Tag: alimony and taxes

Florida Alimony Reform 2023

Posted by Ron Kauffman on

Gov. Ron DeSantis signed a bill that will reform Florida alimony in 2023. The Florida alimony reform bill was signed after three vetoes of similar bills and a decade of legislative battles. But this year things changed. The 2023 proposal got the support of The Florida Bar Family Law Section, which had fought against poorly worded alimony reform bills in the past.

Alimony Reform

Florida Alimony

I’ve written about alimony in Florida before. In every Florida divorce case, the court can grant alimony to either party. Not many people realize there are several types of alimony in Florida: bridge-the-gap, rehabilitative, durational, and before July 1st, permanent alimony.

Florida courts can also award a combination of alimony types in a divorce. Alimony awards are normally paid in periodic payments, but sometimes the payments can be in a lump sum or both lump sum and periodic payments.

In Florida, once a court determines there is a need and the income available to pay alimony – sometimes referred to as the ability to pay alimony – it has to decide the proper type and amount of alimony.

Florida Alimony Reform

Last week the governor signed into law CS/SB 1416, which makes significant changes to alimony awards. The most talked about feature of the new law is that permanent alimony, which is sometimes called lifetime alimony, is eliminated.

The elimination of permanent alimony leaves only bridge-the-gap, rehabilitative, and durational forms of alimony. However, rehabilitative alimony has now been limited to five years. Additionally, durational alimony is now not awardable to people married for less than three years. But, if a couple has been married 20 years or longer, they will be eligible to receive payments for up to 75 percent of the length of the marriage.

Another big change is the new law’s limits on the amount of durational alimony. Durational alimony is now calculated to be the lesser of the recipient spouse’s reasonable need or no more than 35 percent of the difference between the parties’ net incomes.

Another change is in the area of supportive relationships. Courts reduce or terminate alimony in cases in which they find that a supportive relationship exists. The new law also places the burden on the payor of alimony to prove by a preponderance of the evidence that a relationship exists. Once proven, the burden shifts to the recipient spouse to prove by a preponderance of the evidence the court should not reduce or terminate alimony.

The new law also impacts modifications by codifying a 1992 Supreme Court decision that judges use as a guidepost when making decisions about retirement. If a payor of alimony wants to retire, he or she may apply for modification of the alimony award no sooner than 6 months prior to the planned retirement. The bill provides several factors courts have to consider in determining whether to modify or terminate alimony. The new law became effective July 1, 2023.

The new law is here.

Divorce Planning and Residency

Posted by Ron Kauffman on

As cold winds begin to blow, marriages start to feel the chill. Recent statistics show divorce rates rising by nearly 10 percent in some places. This means divorce planning. Your residency, the state where you file your divorce, can have a big impact on the outcome.

Divorce Residency

 

Florida Divorce and Taxes

The 2018 Tax Cuts and Jobs Act increased the tax incentives for people to move to Florida, both for older and younger taxpayers. One reason is because Florida is one of only a few U.S. states with no state income tax. Another reason is the dolphins.

New York, unlike Florida, has income tax rates exceeding eight percent. In New York, there is also an additional income tax levied within New York City. Similarly, California has a state income tax. The rates in California can reach up to 12.3 percent, in addition to a one percent mental health services tax applied to incomes exceeding $1m.

However, the tax implications aren’t the only impacts to consider when deciding to change your residency. Residency and domicile are the terms often used around the country in different states to describe the location of a person’s home, the place to which a person intends to return and remain, even if they reside elsewhere.

Because a lot of interest has developed in changing residence and domicile – primarily for the best tax savings – the question remains: do you qualify? States examine many factors to determine your permanent home.

The residency analysis can include how much time is spent in a state, where your car is registered, where you bank, what state you vote in, what you declare on your tax returns, and where your dentist or doctor is.

State and local tax laws differ from state to state, and they are enforced based on your place of residence. While there are major tax implications of changing your home, there are some important divorce issues to consider on top of the tax savings.

