Author Archive

Tax Reform: A Business Boom for Family Law Attorneys

Under the House version of tax reform, there is a provision to repeal § 215 – Alimony payments.  That means that the payor will no longer be able to deduct their support payments.  It also means that the recipient will not be taxed on the income.  That sounds great for the recipient!  But the payor is not going to be happy.

Looking at the background, a lot of settlements revolve around the payor spouse being in a higher tax bracket than the recipient.  The net result is that by getting a deduction for the payment, there is a shift of income from the higher bracket to a lower bracket.  This is attractive to the payor since they get to reduce their overall taxable income.  In fact for those in high-tax states, the combined rate of 49% or more means that the payor spouse is making the support payments at a 49% discount.  This also leads couples to negotiate family support, or unallocated support payments, that only increases the tax effect.  This saves even more through tax dollars.

Now, if that adjustment is taken away, those dollars paid will be hard after-tax dollars costing the paying spouse a lot in taxes.  Since taxes were part of the original equation, it is easy to see a flood of petitions to the family courts asking for adjustments in support based on the new math.  The argument will be that the recipient will have a non-taxable flow of income.  Therefore, the payor spouse should be entitled to a discount based on the recipient’s tax bill, had they paid income tax on those funds.  There will be a spread in taxes between the paying spouse and the recipient, and that will be an area of contention and negotiation.

Sadly, the matter tends to move against public policy.  Family courts had an interest in keeping people off welfare and other public support.  This change challenges that notion making it more difficult for families to separate, especially when they are struggling with hard financial conditions.

A Big Cost That Jeopardizes Support Levels

Here is a simple example for illustration.  If the paying spouse is in a 39.6% bracket and the receiving spouse is in the 25% bracket, the net tax savings in the transfer of income is $$8,760.  That is a tax saving of $23,760 for the payor and a $15,000 bill for the recipient.  When that advantage is taken away, not only is the $60,000 transferred, the tax of $23,760 needs to be paid by the paying spouse.  That is a hard cost and total payment of $83,760 from the paying spouse to the recipient (the alimony plus the tax due).

With this much at stake, it is not hard to imagine that a lot of agreements will be altered and petitions will be filed to reduce the amount of support being paid.

Comment:  We wonder if the people behind the scenes that wrote this bill were IRS representatives.  For years they have worked to chisel away at family support (unallocated support) and other forms of transfer payments.  It seems that this bill is targeting those elements precisely with the intent to eliminate all tax aspects of these transfer payments.  The Senate version leaves § 215 untouched.  We will have to wait and see what they do in their committees.

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

11 Facts About Divorce That Will Keep You Up At Night

Divorce: A Look Into The Future

The focus of our One Last Look(SM) program is to educate couples and individuals about the process of divorce and separation as well as the realities of life after the divorce is granted.  The questions and situations we encounter spark interesting insights into what people think they know and how surprised they are when reality confronts them.  Here are 11 that may just keep you up at night.

1  Women Are More Likely Than Men to File for Divorce: Are You Paying Attention?

Women file more than menBecause of the way men and women function in relationships, it is common for men to be unaware of their companion’s concerns.  John & Julie Gottman point out from their research that bids for attention in relationships may impact women more than men.

In their research Drs. Gottman found that men who divorce ignored their wives 82% of the time.  Men in stable marriages ignored a spouse 19% of the time.  On the other hand, women that divorced ignored a spouse’s bid 50% of the time.  Those in stable marriages ignored the spouse 14% of the time.

This is a strong indication that women have a lower threshold than men for being ignored.  This may be how a woman can file for divorce and the husband is unaware as to why it happened.

The statistic of more women filing than men is proven by the number of female petitioners versus the male respondents in court documents.  However, when we dig deeper, it becomes clear that when women are talking about divorce, they are done.  Men, on the other hand, are more likely to pull back in their quest unless they are into a new relationship.

2  Is A Health Marriage Possible

“What went wrong?” is a common comment.  There are many reasons for a marriage to fail.  But research shows that the lack of friendship and paying attention to a spouse are key.

