Archive for October, 2017

Divorce and Marital Conflict: The Math, The Magic & The Reality

I am the kind of person that likes to get to the heart of a matter.  So here it is, in simple terms from the research of John Gottman.

69% Of All Marital Conflict Is Unsolvable

People headed for divorce typically have the unsolvable problem.  Along the way the relationship got off track, there were benchmarks that were crossed, trust that was violated and expectations that were not met.  This may have been financial, sexual or whatever.  In some way at least one side of the relationship reached a point that for them, anything was better than this marriage.

These issues flow from core differences in personalities that engender conflict, or they are fundamental differences in lifestyle.  In either case, these are reflections of values help by each individual.

Research shows that the issue is not the problem itself, but rather the ability of two people to create a dialogue around the matter.  If there is no way to discuss what is happening then the couple becomes deadlocked, they build defenses and eventually check out emotionally from the relationship.

Dr. Gottman shares six skills from his research for managing conflict and building dialogue.

  • Practice Physiological Self-Soothing
  • Use Softened Startup
  • Repair and De-Escalate
  • Listen to Your Partner’s Underlying Feelings and Dreams
  • Accept Influence
  • Compromise

These can be explored in more depth in Jon Gottman’s book, The Seven Principals for Making Marriage Work.

Even if a couple reaches the determination to separate, the ability to communicate will still be essential to their new lives as separate adults.  This is especially true when children are part of the picture.

Ratio Of 5:1 Positive to Negative Interactions Indicates a Healthy Marriage

Turning again to research, when couples argued, it was found that anger is not the element that is dangerous.  Everyone gets angry when they are hurt.  The question is, what happens with that anger and how does a couple work through it.

Successful couples, even when fighting, tend to offer positive support to each other.  As couples in the research studies showed, those that offered five positive comments to each negative comment were more successful.  Those that tended to head for divorce were closer to a 1:1 ratio.

This is important when you recall how we, as humans, take in negative comments about ourselves, as well as some of our own internal dialogue.  The negative seems more real to humans than a positive statement.  Think about this as an emotional scale.  If every negative comment was 10 pounds and every positive comment was two pounds, it would take five positives just to balance out the negative.

This is the same in a relationship.  What was interesting was that when couples were not in conflict discussions their ratio was closer to 20:1 and made up a richer environment.

Don’t get this wrong and think that these compliments are massive statements of adoration.  These are the simple responses we give like, “That’s nice,” or “Good idea.”  Within a conflict, responses might be, “I see your point” or “What are your thoughts about…”  These are ordinary statements that acknowledge and enrich.

86% Versus 33% Rate of Responsiveness

This idea of a rich environment leads to the concept of responsiveness.  Paying attention to the other person builds trust and confidence within a relationship.  Again, this is not the longing adoration that may have been heaped on each other before marriage.  But it is the consistent acknowledgment of a partner.

Couples that succeed tended to respond to their partner about 86% of the time.  As Dr. Gottman calls it, they turn towards their partner.  This turning towards is seen with simple acts such as a nod of the head, a verbal acknowledgment or even a grunt.  It is a way to say, “I heard you.”

Those that are less successful tend to ignore the other person or tune them out.  In one relationship, this was an interesting matter since both had hearing problems.  At first there was an issue of feeling ignored.  As they learned more about the matter it became a skill and sign of respect to see if the other person was able to hear, so they knew when they were tuned into each other.

In divorce, acknowledging what each side is experiencing may not be a path to reconciliation.  But it is a path to acceptance and communication on a business level.  This is necessary to have a low-cost successful transition from marriage to life as two adults with children.

Good Marriages & A Good Divorce Tend to Be Uninteresting

When people part company, the way they change direction impacts the rest of their lives.  Are they willing to move on if one person is done or is their conflict based on emotion?  Are both willing to share and be open with each other, something that is required by the law, or is the need to fight more dominant in the relationship.  In the end, if a couple chooses separation, resisting the change on whatever level, only leads to financial damage and hurt that will last far longer than any court battle.  The better transitions are business like and cordial.

On the other hand, the bottom line for most good marriages is that they are boring.  They are gentle and full of acceptance.  They carry acknowledgment and a willingness to understand.  Marriages move to a higher level when curiosity enters in and couples remain engaged with their evolving lives and new experiences.  The ability to embrace change and growth are keys.  Understanding the “Gottman” math helps along the way.

Armand D’Alo and Robbin D’Alo

Divorce: The Dance of Breaking Up

There are many self-help and support groups for people in relationship trouble, going through divorce and after the divorce.  They offer support as people cope with changes in life.  These are all helpful tools.  Here is one additional tool that helps people along the way; the art of dancing.

