My paralegal Cat found this flowchart online recently at the Riverside County Superior Court website. It shows the decision-making structure that parties to a divorce generally follow while going through their divorce. I highly recommend looking at this to help demystify the process.
I do not think anybody actually likes paying income taxes, no matter what they say. True, the many benefits of taxes include things like roads, police, and even my beloved courthouses, but it is hard to part with a portion of every cent I earn.
In a divorce, child support and spousal support issues have different tax consequences. In general, a child support payment is considered the paying party’s obligation to support his or her child, which every person in the United States has an obligation to do from their net income after paying income taxes. Because of this, child support payments are not tax deductible, though dependent children are.
On the other hand, payment of alimony (or, in California, “spousal support”) is considered the sharing of income before the earning party has the opportunity to enjoy it. Because spousal support is the income of the party who is receiving it, and not the obligation every parent has to help support children, the paying party has traditionally been able to claim spousal support as a tax deduction, and the receiving party must pay regular income taxes on spousal support received.
In this article, a tax court considered whether to allow a paying party to claim deductions to taxable income write off alimony payments made before a court made orders requiring the paying party to pay alimony. The court made the following conclusions:
To qualify for a deduction, alimony must meet the following requirements:
In other words, the IRS and tax courts will want a formal written order (even if agreed) that mandates the payment of spousal support before the paying party can deduct alimony payments from his or her taxable income. Such agreements are relatively simple, and there are forms on the California Courts website that you can use, but they do not always fit what a specific couple needs. A simple spousal support order should cost relatively little if you need to consult an attorney or a legal document preparer.
Source: Zero Alimony Deduction for a Split Bonus, Tax Court Says | AccountingWEB
I have kids. Young ones. They exemplify the term, “This is why we can’t have nice things.” Our art is mostly made by them, or from a local housewares store.
In my career, I have run across several couples with collections of valuable fine art. Every time, the fine art collection has posed a problem in the division of property. Here are some examples of the real arguments I have heard about art and other collections:
There are two problems with any collection of valuable items, including art, while you are dividing them in a divorce:
The simple advice in this article from the Wall Street Journal is excellent, but only really works if at least one party comes to terms with the second of these two issues: the emotional attachment to the art or collection. The toughest part often is in finding an appraiser who can place a reliable value on the collection. The internet is a great resource to find appraisers for just about any collection.
When you are dividing items from the household, emotional distance is key. The more intrinsic value you place in an object, the more power you give to the other side. Find your Zen, find an appraiser, and divide your community property.
Getting a divorce started is one of the simplest parts of the process. Here is what you need, and how to get it done.
Forms:
The forms required to start your divorce in California are available online for free, and are relatively simple to fill out. The forms include these:
Download all four to your computer first, because they will not save with the portions you will need to type in later.
Prep Work:
Make an inventory of the things you know you bought while you were married. While making that list, try to estimate what everything is worth. For things like furniture, use “Craigslist” or “garage sale” values. For cars, use Private Party value from kbb.com.
Filling Out the Paperwork:
The Summons.
Start with the easiest one: the Summons. To fill out the Summons, put your spouse’s name in the “Notice to” line at the top. Then fill out your name at “Petitioner’s name” line. The court will provide the case number when you file everything.
Fill out the bottom of the first page with the address of the courthouse, and the your own name, address, and telephone number at the very bottom. The second page does not need to be filled out.
Make three copies, or two copies and a scan. Set the original and the copies aside.
The Property Declaration.
The series of boxes at the top of the first page is the “caption.” It needs the following information: (a) your name, address, and telephone number; (b) the court’s address; and (c) the names of you (as Petitioner) and your spouse (as Respondent). As before, the court will provide the case number when you file your documents.
The Property Declaration has instructions on the last page. This is where your inventory of property comes into play. Fill it out the best you can. Your list of property does not need to be exhaustive, so long as you hit the most important things, like the house, cars, investments. Also, you can lump certain things, like collections, together in one line, like “gun collection” or “women’s jewelry.”
