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New Jersey Family Law Blog

Divorce settlements may not focus on alimony much longer

Couples in New Jersey who have finally come to the decision that they will end their marriage understandably may feel overwhelmed by the emotional toll of the choice they have made. However, if they believe that one of the spouses might be deserving of spousal support, they will not want to wait long before taking steps to get their divorce underway. As difficult as this sounds, the reason for this is because by waiting, that person may end up with a lot less in alimony than if they can manage to get their divorce completed this calendar year.

As reported by CNBC, current alimony payments are tax deductible by the person who makes the payments and while that means the receipient has to pay the taxes it also means the paying spouse may be more willing to agree to making those payments. Under the new tax plan, any divorce completed as of January 1, 2019 or later will find the paying spouse also responsible for income taxes on alimony. As such, these spouses may not be so willing to agree to spousal support.

Divorce, alimony and shifting dynamics

New Jersey residents going through divorce are all too familiar with the frustration that can often accompany procedures, especially when it comes to the fine print. Navigating alimony post-divorce alone can present obstacles for some ex-spouses, depending on the situation. As far as the process goes, recent news reflects future changes in regard to alimony in the state of New Jersey.

News 12 New Jersey shared in February that future changes will be taking place in the state's alimony laws. More specifically, these modifications are connected to New Jersey's tax plans: starting in 2019, alimony payments will no longer constitute a tax deduction for spouses who pay alimony. By the same token, spouses receiving alimony will no longer include alimony as income. However, those going into a divorce agreement prior to December 31, 2018 will still work under the old regulations regarding alimony. 

How can I prepare to tell my kids about my divorce?

Whether you have one, two or ten children the thought of telling them that you and their other parent are going to get divorced may well cause you great angst. This is understandable and many New Jersey parents have walked in your shoes before. While this is admittedly a difficult thing to do, it is not impossible and there are some things you can do to help make it more emotionally balanced for your children.

One thing Parents magazine recommends is that you think carefully about what you want to say and that you even consider rehearsing it to a point. You might even want to make notes for yourself so that you do not forget points you know you want to make. Even though only one spouse might have initiated the divorce, when you tell your kids, it is best to position things as though getting a divorce was a mutual decision. Children will feel more supported if they get the sense that their parents are of like mind in these matters.

Postnups and at-home parents

Whether you and your spouse in New Jersey have been married for many years or are newly married, you may end up making different decisions about raising children than what you originally planned. It is not uncommon for people to assume that both parents will continue to work after they have kids but to later on choose for one parent to stay home with the children. If you are the parent who is going to give up your career, you may want to consider creating a postnuptial agreement.

As explained by Today, leaving the workforce even for just a few years can make it much harder to get back in the job market at a comparable salary should you desire later on. If you remain married to your spouse that may not be as much of a concern. However, if you get divorced, your need to earn more money could take on a new level of importance. A postnuptial agreement can provide valuable protection for you when you decide to leave a career for your family.

Defining a divorce from room and board

If you and your spouse have chosen to separate, then your next step will no doubt be to consider the future of your life together in Hackensack. Such is the conundrum that many have brought to our team here at Melinda L. Singer, Esquire. There hopes typically were to enter into a legal separation, to which we informed them that New Jersey technically does not recognize such statuses. Rather, the state allows for a divorce "from room and board." 

The concept of a room and board divorce originates from the Latin term "a mensa et thoro," which literally translated means "from table and bed." Couples in such a status are recognized as still being married without engaging in the intimate and domestic privileges that typically come with marriage. You could easily say that a room and board divorce is different from a legal separation in name only. You still cannot remarry without officially getting a divorce, yet you and your spouse still have access to the financial benefits reserved for married couples. 

Enforcement actions for unpaid child support

People who have been ordered by a court to make child support payments in New Jersey may want to learn about the various ways that the state might enforce such an order. It is also important for them to know that the state has the power to also enforce the requirement to provide health insurance coverage for a child as explained by the New Jersey Department of Human Services.

