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Three Leading Causes of Divorce

You may or may not be surprised to learn that the divorce rate in the U.S. has been around 50% for many years. While there is a myriad of reasons as to why divorces can occur, there generally are commonalities between all divorce cases. In many instances, money and finances can cause a lot of distress. Ultimately, if we can solve our issues with finances, many people would be able to avoid divorces. Top Divorce attorneys in Scottsdale recommend paying attention to the following list of three of the most common money problems in a marriage along with some solutions that can help get you back on the right track.

Financial Secrets

It’s in your best interest to never hide money from your spouse. Finding out about a secret stash of money can lead to mistrust. Ultimately, this will impact other areas of the marriage.

Solution

Do not keep secrets from your significant other. It’s important to be entirely transparent, which builds trust and fosters love.

Weak Communication

It’s absolutely imperative to have a strong foundation for communication with your spouse. Couples who do not talk about their finances will inevitably experience trouble sooner rather than later. Ultimately, you should seek to establish trust with each other. Once you have this, it’s okay to relinquish the financial management role to one partner over the other.

Solution

You should set up regular meetings with your spouse to discusses finances. For example, talking about mutual access to online bank accounts will only help your marriage.

Not Enough Savings

It is no surprise that many American families have under one thousand dollars in savings. Think about it: with no money in the bank, you will undergo stress.

Solution

There is no question that you have to generate and save money for unforeseen expenses. You should have separate savings account devoted to just this.

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6 of the Hardest Moments During Divorce, According to Women Who Have Experienced It

It can be hard. It can be ugly.

Divorce is never a good thing (in the moment), but it happens.  A lot.

Of course, divorce can always end up being a good thing when all is said in done, but going through the process yields some difficult and challenging times. There are arguments about money, child custody, real estate, residences, and more. These disputes seem to go on forever with little to no resolution.

While every divorce is a little bit different, arguments about money generally top the list. Especially if you’re in business with your spouse, figuring out how to separate money can be a brutal task. The process involves lawyers and a lot of tears. Sure, there are things that be done to prevent divorce, but sometimes it is unavoidable.

Why must divorce be so hard? It need not be.  Divorce attorneys in Scottsdale will tell you that there is a right way to approach this transition as opposed to the long-reviled “scorched earth” approach.  Is it really worth the emotional and financial trauma to “go to war” with someone you once loved deeply?

That said, let’s take a look at six of the hardest moments during a divorce, according to women who have been through the conventional litigation process to achieve it.

Money Stress

During your marriage, there are times when you may have discovered your spouse handling finances in a secretive and non-transparent manner. For example, perhaps your spouse had a gambling or substance abuse issue that caused depletion of your community funds. This can end up very, very messy.

Leaving Your Home

After pouring your heart and soul into your primary housing (including potential renovations), having to either sell it or move out is a very difficult process.  Memories were made in that space, the children grew attached, school districts were established.

Feeling Unsafe

One of the most compromising feelings is the notion that you’re in a dangerous physical predicament During a divorce, you may experience blowout fights that can result in the feeling of being unsafe.  Your lawyers can solve this problem rapidly and with strength so you can sleep well at night.

Seeing Someone Else

Things can get ugly if/when you find out that your spouse is romatically seeing someone else prior to divorce papers officially being filed or later on, finalized. This can be seen as disrespectful and downright rude.

Time Away From The Kids

Not being near your kids each and every day can result in a lot of heartache. Experiencing divorce is hard enough; losing time with your kids may be harder.

Losing Your Best Friend

After all, people tend to marry who they refer to as their best friend. Knowing that you’re losing your friend and husband/wife at the same time can be a deflating feeling.

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Four Logical Tips to Improve Your Marital Finances

It is no secret that nearly all marriages come with financial obstacles. Big or small, money issues will inevitably come up and will certainly be stressful. Whenever you are feeling strapped, you may overreact and try to completely overhaul your finances. Having said that, saving money in short, aggressive spurts is the financial equivalent of a crash diet and therefore never truly works.

Divorce attorneys in Scottsdale recommend sticking to the following four financial tips to secure comfort and peace of mind in your marriage.

Set A Grocery Limit

Due to the simple fact that a grocery bill is not a fixed expense (like a car payment or internet bill), food costs can be significantly reduced. Try creating a meal plan before going to the store and buying only for those specific meals. Furthermore, you can consider buying your groceries online. This way you’ll know exactly what your total bill will be before you buy.