We recently had a couple in our office for One Last Look(SM).  It was clear by their body language that there was still something positive between them.  We asked, “When did you stop being friends?”  The husband looked surprised, but the wife immediately said it was 10 years ago.  She probably could have put an exact event around it if we let her.

If there is an emotional gulf between the couple, starting with friendship is a path back to health, if that is what is desired.

3  “I Will Be Taken Care Of”

Support is not what people thinkNot so much anymore.  Couples read the family code and try to understand what long and short marriages are about under the law.  We get the “half the length of the marriage rule” spouted at us by many husbands.  Wives, on the other hand, refer to the marital standard of living as their basis for moving forward.

Both sides are often surprised with the reality that courts want both to be self-sufficient and that it is common for vocational evaluations to be done.  We are not making predictions in this article.  It is simply our experience that what people end up with is very different from what they were seeking after.  Before someone plans on their online support calculation, make sure to seek some professional counsel.  Even then, that does not predict the actual outcome since courts are not allowed to rely on those calculators

4  He / She Owes Me

There are many paths to settling a dispute.  The “he or she owes me” argument is not always a good one.  The most common of these is supporting a spouse through college.  While our experience indicates that there is some validity to this argument, the outcomes often cut in different directions.  For example, a self-employed person may have a value to their business.  Part of that value may be their license to practice.  But the court also looks at those things that are taken for tax purposes but are not cash expenses.  These “deductions” are added back to the income calculation.

On the other side, a degree that helped someone get a job only provided the ability to earn a living.  The actual value of the degree may be arguable, but you cannot know how a court will look at that in terms of being owed something in separation.  Making this argument may, in part, be a gamble.

5  My Spouse’s Behavior Makes A Difference To The Judge

In the United States, every state has a no-fault divorce law.  That simply means if one person wants the divorce, they are entitled to it.  In California, pleading before the court about the distress of an affair or emotional estrangement are not of interest to the court.  There may be some interest for verified incidents of high conflict or similar grounds.

However, this is more likely to impact support and the placement of the children with one parent over the other.

6  Children Are Resilient In Divorce; Most Of Their Friends Have Divorced Parents

Children are not resilientSad as it is, people think their children are different.  Research indicates that the most likely outcome for a child will be detachment and possible isolation from one parent or the other.  This results from the fighting.  Even though a divorce is done, there is still animosity and pain between the parties.  Children end up helpless in the middle of adult conflict.

One woman, age 25, noted to us that her parents still fight.  If she wants to host a family event, and have both her parents attend, she cannot have it them present at the same time.  Even if there are two separate rooms available, they will not attend.  She must have two separate events – one for mom to attend and one for dad.  For her, the pain between her parents spills into her life at every level.

The result to these types of situations is that children are more likely to divorce if they come from a home where divorce happened.

7  Adults Thrive After Divorce

The end of a high conflict relationship is a relief.  Even facing the many challenges of being a single parent and coping with life feels like a relief on the other side of a stressful situation.

For the average couple going through divorce, “thrive” may not be a good description.  With two households to support, the children living in two locations, the fact that there is no support system within a single combined household.  The demands on time and resource management heavily impacts both adults, and the family in general, after the divorce.

On the emotional side, research shows that people typically move through a mourning period.  In that time, there is a lot of soul-searching and questions as to whether they made the right choice or not.  The results show that divorced individuals were:

  • Generally less happy
  • More susceptible to depression, especially women
  • Likely to see a doctor more often
  • More likely to suffer from serious illnesses
  • More open to consuming alcohol than married adults

Looking to studies in the United Kingdom, research and surveys of divorced people found that 22% wished they hadn’t gone through a divorce.  In a study of 867 people, only one in five had no regrets about the divorce.  The survey also found that:

  • 21% regretted the way they conducted their divorce
  • 33% regretted the way it affected their children
  • 24% wished they had worked through the financial consequences

8  Divorce Is A Private Matter

Divorce is PublicThis is a big misunderstanding.  When papers are filed with a court, they become public record.  Everyone can see who is getting a divorce.  Likewise, if people are not careful, all their accusations are part of the record.  That may include disclosing financial information that individuals would prefer remained private.  Beyond the financial elements, imagine a child researching the divorce of the parents (children do this).  What do you want them to read in the record?  What do you want them to see regarding yourself or your partner – their parents?  It will all be there on display for anyone to read.

