Spartanburg Divorce Lawyer & Attorney : Stevens-MacPhail Law Firm : South Carolina Family Law Serving Columbia, Charleston, Greenville, Hilton Head Island

The South Carolina Family Law Blog is proud to once again sponsor a youth baseball team (the Tigers) in the Hillbrook 7-8 year old spring baseball league.  I am our team's head coach again this year, and it looks like we have a great group of kids.  Coaching youth baseball is hard work, but it is always great to see these kids learning to play baseball and also to work together as a team.  If any of my readers are interested in following our progress this season, our team has its own webpage located here.  Go Tigers!

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A local candidate for County Council finds himself the target of public accusations of breaking up another man's marriage.  The husband claims that the politician had an affair with his wife, and he has been driving a truck around town with a large placard that says "__ WHO IS RUNNING FOR COUNTY COUNCIL DIST. 1 HAD AN ADULTEROUS AFFAIR WITH MY WIFE __."  (Note:  I am omitting the  names of those involved for this post, but they can be found in the article specified in the link below.)

The politician claims that he was only helping a longtime friend who was in an abusive relationship.  He and the wife both deny that their relationship was sexual in nature.  However, the husband was granted a divorce from the wife on the ground of adultery last November, and a private investigator reported seeing the wife and the politician at his home, a restaurant, and a hotel in a nearby town.  Further, the investigator claims that he saw the wife and the politician kissing.

I previously posted a discussion of how nasty divorces can become when they involve a public figure.  This case is a peek into the deep hurt that a spouse can feel when he believes (rightly or wrongly) that his spouse has cheated on him and how tough it is to let those feelings go, even after divorce.  I have found that people get over these feelings at varying rates, and unfortunately some never do.

In many cases, clients want "revenge" against their spouse and/or the paramour.  I caution my clients against such conduct, and I urge them to consider the short term "good feeling" that they might get from such conduct and to weigh that against its long term consequences.  Once they do so, they see that it is simply not worth it to seek such revenge. 

For instance, what if the parties in this news story have children?  What if the husband causes the politician to lose the election, but he is still not satisfied?  Where will it all end?  I would venture to guess that it will end up back in court -- unfortunately that could be any combination of family court, civil court, or criminal court.

You can read much more about this situation in "Spartanburg County Council Candidate Denies Affair Claims" by Robert W. Dalton, published in the Spartanburg Herald Journal.

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The South Carolina Supreme Court recently decided a case that addressed the importance of obtaining voluntary parent consent in adoption cases.  This case also included a thorough discussion of the relinquishment law in our state, particularly when compared with that of surrounding states.

In McCann v. Doe, the Court held that abundant evidence existed to support the Family Court's determination that the biological mother's consent to relinquish her parental rights was involuntary.  The Family Court ordered that the child be returned to the biologial mother, and the Supreme Court found that was also proper. 

While both the adoptive and biological parents presented evidence that they were fit parents, it was in the child's best interest to be raised by its biological parent and for custody to be returned to her.  You can read the full text of McCann v. Doe by clicking HERE.

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The news media is abuzz this morning about former actress and playwright Tricia Walsh-Smith's YouTube video in which she rants about her divorce case.  Apparently, she is upset that she signed a pre-nuptial agreement, and she has chosen to air all of her husband's dirty laundry in public via YouTube.

Is this a good idea?  Not in a million years!  All she is doing is putting information out there that at best will irritate or anger the judge and at worst will be give her husband additional ammunition to use against her in the divorce case.  I can only imagine how upset Ms. Walsh-Smith's attorney is this morning at the mess his client has created for herself.

This is a perfect example of a divorce party having a half-baked idea and then acting on it without thinking through all of the ramifications.  I had a case years ago where my client's wife had cut off one sleeve on all of his business suits.  It probably made her feel better at the time, but she certainly was not laughing once the judge had his say on her actions.

You can view the video below, and you can also read more about this situation in the Chicago Tribune, London Daily-Mail, CNN, Washington Post, People magazine, and the Los Angeles Times.

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Pursuant to an Administrative Order issued on April 2, 2008, the South Carolina Supreme Court drastically overhauled the Financial Declaration that must be filed in Family Court cases.  This is the first significant change to the Financial Declaration form in almost twenty years.

I believe that this new format will prove to be much more useful once the Judges, attorneys, and parties get used to it.  It not only provides more information, but it also provides more practical, helpful information.  Some of the more significant changes are:

• The field to include the social security number has been deleted;
  
• "Husband/Father" replaces "Husband" and "Wife/Mother" replaces "Wife";
  
• The "Marital Assets Addendum" section has been deleted, along with endnotes 1-4 on the previous form and endnotes 1-21 were added throughout the form to define the associated terms;
• The following sections were added to the form: "Any Non Marital Property Claimed By You," "Financial Accounts Section," "Voluntary Retirement Accounts and Pension Accounts Section," "Publicly Held Stocks, Bonds, Securities, Mutual Funds Section (Non-Retirement)," and "Real Estate Section."
  

