Tuesday, September 29, 2009

Facebook Status: Married, no wait . . . Single

Airing the intimate details of your divorce via online networking is rarely advisable. Documenting the most intimate, painful and personal moments of the break-up of a marriage for all to see may feel cathartic but can have serious repercussions. After all: think of who could possibly gain access to this material . . . your children, family members, co-workers, bosses, colleague, future spouses? The list is endless.

For a thought provoking article on the risks of divorce via Facebook, click here.

Taking care to know about business.

Understanding how a business is formed can help you understand the valuation process in a divorce.

If you or your spouse have a business, collecting the information relevant to that business will assist your attorney and financial expert with valuing the company, as well as the income. The discovery process will lead to the information but your preliminary research may help streamline the process and narrow the issues for your legal team. Here are some items to include in your research:

1. Find out the type of business entity, whether a sole proprietorship, partnership, S corporation, C corporation, limited liability company or other type of entity. You can usually determine the type of entity by looking at the tax return. Additionally, if the company is incorporated, most states have the incorporation information available online. The original company formation papers, shareholder agreements or stock certificates will also provide this valuation information.

2. Businesses (at least properly run businesses) have bank accounts separate and apart from the owner’s personal account. Some businesses require several bank accounts, like operating accounts and payroll accounts. Gather as much information as you can regarding the bank accounts including name of bank, account numbers and title holders.

3. Determine the accounting system used, whether a hand ledger, QuickBooks, other type of accounting software program, or a combination of all of the above. Tax returns do not always present a complete picture as to income and cash flow. Internal accounting documents will tell a more complete story.

4. Some businesses require a variety of business licenses and these may be available as a matter of public record. Understanding the types of business licenses owned by a business may help you understand the scope of the business.

5. Some businesses have insurance, such as liability insurance or key man insurance. A review of these policies can provide you with insight into the owner’s view of the value (or, sometimes, a lender’s view of the value).

If your divorce involves a business, a professional valuation will be an inevitable part of the process. To be an informed consumer of legal advice and to be more equipped to make cost efficient and economical decisions, learn what you can about business formation and operation. The IRS publishes an informative guide for novices titled: Publication 583: Starting a Business and Keeping Records. If you need a beginners’ guide, this free publication may be a good place to start to familiarize yourself with the jargon. Remember, you cannot negotiate about the value of something unless you understand the basics of its operation.

Friday, September 25, 2009

Quote of the Day

"Organizing is what you do before you do something, so that when you do it, it is not all mixed up."

- A. A. Milne -

Wednesday, September 23, 2009

Help from the tax man when happily ever after abruptly ends

Bride and groom figurines lying at destroyed wedding cake on tiled floor

The IRS publishes an excellent resource, updated yearly regarding the tax impact on Divorced and Separated Individuals. Read this excellent resource to understand such issues as filing status, exemptions, dividing retirement accounts, dependents, joint and several liability and property settlement agreements. You can view the 28 page booklet here.

Tuesday, September 22, 2009

When love goes bad . . .

The most shocking aspect of the Anne Heche divorce/custody melodrama is not necessarily dirty laundry factoids that are being aired in public: allegedly lazy stay at home husband, accusations of lunatic like behavior, infidelity, barbs about inability to parent, narcissim, etc, etc.

The real surprise is that these people were once actually in love enouigh to marry and make a baby!

See all of the sordid details here, including Anne's talk show appearance where she complained bitterly, and without apparent capacity for embarassment, about the father of her child.

Where did the love go?

Note: Anne is an actress but is more famous for her turn as the girlfriend of Ellen Degeneres, her wacky persona and her very public divorce.

I hate you but I love the dog

A pug

Ahhh . . . the drama of breakups. The accusations, the insults, the tears, the shouting matches . . . . and I am not even talking about the trauma of divorce.
Relationships that break up even before the walk down the aisle can be just as painful -- and expensive -- as an actual divorce. Do you return the engagement ring? What to do with a used wedding dress? Non-refundable deposits on the catering, photography, flowers, honeymoon . . . . untangling these messy complications ups the ante on the painfulness of the process.

When Doreen Houseman and Eric Dane broke up after a thirteen year relationship but before their wedding, they needed to divide their jointly owned residence as well as may items of personal property. They slogged through the "this is mine, that's yours process" but the family pet proved to be their undoing.

Deciding what would happen to their pedigreed pug (purchased for $1,500) resulted in the ultimate battle, requiring tens of thousands iin legal fees and three years of contentious litigation. When Doreen was not happy with the trial court's solution -- essentially Eric got the dog but had to pay her $1,500, Doreen took the case to the appellate court of New Jersey. (Notably, appeals are expensive and time consuming -- even the most basic appeal can quickly exceed ten thousand dollars in legal fees and expenses.)

