Year: 2018

Daredevil without a Prenup

Posted by Ron Kauffman on

Ben Affleck and Jennifer Garner have not resolved their jointly filed divorce one year after filing. Reports suggest they never had a prenuptial agreement, which may be the reason the divorce is taking so long after they filed.

Gone Girl

The actors filed to end their 10-year marriage on April 13, 2016, nearly two years after they originally announced their split, but there are no reports of a prenuptial agreement filed.

The divorce isn’t finalized and the two have been in mediation to settle privately. The actors are seeking joint physical and legal custody of their three children.

Affleck and Garner, costarred in 2003’s “Daredevil” and wed in 2005. They announced their intention to divorce in June 2015, after 10 years of marriage, but did not file documents until now.

“After much thought and careful consideration, we have made the difficult decision to divorce,” the couple said in a joint statement in 2015.

According to TMZ, Affleck and Garner do not have a prenuptial agreement, meaning everything is on the table for negotiation and possibly trial.

Prenuptial Agreements

I’ve written about prenuptial agreements before.

Many people think prenuptial agreements are for actors such as Affleck and Gardner. That is just fiction out of Hollywoodland. Even if you don’t enter a marriage with Affleck’s wealth, it might not be a bad idea to have a prenup.

The lack of a prenuptial agreement for Affleck has probably means that a lot of issues they could have resolved at the beginning of the marriage, may have to be fought over the past year since they’ve filed..

Prenuptial agreements, or “prenups,” are contracts entered into before marriage that outline the division of assets in case of divorce or death.

A prenup can resolve things like alimony, ownership of businesses, title of properties, and even each spouse’s financial responsibilities during the marriage.

There are many other concerns that can be addressed in the prenup:

  • Caring for a parent
  • Going back to school
  • Shopping habits
  • Credit card debt;
  • Tax liabilities;
  • Alimony and child support from previous relationships; and
  • Death or disability.

A few of the points of a prenup, is that you get to decide on the amount of alimony, the terms of alimony or whether you will pay any alimony at all, and how to divide movie royalties and other assets.

Chasing Amy

Putting aside the lack of a prenuptial agreement, Affleck and Gardner seem to be doing well by their children. The whole Affleck Gardner family recently made a group trip to Sea Life Park in Oahu. “During the trip, Garner stayed at a resort while Affleck stayed at a nearby house. Additionally, there are reports that Affleck is looking to buy a home near Garner in Los Angeles.

“Ben is looking to buy a family friendly house,” a source previously told PEOPLE in October 2017. “Lindsay shared her opinions, but it was clear that they are not buying a house together.”

Affleck had been living in a rental since he moved out of the family estate he used to share with Garner. Prior to their divorce filing last April, he was living in the family’s guesthouse.

The Los Angeles Times article is here.

 

Joint Physical Custody

Posted by Ron Kauffman on

Former NFL wide receiver, Hank Baskett, answered his former Playboy model wife’s divorce petition last week, and is asking for joint physical custody of their two children. What is joint physical custody, and is it something you should ask for in Florida?

Penalty Flags

Baskett is a former wide receiver who played in the NFL for the Vikings, the Eagles and the Colts. While at the University of New Mexico, he was a leading wide receiver and earned all-academic honors.

Baskett married Playboy model Kendra Wilkinson in 2009. Wilkinson and Baskett were co-stars on Kendra, a reality TV series following Wilkinson’s life. They have co-starred on another show, Kendra on Top, since June 2012.

His wife announced her intention to divorce on Instagram. A few years ago, she received bad press when she criticized people who had a problem with a photo she posted to her Instagram account of her daughter, stating:

“Wow by my last post I just exposed all you sick f**ks… [m]an, this world is more f**ked up than I thought, I’ll go ahead and go back to my vacation while we run around naked n free.”

According to People, in the former NFL player’s filing submitted Friday, Baskett cited irreconcilable differences as the reason for the divorce after 9 years of marriage according to court documents obtained by The Blast.