Florida Divorce and Residency

I have written about divorce planning in the past. In Florida, divorce is called “dissolution of marriage”. In order to file for dissolution of marriage in Florida, at least one of the spouses to the marriage must reside six months in the state before the filing of the petition.

Residency under Florida law usually means an actual presence in Florida coupled with an intention at that time to make Florida the residence.

In Florida, there is a difference between domicile and residence. A person’s domicile in Florida, involves the subjective intent of the person. Residence, on the other hand, is a matter of objective fact.

Although the state residency requirement has been construed to mean you must reside in Florida for the six months immediately preceding the divorce filing, courts have recognized exceptions. For example, Florida allows military and government personnel to file for divorce – without proving their actual presence in the state during the six-month statutory period – prior to the filing of their petitions of dissolution.

Under this exception, when a Florida resident is stationed outside the state by the military, the person did not lose their Florida residency, and could file for divorce – even though she had not been physically present in the state for the immediately preceding six-month period.

Moving to the Sunshine State

Before picking up and moving your residence or domicile to Florida to save on state income taxes, there are other things you may want to consider that can impact your legal rights and your savings.

For one, there’s a difference between equitable distribution states and community property states. The effect of moving from an equitable distribution state to a state with community property ownership, may have a huge impact on your property rights.

Many western states are community property states. In California, a community property state, marriage makes two people one legal “community.” Any property or debt acquired by one person during the marriage belongs to the community. In a divorce proceeding, community property is generally split equally by the court.

Conversely, Florida is an equitable distribution state.  In a divorce proceeding the court distributes the marital assets and liabilities with only the premise that the distribution should be equal. However, there may be a justification for an unequal distribution based on certain statutory factors.

The differences between states are not limited to property division. Each state has different local laws to deal with alimony, child support, child custody, and even prenuptial and postnuptial agreements.

Changing the state you live in can be complex, and there are factors besides the tax savings to consider before making any change.

The Crain’s Chicago article is here.

Dr Dre and Temporary Alimony

Posted by Ron Kauffman on

Nicole Young will be receiving a substantial amount of temporary alimony during her ongoing divorce from Dr Dre. According to reports, a judge just ordered the music mogul to pay his wife $293,306 per month in temporary spousal support.

Temporary Alimony

Nuthin but a Two Hundred G Thang

Dr Dre, of course, is an American rapper and producer. As a member of N.W.A and later as a solo artist, he sold hundreds of millions of albums and singles during his career. He and music producer Jimmy Iovine co-created “Beats By Dre” which was later acquired be Apple in 2014 for $3 billion. At the time of the sale, Jimmy and Dre both owned 25% of Beats by Dre and each reportedly earned $750 million from the deal.

In June of 2020 it was reported that Dre’s wife of 24 years had filed for divorce. At the time of the filing some estimated that Dre’s net worth was $820 million. While Nicole’s temporary alimony award would be considered “ok” for most people, the amount is much less than what she asked for.

In September 2020, Nicole asked for $2 million per month to cover her needs. The recent temporary alimony award amounts to a temporary alimony of more than $3.5 million a year.

In addition to the monthly cash payments, Dr Dre will also reportedly have to pay for the expenses of their Malibu and Pacific Palisades homes and will pay for Nicole’s health insurance. The couple has two adult children.

Florida Temporary Alimony

I’ve written about alimony before. In every Florida dissolution of marriage case, the court can grant alimony to either party. Not many people realize there are several types of alimony in Florida: bridge-the-gap, rehabilitative, durational, permanent alimony, and of course, temporary alimony.

Florida courts can also award a combination of alimony types in a divorce. Alimony awards are normally paid in periodic payments, but sometimes the payments can be in a lump sum or both lump sum and periodic payments.

Pursuant to Florida law a judge can award temporary alimony to either spouse if there is a well-founded request while a divorce action is pending. The standard for awarding temporary alimony is the same as when the trial court considers a request for permanent alimony, namely, the parties’ standard of living along with the need of the petitioning spouse and the ability of the other spouse to pay.

