Protecting Your Family's Future
 

Tax Tips for Divorcing Couples

In the midst of a divorce, one of the last things you may think about are the potential tax ramifications of ending your marriage, but financial counselors say it’s something you need to address.

Child Support and Alimony Payments

It’s important to understand the tax consequences of both child support and alimony payments. Child support payments are taxable by the recipient. Furthermore, they cannot be claimed as a deduction by anyone paying child support.

Alimony payments are treated differently under state and federal tax laws. As a general rule, alimony is considered income and must be reported as such, provided the payments are made pursuant to a valid divorce or separation agreement, and the payments are made in cash (not in kind). Likewise, if the same conditions are met, alimony payments may be deducted by the payer.

Filing Status

If you are in the middle of a divorce at the end of the tax year, you can choose to file a joint return, or file as “married filing separately.” If your divorce becomes final before the end of the tax year, you must file as either single or as “head of household.”

To claim your children as exemptions on your return, you must be considered the custodial parent. Generally, the parent with whom the child spent the most amount of time will be considered the custodial parent for tax purposes. You can, however, claim your child if the custodial parent waives the exemption in writing.

Contact Us

At the office of Linda Stewart Law, PLLC, in Baytown, we bring more than 8 years of experience to clients in south Texas. To learn how we can help, call our office at 281-420-8020 or contact us online. We offer an initial consultation at a reduced fee of $50. We accept credit cards and will set up a payment plan, if appropriate. Our offices are open Monday through Thursday, from 9 a.m. until 5 p.m., and until noon on Fridays. Evening and weekend appointments can be arranged upon request.

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Living Close for the Sake of the Children

In the aftermath of a divorce, one of the most challenging and emotionally difficult issues to deal with is not seeing your children, regardless of whether you are the custodial or non-custodial parent. While the natural inclination may be to put some distance between you and your ex, some parents are choosing to stay close, primarily for the benefit of children.

One couple in Brooklyn, recently divorced, decided to keep their three-unit brownstone there, with one parent living on the second floor, the other living at the garden level, and the parties renting out the middle apartment. They say that, though it was a challenge at first to ensure that the privacy of all parties was respected, the arrangement has proved to be a huge benefit for everyone involved.  There is no need to pack for kids when they visit the other parent, no need to drop off children and pick them up. In addition, if either parent has a work emergency, the other is right there, able to step in and meet the needs of the children. For the kids, it ensures that they’ll never be too far away from their favorite book or stuffed animal.

For some parents, the concept of “bird-nesting” works, where the children stay in one home and the parents rotate in and out. Most who have tried it, though, say it presents a lot of challenges, requiring the visiting parent to constantly check to see if they have clothes and other necessary items.

The preferred approach of many is to stay a few blocks from each other, where they can walk to see of pick up children, and where children can easily commute back and forth.

Contact Us

At the office of Linda Stewart Law, PLLC, in Baytown, we bring more than 8 years of experience to clients in south Texas. To learn how we can help, call our office at (281) 420-8020 or contact us online. We offer an initial consultation at a reduced fee of $50. We accept credit cards and will set up a payment plan, if appropriate. Our offices are open Monday through Thursday, from 9 a.m. until 5 p.m., and until noon on Fridays. Evening and weekend appointments can be arranged upon request.

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Workshop Helps Parents Protect Children after a Divorce

In the aftermath of a divorce, when there are children involved, one of the big challenges often comes when non-custodial and custodial parents must interact. The communication problems that likely plagued the marriage can also present problems when parents must talk about issues involving the kids. Recognizing that many parents may lack the tools for effective communication in these situations, marriage and family therapist Anne Buettner has developed a workshop, entitled “Parenting from Different Homes,” to help parents of divorce.

Buettner identifies certain fundamental rules for parents of divorce:

  • Rule #1Never denigrate or badmouth the other parent, especially when children are present. Your child loves both parents. When you speak negatively about your ex, you are essentially speaking badly about your child, telling them that their love for the other parent is unfounded.
  • Rule #2Don’t ever use your child as an intermediary. If you have something to say to your ex, say it directly to your ex, preferably when your child is not within hearing distance. Making your child the messenger puts a lot of pressure on them. They may fear communicating the message incorrectly, or that the other parent will think they are siding with you.
  • Rule #3Make certain your child knows that he or she is not the cause of your divorce. This can be tricky. You don’t want to point the finger at your ex. If you say nothing, though, your child may conclude that it was their fault. This is really the best time to acknowledge your role in the breakup. You don’t need to go into detail, but you won’t lose your child’s love simply by saying “I made some mistakes.”