9  You Can Settle Matters Without Attorneys

We strongly counsel people against doing this on their own.  The courts do offer some support for those with simple matters.  But most people have complex financial issues and children.  Even if they use mediation, we want each side to have legal support from an attorney.  One simple reason is that every agreement has its positive and negative elements.  If both sides are represented, it is less likely that someone can come back later claiming they did not understand what they were doing.  Legal advice is also valuable so that you are informed about the impact of your negotiations.

10  Social Support And Friends Will Get Me Through

This is a big “maybe.”  When couples separate, there is an impact on those around them.  This is especially true when it comes to married couples.  Suddenly the aspect of friendship shifts.  There are new considerations for the divorced spouse that do not impact the married couple.  Interests, time demands, and needs become different based on life experiences facing both the married and unmarried persons.  The result is that social circles change, support groups become important and new bonds form that would otherwise not be in the picture.  All this change ends up with old relationships fading and new ones forming.  The old guard most likely will not get you through.  The new alliances will take time to form.  That in-between-time can be painful for people when they suddenly find themselves in the reality of being alone.

11  When I Am Divorced, I Never Have To Worry About My Spouse Again

Divorce does not end the relationshipThis is a definite “No.”  We teach people that the first reality in divorce is that the family is not ending; it is reforming.  There is a new relationship that is born out of a divorce.  That new path may be acrimony and pain, or it can be acknowledgment and respectful distance.  If there are children, there will always be the family events and possibly grandchildren.  Beyond that, there may be financial obligations that keep people intertwined for years as all that is sorted out.  Child support, by itself, will not end until the last child turns 18 or is out of high school.  No, you will be involved with your ex-spouse for many years to come.

Final Thought

We found it interesting, as we researched this article, that one of our favorite performers, Phil Collins reunited with his ex-spouse after about 10 years.  The remarriage factor is interesting and, if you are considering divorce, it may give you a reason to think twice before all this keeps you up at night.

 

Armand D’Alo & Robbin D’Alo

Tax Checklist for Divorce

Armand, Robbin and Eva are presenting a class offered through CCH CPE Link.  The class covers problems and issues missed in the heat of negotiation or simple errors in drafting documents.

Join us for a two-hour class that is insightful and filled with information.  If you are thinking of divorce, this is something for you.  If you are a professional, this is another tool to put in you box to help your clients.

This course will address the top ten tax issues that attorneys may miss to properly prepare divorce documents, filed with the Court. Participants will get a Checklist to use in each divorce file.

Who Should Attend

Tax practitioners at all levels regardless of tax practice who want to protect their divorcing clients interests — and their own. This is also an excellent resource for individuals in the midst of divorce — to help them identify key tax issues before signing their divorce agreements.

Topics Covered

  • Tax Forms to be signed during divorce proceedings
  • When $500,000 to him does not equal the $500,000 to her
  • Family support vs alimony and child support
  • QDROs
  • Final tax return — joint or separate — and why
  • Conflict of interests and releases
  • Personal residence — when one spouse moves out
  • Splitting tax breaks
  • Splitting prior tax debts and splitting other debts
  • Innocent spouse issues — and effect on the not-so-innocent spouse
  • And more.

Look forward to seeing you September 19 and 12:00 PM at CCH CPE Link.  Use the link above to check it out.

 

Armand & Robbin D’Alo

How the Six-Month Waiting Period for Divorce Works in California

California Says, “Think Before You Leap”

California has what they refer to as a cooling-off period for couples seeking a divorce. The idea is that within the six-month timeframe people will have the ability to step back. They can look at the realities of what they are doing and then proceed with better information. The hope is that they will have a more informed plan of operation. The couple may even decide to reconcile. If divorce were instant, that would not be an option.

Unfortunately, the cooling off period does not always help couples to gain added insight into their marriage and divorce. By the time they hire attorneys, couples are not speaking to each other. They see legal fees mounting. Some even comment that they felt the pressure just to get it done because of the money spent.