Even if you are in a short-term marriage, you can be awarded temporary alimony because the duration of a marriage, standing alone, is not justification for denying temporary relief.

Additionally, even if you have a prenuptial agreement which specifically waives temporary alimony, in Florida temporary alimony cannot be waived by agreement, and may be considered void and against Florida public policy. Instead, a Florida court determines temporary alimony by balancing the needs and ability to pay.

Forgot About Dre

Young filed for divorce from Dr Dre in June 2020 after 24-years of marriage. The divorce proceedings have been anything but amicable. Young accused the acclaimed rapper and producer of emotional and physical abuse; which Dre has strongly denied.

Technically, they are already divorced. Dr. Dre’s marriage was legally dissolved by a family judge after Dre filed a motion for bifurcation, requesting the judge dissolve the marriage and reserve on the remaining issues so they can be resolved later. The divorce case has yet to be finalized.

The Yahoo news report is here.

 

Biden’s Tax Plan and Divorce

Posted by Ron Kauffman on

President Joe Biden’s latest tax proposal may require any couple thinking about filing for divorce to do some planning. Biden wants higher taxes on the wealthiest 1% to help fund education, paid leave, childcare and other social programs, and there are other other changes which may impact your divorce.

Divorce taxes

Taxes and Doughnuts

In 2017, President Trump signed the the Tax Cut and Jobs Act (TCJA) into law. The TCJA generally reduced tax rates overall, and reduced the highest individual income tax rate from 39.6% to 37%. Almost all of the individual tax cuts expire at the end of 2025 unless Congress extends them.

However, there is a new president, a new Congress, and there is little doubt president Biden’s proposal will increase your taxes and impact your divorce. For instance, the Biden Plan would revert the top individual income tax rate for taxable incomes above $400,000 to 39.6%.

Even still, the proposal could still affect people earning under $400,000 too. There’s also social security taxes. Right now, a Social Security tax is imposed on wages up to $142,800. Wages above the $142,800 ‘wage cap’ are not subject to Social Security tax.

But Biden is proposing a shrinking doughnut hole for Social Security. Earnings between $142,800 and $400,000 wouldn’t be taxed, but that doughnut hole would shrink each year as the $142,800 wage cap increases.

The Biden Plan also taxes long-term capital gains and qualified dividends at the ordinary income tax rate of 39.6 percent on income above $1 million instead of at the current top capital gain rate of 20%.

Itemized deductions are also impacted under the Biden Plan. His plan caps the tax benefit of itemized deductions to 28 percent of value for those earning more than $400,000, and restores the Pease limitation on itemized deductions. The Pease limitation capped how much you could deduct.  The Pease limitation was repealed under TCJA.

Divorce and Tax

I’ve written about divorce and tax changes before. The impact president Trump’s TCJA changes took on divorce was huge. Most notably, Trump’s tax changes eliminated the alimony deduction. People become less willing to pay as much in alimony because of the loss of the deduction.

That change, it was claimed, disproportionately hurt women who tend to earn less and are more likely to be on the receiving end of alimony payments.

On the other hand, the alimony deduction itself 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.

Divorce Taxes and Child Credits

The Biden Plan also includes two significant proposals concerning tax credits related to children. These proposals, if passed, could cause couples to spend more time arguing over who will claim the children to maximize tax benefits.

Under the TCJA, the dependency exemption was eliminated altogether, and was replaced by an expanded Child Tax Credit. If you have kids under the age of 17, you likely qualify for the CTC.  The CTC provides a tax credit of up to $2,000 per child under age 17. The CTC begins to phase out for single taxpayers with an adjusted gross income over $200,000 and married taxpayers over $400,000.

The Biden Plan increases the CTC from a maximum credit of $2,000 to $3,000 for children ages 6 to 17, and $3,600 for children under age The CTC would also be made fully refundable, removing the $2,500 reimbursement threshold and 15 percent phase-in rate.