Contact Us

At the office of Linda Stewart Law, PLLC, in Baytown, we bring more than 8 years of experience to clients in south Texas. To learn how we can help, call our office at (281) 420-8020 or contact us online. We offer an initial consultation at a reduced fee of $50. We accept credit cards and will set up a payment plan, if appropriate. Our offices are open Monday through Thursday, from 9 a.m. until 5 p.m., and until noon on Fridays. Evening and weekend appointments can be arranged upon request.

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“Affluenza Teen” Parents Getting Second Divorce

The parents of Ethan Couch, the Texas teen whose lawyers effectively used the “affluenza” defense to avoid jail time after he killed four bystanders in 2013, have filed for divorce for a second time. Fred Couch, Ethan’s father, filed a complaint asking the court to end his marriage to the boy’s mother, Tonya. The couple divorced once before, but remarried in 2011. Though Texas allows for at-fault divorce when one of the parties is incarcerated—Tonya Couch has been in the Tarrant County jail for some time—Fred Couch alleged in his divorce complaint that the reason for the divorce was his wife’s treatment of him. He alleged that Tonya had withdrawn approximately $30,000 from their account and called him, telling him he would never see her or their son again.

Ethan Couch was arrested and charged in the deaths of four bystanders after he drove through a 45 mph zone at 70 mph, striking and killing the victims as they sought to help a woman whose vehicle had broken down. Couch was convicted for drunk driving and for intoxication manslaughter, but ended up with 10 years probation after a psychologist testified at his sentencing hearing that he suffered from “affluenza.” The psychologist alleged that Couch did not have the capacity to associate bad behavior with any consequences because his parents had taught him that “wealth buys privilege.”

The judge in the Couch divorce case has ordered Tonya Couch to submit to a psychological exam to determine whether she is fit to stand trial.

Contact Us

At the office of Linda Stewart Law, PLLC, in Baytown, we bring more than 8 years of experience to clients in south Texas. To learn how we can help, call our office at (281) 420-8020 or contact us online. We offer an initial consultation at a reduced fee of $50. We accept credit cards and will set up a payment plan, if appropriate. Our offices are open Monday through Thursday, from 9 a.m. until 5 p.m., and until noon on Fridays. Evening and weekend appointments can be arranged upon request.

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The Benefits of Preparing for Divorce

Though divorce is always emotionally difficult, you can minimize some of the financial, personal and time challenges by thoroughly preparing for the process, once it’s clear that divorce is inevitable. Here are some of the things you can do.

Protect Yourself Financially

Whether you are the sole breadwinner, a stay-at-home-parent or one of two working parents, a divorce will have a significant impact. You may face the significant loss of income, be required to pay substantial amounts in child or spousal support, or wind up with a big chunk of the marital debt.  To minimize the impact, put together a file that contains all of the following:

  • Pay stubs for the last two years
  • Bank statements for the last two years
  • Current investment and retirement account statements
  • Documentation of any life insurance policies
  • Copies of tax returns for the last five years
  • A copy of your credit report

Protect Your Right to See Your Children

Custody is never an easy matter to resolve. You want what’s best for your children, but you also want to play an active role in your child’s life. All states use the standard of the “best interests of the child” when determining who will have custody. If you believe that custody may be an issue, you need to do the following:

  • Identify what you believe will be in the best interests of your children and why
  • Document anything about your ex that you believe may put your children at risk. Remember, though, that this is not about disparaging your ex—it’s about protecting your children. Don’t exaggerate isolated incidents in an attempt to gain favor with the courts. You’ll only hurt  your children in the process

Contact Us

At the office of Linda Stewart Law, PLLC, in Baytown, we bring more than 8 years of experience to clients in south Texas. To learn how we can help, call our office at 281-420-8020 or contact us online. We offer an initial consultation at a reduced fee of $50. We accept credit cards and will set up a payment plan, if appropriate. Our offices are open Monday through Thursday, from 9 a.m. until 5 p.m., and until noon on Fridays. Evening and weekend appointments can be arranged upon request.

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Divorce Won’t Necessarily Set You Free

One of the Big Divorce Myths—Divorce Will Set You Free

When you are stuck in an unhappy marriage, you can mistakenly believe that a divorce equates with freedom…that you’ll be able to do many of the things that you couldn’t, that you won’t have to structure your life around someone else for a change. If you have no children, that might be true. But you could still be hit with alimony payments or find yourself unable to sustain the lifestyle to which you’ve become accustomed.

The Many Losses of Freedom that Come with Divorce

Some of the losses are pretty straightforward. If you have minor children, you will quickly lose most of your control over what you do with your time. If you are the custodial parent, you’ll find that you have to spend a lot more time parenting. You won’t be able to let your spouse take over every other night or on the weekend if you have other plans. Accordingly, you’ll discover that taking care of your children takes priority over your social life. You may have been involved in a lot of activities, with an arrangement with your ex-spouse that allowed you to be gone some evenings. Now you’ll either have to get a sitter, or arrange to do things only on those nights that your child is with your ex.

