Effect of Divorce on Your Tax Liability

This post will make more sense if I give you a scenario as to how this situation may arise:

Husband and Wife are married, and file joint taxes during their marriage.  Husband and Wife divorce.  At the time of the divorce, Husband had a tax liability owed of $1,000.00.  During the divorce negotiations, Husband agrees to be responsible for the tax liability.   Years later, (Ex)Husband dies and never paid the tax liability.   Wife has remarried, and files taxes jointly with her new husband.  20+ years after their divorce, the IRS takes Wife and new Husband’s tax return to cover the tax liability of her ex-husband who is now deceased.

WHAT???

In the past, some states only had the ability to track the first person listed on the tax return.  Generally, the Husband, the higher income earner (again, generally), the Husband, was listed first on the return, and the Wife second.  The state had no way to come after the Wife, until their system was updated.  Once they had a way to track the second person listed on the return, the state came after the Wife since the Husband was now dead.   Your joint tax liability doesn’t necessarily go away if one party dies.  Even though the Husband agreed to be responsible for the debt in the divorce negotiations, Wife was still liable for this joint debt in the eyes of the IRS.

What can you do about this??

First, you need to make sure your divorce decree or settlement agreement addresses future or current tax liability.   There should be some language such as this in your agreement:

Each of the parties agree that they shall give the other party notice of any tax investigation, audit, or assessments for taxable years during the marriage and before and the failure to give notice shall require indemnification from that person for all costs and expenses including the attorneys fees for the resisting of the imposition of the tax and collection of reimbursement or failure to give such notice. In the event of an assessment of any taxes, penalties or interest arising out of taxable years during the marriage and before, each party shall be solely responsible for any and all liability as a result of their respective incomes in such year.

Second, if the IRS were to come after you for your ex-spouse’s liability, you can appeal the decision based upon the language in your divorce decree or separation agreement.  While most would prefer a more clear cut solution, there is no perfect solution for pre-divorce liabilities.

Discussing your Kansas Divorce with your College Age Children

Many people wait until their children have left home to file for divorce, thinking the divorce will be easier on their children once they are grown.  Waiting until you have an empty-nest is not always easier on the children. In fact, according to the author of He’s History; You’re Not: Surviving Divorce After Forty , a divorce on a college-age child can be devastating.   According to Erica Manfred, college students have a name for it: “the freshman call.”

Ms. Manfred gives parents the following tips when discussing your divorce with your college aged children:

How Not to Announce Your Divorce

On the Phone or by Email:

“The worst thing is when the entire divorce plays out over the phone and e-mail,” says Brooke Lea Foster, who went through her parents’ divorce over the phone when she was a college freshman. “You get snippets and constantly feel like you should be there. You feel guilty, embarrassed. You’re just getting to know people at college and are too embarrassed to be crying about Mom and Dad when you’re being an adult for the first time. When you leave home you rely on home to ground you; when home has an earthquake rumbling under it, you’re thrown for a loop.”

At Christmas Dinner:

Your children will feel blindsided if they come home for the holidays only to find out their parents are getting divorced. Tell them when they have some time to absorb the news, such as mid-semester or the end of their freshman year.

Without Telling Your Spouse First:

Adult children bitterly resent it when they feel that the news has been communicated in a sneaky, indirect, dishonest, humiliating, or unnecessarily brutal way. They especially resent it when they are left to break the news to the other parent. Actually, the best way to tell adult children about your divorce is the same way the experts recommend telling small children. If at all possible, you and your husband should sit down with them together when they have some time to digest the news. If your children are in college, wait until they’re home for a long break.

By Telling A Lie:

If you were the one who had an affair, own up to it. Don’t try to lie to your kids, because someone will tell them and they’ll be furious at you for it. If their father had the affair, don’t cover up for him, either. They are grown-ups and can deal with it. If they ask about something, be straight with them–without trashing your ex in the process.

