Lewisville Family Law Blog

The impact of divorce on tax filings in Texas

  • 15
  • April
    2014

Divorce can have a significant impact on the tax status of the divorcing parties. The time of the divorce can determine the taxpayer's bracket and the eligibility for certain credits and deductions, which can impact the amount of income tax paid.

For IRS purposes, if the couple is still legally married on the last day of the tax year, usually December 31, then the couple will still be considered married for that tax year, even if their divorce is finalized before the tax return is filed. If a couple is still legally married on the last day of the tax year, they can choose to file jointly or separately. The benefits of filing separately are that each spouse is only responsible for the tax due on their own income and for the accuracy of information filed on their tax return. The major disadvantages of filing separately are that each taxpayer will likely end up paying a higher tax rate, and it may be more difficult to use certain tax credits, such as the Earned Income Tax Credit and education credits.

Art collectors getting a divorce

  • 07
  • April
    2014

While many Texas divorces are no-fault, even amicable divorces can lead to arguments over the division of property. The reasons for divorce can vary widely, from a couple growing apart to infidelity. Two well-known art collectors in D.C. appeared to be having an amicable divorce until recently.

Last year, the couple reported that they were getting a divorce, but that they were "best friends." However, the husband filed for divorce on April 3. In the complaint, he alleged that his wife had misled him about the potential for the couple to reconcile when he made a large down payment on a home that she has resided in for the last year. He further alleges that his wife of 11 years was already dating another man. Additionally, he says that she has changed locks on an apartment they own in Italy and asking museums to prevent the man from donating works of art.

Advisors need to dig deep for hidden assets in HNW divorces

  • 04
  • April
    2014

As many Texans know, going through a divorce can be complicated. Issues that often must be dealt with include the division of property, spousal support and child custody. In a high net worth divorce, money tends to take on an extraordinary level of importance and complexity. Assets may include such things as business partnerships or venture capital funds. According to one divorce specialist, some of those assets are illiquid, making it hard to split them down the middle. Calculating the future value of an asset can be tricky. If the asset is a business, for example, its future success may be hard to predict.

According to one divorce mediator, individuals in a HNW divorce will sometimes attempt to hide assets. However, this doesn't necessarily mean moving money to an offshore account. Hiding assets typically involves finding a way to move assets from one spouse to the other in a manner that does not show up on financial documents. Examples would include interest-free loans to family members or large purchases made with the spouse's money.

Sidestepping the common mistakes many spouses make in divorces

  • 24
  • March
    2014

Texas residents who are planning a divorce may be interested in an article detailing some of the common mistakes that spouses make. Many of these involve the misuse of social media and other traceable data.

Every time a spouse fills out a credit card or loan application, sends an email or posts on Facebook, they are creating a trail of data that can potentially be used against them. Attorneys recommend that spouses looking at a divorce be civil and think twice before they create a permanent record of anything. For example, if a spouse puts financial information on a credit card application, this could be used against them when they ask for spousal support. Often, people put inflated income numbers on applications like this, which could end up being very costly.

Ex-wife of Peter Orszag seeking increased child support

  • 17
  • March
    2014

Some Texas residents may recall when Peter Orszag was the director of the Office of Management and Budget. Prior to working for the federal government in that capacity, he was an economic advisor to President Clinton. After leaving the OMB, Orszag went on to become an executive with Citigroup at a much-increased salary.

As a result, his ex-wife and the mother of two of his children filed in 2012 for an increase in child support to $25,000 per month. In February 2014, a judge in the Superior Court of the District of Columbia ruled, over the protests of Orszag's attorneys, that his personal finances could be made public during the course of the proceedings. On March 9, Orszag's lawyers filed necessary documents that pertained to his finances. The documents indicate that Orszag is expected to make a little less than $4 million in 2014. Assets valued in the millions of dollars were also disclosed.