The appellate court opined that the $1,500 was not a reasonable solution and sent the case back to the trial court for another go-round. You can read the appellate court's decision here.

The trial court just ruled that the parties must share the dog. Therefore, the six year old pug, named Dexter, will shuttle from home to home, every five weeks. You can read the newspaper article about the case, here. Eric and Dorwwn were not the only litigants -- the Animal Legal Defense Fund and Lawyers in Defenses of Animals both filed briefs, asking the court to consider the best interests of the dog.
Before you rush to your lawyer's office to talk about litigating over your beloved pet, realize that these people each spent tens of thousands of dollars and three years of their life on this battle. Let's hope this dog leads a long and healthy life so that Eric and Doreen can enjoy quality time with this very costly pug.

Monday, September 21, 2009

It’s a wrap!

Whew . . . finally can see light at the end of the tunnel?

If you are nearing the finalization of your divorce process or have received your decree, tie up the loose ends. Here are a few tips for a seamless transition back to the single life.

1. Keep a complete, orderly copy of your divorce file, especially the divorce decree. Your attorney does not necessarily keep these papers forever so you should make sure you keep a copy in a safe place. Scan a copy into your computer for safekeeping.

2. Take the time to review all of your bank accounts, retirement accounts, life insurance policies and any other documents or accounts with beneficiary designations to be sure that you removed your spouse as a beneficiary or co-owner.

3. Inform your employer, insurance companies, taxing authorities, government agencies, the social security administration and any other interested parties of the finalization of your divorce.

4. Order a copy of your credit report to make sure that none of your spouse’s debts or responsibilities appear on your report and that your credit accounts are properly divided.

5. If you have a Will that was prepared during your marriage or you do not have a Will at all, consult with an attorney regarding your estate plan, including Powers of Attorney and Health Care Directives.

6. You may have duties and responsibilities under the divorce settlement or the court order you receive. Make a list of all due dates, tasks, responsibilities, and other important information, so that you do not miss any deadlines.

7. If you are contemplating remarriage, you may want to consult with an attorney regarding a Prenuptial Agreement as this type of marriage planning becomes more common in subsequent marriages, especially when children or significant finances are involved.

8. Consult with your accountant regarding your options as to your tax filing status. Since you were undoubtedly divorced in the middle of a year (not everyone is divorced directly on December 31), you may need to cooperate with your ex-spouse with regard to certain deductions and credits.

9. Do something nice for yourself. Divorce, even in the most amicable situations, can be incredibly anxiety producing. Even though a divorce is not always a cause for celebration (as it is the loss of a marriage), make sure to take care of yourself by treating yourself or attending to your own needs so that you can face your future, refreshed and ready.

Monday, again . . . . . . .

“There aren’t enough days in the weekend.”

―Rod Schmidt

Tuesday, September 15, 2009

Divorce paperwork snafus

Divorce procedure in Pennsylvania tends to be paperwork intensive. A divorce involving only dissolution of the marriage (and not alimony, equitable distribution, counsel fees and costs or other claims) requires, at a minimum, the filing of a complaint, service on the other party, an affidavit attesting to irreconcilable differences, a notice of intention to seek a divorce, the paperwork required to request the divorce, and the attachments. Obviously, when a divorce involves ancillary claims, the paperwork gets a bit more complex. Making a mistake on any of the paperwork, from the divorce complaint to the final decree, can result in an expensive and time consuming conundrum.

In a case decided by the Pennsylvania Superior Court in August 2009, a wife attempted to re-open a January 2008 divorce decree, as it was defective on its face. You can review the Opinion here. The name of the case is Bingaman v. Bingaman. Although the trial court had decided to specifically retain jurisdiction of the alimony claim, meaning that the claim would remain open, the final divorce that was entered indicated that the court retained jurisdiction of no other claims. Two months after the decree was entered, wife must have realized the problem and filed a Motion to Strike and/or Reopen Decree in Divorce. The trial court denied her request and she took the claim to the Superior Court. The Superior Court found that the trial court should have opened the divorce because of a fatal defect appearing on the face of the divorce decree.

The Opinion relates how husband’s “Praecipe to Transmit Record,” (a fancy name for a request for the court to enter a divorce decree) did not comply with the forms provided required by the Rules of Civil Procedure. When a judge signed the decree, because husband had failed to note any related claims pending in his paperwork, the judge, or a staff member wrote “none” on the decree in divorce in the space provided to preserve other claims.

The moral of the story? Read, review and re-read all paperwork. Review everything with an attorney and keep an orderly file. Attempting to re-open a divorce decree later can be expensive and your success is not guaranteed.

Monday, September 14, 2009

How can parents help children during a divorce

Recently, one of my friends, the married mother of two preschool aged boys, sold their home, moved into a temporary apartment and then into a new home, all in the matter of about a month. The morning schedule is a bit different in the new house, as there is a bit of a longer drive to the pre-school. Her four year old son has had trouble adjusting to the new routine -- he is especially restless at bedtime and has exhibited some disruptive behavior.