The six-month waiting period is simply the earliest date at which a marriage can end. For those that are timing the divorce around the end of a year, you must be careful. The frame is six-months PLUS one day. Once the divorce is complete, both are free to marry or remain single.

Starting The Clock Toward Divorce

To launch the clock one person needs to file their petition with the court. The petition states that they are seeking a divorce from their spouse. Divorce filing is confusing.As part of the filing, there is also a process to serve papers on the other person. That is how the other spouse is informed of the action. It is the serving of the papers that start the clock moving. In movies and shows, this is the dramatic point where someone ominous walks up to the unsuspecting person. They suddenly shove papers at the unsuspecting spouse with the announcement that they are served.

That is really for the drama of a show. In fact, the service of papers can happen in many ways. To see the detailed overview of the process, you can visit the San Diego County Court web site. The basics are that you cannot do this yourself and you may want to talk to an advocate, lawyer or legal service about this process.

How The Timing Works Out

For example, if a petition for divorce is filed on June 1st, and documents are served on the other person the same day, the six-month waiting Reading divorce papersperiod and earliest termination date of the marriage would be December 2nd. But if they wait until July 1st to serve the papers, the soonest the marriage will end would be January 2nd of the following year.

So if someone wants to end the marriage as soon as possible, and tax filings are an issue, they need to watch the timing. The anxious spouse needs to have the other person served in a timely manner that meets the targeted deadlines.

You need to remember that wanting to end the marriage in six months does mean it will happen that way. The other spouse may have other thoughts. That is why we recommend One Last Look as a way to get both sides working for the same goal.

The “What” & “How” of Serving Papers

The person who is serving the papers must be at least 18 years old and not involved in the case. The person will have to fill out a Proof of Service form telling what they gave (served) to the other person. There is also a chance, if this goes to court, that the individual who served the papers might have to appear and testify when and how the papers were served.

The link above will let you learn more about details for the following forms of service.

  • Personal Service
  • Substitute Service
  • Service by Mail
  • Notice and Acknowledgement of Receipt
  • Service by Publication or Posting
  • There are also processes for serving people living outside of California as well as someone that may be incarcerated.

The court requires service so that everyone involved is aware that the divorce process is happening and it allows both sides the opportunity to respond or take whatever legal actions they deem necessary.

If there is a change of heart during this period, even if a final judgment has already been entered and a date for the marriage to end has been set (but that end date has not yet occurred), the couple can file for a dismissal. The action has the effect of terminating the case (referred to by the court as extinguishing the pending termination). Of course, it takes both sides to agree to this.

Be careful as you move through this process. Errors in filing can result in the entire case potentially being invalidated.

Armand & Robbin D’Alo

Gray Divorce: What Went Wrong?

The process of divorce is common across all ages. It’s about the division of assets and income as well as support for small children, when they are part of the picture. With Gray Divorce, there are a few different twists to the mix that focus on time together, division and support during retirement and the facts of health as we age.

But for those that have been together for so long, what brought the marriage to a point that divorce is the option?

Average life expectancy today is about 79. The 2010 census showed more than 40 million people over the age of 65. At this point in life there can be many internal questions that drive us to seek change. Just like the younger divorcing couples the gray divorce experiences infidelity, family violence, substance abuse, financial pressures, a sense of lost direction or simply the wish for independence.

But as we age, the sense of interdependence plays a large roll in these choices. One example is when health issues present themselves and life gets tougher. At a time when people thought they would be free to enjoy life, heartache sets in.

The afflicted spouse may selflessly want the other person to move on. They do not want to be a burden. The caregiver may be fatigued emotionally and mentally. As caregivers, it is often too stressful for one person to deal with the decline in health of a spouse.

Close up of mature couple fighting sitting on sofa

Dominic A. Carone, PhD, noted that in the case of Alzheimer’s, couples struggle with the desire for relationship. Dr. Carone, notes that it is common for the caregiver to begin seeing other people after the spouse has developed Alzheimer’s. The typical question is if the caregiver should be allowed to see other people, because the spouse that they knew is now “gone.”