In the corporate world, the TCJA reduced corporate tax rates from a maximum rate of 35% to a flat 21% tax rate on taxable income. The Biden Plan would increase the corporate income tax rate from 21% to 28%.

At this point, no one knows what part of President Biden’s tax proposals will become law, or what the final law would look like. But any couples considering divorce should keep an eye on these proposals and how they could impact your after-tax income and assets after separation.

The CNBC article is here.

 

Marriage Penalties

Posted by Ron Kauffman on

Although Florida doesn’t have a state income tax, many people moving here from other states and seeking divorce, frequently ask whether our state has marriage penalties built into the tax code. The Tax Foundation has the answer.

marriage penalty

What is a Marriage Penalty?

A marriage penalty is when a household’s overall tax bill increases due to a couple marrying and filing taxes jointly. A marriage penalty typically occurs when two individuals with similar incomes marry; this is true for both high- and low-income couples.

In other words, a marriage penalty arises any time a married couple pays higher income taxes than they would have paid if they were un-married and filed individual tax returns.

At the federal level, the Tax Cuts and Jobs Act of 2017 definitely lowered the cost of being married for many couples. But being married can be more expensive than being two single tax filers on April 15th.

For example, if a couple has children and both spouses earn income, they can owe thousands of dollars every year just for being married.

Some states have their own income tax. Under a graduated-rate income tax system, a taxpayer’s marginal income is exposed to progressively higher tax rates.

A marriage penalty might exist when a state’s income brackets for married taxpayers filing jointly are less than double the bracket widths that apply to single filers.

Put differently, married couples who file jointly under this scenario face a higher effective tax rate than they would if they filed as two single individuals with the same amount of combined income.

Florida Divorce and Tax

I’ve written about divorce and taxes before. For example, in 2012 the American Taxpayer Relief Act made permanent the Bush-era expanded standard deduction, and the expanded 15% bracket for joint filers.

But for high income earners, the 2012 law 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.

State Marriage Penalties

While Florida doesn’t have a state income tax, fifteen states have a marriage penalty built into their bracket structure. Seven additional states (Arkansas, Delaware, Iowa, Mississippi, Missouri, Montana, and West Virginia), as well as the District of Columbia, fail to double bracket widths, but offset the marriage penalty in their bracket structure by allowing married taxpayers to file separately on the same return to avoid losing credits and exemptions.

Ten states have a graduated-rate income tax but double their brackets to avoid a marriage penalty: Alabama, Arizona, Connecticut, Hawaii, Idaho, Kansas, Louisiana, Maine, Nebraska, and Oregon.

The ability to file separately on the same return is important in states that do not double bracket widths, as is the ability to do so even if the couple files jointly for federal purposes.

While married couples have the option of filing separately—though some states only allow this if they do so on their federal forms as well—this normally creates a disadvantage, because it either disallows or reduces the value of deductions and credits available to the family jointly, which is also a form of marriage penalty.

Filing separately on the same return eliminates this problem, though at the cost of slightly greater complexity than doubling tax brackets for joint filers so that there is no penalty for filing jointly.

The Tax Foundation article is here.

 

Calculating Alimony with De Niro’s Dinero

Posted by Ron Kauffman on

Calculating alimony with Robert DeNiro’s dinero is what is turning up the heat in his divorce. His wife, Grace Hightower, is seeking temporary alimony and has asked for an emergency order to raise her monthly credit card limit from $50,000 to $100,000 – which De Niro halved.

Alimony Calculation

Raging Bull?

In their response, De Niro’s lawyers claimed that the actor’s financial status had been significantly damaged by Covid-19 after restaurants Nobu and Greenwich Hotel, which he owns stakes in, were forced to close.

The judge was told that, as well as sushi restaurant Nobu losing $4.87m between April and May, De Niro had been forced to borrow from business partners to pay investors ($500,000) because “he doesn’t have the cash”.

The actor’s lawyers said: “He is going to be lucky if he makes $7.5m this year,” adding that he would likely make $2.5m in 2020 and 2021!