Mirroring his wife’s filing, Baskett listed their date of separation as Jan. 1, 2018, and requested joint legal and physical custody of their two children.

Many people are surprised to learn when they file for divorce or custody in Florida that joint legal and physical custody is not available in Florida.

Florida Shared Parental Responsibility

I’ve written about child custody issues before. In 1979, the first joint custody statute was enacted in California. The joint legal custody law promoted more paternal involvement after divorce.

In 2008, Florida modified its custody laws to get rid of outdated and negative terminology about divorcing parents and their children to reduce animosity.

The law did that by deleting the definitions of the terms “custodial parent” or “primary residential parent” and “noncustodial parent” and creating a definition for the terms “shared parental responsibility, “parenting plan”, and “time-sharing schedule.

Shared parental responsibility, is similar to joint physical and legal custody, and is a relationship in which both parents retain their full parental rights and responsibilities.

Under shared parental responsibility, parents are required to confer with each other and jointly make major decisions affecting the welfare of their child.

In Florida, shared parental responsibility is the preferred relationship between parents when a marriage or a relationship ends. In fact, courts are instructed to order parents to share parental responsibility of a child unless it would be detrimental to the child.

Florida’s public policy comes from the literature proving the importance of a father’s contributions to a child’s development and a child’s attachment to a father, gender roles within families are shifting, and the documented loss and alienation experienced by noncustodial parents and children.

Custody Touchdown

The former Playboy model’s filing came hours after she confirmed in an Instagram post that the couple had chosen to split.

“Today is the last day of my marriage to this beautiful man. I will forever love Hank and be open but for now we have chosen to go our own ways.”

The People article is here.

 

Divorce Auction

Posted by Ron Kauffman on

Russell Crowe sold dozens of items this past weekend at a Sotheby’s auction to help him fund his divorce from ex-wife Danielle Spencer. The auction appears to have worked better than expected.

The Art of Divorce

Crowe titled the event “The Art of Divorce,” the divorce auction took place in Sydney on his 54th birthday and featured more than 200 items, including movie memorabilia, antique treasures, artwork and a collection of instruments.

A replica Roman chariot from the same movie in which Crowe played the general-turned-gladiator Maximus, thought to be worth up to AU$10,000, was sold for AU$65,000.

Sotheby’s had estimated the sale would bring in up to AU$3.7m (more than $2.8 million in U.S. dollars), but many items sold for more than their original pricing.

Florida Property Division

In Florida, courts distribute marital assets and liabilities between the parties with the premise that the distribution should be equal unless there is a justification for an unequal distribution. Although it may seem like it, equitable distribution is not an auction.

I’ve written about various aspects of property division before, including Russell Crowe’s proposed auction when it was first announced.

Marital assets are properties acquired and debts incurred during the marriage, individually by either spouse or jointly by them.

Marital assets and liabilities also include the enhancement in value and appreciation of non-marital assets resulting either from the efforts of either party during the marriage.

Dissipation and Waste

One of the relevant factors courts look to in property division is whether one of the parties intentionally dissipated, wasted, depleted, or destroyed any of the marital assets after the filing of the petition.

Spouses can dissipate assets by giving away money irresponsibly, spending money on girlfriends, gambling losses, and drug usage. Some people would rather lose the money outright than split it with their spouses.

If the dissipation of an asset resulted from misconduct, the question is whether a spouse used marital funds for his own benefit unrelated to the marriage at a time when the marriage was undergoing an irreconcilable breakdown.

Misconduct is not mismanagement or even a simple squandering of marital assets in a manner of which the other spouse disapproves. There is no report that the Crowe auction was a waste of assets.

Instead, there has to be evidence of the spending spouse’s intentional dissipation or destruction of the asset. Where marital misconduct results in a depletion or dissipation of marital assets, it can serve as a basis for unequal division.

Alternatively, courts can look at the misconduct, and can assign to the spending spouse as part of their equitable distribution, the misconduct losses.