The state tracks the payments of child support or the existence of health care insurance via a dedicated computer system. If there is a noted gap in what has been ordered and what has been paid or provided, there are multiple ways that the state may attempt to collect the money. These include the reporting of arrears, which is the falling behind on child support responsibilities, to credit bureaus, taking assets from the parent who is ordered to pay, collecting money from the parent's wages or other sources of income and more.

How can I protect myself financially in a second marriage?

The ability to find a new love after the dissolution of a previous marriage is something that can be a great joy to New Jersey residents. The prospects of a brighter future with a new partner, however, should not allow you to ignore some practicalities before you make the final decision to get married again. Regardless of how wonderful your new partner is, the fact of the matter remains that second marriages can be far more financially complicated than first marriages especially if there are children involved.

Yahoo Finance points out that a prenuptial agreement may be one of a remarrying spouse's best friends so long as it is prepared properly. Many things can be put into these marital agreements that may help to prevent unpleasant surprises or disputes down the road. Imagine that your spouse has a child who is in high school and preparing for college. Deciding before you get married about how that college education will be funded is important. So too is documenting that decision in a prenup.

Divorce negotiations may change under new tax law

If you are one of the many spouses in New Jersey who is considering whether or not to stay in your marriage or to pursue a divorce, you will want to know about how changes in the tax code might impact you differently this year than next year. Updates to tax laws, deductions and more are not unusual but the recently passed Tax Cuts and Jobs Act may have significant ramifications for divorcing couples.

As explained by CNBC, starting in January of 2019, a person who receives spousal support does will no longer need to report the payments as income on a tax return. This means that they will be able to receive the money with no associated tax responsibility as has been the standard for several decades now. Instead, the spouse who is ordered to make alimony payments must pay income taxes on the money. Up until now, payors of spousal support have been able to deduct these payments from their taxable income.

What is a qualified domestic relations order?

New Jersey residents who get a divorce may be worried not only about their current finances, but also about their money in the future. This is particularly true if you were relying on the idea of having retirement benefits or a pension through your ex-spouse. Fortunately, there are still ways to get your share of retirement and pension benefits.

The United States Department of Labor (DOL) defines qualified domestic relations orders (QDRO) as an order that assigns or acknowledges your right to get some or all of your rightful retirement or pension benefits from a plan shared with your ex-spouse. This differs from domestic relations orders, which is a more general term that applies to the division of property rights, alimony, or child support payment.

How does a legal separation affect your taxes?

When you and your spouse are legally separated in New Jersey, you may think most about the day-to-day aspects of your separation. Your separation usually affects your taxes, though, and as tax season approaches, it is important to understand what factors you need to consider.

Your child support usually affects your taxes when you are legally separated. According to Marriage.com, you and your spouse cannot both claim your children as tax exemptions. You may want to decide in advance which of you will benefit most from these tax savings. If you have more than one child, it might sometimes be best if you each claim one of the children on your taxes. It is important to remember that your child support payments usually are not tax-deductible. Additionally, your spousal support is another factor to consider as you prepare to file your taxes. If you currently pay spousal support, you can usually deduct these payments. If you receive these payments, though, they are considered taxable income.

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Melinda L. Singer was selected to the 2017 & 2018 Super Lawyers list. The Super Lawyers list is issued by Thomson Reuters. A description of the selection methodology can be found at: http://www.superlawyers.com/about/selection_process.html. No aspect of this advertisement has been approved by the Supreme Court of New Jersey.

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Melinda L. Singer was selected among the Top Lawyers in Bergen County by (201) Magazine in 2013, 2017 & 2018. The list of Top Lawyers in Bergen County was compiled from the results of a peer-review survey, conducted by Professional Research Services (PRS) of Royal Oak, Michigan. According to (201) Magazine’s website, “[t]housands of attorneys throughout Bergen County were contacted by PRS and asked who they would recommend within the county in given areas of law.” For more information on the criteria for being selected as a Bergen County Top Lawyer, see http://dng.northjersey.com/media_server/201/201_Magazine_TopLawyers_2015.pdf. *No aspect of this advertisement has been approved by the Supreme Court of New Jersey. The lawyers nominated to (201) Magazine were included in the lists with those names, and do not suggest that the lawyer has that attribute.

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