Advantages to Not Settling Your Kansas Divorce

My last post focused on settling your divorce through a settlement agreement, however, I recognize there are times when settling is not advantageous or sometimes, possible.  While I still believe the best way to amicably end your divorce is through settlement, having a divorce trial may be necessary under the following circumstances:

  1. You are unable to communicate effectively and reach any agreements with your spouse, and most discussions end up in arguments.
  2. You believe the law is clearly on your side in your case (for example: your spouse is wanting to divide the assets 70/30, however, you propose 50/50)
  3. You believe your and your spouse could potentially have a better friendship in the future if the ruling is made by a Judge.
  4. The Judge may award you more than if you had accepted your husband’s offer

Advantages to Resolving Your Kansas Divorce Through Settlement

Most divorces, especially those in Johnson County, are settled through means other than a trial in front of a Judge.  I believe this is the best solution for all parties involved.  It is a more cost effective way to resolve the issues and hopefully a more peaceful and amicable solution.  It is often hard for clients to believe that I can help them achieve a  more satisfying result than a Judge will, however, a majority of clients are often disappointed with the final divisions made by the Judge, and often deem it to not be “fair”.

Here are some things to thing about when engaging in settlement conferences with your soon to be ex-spouse, and why you may want to work very hard to resolve your issues instead of proceeding to trial:

  1. Trials are extremely expensive.  The costs for legal fees, witnesses, depositions and exhibits can be daunting.
  2. When a judge makes the decision, you (and your spouse) lose all control over the final decision.
  3. Taking a case to trial takes a lot of time, therefore the divorce may take over one year to complete.
  4. Dates for trials can be scheduled in non-sequential days, adding to stress, loss of money, and inconvenience.
  5. Your fate (and your families) is left in the hands of a stranger or many strangers.
  6. You may not like the judge assigned to your case.  You may feel he/she has biases and prejudices against you.  It is very difficult to get a new judge assigned to your case.
  7. A civil courtrooms is generally a public forum.  Anyone can come and watch your divorce trial.  All confidentiality is lost, unless all parties agree to a closed courtroom.
  8. Since the divorce process is dragged out, a deeper strain on the relationship between your ex-spouse may make it harder to successfully co-parent, and may eventually be more difficult on the children.
  9. You have to participate in the trial.  You will be on the witness stand for direct examination by your attorney and cross examination from your spouse’s attorney.  Testifying can be brutal, grueling, intrusive, and stressful.
  10. There is absolutely no guarantee you (or your spouse) will have a outcome you are happy with.

When there’s a chance of resolving the divorce without going to trial, you should attempt to settle. You will not only save money and time, the emotional healing from the trauma will begin much sooner.

Dealing with Depression and your Kansas Divorce

I have mentioned this in previous articles, however, I find it important enough to mention it again.  Divorce can be and often times is more traumatic on a person that death.  Due to this, it is very common for clients to feel depressed during this tumultuous time in their life.  Often, clients are feeling and thinking things they have never experienced in their life, and they do not realize their symptoms are commonly associated with depression.

It is important to recognize the signs and symptoms of depression and seek the help of a mental health professional, not your attorney.   Below are the symptoms of a depression taken from the National Institute of Mental Health website.   If you or your children experience five or more of the following symptoms for at least 2 consecutive weeks nearly every day and they are causing significant distress and impairment in functioning consider contacting a professional:

  1. Persistent sad, anxious or “empty” feelings
  2. Feelings of hopelessness and/or pessimism
  3. Feelings of guilt, worthlessness and/or helplessness
  4. Irritability, restlessness
  5. Loss of interest in activities or hobbies once pleasurable, including sex
  6. Fatigue and decreased energy
  7. Difficulty concentrating, remembering details and making decisions
  8. Insomnia, early–morning wakefulness, or excessive sleeping
  9. Overeating, or appetite loss
  10. Thoughts of suicide, suicide attempts
  11. Persistent aches or pains, headaches, cramps or digestive problems
  12. Suicide attempt

To learn more about depression and its treatment visit the National Institute of Mental Health website.