Walk (Everywhere)

There is no question that walking places will save you money. Outside of walking, public transportation is the next best option. Buses and light rails are a perfect way of getting around in an urban area. However, walking with your spouse is almost like a completely free built-in date. You can often choose a far-away restaurant, grab a go-cup of wine (legal in some cities), and take the extra long stroll as a pre-and post-dinner activity. Not only will this save you cash, but it’s a nice chance to catch up and get more exercise.

Stay In On The Weekend

Quite frankly, this can be boring. Once Friday rolls around, you may feel that you’ve earned a night out for the hard work you’ve done all week. Generally speaking, however, this can be an expensive habit. Although this may seem boring at first, staying in doesn’t mean that you can’t have fun or celebrate the week’s end. On Friday, you can have a drink on your porch and then cook dinner together. Usually, this proves to be a lovely evening and a great way to save money.

Travel More Thriftily

Instead of booking a hotel room, look into booking a rental home. This will save you money. Ultimately, you’ll be able to cook breakfast in “your house” and sip a bottle of store-bought wine on the balcony after dinner. Sure, you may miss being in a full-service hotel, but it’s a nice treat to feel as if you live like locals. Not only that, it will save you enough money to tuck away toward a future trip.

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Reasons Why People Make Divorce Overly Expensive

There is no question that it takes more money to run one household than two households after a divorce. Having said that, it doesn’t mean that it isn’t doable or worth it to go through a divorce, if that’s what is necessary, you have little choice.

Sure, divorce is expensive. When all is said and done, costs can run close to $50,000 to $100,000 if both sides dig in and want to litigate. That is a lot of money.

While there are certainly ways to save money during a divorce, there are also many ways to increase costs, many of which are almost entirely unnecessary.

Divorce lawyers in Scottsdale see costs continue to grow as people exhibit the following behaviors.

Of course you want what you are entitled to. Having said that, are you willing to go to the brink on this one even if the amount that you fight for is not enough to cover attorney costs? Think about that one for a minute. Spending ten thousand dollars to win back five thousand dollars to “show up your spouse”—that’s bad math. Do not do it.

Refuse to Accept Your Settlement Proposal

Sure, your attorney wants what is best for you, even if that entails you spending all of your money on what’s right. Ultimately, you should get what you deserve, right? Demand That Your Ex Runs All Parenting Decisions By You If you and your spouse struggled to make parenting decisions during your marriage, what makes you think that it’ll go smoothly once you’re divorced? This will only result in wasted time, energy, and money.

Negotiate With Your Spouse

One of the most common reasons as to why people file for divorce is due to trouble communicating. Spouses constantly argue about budgets, schedules, and general decision-making. Things can escalate from there within a divorce.

Hire a Child Custody Evaluator

These professionals generally charge about $10k to $15k for a comprehensive custody evaluation, not including time spent as a witness at any hearings. — Sure would be cheaper to hammer out a compromise with the other parent compared to spending the time money and tears usually consumed in the child custody evaluation process.

If you want to decrease costs during a divorce, consider avoiding the aforementioned behaviors. They will save you time and money in the short-term and make you much happier in the long-term.

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4 Tips to Managing Your Money During a Divorce

It’s never fun, but sometimes (and unfortunately) it’s necessary.

Going through a divorce is as tough on your finances as it is on your heart. Having said that, while a divorce will certainly alter your marital status, it really doesn’t have to change who you are as a person.

Divorce lawyers in Scottsdale recommend the following four tips to managing your money during a divorce. These tips will help you push your emotions aside and grasp a stronger hold on your life.

Access Your Credit Reports

Once every year, you are able to pull a free credit report from each of the three credit reporting agencies – Equifax, Experian, and TransUnion. The agencies will show each and every credit account that is in your name, regardless of whether it is individually or jointly owned. If your spouse (or ex-spouse) doesn’t pay his/her bills on time, it can negatively impact your credit score. By watching your credit, you are also watching your spouse in many ways.

Work With Your Ex

You should really continue to utilize your individual or jointly-owned accounts as normal. If you come to a point and realize that you don’t have the proper funds to hire a divorce attorney and handle any other relevant expenses, you should come to a mutual decision with your spouse about spending a conservative and equal amount to get what you want. In the case of a relationship that isn’t amicable, consider going through your attorney for legal separation. This would specify how you both should be using your money until the divorce is complete.

