Divorce Newsletters

Front-loading Maintenance Payments

December 1, 2013

When a spouse in a divorce is adverse to paying alimony, one option is to provide a property settlement that is the equivalent of all the alimony payments. This may be more palatable to the payor, even though he or she gets no tax advantage from the one-time payment. Some attorneys and payors try to “have their cake and eat it too” by recasting property settlement payments into tax-deductible alimony.  This is done by front loading: a payor-spouse would pay a large amount of “alimony” for one or two years only. However alimony payments that decrease or stop during the first three years may be subject to IRS recapture rules.

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Splitting Annuities in a Divorce

November 1, 2013

It is not unusual, when splitting assets in a divorce, to divide each account right down the middle. That might be fine to do for most types of investment accounts, but when it comes to annuities you need to be very careful. Because of their unique structure, dividing an annuity can have unexpected tax consequences.

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Stock Options in Divorce

October 1, 2013

Stock options were a popular form of compensation in the 1990’s and 2000’s, especially with tech companies, as a way to compensate employees and also keep them at the company. Since the options were often not exercisable for years the employee had an incentive to stay with the employer and help the company grow, so that the options would grow in value.

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Concerns of the Older Divorcing Client

September 1, 2013

Many older couples stay married because they are on a fixed income and it's just not financially feasible for them to split up and have two separate households.  But in cases where they DO want to get divorced, it can be a struggle to determine how they can afford it. Even if one or both spouses are still working, clients who are close to or at retirement age face some unique issues and challenges.

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Help your retirement-age client maximize social security benefits.

August 1, 2013

The government may give, and the government may take, but in the case of Social Security they can be quite generous! Even when a couple divorces it may be possible for one spouse to collect a benefit larger than their own, based on the work record of their ex-spouse.

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The spouse who leaves the family home can still get a $250,000 exclusion from capital gains taxes.

July 1, 2013

About a year ago our Divorce Tips highlighted the tax implications of selling the family home in a divorce, and which spouse is eligible for the $250,000 home sale exclusion. There have been many questions about how the exclusion actually works.  This issue will revisit the topic in detail.

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Selling Rental Properties

June 1, 2013

Sometimes in a divorce one spouse will move into a second home that the couple had owned while married. Often the property had been rented and the spouse receiving the property decides to convert it to their personal residence.

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Problems With Dividing the Family Business

March 1, 2013

Closely-held family businesses come with their own unique problems in a divorce. They can be difficult to value, yet the importance of an accurate valuation is critical to a fair and equitable distribution of assets. In addition the future of the business becomes a discussion point when both husband and wife are involved in the company.

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Executing A QDRO – Timing is Important

February 1, 2013

According to Edwin Schilling III, JD, one of the most significant problems with QDROs is not having them prepared before the divorce is final. Mr. Schilling lectures attorneys on "The 30 Most Common Errors in QDROs."

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Life Insurance and Divorce

December 1, 2012

Alimony, or maintenance, is often awarded in a divorce. In order to have alimony be tax-deductible to the payer, the payments must stop upon the payer’s death. Were the payer to die however, the recipient would lose an expected stream of income. A simple way to cover those lost payments is to have the divorce decree stipulate that life insurance will be carried on the life of the payer in an amount that will replace the alimony in the event of the payer's death.

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