Addressing Hightower, they said: “These people, in spite of his robust earnings, have always spent more than he has earned so this 76-year-old robust man couldn’t retire even if he wanted to because he can’t afford to keep up with his lifestyle expense”.

Hightower’s lawyer is calling it raging bull: “I’m not a believer that a man who has an admitted worth of $500m and makes $30m a year, all of a sudden in March he needs to cut down by 50% and ban her from the house.

Florida Alimony

I’ve written about subject of alimony in Florida. In every Florida dissolution of marriage case, the court can grant alimony to either party – husband or wife.

Not many people realize there are several types of alimony in Florida: bridge-the-gap, rehabilitative, durational, or permanent alimony.

Florida courts can also award a combination of alimony types in a divorce. Alimony awards are normally paid in periodic payments, but sometimes the payments can be in a lump sum or both lump sum and periodic payments.

In determining whether to award alimony or not, the court has to first make a determination as to whether a wife or a husband, has an actual need for alimony, and whether the other party has the ability to pay alimony.

As DeNiro’s wife is discovering, proving the ability to pay is one of the central issues in her divorce right now because DeNiro’s income, it is claimed, dropped significantly due to the coronavirus outbreak.

Typically, courts consider any type of earned income or compensation — that is, income resulting from employment or other efforts — along with recurring passive income, such as dividends on your investments, in establishing the amount of support you will be responsible to pay.

In Florida, once a court determines there is a need and the income available to pay alimony – sometimes referred to as the ability to pay alimony – it has to decide the proper type and amount of alimony. In doing so, the court considers several factors, some of which can include:

  • The standard of living established during the marriage.
  • The duration of the marriage.
  • The age and the physical and emotional condition of each party.
  • The financial resources of each party, including the nonmarital and the marital assets and liabilities distributed to each.
  • The earning capacities, educational levels, vocational skills, and employability of the parties and, when applicable, the time necessary for either party to acquire sufficient education or training to enable such party to find appropriate.

But, after establishing Hightower’s need for alimony, how much dinero is there to determine De Niro’s ability to pay?

Analyze This…

The Supreme Court justice ruled that De Niro should keep the lower credit card limit while paying Hightower $75,000 to find a summer home for their children. De Niro filed from divorce from Hightower in 2018.

Robert De Niro’s attorneys said that the actor’s finances have taken a huge hit over the course of the coronavirus pandemic. The actor is battling a divorce case against Grace Hightower, his ex-wife who he was with for 21 years, in Manhattan Supreme Court.

De Niro appeared via Skype at an emergency hearing, which was called after De Niro cut Hightower’s American Express credit card limit from $100,000 to $50,000 a month.

According to the Daily Mail, Hightower’s lawyer told the judge that she and her two children with De Niro, Harvey (8) and Elliot (21), had been banned from his New York compound, which is where De Niro has been staying during the pandemic.

However, De Niro’s lawyer, Caroline Krauss, reportedly told the judge that De Niro was forced to make this cut to Hightower’s credit card limit because his finances have been so badly affected by the pandemic.

Krauss told the judge that Nobu and The Greenwich Hotel, the restaurant chain and hotel that De Niro owns, have both been badly hit by the pandemic as they have been closed or partially closed for months with next to no income.

Krauss said that the 2004 prenuptial agreement between De Niro and Hightower means that De Niro is only required to pay $1 million a year to Hightower as long as he is making at least $15 million a year. The terms, Krauss said, state that if his income falls, hers will proportionately fall too.

Krauss said that the money De Niro has earned from last year’s “The Irishman” has largely already been paid out, meaning he will only receive $2.5 million this year.

“These people, in spite of his robust earnings, have always spent more than he has earned so this 76-year-old robust man couldn’t retire even if he wanted to because he can’t afford to keep up with his lifestyle expense.

In response, Page Six reported that Hightower’s lawyer, Kevin McDonough, told the judge: “Mr. De Niro has used the COVID pandemic, my words would be, to stick it to his wife financially.