Keeping Your Job Through Your Kansas Divorce

Divorce is not only an emotionally and personally devastating event, it can be extremely detrimental to your work performance.  It is imperative for you to keep your job during this time as divorce is also a financially difficult period.  I recently came across an article discussing several tips on how to keep the impact of your divorce on your job as minimal as possible.

How to keep focus at work while getting a divorce

divorce360.com

Personal problems such as divorce or a troubled marriage often become so overwhelming that they threaten to sabotage all aspects of one’s life, including career. During this challenging time, it becomes especially important to exercise as much “damage control” as possible. In order to maintain your professional life despite your personal problems, you’ll need to prioritize at work in ways you might not have done in the past. Here’s help from some divorce experts who offered career tips:

1. Keep your divorce private: Tina B. Tessina, Ph.D., who also goes by the name Dr. Romance, is a licensed psychotherapist and author of Money, Sex and Kids: Stop Fighting about the Three Things That Can Ruin Your Marriage. Tessina suggests avoiding telling anyone at work about the divorce unless they need to know for business reasons. (If you have to take time off for court, your boss will need to know why.) “Keep your personal life to yourself. That will make it much easier to leave your divorce stress out of the office.”

2. Talk about your problems with someone outside of work: Tessina suggests finding someone outside of work that you can talk to about your marital problems. “It’s too expensive to talk to your attorney and you need somewhere to blow off the steam,” she said. She thinks it’s a good idea to ask a good friend or a family member for support. If no one is available, go for counseling. “As a counselor, I have lawyers who refer divorcing clients to me. I can help them calm down, stop them from acting out (which has severe repercussions in divorce) and help them decide how to talk to the mediator, the judge, their family members and in-laws and their children about the situation,” she said.

3. Keep work at work and home at home: Compartmentalize, Tessina said. “When you get in your car at home, shut the car door on the divorce — give yourself that drive time to escape the divorce problems. When you get out of your car at work, firmly shut the car door on any personal thoughts and get into work mode. When you leave work, shut the work door on work problems and don’t take them home. If you compartmentalize like this, you’ll get some relief and your problems won’t overlap each other.”

4. Try to schedule your court dates convenient to your work schedule: “You don’t want to miss any more work than you have to. The good news is you may not have to,” said Nancy J. Dreeben, matrimonial and family attorney. “Judges recognize that people need to work. In fact, money is generally the main issue in a divorce. If there is a legitimate reason to put the case on the 3 p.m. calendar as opposed to the 9:30 a.m. calendar, a judge is likely to do so.”

5. Try to schedule other appointments convenient to your work schedule: “If child custody is disputed, it is not uncommon for a litigant to have to meet with the child’s attorney and/or court-appointed expert. Again, it never hurts to ask for appointments convenient to your work schedule,” Dreeben said.

6. Give your employer adequate notice when you do have to miss work: Dreeben said most court dates are arranged at least one month in advance. “Provide your employer with your court date and time as soon as possible and offer to make up your time before the court date. . . . You need the money and your employer needs you,” she said.

7. Work diligently to settle your case: “There is nothing worse than having your fate, the fate of your spouse and the fate of your children in the hands of a judge when you are close to resolving the case amongst yourselves,” Dreeben said. “Taking time off for a trial will be financially devastating for you and your employer. If you must try your case, then try to schedule it during your vacation time.”

8. Don’t communicate with your attorney during work, except in the event of an emergency: “When you speak with your attorney you should be in a private place and be able to concentrate. Attorneys charge by the minute. When they tell you something, you need to comprehend it the first time so you don’t have to pay twice to hear the same information,” Dreeben noted.

9. Don’t communicate with your soon-to-be former spouse during work, except in the event of an emergency: “Often these conversations are volatile, which may cause you to become emotional and may negatively impact your concentration and work product. . . . Again, the phones at work are for work-related issues,” Dreeben said.