Battle for the Jockstrap?

Among the most popular items at the auction was the breastplate he wore in “Gladiator” when his character Maximus (spoiler alert) bites the dust. The piece sold for $125,000 while matching leather wrist cuffs scored $32,000.

Crowe also sold items from movies like “Master and Commander,” “The Silver Brumby” and “Proof,” though the Royal Navy dress blues from “Master” proved extremely popular, bringing in a $115,000 haul.

One of the more curious items was the leather jockstrap Crowe wore in the 2005 film “Cinderella Man.” The protective piece went for $7,000 to one lucky bidder.

“I put it in the collection as a piece of whimsy and a bit of a gag. Funny enough, it’s garnered a lot of attention,”.

He and Spencer wed in 2003, and news broke of their split in 2012. The divorce is just about finalized, and the ex-couple share two children.

The auction raised money for the A.C.M.F. charity, which provides free music education and instruments to disadvantaged and indigenous children and youth at risk in Sydney.

The New York Times article is here.

 

Jump Street

Posted by Ron Kauffman on

So much for The Vow. Channing Tatum and his wife came out Fighting, announcing their divorce. The appreciation of their properties and investment makes their property division quite The Dilemma – even if they don’t become Public Enemies.

This is the End

The former couple, Channing Tatum and Jenna Dewan, both 37, announced their separation on Monday after almost nine years of marriage and after welcoming their daughter in 2013.

We have lovingly chosen to separate…love is a beautiful adventure that is taking us on different paths for now [who writes these? ed.].

According to People, it’s estimated that Tatum made $60 million in 2013 for movies like The Vow, 21 Jump Street, Magic Mike and G.I. Joe: Retaliation. He also launched his own vodka line during the marriage.

Property Division

I’ve written extensively about property divisions. Equitable distribution, as property division is called in Florida, requires courts to set aside each spouse’s non-marital assets and debts, and then distribute the marital assets and debts.

Marital assets and liabilities include, in part, assets acquired and liabilities incurred during the marriage, individually by either spouse or jointly by them.

Marital property then, could include Tatum’s vodka business and other valuable assets purchased during the marriage.

Step Up

Complicating matters is that Tatum was not as well-known when he married. After their marriage both of their careers grew, the stock market rebounded, and home values rocketed.

The Tatum divorce shows how stakes can rise during a marriage, and how improvements to marital – and even non-marital or premarital assets – can come into play.

Florida recently amended a law dealing with whether there is a marital portion of a nonmarital house with a mortgage paid down by marital money, and if so, how to divide the marital portion.

The issue of the appreciation of non-marital property paid with marital funds includes two components:

  1.  a portion of the enhanced value of the marital asset resulting from the contributions of the nonowner spouse and
  2.  a portion of the value of the passive appreciation of that asset that accrued during the marriage.

The new law amends our statute, and establishes a new statutory formula.

Haywire

The best way to avoid the process of an expensive property division case is to have a prenuptial agreement and a post-nuptial agreement to discuss these issues before the divorce.

Alternatively, the issues can be taken care of in a private mediation. As a last resort, they will have to fight the case in court, and have a judge decide the issues.

As a general rule, divorce litigation is something that should be avoided because things go haywire. Court battles are long, painful and expensive.

One of the other Side Effects, is that divorce also bleeds into every aspect of a person’s professional and personal life.

The People article is here.

 

New Property Division Law

Posted by Ron Kauffman on

Kaaa! That’s not a scream, it’s a Hawaiian name pronounced “Ka-ah-ah”. Florida divorce lawyers know Kaaa as a famous Florida Supreme Court case which changed equitable distribution here. Kaaa had its faults, but recently the Governor signed a bill to fix it.

Florida Property Divisions

I’ve written about property division before. Property division, or equitable distribution as it is called in Florida, is governed by statute and case law.

Generally, courts set apart to each spouse their non-marital assets and debts, and then distribute the marital assets and debts between the parties.