“I’m not a believer that a man who has an admitted worth of $500 million and makes $30 million a year, all of a sudden in March he needs to cut down [spousal support] by 50 percent and ban her from the house.”

McDonough said that “the idea that Mr. De Niro is tightening his belt is nonsense.” The judge issued a temporary ruling that the credit card limit is kept at $50,000 a month, but that De Niro pays Hightower a $75,000 lump sum so she can find a summer home for her and their two children, while De Niro stays in his compound with his other three children.

De Niro and Hightower were married in 1997 but filed for divorce two years later. However, their divorce never finalized, and they patched things up and renewed their vows in 2004. They officially separated in 2018.

The Insider article is here.

Photo credit: David Shankbone – Own work, CC BY-SA 3.0

Divorce Stimulus Checks and More Good Coronavirus News

Posted by Ron Kauffman on

If you have not already received it (and spent it shopping), your Economic Impact Payment may be on its way. But if you’re separated or going through a divorce, your economic stimulus check may not be as stimulating as you had hoped. As always, there’s also some good coronavirus news.

Divorce Stimulus Checks

A Stimulating Divorce Issue

Since the President signed the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), the $2 trillion stimulus package to spur the economic recovery, millions of Americans have already received their Economic Impact Payments and are busy shopping.

You may be eligible to receive a payment if you are a U.S. citizen, permanent resident or qualifying resident alien, cannot be claimed as a dependent on someone else’s tax return, have a Social Security number and an adjusted gross income below a certain amount.

Qualifying single adults who have an adjusted gross income of $75,000 or less will receive $1,200. Married couples with no children earning $150,000 or less will receive a total payment of $2,400. Taxpayers filing as head of household will receive full payment if they earned $112,500 or less.

But will the stimulus funds be impacted because you are in a divorce or family law case?

Florida Divorce and Tax

I’ve written about divorce and taxes before. For example, after the new tax code changes became law, it eliminated the alimony deduction. Many people criticized the tax law change in general. For example, the decision to end the alimony deduction received a lot of criticism. Many argued it made divorce worse.

Since the change, we’ve seen that some people are not willing to pay as much in alimony. This reduction in alimony amounts being paid has disproportionately hurt women, who have tended to earn less, and are more likely to be on the receiving end of alimony payments.

Who CARES?

For everyone who has not received it, the stimulus payment checks are something being counted on every day. Fortunately, most people should expect to receive their one-time, $1,200 stimulus payment from the IRS in the next few weeks. However, some people may receive less than they expected.

For example, if you have not filed your 2019 tax return, the IRS will calculate your payment based on the adjusted gross income listed on your 2018 tax return.

Also, if you have a pending divorce case, the payment will be deposited into the bank account that was provided to the IRS on your previous tax return. So, if your last tax return was a joint return prepared with your spouse, you may have to consult an attorney to discuss your options for recovering your payment.

Don’t forget you may also receive an additional $500 stimulus payment for each qualifying child. For anyone who filed jointly with their spouse, and whose custody arrangement has changed since they last filed a tax return, the portion of the check allocated for qualified children may be impacted.

Finally, the rules for child support enforcement are still in effect. Federal law requires child support agencies to collect past due child support from federal tax refunds.

In passing the federal CARES Act, Congress did not exempt the stimulus payment checks from federal offsets for unpaid child support arrears. All or a partial amount of your stimulus check may be intercepted and used to pay unpaid child support.

Good Coronavirus News

As we enter summer, there is good coronavirus news. More and more cities have decided on timetables for reopening certain parks and recreational facilities as part of a phase of returning to normal during the coronavirus pandemic.

  • In Miami, parks, boat ramps, golf courses and other facilities will open with certain restrictions.
  • Face coverings must always be worn unless otherwise noted.
  • Social distancing must be observed, and there can’t be gatherings of 10 or more people.
  • Sadly, swimming pools are not being opened for adult lap swimming. This critical policy misstep – to open swimming pools to adult lap swimming – is a major oversight mayors around the state seem to be making, and will need to be corrected in the future.

