Divorce can be taxing!

With the April 15th tax deadline just behind us, there is no better time than the present to beging preparing for your 2015 tax filings.  Preparing your returns is never easy and if you are recently divorced, there are new  issues to be considered and accounted for.  The purpose of this post is not to give tax planning advice. Please rely on your accountant or tax preparer for guidance. I just want to idnetify a few areas that require special attention due to a divorce.

Alimony: Remember, alimony, if in a court order, is tax deductible by the payor and is to be included in the taxable income of the recipient.  However, child support has no tax consequences.  If you are the payor, you will need to identify the reicipient on your return and as the recipient, you identify (by their SSN) who you are receiving the alimoy from.  I have to believe that this simple cross cehcking exercise is routinley performed by the IRS.  If you are receiving alimony, it is critical that you develop a plan that prepares you to pay the tax that will be due on your alimony as there are no withholdings made from your payments.
On a related note, I am often asked if the legal fees incurred in connection with the divorce are tax deductible.  The best answer I can offer is “maybe”.  Under the IRS guidelines it may be possible.  But again, please consult with a tax professional on this point.  I will assist your preparer in any way necessary, but I do not offer any opinions as to whether or not your fees are tax deductible.
WITHHOLDINGS: Once your divorceis finalized, review the withholdings with your employer’s HR department.  You will need to make some adjustments to these going forward.
CLAIMING THE CHILDREN: Post-divorce, you cannot both claim the children as exemptions each year.  Don’t get yourslef in trouble by making this mistake or thinking the IRS won’t notice.  Rely on the langauge in your settlment agreement.  In the agreements I draft for clients, I include specific language on this issue.  Parties can alternate making the claim on an annual basis or allow one party to claim the child(ren) each year.  Whatever arrnagemnts you make, adhere to them.
These are just a few of the tax related issues that arise during and after a divorce.  Your attorney should be able to identify these issues and in working with your tax professional you can put the proper tax strategy in place that complies with the terms  of your agreeemnt and the tax code.


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Accusation of Domestic Violence can result in loss of firearms permit

While I have no intention of engaging in the political debate surrounding gun control and the 2nd Amendment, the recently decided case out of NJ (summarized below) illustrates the intersection of domestic violence and individual rights.

 

It has been long held that if an individual is found to have committed domestic violence, one of the penalties can be the forfeiture of that person’s NJ firearm’s purchaser identification card and any firearms owned EVEN if the underlying act of domestic violence does not involve a gun.  This is done by a separate judicial proceeding.

 

As detailed below, the defendant in this particular case was acquitted of the charge of domestic violence.  However, given what appears to be an ongoing history of domestic violence, his purchasers permit was still revoked.  Keep in mind, this prevents the purchase of firearms and the forfeiture of any and all firearms owned.  This can include guns for hunting, collections, and family heirlooms.

CONSTITUTIONAL LAW | FAMILY LAW 10-2-6533 In Re Appeal of the Denial of the Application for Z.L., App. Div. (Kennedy, J.A.D.) (12 pp.) We clarify that an application for a firearms purchaser identification card and handgun permits may be denied in circumstances where the applicant had been accused of assaulting his wife, but acquitted at trial, and where the police responded to his home on several occasions thereafter to address domestic dispute complaints brought by his wife. The application was properly denied pursuant to N.J.S.A. 2C:58-3(c)(5).

 

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Court reluctant to set aside arbitrator’s decision in NJ divorce case

With the backlogs in many county family courts throughout New Jersey, divorce litigants are exploring alternative methods of resolving their divorce proceedings.  The traditional litigation can be time consuming.  One such method of alternate dispute resolution (ADR) is arbitration.

 

There are potential benefits to arbitration.  Those benefits include the ability to proceed on a quicker and more efficient schedule that is not subject to court imposed delays or administrative adjournments.  Unlike court room proceedings, arbitration is confidential. Arbitration, and other methods of ADR, can be less expensive and less acrimonious, but these are not guaranteed benefits.