10. Don’t use the copier at work to copy litigation papers: There is a process during litigation known as discovery, when you and your spouse provide financial documentation concerning income, benefits, etc. “Either use your home copier or go to a copy shop. These matters are extremely private and should not be shared, by mistake or otherwise, with colleagues,” Dreeben said.

11. Don’t inadvertently involve your employer in your litigation.

All information provided in litigation must be truthful, Dreeben noted. “If you make $20 an hour and say you make $10 an hour because you think the judge will make your spouse give you more money, you are wrong. Instead what will happen is that your employer will be subpoenaed to testify with regards to your income,” she said.

12. Don’t use your office computer for personal use.

Your hard and soft drives could be sought for discovery purposes . Your employer will not take kindly to having company equipment seized.

13. Don’t ask your employer to reduce your pay during a divorce for any reason.

If you are a valued employee, you will be putting your employer in an impossible predicament, Dreeben noted. “If you are not a valued employee, you may be terminated.”

14. Focus on work and your work priorities, but with a twist: Keep your focus short and intense.

“Unfortunately, divorce and other high stressors have a way of zapping energy and detracting from the job,” said LeslieBeth Wish, a licensed psychologist and social worker. “Since divorce often increases a sense of loss of control and decreases feelings of self-worth, the last thing you want to do is perform poorly at work. So, divide up your tasks into do-able segments.”

15. Consider taking cry breaks.

By lunchtime, consider taking a three-minute cry break, Wish said. “Go into a bathroom stall or go sit in your car and have a little cry. Crying out your hurt rids your body of stress toxins.”

16. Conserve energy.

Turn down unnecessary assignments so you focus on yourself and your health, Wish said.

17. Make note of abuse.

Do not talk about your divorce at work and schedule personal days to deal with court appearances. The single exception about divorce talk at work, according to Bonnie Russell, a licensed psychotherapist, is when abuse is involved. “In this case, document, document, document and ask all co-workers to alert you should they see his car in the area,” Russell said.

How your Kansas Divorce affects your health insurance

Below is an article written by two health insurance agents who have become appalled at the misinformation divorce attorney’s have given their clients with respect to health insurance after the divorce.  I have previously written a post on this article, however, I thought it might be beneficial to hear this information from an insurance expert.

BY IRENE CARD AND BETSY CHANDLER
NEWJERSEYNEWSROOM.COM
YOUR HEALTH INSURANCE

Last week I received a phone call from a divorced woman who just learned that she has no health insurance and that she will have a waiting period for pre-existing conditions.

During our discussion I determined that she should have been offered health insurance benefits under the state’s continuation law. When she responded, “My lawyer never told me that,” I knew I had to write a column on this subject. Lawyers are experts on the law, not on health insurance. Whether you are the husband or the wife, when you are going through a divorce, you must bring up the subject of health insurance. It is of utmost importance.

You may want to talk with your health insurance agent first. If you work for a very large company, talk with the human resource department. In this particular case, the husband and wife owned a small business and they were each insured under the company small group plan.

She left the company when the divorce was finalized and he kept her on the plan for the next six months as an active employee. This is fraud. She was no longer an employee. If she had had a major claim during that six- month period, the insurance company could have determined that she wasn’t an employee and refund the premiums and not pay any claims. She should have been told that she could have continued her insurance for 18 months under the Continuation law. NOTE TO READER: THEY ARE REFERRING TO COBRA.

As it was, at the end of the six months she could have purchased her own individual coverage with no waiting period for pre-existing conditions. At the end of six months, her former husband canceled the group plan and didn’t tell her. By the time she found out, the gap with no coverage was too great to allow for a new plan with no waiting period for pre-existing conditions. This is a most unfortunate case as she has major pre-existing conditions and now she is left with no protection for those illnesses for the next six months.

I suggested she go back to the attorney to see what can be done, if anything, to get the former husband to pay some of the expenses. It is important to know that when your divorce becomes final, so does your health insurance. You want to make other arrangements so that you do not find yourself without coverage.

If you work for a company with more than 20 employees, you can continue your benefits for three years. If you work for a small company with less than 20 employees you can continue your benefits for three years under the state’s Continuation Law.