The IRS economic impact payments information page is here.

 

Modification of Alimony and Support, and some great Coronavirus information

Posted by Ron Kauffman on

More and more of my clients are asking about modification of alimony and child support because they or their Ex has lost jobs or seen their incomes slashed. There is also a wealth of information about the coronavirus, and one video in particular is a standout.

Alimony Modification

Life in the Coronavirus Economy

We didn’t just pass a $2 Trillion aid package for no reason. Markets have suffered, restaurants, bars and other businesses across the country have closed or are limping along until the market returns.

Employers have furloughed employees or reduced staffing in order to prevent the spread of the cornavirus and manage the economic impact it has created. For many people, this impacts their bottom line.

What if you or your ex-spouse or co-parent has alimony or child support obligations that can no longer be paid as a result of reduced income? Or what if you have lost your job and need additional support?

The time to act may be now in order to get the right information, preserve your legal rights, even while you are trying to work cooperatively with your Ex for the benefit of everyone in the family.

Florida Alimony and Child Support Modification

I recently spoke at the Florida Bar Family Law Section/AAML Certification Review Course in Orlando on the topic of Modifications. There are a few reasons why alimony and child support can be modified.

Dramatic changes brought on by the Coronavirus in people’s health, inability to go back to work, substantial drops and rises in pay, big gifts or lottery winnings, loss of jobs, furloughing, and early retirement are the major forces behind alimony and child support modification.

In Florida, to modify alimony and child support, you have to show three fundamental things: a substantial change in circumstances, the change was not contemplated at the time of the final judgment of dissolution, and that the change is sufficient, material, involuntary and permanent in nature.

Florida courts have discretion to modify alimony and child support retroactively to the date of the original filing of the action to modify, or supplemental action for modification depending on the cause.

It is important to keep in mind that you have to take the initiative, a court will not increase or reduce or terminate your alimony and child support payments if you have not filed the appropriate pleadings.

Simply not paying alimony and child support could cause the court to issue sanctions, pay the other side’s attorney’s fees, have your driver’s license suspended, or possibly even jail.

Great Coronavirus Information

There’s an excellent and instructive video from Dr. David Price of the Weill Cornell Medical Center in New York City who is treating COVID-19 patients. Dr. Price shares information in a Zoom call with his family and friends on protecting yourself during the COVID-19 pandemic. Well worth a look. Some important take aways:

  • Clean your hands.
  • Wear a mask outside – not to prevent breathing in the coronavirus – but because your less likely to touch your face.
  • Stay away from people. Distance yourself from other people outside of your quarantine. Stand a 3-6 feet back.
  • Shrink your social circle. Find your isolation group and keep. It is the people maintaining large social circles who are catching and spreading COVID-19.
  • What if you catch COVID-19?

Throughout the world, the way the COVID-19 disease has been transmitted is primarily through family and your close contacts: dads and sons, husbands and wives, romantic partners, etc. If you develop a fever, isolate yourself from your family and the same rules apply: no-sustained contact to avoid picking it up. Ideally, the sick should have their own bathroom, their own bedroom, one medical mask is needed . . . on the person who is sick.

The video is here.

 

Divorce and Short Term Marriages

Posted by Ron Kauffman on

Baretta action star, Robert Blake, has filed for divorce from his third wife, Pamela Hudak, just a year after the two strolled into Beverly Hills City Hall to obtain their marriage license. What is the impact of such a short-term marriage on divorce?

divorce alimony

And that’s the name of that tune!

According TMZ, actor Robert Blake filed docs in Los Angeles Friday to call the relationship quits. The 85-year-old married Pamela Hudak in Spring of 2017. The couple had known each other for decades and even dated years ago. Blake was previously married to Sondra Kerry from 1961 to 1983.

Florida Divorce

I’ve written about divorce and the length of a marriage before. Florida Statutes actually define what the length of your marriage means. For example, in order to determine alimony, there is a rebuttable presumption in Florida that a short-term marriage is a marriage having a duration of less than 7 years.