Marital assets and liabilities include, in part, assets acquired and liabilities incurred during the marriage, individually by either spouse or jointly by them.

Passive appreciation of a nonmarital asset, a house for example, encumbered with a mortgage paid down with marital funds, may be a marital asset the court must equitably distribute.

Can You Split Nonmarital Property?

Passive appreciation of a house without a mortgage, for example, is not subject to division in a divorce. But what about the passive appreciation of a house with a mortgage, where the principal balance of the mortgage has been paid with marital funds?

In 2010, the Florida Supreme Court held that “passive appreciation of a nonmarital asset … is properly considered a marital asset where marital funds or the efforts of either party contributed to the appreciation.”

The Kaaa court recognized that the marital portion of nonmarital house encumbered by a mortgage paid down with marital funds includes two components:

(1) a portion of the enhanced value of the marital asset resulting from the contributions of the nonowner spouse and

(2) a portion of the value of the passive appreciation of that asset that accrued during the marriage.

The Kaaa Problem

The Supreme Court created a formula for courts to use in determining the value of the passive appreciation of nonmarital real property for equitable distribution.

But the Kaaa formula was flawed because there is no relationship between the amount of marital funds used to pay down a mortgage during a marriage, and the passive appreciation of the property.

Also, the Kaaa case required a nonowner spouse to have made contributions to the property as a prerequisite to sharing in the passive appreciation of the property.

A lot of people argued that Kaaa conflicted with our equitable distribution statute, which said marital assets include the enhancement in value and appreciation of nonmarital assets resulting from the use of marital funds.

The Fix Bill

The Family Law Section of the Florida Bar helps create legislation, and also monitors proposals in the Florida Legislature. Members of the Section advise legislators and staff and even testify before the Legislature.

Governor Scott signed a bill to fix Kaaa. The bill amends our equitable distribution statute and establishes a statutory formula for courts to use.

The new statutory formula does not require the nonowner spouse to have made contributions to the property, as required under the Kaaa calculation.

The fix bill also bars the marital portion of nonmarital real property from exceeding the total net equity of the property on the valuation date in the divorce action, and even allows a party to argue that the formula shouldn’t apply.

The new law takes effect July 1, 2018.

The Kaaa fix bill is available here.

 

Danish Divorce

Posted by Ron Kauffman on

As one of the most wired countries in the world, Denmark offers hospital records, tax returns, and divorces online. But the skyrocketing divorce rate has caused the country to limit the ease of divorce. What are drawbacks to a quick, online divorce?

Quickie Divorces

The New York Times reports that a Danish divorce can be obtained in less than a week with only a short online form and a $60 fee. But the government has decided that breaking up should be a little a harder to do.

Under new rules set to go into effect next year, couples who have children and who decide to dissolve their marriage will be required to observe a three-month “reflection period” before the divorce takes effect, during which they will be offered free counseling.

The idea is to provide protection for children, who will also receive counseling during the waiting period. (The quick divorce is still available for childless couples and in cases of abuse.)

Florida Divorce

I’ve written frequently about divorce issues, especially the differences between international and Florida divorces.  Florida, like Denmark, has its own restrictions on divorcing, even if not everything is available online.

For instance, you have to be a resident of the state of Florida for at least six months before filing. Additionally, you must file a Petition for Dissolution of Marriage with the circuit court and the Respondent files an Answer and/or counter petition.

A final judgment ending the marriage may not be entered until at least 20 days after the date the Petition was filed, unless the court finds that an injustice would result from this delay.

This is Your Danish Divorce

The current Danish laws give divorcing parents only a few days to decide on arrangements for their children online, increasing the potential for conflict. Denmark wants to give parents space and not make decisions right away.

The changes are a rare step back in a country that has moved aggressively to move official interactions online.

More than 90% of Danes between 16 and 89 can use a government-issued digital ID to gain access to personal records or to communicate with the authorities.

The system is often efficient: 1.3 million people logged on to see their annual tax return within 24 hours of release this month. But the push to digitalize Denmark may have gone too far and doesn’t work in divorce and death.

