepared to change your mind and don’t draw lines in the sand with the other party until you know what’s for certain the best course of action for you. Over the course of a separation and divorce process, one or both parties often have a change of perspective on what’s the best course of action.  For example, initially a party may want to keep the home or sell the home. Often expectations of custody arrangement play into this, where on parent may want to keep the home to keep the stability for the children in terms of schools, neighbors, activity programs, etc.  As the terms of child custody become clearer, you may find it more advantageous to sell the home or rent it, or your original plan may end up being the best.  Your goal is to look after the best interest of yourself and your children, so it’s often best to avoid drawing lines or going to battle until you know for sure what you want. You don’t want to pen yourself into a decision that ends up being disadvantageous.
  1. Look into the tax consequences and financing realities of each decision course. Initially couples tend to gravitate to simple solutions:  sell the house, sell the business, have one spouse buy the other out, etc.  This may be the best for you, but it may not.  Talk to a professional about the tax implications of each course of action.  For example, if you have to liquidate tax deferred investments in order to finance a buy out, then it may not be in your best interest to do so.  If selling a business at this juncture will significantly impact its value, maybe that is not the right decision. Talk to the experts and open your mind to solutions that may initially be more complicated, but may pay big over the long haul.
  1. Be conservative and avoid making big decisions until your divorce is finalized. Negotiating the finances is emotional and stressful for all parties involved, and it is typically a very bad time to make huge changes in your life. Avoid changing or quitting a job during this time if possible. Keep the status quo as much as possible financially. Don’t do anything to destroy value in any of your assets or to hide income or assets from the other spouse. 
  1. Try to settle quickly and efficiently. Some cases cannot be settled and in those instances you should feel entitled to enforce your rights.  However, in many instances a negotiated settlement saves money for both parties.  To the extent you can, take your emotions out of the picture and look at the numbers.  Educate yourself as soon as possible on the options and the ramifications of each option. The more you can take the lead in finding meeting ground that is favorable to you and acceptable to the other party, the faster your finances will be settled and you can move forward.  Typically neither party will benefit from dragging the process out. 
  1. Consult the right people. You will get a lot of advice from family, friends and coworkers. Listen to that advice and take it for what it is worth. However, take the time to consult people with experience and knowledge. The final decision is always in your hands, but the right professionals can give you the information necessary to make good decisions.
Filed Under: Divorce Lawyer, Fairfield Lawyer, Vacaville Attorney, Vacaville Lawyer

3 Basic Facts You Need to Know about Custody in California

That you love your kids is a given, so if you are considering a divorce, you are probably wondering what will happen to your children and how will the divorce impact your parenting.  This article will discuss three basic facts about custody, which will help you plan for the future.

What is legal custody and what is physical custody?

  • Custody is the legal rights and responsibilities of the parents or caretakers. Visitation is how and when each parent spends time with each child. Either parent can have sole custody of the child, or the parents can share the custody.
  • Legal custody involves the right to make decisions on behalf of your children relating to school, health care, etc.  Physical custody refers to where the kids actually live.
  • It is common for sole physical custody to be granted to one parent and then visitation to the other. For legal custody, the preference if for the parents to share legal custody.  Joint legal custody can be tricky because it means that the parents must share in the making the important decisions for their children.

What are some common schedules?

  • Schedules can vary as per the best interest of the child, but some that are commonly used are as follows:
    • For joint physical custody, common schedules include one week per each parent, 2-2-3 schedules where a parent has Mon/Tues, the other parent has Wed/Thursday and the first parent has Friday, Sat Sun.  
    • For sole custody, weekend visits from Friday-Sunday with one or two weekday visits.

Can the court favor one gender over another?

  • No, the judge cannot favor one gender over another.
  • The standard question in any analysis is what is in the best interest of the children.
  • Judges have discretion, which allows for gray areas and wiggle room.
  • Bonding is an important factor in child custody cases, and goes to the emotional attachment a child and parent have.  

 

Filed Under: Divorce Lawyer, Fairfield Lawyer, Family Law

3 Tips on How to Create a Perfect Parenting Plan for Your Children

A parenting plan is required in every divorce case because it establishes the rules for physical and legal custody for the children.  If you and the other parent can agree, then it is a stipulated plan, or if you cannot agree then the court can establish a parenting plan for you.  You can tailor the parenting plan to the needs of your family, and this article will help you think through some important points you will want to include in the plan.

What are important issues for physical custody you should think through in creating the plan?

  • When will visitation occur
  • How will children be exchanged
  • Holidays, school breaks, special events
  • Accommodations for a parent’s illness or travel
  • Parent wants to relocate
  • Extracurricular activities and lessons
  • Resolving disputes
  • Phone/email/social media access with other parent
  • Military or other prolonged absence
  • Discipline or punishment methods
  • Children’s clothes and other belongings and how they are exchanged
  • Cancelations and delays

What are important issues for legal custody you should think through in creating a plan?