If you elect to proceed with arbitration, it is critical that you understand the process and the “rules”.  As explained in the summary of a recent unpublished decision below, the ability to review or appeal an arbitrator’s decision are limited.  If you have questions about arbitration, ADR or other methods of resolving your divorce, contact The Durst Firm, LLC to arrange for a consultation.

FAMILY LAW | ARBITRATION 20-2-6519 Shelley v. Shelley, App. Div. (per curiam) (5 pp.) Plaintiff appealed from two orders confirming a matrimonial arbitration award and entering a final divorce judgment. Plaintiff and defendant agreed to arbitrate the financial issues of their divorce under the Alternative Procedure for Dispute Resolution Act. The arbitrator issued a detailed decision from which plaintiff requested modification. The arbitrator addressed each of his substantive contentions and affirmed the award. Defendant then moved before the Superior Court to confirm the award and plaintiff filed a cross-motion, contesting confirmation and seeking modification, arguing the same points as in the application for modification of the original award. The trial court issued an opinion and order, confirming the arbitration award, and denying plaintiff’s contentions. Plaintiff then moved for reconsideration. The court denied the motion. The court’s decision adopted and supplemented its previous decision confirming the award. In its decision, the court found that plaintiff failed to cite any legally cognizable reason to vacate or modify the award. The arbitrator gave defendant $30,000 a year in alimony and fifty percent of the stock units that plaintiff received from his employer’s stock option plan during the marriage. The arbitrator also awarded defendant twenty-five percent of plaintiff’s annual bonuses, as part of her support. In this appeal, plaintiff again raised the same arguments that he made in his previous three attempts to modify the award. He argued that the award was unclear as to the cut-off date on which to value the stock. He argued that “during coverture” means the cut-off date is the filing of the divorce complaint, not the date of the divorce judgment. The trial court in two opinions found plaintiff’s arguments lacked merit and that plaintiff had not demonstrated that the arbitrator committed any factual or legal error. The grounds to vacate, modify or correct an arbitration award under the APDRA are limited. The Supreme Court has determined that, in general, N.J.S.A. 2A:23A-18(b) precludes appellate review of an arbitration award with only a few exceptions in rare circumstances, where the Appellate Division is compelled by public policy concerns or the need to exercise its supervisory authority. These circumstances did not exist in this case. The appellate panel dismissed the appeal, concluding it lacked jurisdiction to review the order and judgment.

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Sandy Durst, Esq. selected for membership to National Association of Distinguished Counsel

For over fifteen years, Sandy Durst, Esq. has focused his legal practice on family law in New Jersey.  This commitment was recently recognized as he was selected for membership into the National Association of Distinguished Counsel.  This elite group of attorneys represents the top one percent of attorneys in the country.  Information on the selection process can be found at www.distinguishedcounsel.org 

 

Of the 56 members from New Jersey, Durst is one of only 8 attorneys who have identified their practice area as Family Law (as of 4/22/15 listings) and the only member attorney who is based in Mercer County, New Jersey.

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My spouse wants a divorce but I don’t!

I frequently meet with people who have had a divorce “forced” upon them.  They are not the party initiating the divorce proceedings and may not even want a divorce or see the need for a divorce.  Virtually all of them ask me if there is anything that can be done to stop the proceedings or prevent the divorce from happening.  My answer, which almost always disappoints them, is that no, there is really nothing that can be done to stop a divorce if one party really wants one.

 

If there are procedural irregularities such as a failure to establish jurisdiction in New Jersey or of the case was improperly filed in the wrong venue (the incorrect county) there are steps that can be taken to correct the errors.  But once corrected, the case will proceed.

 

It is important to know that a divorce case can be initiated, proceed, and be concluded WITHOUT the participation of the reluctant spouse provided that the proper steps have been followed.  Do not simply ignore the Complaint that has been served upon you, letters from your spouse’s attorney or notices from the Court.  Turning a blind eye could result in having you held in default and this can place your rights and interests in jeopardy.

 

It is easy to become overwhelmed during a divorce – particularly if it is a divorce you did not want.  Relying on an experienced divorce attorney can help you navigate the process and protect your rights.

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