More health insurance options for divorcing couples

  • 12
  • March
    2014

Most Texans may know someone who has decided to stay in an unhappy marriage for the sole reason of protecting their access to health insurance. According to some family law attorneys, the Affordable Care Act may now be making it easier for such individuals to leave their marriages and avoid being hampered by such obstacles. In previous years, divorcing couples sometimes fought over continued insurance coverage, forcing one party to make some significant concession in order to ensure availability of their needed medical treatments. With ACA, these considerations may no longer be applicable in all cases.

One attorney from a Philadelphia law firm says that she was once involved in a divorce case wherein the man had obtained health insurance through his wife's employment. As part of their separation agreement, the wife agreed to stay married for eight years in order to avoid interrupting that coverage. In addition, had she chosen to remarry within that time period, she would have to continue providing him that insurance. While this may seem like a significant concession on the part of the woman, the man's attorney says that he made a number of concessions of his own because he could not afford to go without insurance.

Stay organized during and after your family law dispute

  • 07
  • March
    2014

When you are navigating a family law dispute, certain elements of the process can prove to be overwhelming. Even with an experienced family law attorney navigating much of the process on your behalf, you likely must keep track of a mountain of paperwork, dates related to your legal proceedings and other dispute-related tasks. As if divorce, child custody disputes, domestic violence cases, adoptions and other family legal issues are not taxing enough already, most of these processes require you to stay highly organized.

In addition, the need to remain organized will not likely cease once your dispute has been largely resolved. If you are domestic violence victim, you will need to carefully file away all related paperwork and come up with a plan of action if your abuser violates his or her order of protection. If you have recently divorced, you will need to track all financial information affected by the divorce for as long as your divorce settlement directly affects your finances.

The potential need for divorce planners

  • 28
  • February
    2014

When a couple decides to wed, the process of planning a wedding celebration can seem overwhelming. As a result, many couples opt to hire wedding planners who help to walk them through the ins and outs of planning a wedding. While planning a wedding ceremony and reception can be stressful, the process of planning for both the process and aftermath of divorce is almost unquestionably more stressful for most couples.

Increasingly, individuals who have chosen to file for divorce are choosing to enlist the help of so-called divorce planners. Divorce planners are not a necessity. Depending on your circumstances, you will almost certainly need to enlist the help of an attorney to file for divorce and you may need to seek the help of other professionals such as a financial planner or a counselor to help you through your divorce. These individuals provide critical assistance to individuals transitioning from a married life to a single one. However, divorce planners may help you in ways that are not as urgent but are nevertheless important to you.

Why retaliation against your co-parent is a choice worth avoiding

  • 21
  • February
    2014

You may have excellent reasons for being frustrated with your co-parent. You may even have good reasons to be enraged by your co-parent. But it is far better to speak with an attorney, a counselor, a trusted loved one or some combination of these support people than it is to retaliate against your co-parent in any way. Not only is retaliation a poor choice for your own wellbeing, it is a poor choice for your child’s wellbeing and may even affect your ability to gain or retain the child custody arrangements that you prefer.

Retaliation is ultimately viewed as uncooperative parenting behavior by family law judges. More minor instances of retaliation could simply paint you in a bad light in the eyes of the court. More significant acts of retaliation could call into question your fitness as a parent, even if your co-parent has arguably behaved in worse ways.

Thinking about potentially necessary divorce-related reforms

  • 14
  • February
    2014

Over the past several years, the nation’s lawmakers, media and public have become deeply invested in various efforts to reform a few key areas of American life. Specifically, the U.S. has become fixated on reforming healthcare, immigration policies and sentencing laws for low-level, nonviolent drug offenders. All of these issues are pressing and arguably affect every aspect of the economy and deeply impact the ways in which a great number of families are able to live their lives.

In addition to reforming these areas of the American experience, it is also important to continue reforming another important area. The nation’s laws and culture are in need of reforms when it comes to the divorce process. And while many experts and advocates are pushing for change, the national discussion will likely need to center on this topic more broadly before significant reforms are likely to be both prioritized and passed.