As they settle into their new home, and everyone is getting adjusted, her son has calmed down and is getting back to his old, cooperative self. However, this anecdote demonstrates that change can take some adjusting, especially for preschool age children.

In today's Philadelphia Inquirer, a parent wrote to Ask Dan for advice on helping children through a divorce. Dan discusses how the changes can be upsetting to children and how parents must strive to make them feel safe, secure and stable. Read the advice column here for one person's perspective and tips.

Divorce and separation inevitable involve change for all involved. Do your best to keep at lest some consistency in the routine so your children feel a sense of continuity. Some ideas include: same bedtime, same mealtime, decorating the new room similar to their old room, similar schedules . . . .

Sunday, September 13, 2009

Beat stress while going through a divorce.

Take control of the situation. Read these hot tips that may help your keep your anxiety in check.
1. Put things in perspective. Generally a divorce involves dissolution of a marriage, not a death, disability, serious illness or other tragedy. Putting your divorce in perspective will help you keep a level head.

2. Commit to doing something nice for yourself - if not every day, then once a week. Taking care of yourself and your physical and emotional health will help you deal with the difficult decisions and emotional hills and valleys involved in a divorce.

3. Life starts now. So many people believe that their life will not start again until after the divorce is final. However, because divorces can sometimes take months or even years, putting your life on hold is just not practical or healthy. If you make a set of goals for yourself, start on them today. Go back to school, start an exercise program, clean out that closet, learn a new hobby, play a new sport, make a new friend: anything that will give you a sense of accomplishment.

4. Go pound pavement (or sand or a jogging path or simply your sidewalk). Any type of exercise or fresh air can help to put you in a more calming, restorative state, making you stronger for the emotional ups and downs.

Take a deep breath. Relax.

Saturday, September 12, 2009

Thinking about divorce?

If you are considering separating from your spouse, keep in mind these tips that will help you prepare and hopefully make a difficult situation slightly more tolerable:

1. Inventory your personal items, heirlooms, collections and other pieces of property that can tend to “disappear” once a divorce complaint is filed. You may even want to take photographs of your personal property to prove that it exists. For more expensive items, such as jewelry and expensive antiques, consider obtaining an appraisal.

2. Know your financial situation. Look through bills, bank statements, tax returns, brokerage statements and other financial documents so that you understand your financial status both as a couple and your financial status as an individual. If you file joint tax returns and do not have copies, you may obtain them from the IRS for a fee. Visit www.irs.gov for more information.

3. Get a copy of your credit report. Reviewing your credit report will give you an idea of the debts in your name, as well as the debts in joint names so that you understand your total liabilities.

4. Understand your health insurance options. If you are currently covered by your spouse, determine if you can obtain coverage through your own employer or through a separate policy. Finding out your options now will save you headaches later.

5. Attempt to estimate the value of your house. You can do this using online resources or consulting with a realtor. Of course, none of these estimate substitute for an actual appraisal, but because appraisals can be expensive and time sensitive, you may want to wait towards closer to the time when you distribute your assets. In the beginning stages of a separation, knowing the approximate value of your home, as well as the debt against it will help you with planning.

6. Develop a budget. While child support, alimony and other payments related to a divorce are generally based on income and guidelines, knowing your own expenses will help you to know what you can afford for negotiating purposes . . . and perhaps what you must reduce or eliminate!

None of these tips should be considered without the assistance of an attorney who is familiar with the divorce rules in your locality and can provide you guidance tailored to your specific situation.

Friday, September 11, 2009

Honey, it is over. I want a divorce.

Breaking the news to your spouse that you plan to end the marriage can be emotionally devastating and the beginning of a bitter conflict. Before seriously broaching the subject with your spouse, you may want to consult with an attorney, familiar with the divorce laws and rules in your area who can advise you as to the specifics of your situation and prepare you for best and worst case scenarios.

Telling your spouse you want a divorce before you are both emotionally and intellectually ready to handle what lies ahead may actually put you in a poor bargaining position. Sometimes, the bitterness and arguments attendant to a “divorce talk” quickly evolve into hurtful, malicious mudslinging. Unfortunately, these interactions can be extremely counter productive, especially if neither party understands their rights and responsibilities in a divorce situation.

Before embarking on this journey, I always recommend that a person considering a divorce obtain a comprehensive review of your case. Only once you are armed with the pros and cons of your specific positions, will you be able to productively discuss and potentially resolve issues with your spouse. However, if neither of you understand the process, you could end up wasting time discussing or even arguing about relevant, significant issues.

Putting the genie back in the bottle after using the divorce word is not that easy. Make sure you are armed and ready before opening this process.