To dance, each person must get in tune with the other.  When they practice together there is a harmony that develops.  Eventually they can anticipate each other’s moves and understand how to respond.  It becomes a reflex that results in a form of harmony.

Dr. Sue Johnson, in commenting about marriage, notes that “Love is a constant process of tuning in, connecting, missing and misreading cues, disconnecting, repairing, and finding deeper connection.  It is a dance of meeting and parting and finding each other again.  Minute to minute and day to day.”

Divorce Is a New Dance

When people break up there is a new dance going on.  In their case, a choice if made day by day to tune out, disconnect, ignore, skip repair efforts (they tried already) and eventually end up wanting out.  The pain had grown too deep and trust is no longer present.

This is a new dance through life in which people will step on each other’s toes.  Sometimes that is intentional in an effort to get the other person’s attention – something that was missed in the marriage.

When we see couples moving through this process, we work to help them learn a new dance called  F-A-C-C-T; the basic understanding of what separation and divorce are all about.

The first two letters, F and A, stand for Family Re-Formation and Awareness.  These are basic to this dance.

When people break up they are actually re-forming a relationship.  The new dynamics are based on different ground rules.  There is no intimacy.  But there is relationship in that the new rules have them interacting about finances and, most importantly, children.  Even if there are adult children, there is interaction around family events, grandchildren and many other elements of family life that will go on.

The second letter, A, is for awareness.  People get to the point of separation by following a particular path.  They built this outcome somehow.  Even if there was an affair, or some other event along that way, the seeds are planted for this outcome.  Understanding how that happened can help with the process of separation.  When you understand how and why something happened, it leads to a deeper recognition and purpose for your path forward.

The next part of F-A-C-C-T is Communication.  This is not the deep caring exchanges felt when people are in love.  This is ability to look at what is ahead objectively.  We note to mediation clients that while they are discussing issues, if you cannot do a math problem with it or if you cannot put it into a box it does not belong in the conversation.  This is a way to keep the conversation simple and to the point.

We also encourage people to use the BIFF approach to exchanges.  This involves keeping the communication Brief, Informative, Friendly, and Firm.

That last two letters are for Commitment and Trust.  This sounds odd for separation, but in the process of divorce the underlying issue is a lawsuit focused on breaking a contract.  That contract, once ended, is replaced by a new contract – the Marital Settlement Agreement (MSA).  Since it is a new contact, there are provisions that each side must meet.  That interaction requires a commitment to keeping each side of the agreement and, over time, building trust that the other person will meet their obligations.

Accepting the premise of F-A-C-C-T, couples recognize there is an entirely new set of “dance steps.”  We encourage people to reflect on F-A-C-C-T and consider how this process impacts their own separation.  Will this be a series of missteps leading to costly court fights or will this be a new dance that leads to a different life after marriage.  The choice is yours.

You can get a copy of F-A-C-C-T at Amazon.com and for subscribers you can get a copy by dropping us an email requesting a PDF version.

Armand D’Alo and Robbin D’Alo

Tax Relief During and After Divorce

One area of negotiations focuses on how to file a tax return during the divorce.  The discussion also focuses on how to handle refunds or tax liabilities on those filed returns.

Refunds are potentially simple.  This is done by allocating the refund to separate bank accounts.  The allocation is based on many factors negotiated by the couple.  The actual allocation is accomplished by filing form 8888, Allocation of Refund, with the tax return.  This directs dollars to the separate accounts, as indicated in the form.

When taxes are due, there may be other issues.  If there is significant lack of trust on the part of one spouse, there may be fear that taxes due will be imposed on an innocent spouse.  Further, if the return is filed as a joint return, both people become responsible for the tax that is due.  A family court order or agreement in a settlement cannot change or assign the responsibility for the taxes that are owed.  Here are some options to consider.

Innocent or Injured Spouse

These are two concepts that focus on very similar issues but carry different results.

Injured Spouse:  The tax liability for your spouse remains, but the injured person receives the tax refund to which he/she was entitled based on his/her income and tax payments.  The injured person is not held liable for the other person’s misconduct.

Innocent spouse:  The IRS releases the innocent person in whole or in part from any responsibility to pay the assessed tax along with fines and penalties levied on the other spouse for filing a fraudulent return.