If you are not eligible for group benefits, you can buy individual coverage for yourself but make sure you speak with an insurance agent before your divorce becomes final.

Dating After Your Kansas Divorce

I recently came across an article discussing the dos and don’ts of dating after your divorce.  Here is a link to the full article.

Post-Divorce Dating Pitfalls

About to start dating again after a divorce or the end of a long-term relationship? There are reasons to be careful, but these tips can help you avoid some of the prominent pitfalls that can crop up when returning to love.

By Kimberly Dawn Neumann

Re-entering the singles’ scene can be a bumpy road, especially if you haven’t been “on the market” for a long time. As a result, re-emerging daters often find themselves face-to-face with a host of possible pitfalls, ones that can thwart even the most resilient of dating efforts. With that in mind, we gathered expert advice to help you avoid these post-divorce dating potholes. So here’s the advice you need for dating to be easier … and more enjoyable.

Dating Pitfall: You compare every potential partner to your ex
There’s probably no way around this one completely. One way or another, your ex is going to factor into your dating psyche. “Whether admitting it or not, whether conscious or not, it practically always occurs,” says Joel Block, Ph.D., relationship therapist and author of Broken Promises, Mended Hearts: Maintaining Trust in Love Relationships. “This often leads people who are dating again to look for someone different from their ex… very different.” Problems can start if you begin to overcompensate as if to correct for your divorce.

“For example, if the ex was very dominant, then the person might find themselves drawn to someone one step away from a coma — yes, that submissive — and it’s not a good thing,” says Dr. Block. “I’ve seen cases where people totally overcorrect and marry their first spouse’s opposite for their second marriage. Then, they finally find a happier balance for marriage #3!”

Tactic to try: Anytime you catch your brain going into “Ex Mode,” take a time-out and recognize what you’re doing. “It’s probably not your ex-partner or date but rather you getting inside of your own head—so take a deep breath, clear your mind and stop holding yourself hostage to your past,” says Amy Botwinick, author of Congratulations on Your Divorce—The Road to Finding Your Happily Ever After and founder of www.womenmovingon.com. Challenge yourself to inhabit your new self and see who clicks with you. Walking around with a big list of qualities a person must possess (be they identical to your ex or the opposite!) just isn’t helpful! You’ve changed and grown; there’s no need to be hung up on the past.

Dating Pitfall: You’re overcome with dating anxiety
So you’re feeling dating jitters? Join the club. Just because you’ve been out of the loop for a while, don’t think you’re the only one whose heart is pounding. Pretty much everyone feels nervous when meeting someone new. “Will he like me?” or “Will she notice my bald spot?” are not uncommon thoughts for anyone. “Learning to relate closely again is bound to be unsettling but rather than backing away, consider: Do you want to go on protecting yourself or do you want to develop a new relationship?” says Dr. Block. “If you want the latter, it is important to recognize that intimacy always involves some risk; consequently, anxiety is to be expected.”

Tactic to try: To lessen your anxiety, go on mini-dates. “A drink after work, lunch or even coffee when you have something scheduled later are great ways to ease into the scene without the pressure of an elaborately planned evening event,” says Dr. Block. Even if you don’t have something later, pretend you do. Knowing you have a finite time limit will take the pressure off because you have an escape hatch.

If things go great, you can always schedule another rendezvous. But keep first dates short and sweet until you get back into the swing. (Incidentally, the same approach goes for socializing at bars, clubs, and volunteer groups—don’t force yourself to be the first one there and the last one out. At this stage, just stopping by social events for a half-hour to an hour is a fine way to get your feet wet as you build confidence.)

Dating Pitfall: You embark on a dating rampage to prove something to yourself (or your ex)
When people re-enter the dating world, they frequently go a little wild and make some not-so-great dating choices (think “the bad boy” or “ditzy arm candy”). Post-divorce daters may feel a need to prove their desirability to themselves and others—especially if cheating was involved in the breakup. “The partner who has been cheated on feels like he or she has to prove sexual desirability; this helps validate personal attractiveness and worth. But going out and having a string of meaningless flings not only puts one’s sexual health at risk, it can also be emotionally damaging when you wake up feeling empty,” says Botwinick.