You can download a copy of the new form by clicking HERE. 

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From The Oregon Divorce Blog:

Clients often come to me asking whether they or their ex-spouse/unmarried parent of their child can claim their joint child as a dependents for tax purposes and receive the dependent tax exemption. They often think that this is a decision that is up to them and attorneys often use it as a bargaining chip.

In a divorce or custody case I am representing clients in state court. The United States Congress, through the tax code, has determined how the child/dependent tax exemption should be awarded. The supremacy clause of the United States Constitution prevents state courts from deciding issues of federal law. This means that a state court cannot properly award the exemption to a parent who otherwise would not qualify for the exemption under federal law.

The qualifying parent under IRS rules is the “custodial parent,” which is defined as “the parent having custody for the greater portion of the calendar year.” The award of “legal custody” has no effect on this definition, rather the custodial parent is “the parent with whom the child resides for a greater number of nights during the calendar year.” In cases where the child resides an equal number of overnights with each parent, the parent with the higher adjusted gross income for the calendar year is awarded the exemption.

Parties can agree to share the exemption or to have the parent that does not qualify receive the exemption. This is usually accomplished by a provision in the parties’ judgment. In order to provide the non-qualifying parent with the exemption, the qualifying parent must sign a written declaration and the declaration must be attached to the non-custodial/non-qualifying parent’s income tax return. This can be completed using IRS tax form 8332, which can be found here http://www.irs.gov/pub/irs-pdf/f8332.pdf.

A decision to allocate the dependent exemption to the non-qualifying parent should not be taken lightly. In addition to the exemption, the non-qualifying parent will also receive the child tax credit. Therefore, an agreement to deviate from IRS rules can have significant tax impacts for the qualifying parent and creat a tax windfall for the non-qualifying parent. If the agreement will be included as a provision in a judgment, the decision to do so should be carefully discussed with your attorney.

The IRS Frequently Asked Questions located at http://www.irs.gov/faqs/faq-kw46.html provides detailed information on this question.

Source:  "Who Gets to Claim the Child Tax Exemption?" by Sean Stephens, published at The Oregon Divorce Blog.

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Several weeks ago, I published part one of “Your Family’s Financial Plan:  Are You Prepared in Case of a Family Catastrophe?” by Aimee Waite, a Financial Advisor with Raymond James & Associates.  Today, I am pleased to bring you part two.  Thanks again to Aimee for sharing this information with my readers.

Part 2: Changes to be made to your financial plan if you get divorced and how to figure your expenses and income as a newly single person.

Whether you are a man or woman getting divorced, you will need to evaluate your current financial plan and make necessary changes. Here are some of the most important things to keep in mind.

1. Create a budget. For an entire month, keep track of your income and expenses and then decide how the divorce will change them. Your bank statement is a good indication of both income and expenses. Then ask yourself - after the divorce, will you have less income? Higher expenses? Your financial advisor is also a good resource to help you determine what you have and what you’ll need. Remember, it’s best to estimate expenses as higher and your income as less to make sure you have enough money available.
2. Evaluate insurance needs. 
   • Health Insurance:  After the divorce, will you still have health insurance? Will your children? Who pays for the health insurance? And is the coverage only temporary? 
     
   • Life Insurance:  This is especially important if you are receiving child support or alimony payments from your ex-spouse. If you are, make sure that your ex-spouse has life insurance and that you, as the custodial parent, are the beneficiary. And periodically request proof that the policy is in force.
     
   • Talk to your attorney about whether this should be a part of your divorce settlement.
     
   • In addition to life and health insurance, make sure to change your beneficiaries and modify your property insurance as necessary.
     
   • If you need new insurance, make sure to get several quotes so you know you’re getting the best coverage at the best price.
3. Revise your will and your estate plan. Your attorney, financial advisor, and tax advisor will be able to help you with these as there are many factors to consider. Specific areas to note are how the divorce will affect the tax aspects of your estate plan, gift tax implications to consider, and changing the power of attorney, personal representative, or successor trustee listed in these documents.
4. Financial Goals & Investment Style. You may find that after the divorce you have new financial goals and you need to prioritize them. For example, now it may be your ex-spouse’s responsibility to pay for the children’s college education giving you the opportunity to travel. Or, you may need to wait a little longer until you retire because your annual expenses have increased. Your investment style may also change based on your needs. It may be necessary to be more aggressive or conservative with your investments. Sit down with your financial advisor to discuss your needs and then prioritize them. Decide on an investment style that best suits your situation.