Innocent Spouse Relief is found in IRC Sec. 6015(b) (form 8875).  We note that it is hard to prove a person was truly innocent.  The burden of proof is on the person making the request.  To win on this, the innocent spouse must show:

  • The understatement was caused by erroneous information provided by the other spouse.
  • The innocent person had no knowledge of the errors and probably could not have known.
  • The innocent person did not derive benefit from the errors (he/she did not live in a luxury house, had house workers, owned a boat, took vacations, etc.).
  • Finally, it is found that it would be unfair to hold the person responsible based on the evidence.

A questionnaire (IRS form 12508) is used to help determine the facts in each case.  This form is provided to the other spouse, and there will most likely be contact between the two parties during this process.  That aspect can become a problem when accusations are being made about either side.

For details on how the IRS looks at this, you can check out the Internal Revenue Manual for 25.15.18 Innocent Spouse Relief Processing Procedures.

Injured Spouse Relief is found in the Internal Revenue Manual at 25.18.5.  As noted, this is a request that a non-liable spouse be entitled to receive his/her own refund even on jointly filed return.  The injured spouse claim is made with form 8379 Injured Spouse Claim and Allocation.  There are some catches to these provisions for community property states.  Since income and taxes are part of the community, the allocation may not be as favorable as the petitioning spouse may desire.  The IRS, under the Revenue Rules, will look to state tax and family law for guidance in these matters.  Given that different states handle the matter differently, there are separate rulings for various community states.

Injured Spouse Relief Community Property Rules:

  • Rul. 2004-71 for Arizona and Wisconsin
  • Rul. 2004-72 for California, Idaho, and Louisiana
  • Rul. 2004-73 for Nevada, New Mexico, and Washington
  • Rul. 2004-74 for Texas

Separation of Liability

The next option is a request for Separation of Liability under the Internal Revenue Code (IRC Sec. 6015(c)).  Under this process, the tax liability is acknowledged, but it is divided into two accounts.  This is the ultimate way to divide a valid tax liability and make sure the IRS will not come after one spouse for the entire amount due.  This course of action only applies to amounts that are currently unpaid.  According to this statute, the IRS cannot give refunds of amounts already paid in.

This action applies to under-statement of liability on joint returns where one spouse is deceased, or there is a legal separation, a divorce, or the couple has lived apart for the entire 12 months prior to filing Form 8857.

Equitable Relief

Along with the innocent spouse relief request and separation of liability, there is also an option for equitable relief.  This option is available when it is found that the imposition of the tax on an innocent person would be unconscionable.  This includes relief from a tax liability that flows from community income.

Section 4.03(2) of Rev. Proc. 2013-34 provides seven factors the IRS uses to guide a determination based on facts and circumstances.  This is not an exclusive list, and the IRS will look at other factors, positive and negative, to make a final ruling.

  1. Marital Status: Is the requesting spouse no longer married to the non-requesting spouse;
  2. Economic Hardship: What, if any, economic hardship will the requesting spouse suffer if relief is not granted [4.03(2)(b)];
  3. Knowledge or Reason to Know: Under section 6015(f), did the requesting spouse not know or have any reason to know that there was an understatement or deficiency on the joint income tax return.  There are several elements under this provision that are worth exploring in more depth and are beyond the scope of this article.  But the core question is if the non-requesting spouse maintained or restricted access to information in such a way as to disadvantage the requesting spouse and to keep that person uninformed as to the understatement or deficiency in an understatement case.  This also looks at the knowledge or reasons that the requesting spouse would not or could not pay the tax liability within a reasonable period of time after filing the return in an underpayment case;
  4. Legal Obligations: Was there a settlement that either spouse has a legal obligation to pay the liability, such as under a divorce decree or other legally binding agreement;
  5. Enrichment: Was there a situation in which the requesting spouse received a significant benefit from the unpaid tax liability or understatement;
  6. Good-Faith Effort: Did the requesting spouse make a good-faith effort to comply with the income tax laws in the years following the tax year or years to which the request for relief relates; and
  7. Health Issues: What is the requesting spouse’s mental or physical health.

There is no clear test that the IRS will use to evaluate relief claims.  There is not a single factor or mixture of factors that will necessarily determine the scope of relief, if any.  These will vary in each instance.

The final request, one that we hope will not apply to our readers, is relief based on abuse.  When a person is under duress and intimidation, they cannot be viewed as capable of entering into a contract.  The result is that they should be freed from the obligation and consequences they were forced to undertake.

This is a brief summary of options which are offered as information.  It is important to have a qualified tax professional review the facts and circumstances of a situation to see how this might apply and which options have the best likelihood of success.

Armand D’Alo and Robbin D’Alo