Digital death certificates, required in Denmark since 2007, lead to the immediate cancellation of passports, driver’s licenses and digital IDs to prevent fraud.

Kirsten Margrethe Kristensen was mistakenly declared dead by a doctor this month. “Making mistakes is human,” she told DR, the national broadcaster. “It’s more that one, just by a click, is out of the system and gone.”

The quick divorce presents a similar problem, some officials said — particularly when children are involved.

Soren Sander, a psychologist who has studied the effects of divorce, said that children and adults alike suffer psychologically and physically from a breakup:

“There are indications that with intervention their well-being increases.”

That’s not to say that divorces in Denmark are leaving the internet behind: While some counseling during the three-month reflection period takes place face to face, a mandatory course on the typical challenges of a divorce is available online and through an app.

The New York Times article is here.

 

Turkish Delight

Posted by Ron Kauffman on

Another fault-based divorce ruling comes from Turkey’s Directorate of Religious Affairs, which issued a fatwa stating that if a man refers to his wife as either “mother” or “sister,” their marriage will be deemed divorced. What is no-fault divorce?

A Real Turkey

According to Turkey’s Hurriyet newspaper, if a man tells his wife that he sees her as a mother or sister, the man will be considered divorced from his wife.

However, if they have not divorced before, they may come together with a new marriage,” it said.

If a man says those things or other phrases like “I divorce you”, “You are not my wife”, “Be free”, “Go off”, or “Go to your father’s house” to his wife with the intention to divorce, the divorce has taken place in terms of Islam, even if it is sent by SMS or by e-mail.

Previously, the Diyanet, the Turkish Religious Affairs Directorate, had issued a fatwa on divorce, stating that couples may get divorced via telephone call, fax, letter, text message or internet.

Turkey’s preeminent religious authority has a long track record of issuing other interesting fatwas. For example, in November, the Diyanet declared the digital currency bitcoin “inappropriate at this moment in time.”

Then it issued a fatwa on hair dye for men, followed by a prohibition on purchasing national lottery tickets. Several days later, it warned against “immoral music.”

Florida No Fault Divorce

I’ve written about no fault divorces before. Historically in Florida, in order to obtain a divorce in Florida, one spouse had to prove the existence of legal grounds such as adultery.

Proving fault often required additional expenses on behalf of the aggrieved party, only serving to make the divorce process more expensive and cumbersome than it already was.

In the years leading up to the enactment of “no-fault” divorce, courts often granted divorces on bases that were easier to prove, the most common being “mental cruelty.”

Over time, the “no-fault” movement expanded to other states, although interestingly it only reached the typically progressive state of New York in 2010.

The Triple Talaq Divorce

Islamic countries have been convulsing lately with the divorce concept of “triple talaq.” Turkey’s Diyanet issued a similar fatwa. According to Hurriyet:

Divorcing your spouse by saying ‘talaq’ three times via phone call, letter, SMS, internet and fax are as valid as saying it to their face. However, in this situation, the husband should not deny the divorce.

If a woman is divorced through written methods such as a text message or letter, she should ensure that the message was sent by her husband.”

The religious body, Diyanet, has no power under Turkish law to issue a divorce. Civil courts grant separations under the 1926 Turkish civil code law. However, Turkey has become increasingly religious over the past several years.

The institution serves the Prime Minister’s office, is responsible for the appointments of personnel at mosques, drafts centralized sermons read at all mosques, and issues fatwas.

Critics argue that the Diyanet is against the impartiality required of a secular state, and that it promotes only one understanding of Islam in Turkey and abroad.

The Hurriyet article is here.

 

Extracurriculars and Child Custody

Posted by Ron Kauffman on

A contentious issue in child custody cases is a child’s extracurricular activity. The decision may be easy when the sport is badminton, but litigation is not out of bounds when the activity involves football – especially in a big football state like Florida.