Remember Health Insurance

If you were on your spouse’s insurance policy, paying for an entirely new individual policy could cost you a significant amount of money. You really want to take time to examine your insurance policy before your divorce is finalized. Open enrollment for health insurance begins at the end of the year. A change in health insurance resulting from a divorce is considered to be a “qualifying life event.” Thus, you’ll likely be eligible for a plan under a Special Enrollment Period regardless of your offical divorce decree date.

Establish a Financial Plan

Living on less income is certainly no easy task. In order to be financially stable, you need to learn the art of budgeting. You’ll need to consider things like college tuition, sports and activities, child care, lessons, retirement, transportation, taxes, and rent/mortgage payments.

Here’s another thought: if your divorce settlement results in money from property sales, retirement account rollovers, or the sale of other assets, consider using a financial planner to help you create a budget and to properly navigate the taxable implications of such transactions.

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Talk About Divorce Right After Engagement

It’s THE most exciting time in your life. You’re newly engaged and about to embark on an exciting life journey with the one you love.  You will soon marry!

But guess what? Now, and we mean NOW, is the best time to talk about divorce.

Why is that?

Well, divorce attorneys in Scottsdale see it all the time. Great people with high hopes and optimism for their relationship soon crumble before them with a relationship that ends in resentment and heartbreak. With affections and optimism at its peak during an engagement, talking about divorce is extremely productive.

Generally speaking, people end up filing a divorce because they don’t know their spouse or they don’t know themselves. By simply speaking with your significant other about divorce, you are taking a huge leap in the right direction to avoid this situation.

The only question that remains is, what should you talk about?

Let’s take a look.

Talk About the Why

That’s right. You should have a conversation with your fiancé about why you would get divorced in the first place. This is a very clear path to pinpointing your marital expectations. This includes non-negotiables such as fidelity and honesty in addition things that might change throughout the marriage like friendships and career details. You can take this one step further and discuss what you both feel are good and bad reasons to get divorced.

Discuss Prevention

Experiencing issues in a marriage is inevitable. A perfect marriage, with no problems, simply doesn’t exist. Having said that, it’s important to handle those issues properly and overcome them in the best possible manner. Be candid with your partner about how you would handle problems and what you would do if issues were to present themselves. Would you broach things head on? Would you wait it out? Would you seek counseling? These are all important questions to consider.

Share Obligations If You Were to Get Divorced

While prenuptial agreements may be tough to have at such an early stage of your long-term relationship, they provide a great of insight. They are raw, emotional, and passionate.

It’s important to discuss things like the space you share (your home), financial logistics/needs, professional life changes, family member involvement, and parenting.

While it’s important to discuss individual needs during a divorce, if you devote enough affection throughout your relationship and appreciate everything your fiancé has to offer, it’s unlikely that you’ll ever need to file those divorce papers.

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Divorce Settlement in Arizona

Divorce settlement via private mediation is common in some states, where some courts may require couples to settle their problems before contested trial. Arizona is not one of these states. Divorcing couples can directly go to trial without any legal obligation to negotiate via a mediator. But that does not mean divorce settlement is impossible or not worthwhile in Arizona. The state’s family courts are dealing with a massive backlog.   Six or twelve-month backlogs are not uncommon.  Therefore, if you want your divorce case to proceed faster, the settlement might be the best option through private mediation.

There are multiple ways to settle your divorce case with your soon-to-be-ex. The easiest path is to talk to him or her civilly with your divorce attorney in Scottsdale present. You can also hire a third party mediator, with your attorney attending such mediation, to facilitate talks. Divorce mediators are not attorneys, but impartial third-parties who help couples hold discussions. Mediators can help when spouses are not on speaking terms.  You can have your lawyer present, as can your spouse.

Some individuals may refuse to talk to their divorcing spouse and prefer to sort out differences in court. This, however, could be counterproductive to both parties. Here are several reasons why settling a divorce case can be to your advantage:

Save Money

The biggest motivator that drives many divorcing couples to settle via mediation instead of going to trial is the money and expense. Make no mistake, divorce is expensive in Arizona. When an attorney has to represent you at trial, the expenses can pile up because the trial prep is extensive and time-consuming. You will also have to pay documentation fees. Attorney fees and other costs are much lower when you settle.