If you are the non-custodial parent, you’ll need to get used to having your children with you every other weekend, alternating holidays and maybe a night a week. When events you want to participate in fall on your weekend, or a night when you have your children, you’ll be faced with a choice.

Divorce can result in the loss of financial freedom as well, for both parties. If you were the primary provider and a good saver and investor, with a well-organized system for managing family finances, you’ll have to give up a lot of that. You may be ordered to pay child support and/or spousal support, but you won’t have any control over how the money gets spent. In addition, your support obligations may make it difficult to build an investment portfolio, buy the things you used to, or make decisions about what your children wear and how their needs are met.

Contact Us

At the office of Linda Stewart Law, PLLC, in Baytown, we bring more than 8 years of experience to clients in south Texas. To learn how we can help, call our office at 281-420-8020 or contact us online. We offer an initial consultation at a reduced fee of $50. We accept credit cards and will set up a payment plan, if appropriate. Our offices are open Monday through Thursday, from 9 a.m. until 5 p.m., and until noon on Fridays. Evening and weekend appointments can be arranged upon request.

Se Habla Espanol | ASL and ESL Services Also Available

Texas Divorce Basics

Texas Divorce Law—The Basics

If you are considering filing for divorce in Texas, you probably have a lot of questions—here are answers to some of the most basic questions about divorce.

Do I Have to Give a Reason for Wanting a Divorce?

No. In Texas, you can ask for a divorce with or without stating the grounds. In a no-fault divorce, you need only advise the court that you have irreconcilable differences. You can, however, state grounds, such as adultery, cruelty, abandonment, felony conviction or confinement in a mental institution. If the court agrees, you may be able to get more than an equal share of marital property.

Do I Have to Be a Texas Resident? If So, For How Long?

Texas does not have jurisdiction over a divorce proceeding unless one of the parties has been a resident of the state for at least six months, and a resident of the county in which the action is filed for at least three months.

How Long Will It Take for My Divorce to Be Final?

That will vary, depending on a number of factors, including the ability of the parties to agree on custody, visitation, support and property distribution. At a minimum, however, a divorce cannot be finalized for at least 60 days after the filing of the complaint.

How Will Property Be Divided?

Property will be divided under the community property laws of Texas.

Is Alimony Available in Texas?

Texas law allows alimony in limited situations, typically where the recipient lacks the ability to be self-supporting, has a physical or mental disability, or cannot take care of himself or herself.

How Is Child Custody Determined?

Ultimately, the court must be satisfied that the custody and visitation arrangement is in the best interests of the minor children. The parties may agree to a specific arrangement, but the court may reject that agreement if it determines that it was entered into under duress or coercion, or is not in the child’s best interests.

How Does the Court Calculate Child Support?

Texas uses a formula that includes the income of both parties, the needs of the child, and any other special factors.

Contact Us

At the office of Linda Stewart Law, PLLC, in Baytown, we bring more than 8 years of experience to clients in south Texas. To learn how we can help, call our office at 281-420-8020 or contact us online. We offer an initial consultation at a reduced fee of $50. We accept credit cards and will set up a payment plan, if appropriate. Our offices are open Monday through Thursday, from 9 a.m. until 5 p.m., and until noon on Fridays. Evening and weekend appointments can be arranged upon request.

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Divorce at Retirement—Pay Attention to the Details

Late-in-Life Divorce—Watch Out for Impact on Retirement Assets

Over the last two decades, the rate of divorce among 50-somethings (and older) has more than doubled. Even though there is less likelihood of disputes over child custody, visitation and support, there are other factors that make these types of proceedings complicated and time-consuming. Marital estates tend to be more substantial and the parties often have significant retirement assets.

Paying Attention to the Details

If you are involved in a divorce, have substantial retirement plan assets and are at or near the end of your working life, you need to take great care when attempting to divide retirement or pension plan assets. With an IRA, you can split the value and roll a portion of the funds over into a new IRA without any tax consequence simply by setting up the new IRA and making the tax-free rollover. However, if your retirement is in a 401(k), 403(b), or other qualified plan, you will need the court to issue a Qualified Domestic Relations Order (QDRO) or you will incur tax on the transfer.

Another concern may involve your home. For many, the equity in their home is a substantial retirement asset. In a divorce, you may consider selling the home and splitting the proceeds, but there can be adverse tax consequences to doing this. You are best-served to discuss the matter with a tax professional and/or a lawyer before you make any decision.

You should also reexamine your insurance coverage as part of a late-in-life divorce. The policies will likely name your ex as a beneficiary. In addition, you may need to seek new source of insurance coverage.