Tackling Extracurricular Decision Making

As the New York Times reports, there are always questions regarding whether the child will participate in extracurricular activities. The typical questions involve which activities, who pays the costs, and scheduling the activity so it doesn’t infringe on the other parents’ timesharing are easy enough to punt.

In shared parental responsibility cases, the issue of extracurricular activities can be very divisive – especially when choosing an injury-prone sport like skateboarding and football.

How do courts tackle the issue?

Extracurricular activities are closely related to decisions about education and schooling, and the parent with sole, or ultimate decision-making authority over education, makes the final decision concerning extracurricular activities as well.

But in a shared parental responsibility case, the decision can be easily fumbled.

Florida Shared Parental Responsibility

I’ve written about parental responsibility choices before. Generally, shared parental responsibility is a relationship ordered by a court in which both parents retain their full parental rights and responsibilities.

Under shared parental responsibility, parents are required to confer with each other and jointly make major decisions affecting the welfare of their child.

In Florida, shared parental responsibility is the preferred relationship between parents when a marriage or a relationship ends. In fact, courts are instructed to order parents to share parental responsibility of a child unless it would be detrimental to the child.

Issues relating to a child’s extracurricular activities, including the decision to participate in dangerous sports, are major decisions affecting the welfare of a child.

When parents cannot agree, the dispute is resolved in court.

At the trial, the test applied is the best interests of the child. Determining the best interests of a child is no longer entirely subjective Instead, the decision is based on an evaluation of certain factors affecting the welfare and interests of the child and the circumstances of the child’s family.

A Custody Touchdown?

In the decade since scientists began to link football to long-term brain damage, the debate over the future of the sport has moved from research laboratories to the halls of Congress, to locker rooms and parents’ kitchen tables.

The growing number of disputes over the long-term consequences of football has put family court judges in the awkward position of having to pick sides on a hotly debated issue.

In most states, such as Florida, family court judges are charged with ruling in the best interests of a child’s health. In the case of sports like hang gliding or rock climbing, the dangers may be self-evident.

But the science around the long-term cognitive and neurological damage caused by football is still emerging.

Judges who side with parents trying to prevent their sons from playing tackle football end up endorsing the view that the sport is too risky, a stance that might be unpopular with voters who elect them.

Judges who side with parents who want their son to play, on the other hand, risk being accused of not being prudent enough if the boy is injured.

The New York Times article is here.

 

The Engagement Ring

Posted by Ron Kauffman on

If the luck of the Irish holds, your engagement diamond may be yours forever. Diamonds, given to you after someone asks the question: “will you marry me?” with a “yes” to follow, are a contract. This is why so many of them end up in court property division cases.

The Engagement Ring Tradition

Until the 1930s, a woman jilted by her fiancé could sue for financial compensation for “damage” to her reputation under what was known as the “Breach of Promise to Marry” action.

As courts began to abolish such actions, diamond ring sales rose in response to a need for a symbol of financial commitment from the groom.

I’ve written about engagement rings before. Florida abolished the appropriately termed “heart balm statutes”. Heart balm statutes were laws allowing couples to sue each other to recover money for the alienation of affections and breaches of contract to marry.

As one court poetically noted:

[A] gift given by a man to a woman on condition that she embark on the sea of matrimony with him is no different from a gift based on the condition that the donee sail on any other sea. If, after receiving the provisional gift, the donee refuses to leave the harbor – if the anchor of contractual performance sticks in the sands of irresolution and procrastination – the gift must be restored to the donor. A fortiori would this be true when the donee not only refuses to sail with the donor, but, on the contrary, walks up the gangplank of another ship arm in arm with the donor’s rival?

Engagement Rings in Court

After an engagement ring is given, and if the couple doesn’t marry, in New York the law deems a broken engagement as no one’s fault. Accordingly, the ring should be given back to the giver, with few exceptions. Most states have adopted that approach.

This is true in Florida. Lawsuits to recover an engagement ring by disappointed donors usually are resolved by courts looking to see if the engagement was terminated by the donee or by mutual consent of the parties.