This is a struggle that reaches far beyond the longing for a change in life. The years of companionship are lost. That is coupled with a caregiver’s sense of personal vitality and a personal thought that there is still much more to life.

This idea is too often quantified and qualified by research and statistics. It really deserves a different look… a more personal inside look.

For an interesting twist on the same Alzheimer’s dilemma, Deidre Bair gives a glimpse into the situation. In her book, Calling It Quits, she comments about Jan, a middle-aged woman, with parents in their eighties. To quote Jan, “Growing up in Margaret and Harry’s house had been like living on a battleground, as they argued, shouted, and threw things on an almost daily basis.”

Later Jan learned that both her parents needed supervision due to Alzheimer’s. She had to take on the custodial duties of both. Even though they had been divorced for over 20 years, Jan feared what was about to happen. But, according to Jan, when they moved in she said, “They have become best friends because they can’t remember they were ever married to each other. They would spend their days happily sharing tales of their miserable marriages and how they wished they had met when they were younger.”

What a tale of circumstances. That is not to say every story goes this way. They do not. The more common situation is a spouse watching the other as life’s memories fade from view and there is only the shell of what was once a companion.

While health creates a real struggle and dilemma, it is not the average course of events. Most people live longer together which is often cited in research as a reason for the gray divorce. That idea raises the question of how people handle the gray divorce when they feel all else is lost? Can it be avoided?

John Gottman notes that as people grow older, there is a tendency to forget how to connect. Proximity to a partner does not equal knowing and engaging with that person. Today technology creates barriers to intimate communication. People would rather dive into the electronic world versus being in the real world.

Senior adults outdoors in the park on park bench

As we age, there are some powerful actions that can help couples recover from and avoid late life separation. These were summarized by Terry Gaspard, MSW, LICSW as he wrote about successful second marriages. In fact, as people age, their relationship changes and the marriage evolves. It is like a second and third marriage as couples morph over time.

  1. Build a culture of appreciation, respect, and tolerance: The idea is to catch your partner doing something right and acknowledging it.
  2. Practice being vulnerable in small steps: Build confidence in being more open with your partner. Discussing minor issues like schedules and meals is a great place to start before tackling bigger matters.
  3. Create time and a relaxed atmosphere to interact with your partner: Ask for what you need in an assertive, non-aggressive way and be willing to see each other’s side of the story. In The Seven Principles for Making Marriage Work, Dr. Gottman encourages us to respond to our partner’s “bids” for attention, affection, and support. This can be something minor like “please make the salad” or as significant as accompanying our partner on a trip to visit an ill parent.
  4. Discuss expectations to avoid misunderstandings: Take a risk and deal with hurt feelings, especially if it’s an important issue, rather than stonewalling and shutting down.
  5. Prepare for conflict: Understand that conflict doesn’t mean the end of your marriage. Dr. John Gottman’s research on thousands of couples discovered that conflict is inevitable in all relationships and 69% of problems in a marriage go unresolved. Despite this, conflict can be managed successfully and the marriage can thrive! Take a short break if you feel overwhelmed or flooded as a way to restore positive communication with your partner.
  6. Communicate effectively: Accept responsibility for your role in a disagreement. Listen to your partner’s requests and ask for clarification on issues that are unclear. Use “I” statements rather than “you” statements that tend to come across as blameful, such as “I felt hurt when you purchased the car without discussing it with me.”
  7. Embrace your role as a step parent / step grandparent: In a changing relationship the role of each spouse will change whether the children are yours or from another relationship. This role may be one of an adult friend, mentor, and supporter rather than a disciplinarian. Learn new strategies and share your ideas with your partner. There’s no such thing as instant love. When a spouse feels unappreciated or disrespected by children, they will have difficulty bonding with them. This causes stress for the family and the marriage.
  8. Attune to your partner: Eye contact and body posture demonstrate your intention to listen and compromise. Practicing what Dr. John Gottman calls emotional attunement while relaxing together can help you stay connected despite your differences. This means “turning toward” one another and showing empathy rather than “turning away.” His 40 years of research showed that happy couples have a 5:1 ratio of interactions during conflict – meaning for every negative interaction, you need five positive ones.
  9. Establish an open-ended dialogue: Don’t make threats or issue ultimatums. Avoid saying things you’ll regret later. Money is one of the most common things couples argue about and full disclosure about finances is key to the success of the marriage so resentment doesn’t build up.
  10. Practice forgiveness: Accept that we all have flaws. Forgiveness isn’t the same as condoning the hurt done to you, but it will allow you to move on and remember you are on the same team.