This information is provided by Aimee Waite, Financial Advisor, with Raymond James & Associates, 101 W. Broad Street, Greenville, SC 29601. If you would like to contact Aimee in regards to your financial planning, you can reach her at 1-800-922-2364 or Aimee.Waite@RaymondJames.com.

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As you are aware, tax filing day (April 15th) is next week, and the following article from the Chicago Family Law Blog provides an excellent analysis of several important issues that divorcing couples face.

Prior to filing for divorce, various federal tax considerations should be reviewed due to their potentially profound implications. Among the major issues commonly covered in a divorce decree or agreement are: alimony, sometimes referred to as "spousal" or "separate maintenance" support; division of property; and child support. Each has its own tax treatment and implications.

Division of Property

Most divorces involve a division of the property owned by the couple. Such a division of property is not usually a taxable event, i.e., neither owes taxes nor gets a deduction from income because he or she receives certain property as a result of the divorce.

There are, however, tax implications following divorce that affect future taxes. More specifically, selling personal and real property in the future may require spouses who received such property (pursuant to a divorce) to pay taxes in connection to that property.

Personal and real property have a "basis" for federal tax purposes. The basis is usually the purchase price of the property. When the property is sold later, the amount by which the sales price exceeds the basis is called "capital gain." Capital gain is usually taxable at special rates. Thus, when property distributed pursuant to a divorce decree is subsequently sold by the receiving spouse, the receiving spouse may be required to pay taxes on the proceeds of the sale.

For example, in a divorce, the wife may receive the family home while the husband might receive stock or other investments equal in value to the house. If the house has a lower basis than the stock, when both are sold, the husband could end up with significantly more money, because he owes less capital gains tax.

On the other hand, under tax law applicable at the beginning of 2004, the first $250,000 (for individuals) or $500,000 (for couples) of the taxable gain on the sale of a qualifying personal residence is exempt from tax. In light of these tax issues, selling the house before the divorce, then dividing the proceeds, might make more sense.

Child Support

The parent who is granted custody of the child or children from the marriage, usually receives a set amount of money per month as "child support." Child support payments are not includable in the taxable income of the receiving spouse and are not tax deductible by the spouse making the payments.

If the written agreement or divorce decree orders both child support and alimony and the spouse making the payments pays less than the required total amount, for tax purposes, the child support obligation is deemed paid in full first. Only money exceeding the amount of the child support obligation is treated as alimony.

Alimony or "Spousal Support"

In general, for federal income tax purposes, alimony and "separate maintenance payments" are "deductible" from the income of the spouse paying and includable in income for the recipient. "Deductible" for federal income tax purposes means it is subtracted from a taxpayer's gross income before taxes are calculated, resulting in lower taxes. Taxpayers with a threshold amount of deductions must file a particular form with the IRS when paying income taxes and list such deductions.

Between the time a couple separates and a divorce decree is granted, one spouse may pay money for the support of the other spouse. These payments are deductible as long as they are made pursuant to a decree, court order or a "written separation agreement." In order for alimony payments to be deductible, federal tax laws and regulations require the following:

• The payments are made in cash, check or money order (no promissory notes, transfers or use of property, transfer of services, etc.) to the spouse, or to a third party in lieu of alimony at the written request of the recipient spouse, stating the payments are intended as alimony, and the request is received before the tax return is filed.
• The divorce decree, order or the written agreement of the parties does not identify the payments as something other than alimony.
• The spouses do not file a joint return with each other.
• The spouses are not members of the same household when the payments are made, if they are legally separated under a decree of divorce or separate maintenance – separation within the family home is not sufficient.
• There is no liability to make the alimony payments after the death of the recipient spouse – if part of the payment amount continues after death, that portion is not deemed alimony, and if all of the payment continues, none of it is alimony.
• The alimony payments are not treated as child support.

Source:  "Divorce-Related Federal Income Tax Principles" by Alan Pearlman, published at the Chicago Family Law Blog.

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The following tips can help you get a fair divorce and save you a great deal of time, stress, and money:

• Once you have made the difficult decision to end your marriage, begin to focus on the financial issues as soon as possible.
  
• Get a good attorney to ensure you receive an equitable settlement, and get the best attorney that you can afford.
• Remember that most states determine the value of the marital assets (including retirement accounts) based on the date the case is filed with the Court.
  
• Consider when to file your case and whether it might be worthwhile to file sooner or later if you know when significant financial events will occur, such as receiving a bonus at work.
  
• If the mortgage is listed in your name (or both name) and your spouse will receive the house, insist that he/she refinance to remove your name from the mortgage as soon as possible.
• Make copies of all recent financial statements, so that your attorney will have an accurate listing of the accounts, balances, etc.
  

Source:  "Parting Ways? Your Guide to a Fair Divorce" published in the Erie Times-News.

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