Save Time

As mentioned above, state divorce courts in Arizona hear so many cases that you should not expect your case to sail through the court without a hitch. Even setting the initial trial date could take months if not a year or more.   If you don’t want the divorce to drag on for years, do consider talking things through and settling through private five-way mediation.

Make Your Priorities Clear

Settling the divorce with your spouse and attorneys is the best way to make your priorities clear. You will have plenty of opportunities to have your say before the final divorce decree is signed. When the case goes before a judge, it is the judge who ultimately gets the final say. The trial won’t go on forever either. The judge is under pressure to conclude the case within a limited amount of time. Therefore, it’s not unlikely that you may not like the judge’s final ruling. It’s possible that the judge may rule in a manner that neither party is satisfied with. It’s usually the case when it comes to decreeing property division and alimony. When you settle, you will have more control over the outcome.  It’s better to choose than to be chosen by a random person in a black robe.

Protect the Children from Unwanted Hostility

Most important, active divorces take the biggest toll on your dependent children. If your divorce involves kids, you do them a disfavor by dragging out a divorce case for years. If you don’t want your children embroiled in a nasty divorce fight, choose to settle with the spouse. Negotiations can also make co-parenting plans more bearable.  Private mediation can get you to the finish line far sooner and with less expense.

If you want the best outcome from your divorce, try to settle your differences and focus on practical issues. Negotiating a settlement civilly is the best case scenario for both parties and for children in most divorces. If you need more information, contact us to discuss options without charge.

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Divorce and Taxes in Arizona

The tax season for 2018 starts on January 29. It can be a particularly stressful time, especially now that the national tax laws have changed. If you are in the middle of a divorce or have recently filed for a divorce, this season’s filings can be quite overwhelming. Here is what you should know about divorce and filing taxes in Arizona so that you don’t make a penalty-incurring mistake:

Divorce Attorney Fees are Not Tax Deductible in General

Clients in divorce cases often want to know if attorney fees are tax deductible. Typically, the answer is no. The IRS does allow a minor exception for divorce attorney fees paid during “collection or production of gross income.” This clause doesn’t cover a majority of fees you would pay a divorce attorney. But you can ask your divorce attorney in Scottsdale whether the fees you pay are tax deductible.

Your Filing Status Determines Tax Liabilities

When you file your IRS form, you are given three options to choose from as your civil status: married, single, or head of household. Tax liabilities for each category slightly differs, so the box you check matters a great deal for your individual tax obligations. If the divorce is not yet final, it can be difficult to determine whether to file as a single person or jointly with your soon-to-be-ex. You can consult with a lawyer to decide what to do. Or you could calculate what you owe under all three categories and determine which is most advantageous to you.

Spousal Support and Child Support are Distinct Categories

When filing your taxes, do not confuse alimony or spousal support with child support. Spousal support, which is sometimes referred to as alimony, is paid by one former spouse to another, for the benefit of the recipient. Child support, on the other hand, is paid to an adult who oversees the well-being of a child, but for the direct benefit of the child.

If you are a custodial parent recipient of child support, you don’t have to list it as taxable income. If you are the parent paying child support, you cannot obtain a tax deduction for the amount paid.

Spousal support works the other way. The individual who receives alimony payment must list it as taxable income. The paying spouse can obtain a tax deduction on the alimony payment. Note that the new GOP tax bill made an important change to this provision that will take effect on December 31, 2018. So it won’t affect this tax season but will start next year. Under the new law, alimony tax deduction is eliminated. The tax obligation is reversed. The spouse that pays the alimony will not be able to report a deduction, while the spouse that receives alimony no longer has to report it as taxable income.

Property Division may be Subject to Tax When Sold

When spouses divide property during a divorce, it is not a taxable act under the IRS Code. However, there’s a hidden clause called “tax basis” that might result in a tax payment. Tax basis is the purchase price of a property that is used to determine capital gains tax. Not all properties, such as a residence, incur capital gains tax following a divorce. However, certain property, such as investments, may incur capital gains tax when sold after a divorce.

For the most part, your divorce decree would determine how taxes should be paid for some property categories, such as IRAs.

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Holidays and Parenting Time in Arizona

The end-of- the-year holiday season is typically the biggest time of the year for many families to get together. If the parents are divorced, the Christmas season could bring forth new disputes. It’s very important to protect children from any sort of drama during the holiday weeks, especially when they expect to spend their school vacation enjoying themselves. In Arizona, the divorce decree usually also includes a separate parenting time plan that lays out who time is shared over the holidays.