Contact Stewart Law, PLLC

At the office of Linda Stewart Law, PLLC, in Baytown, we bring more than 10 years of experience to clients in south Texas.

To learn how we can help, call our office at 281-420-8020 or contact us online. We offer an initial consultation at a reduced fee of $50. We accept credit cards and will set up a payment plan, if appropriate. Our offices are open Monday through Thursday, from 9 a.m. until 5 p.m., and until noon on Fridays. Evening and weekend appointments can be arranged upon request.

Se Habla Espanol | ASL and ESL Services Also Available

What Should You Include in a Prenuptial Agreement?

Important Components of a Prenuptial Agreement

What Should You Include in a Prenuptial Agreement?If you are considering marriage and have amassed a significant estate, or you have children from a prior marriage, the preparation and execution of a valid prenuptial agreement can remove concerns about your financial protection and allow you to focus your energy on your relationship. Here are the key components of an effective prenuptial agreement.

Property Concerns

One of the most important components of a prenuptial agreement is the distribution of property in the event of a separation or divorce. The first thing you want to include in a prenuptial agreement is an accurate accounting of all property being brought into the marriage. Typically, the parties to a prenuptial agreement identify such property and simply state that, in the event of separation or divorce, all property owned individually before the marriage is considered separate property and will be returned in full to the party who owned it before the marriage.

There may be assets that have been partially paid for before the marriage—a house or car. There may also be assets that were owned before the marriage, but have substantially appreciated in value during the marriage—investments, real estate, or retirement accounts. The prenuptial agreement should clearly identify how such property will be divided. This is especially important in Texas, where community property laws generally hold that all property obtained during a marriage is community property and to be divided equally upon separation or divorce.

Debts Incurred

An effective prenuptial agreement will also establish who has responsibility for any debts incurred during the marriage. Typically, if there are secured debts, the party who receives the property also takes on the debt. Parties can also agree to have separate bank accounts, credit cards and financing arrangements for personal property.

Waiver of Alimony

It is not uncommon for a prenuptial agreement to include a provision that the parties agree that there will be no obligation to pay alimony in the event of separation or divorce.

Contact Stewart Law, PLLC

At the office of Linda Stewart Law, PLLC, in Baytown, we bring more than 10 years of experience to clients in south Texas.

To learn how we can help, call our office at 281-420-8020 or contact us online. We offer an initial consultation at a reduced fee of $50. We accept credit cards and will set up a payment plan, if appropriate. Our offices are open Monday through Thursday, from 9 a.m. until 5 p.m., and until noon on Fridays. Evening and weekend appointments can be arranged upon request.

Se Habla Espanol | ASL and ESL Services Also Available

Chameleon Kids

The Adaptability of Children in Divorce—Pros and Cons

The Adaptability of Children in Divorce—Pros and ConsIt’s pretty hard, most of the time, to be a child of divorce. Kids look to their parents for guidance, acceptance, love, support and instruction. When they get dramatically different signals from one parent, they can become confused, anxious and depressed. Often, as a defense mechanism, they will simply adapt—be what dad wants at dad’s house and what mom wants for mom. Experts say that there are benefits to learning some level of adaptability, but that kids who continually play different roles and wear different “masks” when with different parents ultimately struggle to find out who they really are.

Learning to Be Flexible

To successfully function in society, we all need to learn some level of flexibility—to learn that we can’t always behave the same way in every situation. You wouldn’t want your child to act the same way at a classical music performance or at a funeral that they would at a birthday party or a rock concert. Everyone is different, and it’s inevitable that dad will respond differently to some things than mom does, or that dad will attach more or less importance to some rule or behavior than mom does. Being exposed to that can help children prepare for situations that are different or where circumstances are not as expected.

Children who are expected or believe that they must behave very differently when with different parents tend to become extremely vulnerable to peer pressure and abuse. They can associate the failure to adapt with a fear of abandonment or rejection. They may associate with peers, not because they have much in common, but because they feel sorry for those kids or they are simply afraid to be alone. The other common problem with over-adaptive kids is the inability to make decisions. They tend to believe that the parent with whom they are staying controls the agenda, so they often engage in a game of trying to guess what the parent wants, instead of expressing their own opinion or answering a question honestly.

Contact Stewart Law, PLLC

At the office of Linda Stewart Law, PLLC, in Baytown, we bring more than 10 years of experience to clients in south Texas.

Concerns about Over-Adapting

To learn how we can help, call our office at 281-420-8020 or contact us online. We offer an initial consultation at a reduced fee of $50. We accept credit cards and will set up a payment plan, if appropriate. Our offices are open Monday through Thursday, from 9 a.m. until 5 p.m., and until noon on Fridays. Evening and weekend appointments can be arranged upon request.

Se Habla Espanol | ASL and ESL Services Also Available

 
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