A good way to make life work is to build a “couple culture” of awareness and appreciation. Using the tools of being open to a partner leads to friendship and intimacy. Using Dr. Gottman’s thoughts about respect, acceptance, positive communication, and having a good sense of humor can help make the mature marriage last a lifetime.

To read Terry Gaspard’s full article, go to the Gottman Blog.

 

Armand and Robbin D’Alo

Family Court Does Not Supercede Federal Law

The basis for support in California state law is found in Family Code Section 9 which is Support. As of this writing, it encompasses Code sections 3500-5700.905 and it changes whenever the state legislature deems it necessary.

California Code Section 4320 covers the elements a court can take into consideration when ordering support. In our view, every couple, family mediator and collaborative group team should put these on the table for consideration. Even though it may be a non-litigated settlement. Each couple should be working under an informed concept of support.

Money roll and judges hammer on wooden table

Section 4336 of the family code notes that “Except on written agreement of the parties to the contrary or a court order terminating spousal support, the court retains jurisdiction indefinitely in a proceeding for dissolution of marriage or for legal separation of the parties where the marriage is of long duration.” This simply is intended to allow the court to carry jurisdiction, influence or authority over support, including petitions for changes to support whether it is spousal or child support.

This sets the “table” for support on the state level. However, the IRS has their own set of rules about support and the deductibility of such payments from one person to a former spouse. This is located in the U.S. Tax Code under Section 71 – Alimony and separate maintenance payments.

The rules look complex, but are relatively straight forward. We have put in bold the sections that make up the core of these rules:

  • (a) General rule: Gross income includes amounts received as alimony or separate maintenance payments.
  • (b) Alimony or separate maintenance payments defined: For purposes of this section—
    • (1) In general: The term “alimony or separate maintenance payment” means any payment in cash if—
      • (A) such payment is received by (or on behalf of) a spouse under a divorce or separation instrument,
      • (B) the divorce or separation instrument does not designate such payment as a payment which is not includible in gross income under this section and not allowable as a deduction under section 215,
      • (C) in the case of an individual legally separated from his spouse under a decree of divorce or of separate maintenance, the payee spouse and the payor spouse are not members of the same household at the time such payment is made, and
      • (D) there is no liability to make any such payment for any period after the death of the payee spouse and there is no liability to make any payment (in cash or property) as a substitute for such payments after the death of the payee spouse.
    • (2) Divorce or separation instrument: The term “divorce or separation instrument” means—
      • (A) a decree of divorce or separate maintenance or a written instrument incident to such a decree,
      • (B) a written separation agreement, or
      • (C) a decree (not described in subparagraph (A)) requiring a spouse to make payments for the support or maintenance of the other spouse.

Wooden Letterpress Type Block

In summary, the alimony requirements are that:

  • The spouses don’t file a joint return with each other;
  • The payment is in cash (including checks or money orders) and not an exchange or property or services;
  • The payment is to or for a spouse or a former spouse made under a divorce or separation instrument;
  • While oddly worded, the divorce or separation instrument does not designate the payment as not being alimony;
  • The spouses aren’t members of the same household when the payment is made (This requirement applies only if the spouses are legally separated under a decree of divorce or of separate maintenance.);
  • There’s no liability to make the payment (in cash or property) after the death of the recipient spouse; and
  • The payment isn’t treated as child support or a property settlement.

The wording of the divorce agreement needs to be clear on these matters of the payments may not be deductible to the person making the payment.

 

Armand and Robbin D’Alo

All Mediation Is The Same… Or Is It?