Holiday Parenting Time Under Arizona Law

The family courts in Arizona have a statutory requirement for divorcing couples with children to provide a holiday schedule. Under A.R.S. §25-403.02 (C), this plan must include a “practical schedule” for how parenting time is allocated during the holidays. There should be specifications for with whom the child would reside, how the child should be transported, and a reconciliation method in case disputes arise.

Parents should specifically arrange a parenting time plan for the year-end holidays. Unlike other vacation times, the November-December period involves many public holidays, seasonal celebrations, and family gatherings. The child might require transportation more so than during other long holidays like the summer vacation. It’s highly recommended that divorcing parents get family law help in Scottsdale to come up with a reasonable plan.

Organizing a Parenting Time Plan for the Holidays

Very generally speaking, parenting plans during the holidays can be developed in three primary ways. First, some parents agree to have the children for Christmas every other year. For example, mom could have the kids for Christmas and Thanksgiving during even years, and dad during the odd years. Some parents divide holiday time evenly during the day. For example, the kids would spend Christmas mornings with mom and the evenings with dad. Other parents designate certain holidays for themselves. For example, the kids may spend every Thanksgiving with mom and Christmas with dad.

Of course, parenting plans can be adjusted according to different religions and cultures. Adjustments can also be made depending on the vacation time the parent gets. However, it’s very important to have the holiday season planned ahead and in writing. The arrangements are ideally made months in advance unless it’s already specified during the finalization of the divorce. But practical concerns do arise every year, so ex-spouse’s with children should make arrangements early.

Be Specific with the Details

More importantly, divorcing parents must make sure the parenting plan is highly specific. For example, separating parents may decide to give mom the kids for Christmas during even years. But that’s a very basic provision. Is “Christmas” limited to just Christmas day? Will the children require transportation from parent to parent? On which day and at what time will the kids be dropped off and picked up again? These specifics should be handled in the parenting plan.

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Should You Rush to Get a Divorce before 2019?

There’s been some public speculation in Arizona that couples who want to get a divorce should rush to do so before 2019 rolls around. The reason is the GOP tax bill that has now become law. The new law contains an eyebrow-raising provision that will eliminate the tax deduction for alimony and spousal maintenance.

The Truth about the “Divorce Penalty” in the New GOP Tax Bill

The elimination of the tax deduction for alimony will only go into effect on December 31, 2018. That means couples who divorce before this date can still benefit from the tax deduction. In other words, no, you don’t have to rush to get a divorce before 2019. However, you might want to consider getting a divorce before 2019 to still benefit from the deduction. Seeing that most divorces can take a year or longer to complete, if you are a high net worth or high-income spouse with a long-term marriage and you are considering exiting the marriage, 2018 might be the best time to do it to preserve the tax deductibility of any spousal maintenance you are ordered to pay.

Once the new law goes into effect in 2019, taxpayers in Arizona will not be able to deduct any alimony payments from overall taxable income. Alimony recipients, on the other hand, will not need to report the payment as taxable income anymore. Put another way, spousal maintenance payments will simply be cash out from the payor spouse and cash into the recipient spouse with no impact on either party’s tax returns.

How will the Revised Tax Law Affect Your Divorce Settlement?

It’s important to keep in mind that the new law only affects those who get divorced after New Year’s Eve of 2018. If you are currently in the midst of a divorce negotiating alimony, the new tax law does not need to cause any disputes. Critics of the divorce penalty have argued that the new law would put an excessive financial strain on the ex-spouse that pays alimony or child support. However, these concerns should not affect those who plan to finalize their divorces in 2018.

According to a divorce lawyer in Scottsdale, if divorce settlements are renegotiated after the deduction extension period, the new settlements may be allowed under the tax bill to include language that still allows for the alimony deduction.

Divorcing in 2018 and Beyond

As we push into 2018, it is wise to consult with an attorney to carefully phrase the language in divorce settlements currently being negotiated. There could be additional laws in the future that addresses issues with child support if any arises because of the elimination of the spousal maintenance tax deduction.

In any case, it is not wise to rush a divorce settlement because of a single tax clause. Do consult with your attorneys to makes sure the final settlement is exactly what you need. If children are involved in the divorce, their well-being should be prioritized, as it would be by the courts.

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