Florida Statutes define a moderate-term marriage as a marriage having a duration of greater than 7 years but less than 17 years. And, a long-term marriage is a marriage having a duration of 17 years or greater.

How do you measure the marriage term? In Florida, the length of your marriage is the period of time measured from the date of your marriage until the date of filing of an action to dissolve your marriage.

The Length of your marriage is very important when it comes to determining the kind of duration of alimony payments. For example, permanent alimony is generally for longer term marriages if the statutory criteria are met.

In shorter term marriages and for moderate term marriages, permanent alimony may be considered, but the burden of proof is much higher.

Conversely, bridge-the-gap alimony is generally awarded to allow a person to transition from being married to being single. So, bridge-the-gap alimony is designed for short-term needs. In fact, the length of an award bridge-the-gap alimony may not exceed 2 years.

Durational alimony helps provide a person with economic help for a set period of time after short or moderate length marriages or following a marriage of long duration if there is no ongoing need for support on a permanent basis.

The length of your marriage also factors in to property divisions. When a court divides the marital assets and debts, the court begin with the premise that the distribution should be equal. One of the factors a court can look to in justifying an unequal distribution includes the duration of the marriage.

Don’t do the crime if you can’t do the time.

Blake was accused of murdering his second wife, Bonnie Lee Bakley. Blake was her tenth husband. Bakley was fatally shot while sitting in Blake’s parked car outside a Los Angeles-area restaurant in May 2001.

In 2002, Robert Blake was charged with Bakley’s murder, solicitation of murder, conspiracy and special circumstance of lying in wait. In March 2005, a jury found Blake not guilty of the crimes.

Seven months later, Blake was found liable in a wrongful death lawsuit brought against him by Bakley’s children. Officially, Bakley’s murder remains unsolved.

The TMZ article is here.

 

Divorce Time Flies

Posted by Ron Kauffman on

The New York Times is the latest media outlet noting that a new tax law – that took effect in January – has added a new urgency for many Americans contemplating divorce. Why would a new tax law have such an impact on divorce?

divorce time

Beat the Clock

As the New York Times article notes, several key changes in the tax law may determine whether it is better to complete or update a divorce agreement by Dec. 31st or wait until the new year.

One of the biggest changes affects alimony, which will not be a tax break for Americans after this year. The new tax law is also causing parting spouses to look more closely at benefits for their children and the values of privately owned businesses and partnerships.

In the Nick of Time

I’ve written about the area of divorce and taxes before, but the Times article notes four areas that couples considering a divorce should examine before the end of the year:

Alimony

As many people have heard, the tax law is going to turn the calendar back on alimony. 77 years in fact. That was the year the Revenue Act of 1942 first made alimony deductible for the spouse paying it and taxable for the spouse receiving it.

The new tax law could become a problem in divorces settled after December 31, 2018, because under the new law, the alimony payer will be taxed on the full amount while the recipient will pay no tax on it.

Prenuptial Agreements

It is common in prenuptial agreement to have language calculating alimony payments based on years of marriage, and a clause saying alimony payments are deductible for one spouse.

In the absence of guidance from the I.R.S., a document calling for deductible alimony might not be honored if alimony is no longer deductible.

Business Valuations

Business valuations have always been an important component of divorce. The new tax law increases the cash flow of certain pass-through entities — businesses where the taxes are picked up by the owner, not the company — in a way that raises their value.

However, a higher cash flow – because of the change in the tax law this year  – may not be known until the business owner files a tax return next year.

Other Assets

Should you ask for the house or retirement? The new tax law, particularly in states where deductions for high state and local taxes have been capped, may make the home less valuable than a retirement account with a similar value.

Spouses who get the retirement account will not be able to draw down on it until age 59½, but they will have a more solid financial base in their later years. And by opting for the retirement account over the house, they can avoid paying those property taxes.

The New York Times article is here.