Make three copies, or two and a sacn. Set the original and the copies aside.
The Petition.
The Petition is pretty straightforward, too. Fill out the caption like you did in the Property Declaration. Check the box for “Dissolution of Marriage,” “Legal Separation,” or “Nullity of Marriage.” (I will discuss the difference in a separate article.)
Check the box next to Petitioner for paragraph 1, “Residence.”
Fill out the date you were married for line 2(a).
Fill out the date you and your spouse stopped living as a married couple for line 2(b). (I will discuss date of separation in a separate article.)
Fill out the total duration of your marriage in line 2(c).
If you have no children with your spouse, check the box for 3(a). If you have children, check the box for 3(b), and list their names, birthdates, ages, and sexes. At this point, you will also need to fill out your Declaration under Uniform Child Custody Jurisdiction Act if you have kids.
If any of your kids were born before you were married, and you have a voluntary declaration of paternity, then check the box for 3(d).
Under Part 4, check the box marked “below.” In the space under “Item” write this:
“All property obtained before marriage, after separation, or by gift devise, or bequeath; and any property purchased using the proceeds of the sale of any such property.”
In the space under “Confirm to” write “Petitioner.”
Under Part 5, check the box next to part 5b, and the box next to “in Property Declaration (form FL-160)
Ninety-nine point nine percent of divorces and legal separations are based upon irreconcilable differences. If that is what is motivating you to get a divorce, then check the box under 6(a)(1) for divorces, or 6(b)(1) for legal separations. If you are asking for annulment, call a lawyer to talk about your case.
Paragraph 7 is where the trickiest parts of the Petition are located.
Sign and date the Petition. Make three copies, or a scan and two copies. Set them aside.
Declaration under Uniform Child Custody Jurisdiction Enforcement Act.
If you have minor children with the other party, you must fill this form out. The caption is filled out just like the other two documents. If you have domestic violence, child neglect charges, a contested adoption issue, or any other legal problems regarding your children, call a lawyer because things will get confusing while filling out this form.
List your oldest child first in Box 3a. Put all prior addresses going back five years.
Assuming all your children lived with you together at the same address, write the name of your other child in box 3b, and then check the box under his or her name stating the address information is the same for all other children.
On the second page read through everything carefully. If you can honestly answer “No” to everything under part 4, then check “No.” If you must answer yes, then call a lawyer. Same thing about paragraph 5. If there is an existing Domestic Violence Restraining Order, then call a lawyer. And same thing with paragraph 6. If you must answer “Yes,” call a lawyer.
Sign and date this form, too. As before, make three copies, or one scan and two copies. Set it aside.
Assembling the final product.
Take the original Petition. Behind that, add the Property Declaration and then the UCCJEA form. Staple them together. Make the other two (or three) copies look the same. Many courthouses require you to punch two holes in the top edge of the document so they can be affixed to the court’s file. Punch all three copies.
Then staple the summons and use the two-hole punch on it.
Going to Court.
As of the date this article was written, the filing fee is $435. Bring a check, the originals, and two copies with you down to the family law courthouse. Go to the clerk’s office. Wait in line. File your documents, and pay your filing fee.
You just started your divorce process!
Though this article is written for people generally and needs some fine-tuning for California, it is the best I have seen in years related to pre-divorce planning.
In addition to these steps, someone wanting to prepare for or initiate a divorce in California needs to consider several other issues, including establishing the date of separation, temporary arrangements post-separation (including co-habitation agreements or arrangements where the parties continue to live in the same home, only separately) and dealing with regular expenses.
In cases where nothing is urgent, I often give clients advice to put off filing for divorce to allow them to prepare other aspects of their lives, including preparation for separate living, arranging estate plans, or other similar issues.
Review the article carefully. If you have questions about how to prepare for your divorce, call us for a free 20 minute consultation.