The rationale is that rings are given on the implied condition that a marriage ensue.

Once a marriage proposal is extended and accepted — once the promise is made — no matter what day of the year, that ring is no longer considered a gift. It’s a contract to enter into marriage.

Most states embraced the no-fault rule after the 1997 case of Heiman v. Parrish. There, the Kansas Supreme Court decided that no matter who broke the engagement, the ring should be given back to the giver if the parties don’t marry.

“Ordinarily, the ring should be returned to the donor, regardless of fault,” the court found.

But Montana hasn’t followed the rule. Montana classifies the ring as an unconditional gift. The recipient keeps it. California and Texas take a middle-of-the road approach: the recipient of the ring is expected to return it, unless the giver called off the engagement.

The general rule in Florida is that an engagement ring given before the marriage, becomes a non-marital gift if the marriage is completed. If so, the ring becomes the non-marital property of the Wife.

If the engagement ring is viewed by the court as a non-marital asset, it is not subject to equitable distribution in divorce proceedings, and the spouse keeps it as their own.

The New York Times article is here.

 

The 2018 Divorce Rush?

Posted by Ron Kauffman on

Experts predict a surge in divorce cases this year. Why is this year different from all other years? Because in all other years, alimony is deductible to the spouse paying alimony, and next year that deduction will be eliminated.

What’s Happening to Alimony?

Currently, there is a tax deduction for people paying alimony. The tax deduction can substantially reduce the cost of alimony payments. So, for people in some tax brackets, every dollar you pay in alimony to your former spouse really could only cost you a little more than 60 cents.

The alimony deduction has been in the tax code since 1942. But, because of the new tax law, people paying alimony may not be able to deduct their alimony payments, and anyone receiving alimony will no longer report it as income.

According to the ABA, lawyers are advising you divorce now, before the 76-year-old deduction for alimony payments is wiped out in 2019 under the Tax Cuts and Jobs Act.

If you’re going to get a divorce, get it now. Potential divorcees have all of 2018 to use the alimony deduction as a bargaining chip in their negotiations with estranged spouses.

Divorce and Taxes

The new tax code changes will impact your divorce, but it isn’t the only tax which causes people to make the decision to divorce. I’ve written about the area of divorce and taxes before.

For example, the 2012 American Taxpayer Relief Act raised taxes on couples making more than $450,000, and individuals making more than $400,000. As it turns out, some couples found out they could save over $25,000 a year if they divorced.

The New Tax Law

Many divorce lawyers criticize the new law to end the alimony deduction, saying it will make divorces worse.

People won’t be willing to pay as much in alimony, which will disproportionately hurt women who tend to earn less and are more likely to be on the receiving end of alimony payments.

Conversely, the alimony deduction has also been criticized. For example, the government argues the deduction is a burden on the IRS because, if the alimony amounts ex-spouses report paying and receiving don’t match, it can force the agency to audit two people who may already be feuding.

Why it Matters

Spouses negotiating alimony payments may try to pay less when the change takes effect because there will be no tax savings.

In many cases, women are more likely to be hurt by the change as they negotiate divorce terms. U.S. Census Bureau statistics showing that 98 percent of the 243,000 people who received alimony payments last year were women.

The deduction is a big deal to couples negotiating their divorce because if someone who earns, say, $250,000 agrees to pay $4,000 per month in alimony, it really costs the person about $3,000 after taking the deduction into account.

Without the break, many people will agree to pay only what would have been their after-tax amount. It is feared that more couples will end up fighting in court because they won’t be able to agree on alimony.

2019 Deadline

The alimony deduction repeal doesn’t take effect immediately and won’t kick in until 2019. That is why lawyers are advising clients to file for divorce now.

However, meeting the 2019 deadline won’t be easy.

Some states have mandatory “cooling-off” periods, others states have residency requirements. So, you can’t just file for a divorce today, and expect that you’re going to be divorced tomorrow.

The ABA article is here.