Life has not gone the way you would like, and now you are faced with divorce. Maybe you wanted it, maybe not. In any case, it only takes one side to make a divorce happen.

There are many paths for couples going through a separation. These include working it out themselves, using mediation, working in a collaborative or cooperative setting, or go to litigation which is the highest level of conflict. Yet we find that in almost all situations some form of mediation may take place, even if it is a settlement conference in litigation.

Mediation is a process. It typically involves identifying the conflict issues to find real differences and common ground. The mediator will ask about what is important to each side regarding finances, parenting, and emotion-based outcomes. This leads to proposals and counter proposals. At this stage, the process focuses on communication. That requires both sides to be respectful of the other. The most direct way to achieve that is to remember one simple rule: if whatever is said at the mediation conference cannot be put into a box or be put into a math problem with it, the information may not belong on the table. The whole process results in the formalization of agreements.

But did you know there are different approaches to mediation? These include facilitative, evaluative, and transformative.

Facilitative mediation is very much like it sounds. The mediator assists the couple to come to mutually acceptable agreements. The mediator assists the couple in seeking and obtaining an analysis of options they are considering. The facilitative mediator does not make recommendations to couples. There is no advice or opinions given and no predictions about what might happen in court. The mediator controls the process while the couple is responsible for the outcomes. Mediators in this category want the couple to be the core of decision making, not their attorneys.

Evaluative mediation is more like a court-ordered settlement conference that a judge may hold. This type of mediation offers a view into the weakness of a person’s case or argument with predictions of what a judge might do with the same information. Evaluative mediation focuses more on the legal rights of each side. This is like shuttle diplomacy with the mediator moving from one side to the other. Attorney’s tend to like this format since they have more input into the process. The mediator may even meet with the attorneys alone to discuss the merits of the case, leaving the couple out of those discussions. Evaluative mediation can make the process more like a litigated settlement rather than a participatory process focused on the couple’s wishes.

Cost of Oak Tree Mediation Carlsbad San Marcos Divorce

Transformative mediation works to empower the couple with a recognition by both sides that there are interests and needs that are important and valid for each. The values and points of view are given importance in the process.

The potential for transformative mediation is that any or all parties and their relationships may be transformed during the mediation. Transformative mediators meet with parties together, since only they can give each other acknowledgment and respect. This method fully puts the couple in control of their path forward with the goal of morphing into something healthy on the other side.

Is there a best option? Not really. Each method has pros and cons.

Evaluative mediation sounds like it provides answers that are court-based and “fair” in the eyes of the law. Yet couples seeking mediation tend to want control of their own fate versus being told what is best based on somebody’s case or a law that was written and that does not fit their desires. If a couple wants someone to tell them an outcome, then this may be an option that could work for them. This process came out of litigation so one of the cons is that individuals may feel compelled to settle by the attorneys.

Facilitative and Transformative mediation tend to be more supportive of the couple by providing information and resources. These methods do inform couples of the law and help couples to look at options. They elevate the human elements of the family, a new view of life apart and the impact on children within the process. The con is that there is no pressure to settle and there is no fixed timeframe for people to reach an outcome. The couple is in total charge of the outcomes and, as such, the process may take more time. Yet the biggest pro element is that same issue – keeping the couple in control of their lives rather than surrendering to an outcome-based court model for reaching a settlement.

Each process is a tool that mediators may be trained with. When they are trained in the different methods, a mediator may be more flexible in their approach to your process. The result is if a mediation relies only on one approach, it is possible that legal information may play too great of a role while personal interests may be weighted too lightly. On the other hand, the reverse may take place. In all methods, one critical position of the mediator is to watch for weaknesses or an imbalance and to work to get both sides on an equal footing. This way the resolutions reached are better understood by both sides, and the agreements are profound, lasting, and respected by the couple. It is, in fact, their agreement.

Talk to your professionals that you are considering for any process whether it is mediation, collaborative or even litigation and find out their feelings about these different methods. Chances are that mediation will be used in your separation at some level and you should feel comfortable that the approach is something you agree with.

 

Armand and Robbin D’Alo