  • Religious attendance
  • Immunizations
  • Medications
  • What school will the children attend
  • Babysitting/Daycare arrangements
  • Emergency care

What needs are specific to your child that should be considered?

  • How old is each child
  • What routines would work best for your child’s personality
  • How do the school schedules of each child fit with the plan
  • What will give your child a sense of security and routine

A parenting plan can be unique and tailored to your children or it can be more general.  If you have questions or need help in formulating a great parenting plan, we here at http://www.davidknechtlaw.com/ can help!

Filed Under: Fairfield Lawyer, Family Law, General Legal Advice

4 Potential Consequences of Your First DUI

Whether you have just been arrested for DUI or whether you are further down the road in the process, you need to be prepared for what is ahead. You likely have many potential defenses to fight the charge, which are discussed in other articles. For this article we will assume you are 21 or older and entered a guilty plea or conviction of a first DUI and give you a look at “worst case” scenario.

1. Driving Consequences

  • Suspended License:  The DMV will automatically suspend your license if you had a blood alcohol concentration of .08% or more for four months.  The DMV will suspend your license for a year if you refuse the test. You’ll need to pay a $125 fee to get your license reinstated at the end of the DMV suspension. The court can also suspend your license, which is typically run concurrent to the DMV suspension, meaning that both suspensions are in effect at the same time.  A driver may be able to get a restricted license, to drive only to certain places like place of employment.
      • If you want to fight the DMV suspension, you need to request a hearing within 10 days.  
  • Interlock Device:  You may be ordered to get an interlock device on your vehicle, which measures your breath alcohol every time you drive.
  • SR-22 Insurance. If you don’t win the DMV hearing or don’t dispute it, and your license is suspended, you will need to get a special type of automobile insurance called SR-22 insurance for three years.

2. Court Ordered Counseling and Probation

  • 3-9 Month Programs:  You will likely be ordered to complete one of three programs, with the program usually determined by your blood alcohol content (BAC) measurement from the DUI:  3 month (30 hour), 6 month (44 hour) or 9 month (60 hour program). Additional hours may also be required based on county requirements. Each program requires drug and alcohol education, hours of group counseling, and certain hours of individual counseling.
  • Probation: Probation is typically 3-5 years.

3. Jail Time – Max is 6 months

  • Jail Time:  Crimes come with a maximum punishment, but this does not mean the judge will impose the maximum jail time.  The maximum for a first offense is up to six months in jail.

4. Financial Consequences

  • Fines, penalties and costs. The court at its discretion will impose a fine of between $390- $1000. Additionally, you will likely incur costs of defense attorney, costs for counseling, money for the interlock device if ordered and the cost of SR-22 insurance. The total cost can be very expensive, but consult with your attorney for an estimate of total costs.

 

Filed Under: DUI, Fairfield Lawyer, Legal Advice

5 Secrets to Dealing with Cops

Many people find interactions with the police to be very frustrating and risky.  This article will share five secrets from turning a negative encounter into a safer experience that will lay the foundation for your defense in the future.

  1. Keep calm and be confident but not argumentative.

The police officer will be assessing your attitude and demeanor from the moment he interacts with you, so you need to watch what you say and do and what your body language communicates. You want to exude a positive and calm presence, without anger or frustration.  This will send a message that you are not dangerous.

  1. Don’t debate with the officer, but avoid admitting to allegations.

Know that the officer will write down everything you say, so don’t admit to wrongful conduct if it’s not true.  At the same time, you do not want to get into a heated debate with the officer.  Express yourself politely.  For example, if an officer asks you if you know you were speeding, you could respond with “No, I did not know that,” or you could say, “Thank you for letting me know why you pulled me over, but I did not believe I was speeding.”  You have a right to remain silent, and it is often the best course of action to avoid talking as much as possible.

  1. Never run or fight.

Never run from a police officer. This will only get you into more trouble. Never lay hands on an officer or resist arrest.  These actions escalate the situation, so for your own safety you should comply with officer’s orders.

  1. Ask questions.

Often a very polite question can lay the foundation for your case later on.  A simple question to the officer can help you later:

  • When you feel detained:
    • “I don’t want any trouble, but I just wanted to clarify whether I’m free to go now.”
  • When they want to search you or your vehicle:
    • “Officer, are you asking for my consent to search? If so, I’m sorry but I can’t consent.”
  • When they are requesting to search your home.
    • “Officer, do you mind showing me a warrant? I’m sorry, but I can’t consent to a search of my home without one.”
  1. Don’t be afraid to ask for an attorney.

You have a right to an attorney, and don’t be afraid to exercise that right. Your request may not change the officer’s actions, but the very fact that you requested and attorney may help your attorney fight your case.

 

Filed Under: Fairfield Lawyer, General, Legal Advice
« Previous Page
Next Page »