Tactic to try: Slow down! There is no need to feel under pressure to “make up for lost time.” Consider group activities which will introduce you to many new people. “That way you’re getting out and being social without the pressure of one-on-one dates until you’re ready to handle it intelligently,” says Dr. Block. Another good idea: Once you do start dating, don’t let things speed ahead too quickly. Check in about your dates with a trusted friend who has solid judgment and no hidden agenda or competitiveness with you. Then, take that advice seriously!

Dating Pitfall: You’re not prepared for intimacy
If you were in a monogamous relationship for a while but are now being thrust back into the field, it can be terrifying to think about being really, really close to someone new (you know, like naked-bodies close!). Before you dive into bed, keep the following in mind: Make sure you’re mentally ready. “If you’re not relaxed with the person, don’t get naked,” says Dr. Block. “But if it’s the first time with someone new in a long time, then know that being a little nervous when you take off your clothes is to be expected.”

Give yourself the time you need to distinguish between more run-of-the-mill nerves and “I really shouldn’t be doing this yet” anxiety. Also use good judgment when considering protection—both against pregnancy and STDs. If you wait to think about this, you may find yourself in an uncomfortable situation, unprepared and endangering your well-being.

Tactic to try: First, don’t let any timetable but your own dictate when to have sex. Don’t worry that your friends and family tell you it’s time to “get out there,” or that the person you’re seeing is getting impatient because you’ve been dating for a month and nothing has happened. Learn to trust your gut. There’s no need to do what others think is best for you or what they think they’d do in your situation. This time in life is about discovering what makes you happy—whether that means having sex because you’re really ready on date number three or taking slow, gradual steps over a much longer timeframe.

Also, make sure you are prepared: See your doctor regarding protection options (or do your own research), and act on the advice you glean. Get tested for STDs if you’ve been having unprotected sex (hope not!), and make sure the other person involved does the same. No need to be cute about it. You’re both adults. Not sure how to broach the subject? Botwinick recommends saying something like “I would love to be intimate with you but I won’t do anything that will put us at risk. It’s your choice but testing and sexual monogamy is non-negotiable if you want to take our relationship to the next level.” Be smart here!

Losing your Job and Paying Your Kansas Child Support

In these tough economic times, many parents who have a child support obligation are having a hard time meeting their obligation either due to a job loss, cut hours, or cut pay/bonuses.  Here are some tips to help alleviate some of the stress:

1.  Continue to visit your children according to your current parenting arrangement.  Do not confuse visitation with child support.

2.  Notify your ex-spouse immediately.  Spending habits for both you and your spouse need to be evaluated and reduced, if possible.  Try to work out an agreement with your spouse.  File this with the court or hire an attorney to do so.

3.  If you have to switch to a night job or weekend hours, discuss the situation with your ex-spouse first, and determine if the cost in extra daycare, if any, is worth you taking the job.

4. File for a child support modification.  Do not wait for several months to do this because even if the Judge grants a modification, it will most likely not be retroactive and you will still owe the outstanding amounts.

Custody of the family pet in your Kansas divorce

During a divorce consultation, I am often asked about the family pet(s).  How does the court deal with pets? Do we set up a parenting arrangement?  To date, the Kansas courts have not dealt with the pet as they do with children; the pet is viewed as property, which means that one party gets possession of the pet and if required, the courts value the pet when dividing the property.   The courts do not determine a custody arrangement or parenting schedule, simply, one party gets possession of the animal.  I recently came across a New Jersey case where the courts are viewing the issue of the family pet differently, and the couple has spent approximately $40K in legal fees to determine the custody of the animal.  I do not see the the Kansas courts changing their view on family pets, however, it seems this is an issue that may be very interesting to follow.