Written by Canterbury Law Group

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.

Written by Canterbury Law Group

Reasons to Finalize Your Divorce and Save Money

If your marriage is in a rocky place, it would behoove you to be mindful of the timing of decisions; the government has recently enacted a few tax laws that impact divorcing couples, especially those with high net worth. Tax codes are perplexing in the best of times and now, quite frankly, does not constitute the best of times. This makes it more important that you understand how these new laws affect you.

How do you decide if it is in your best interest to settle this year? The first step is to take a deep breath. Second, divorce attorneys in Scottsdale recommend considering the three items below and what effect they will have on you. Third, work with a lawyer as well as a financial advisor experienced in divorce to minimize the impact of the new laws.

Move Fast To Control Taxes On Alimony

Alimony, often called spousal support or maintenance, will have a significant change on New Year’s’ Day in 2019. Under current laws, alimony has been deductible by the paying spouse and taxable to the receiving spouse. This benefited the family unit as the recipient paid tax at a lower rate than the payor deducted it at resulting in lower taxes. Going forward, however, alimony will no longer be deductible by the payor or taxable to the recipient.  Alimony will now be treated the same as child support: tax free.

Tax Benefits Of The Family Home Are Changing

 Your home. This is a popular item in many divorces. Is it a top priority to keep it? Are you itching to leave it behind with the past? How do you split the value? It’s important to focus on your home as a financial asset while factoring in the memories as well as the potential emotional stability it may provide. The new tax law reduced the deductibility of property taxes and the amount of mortgage that qualifies for interest deduction making it more expensive to own a home under the new tax laws.

Kids Are No Longer As Great A Tax Deduction

The new tax code also eliminated the personal exemption amount for tax years 2018–2025. This means that you don’t get a multiplier of kids as a deduction on your tax return. It’s still important, however, to negotiate who will claim the kids for other purposes. While the exemption amount is zero dollars, it may allow the parent to receive additional child tax credits, which are more generous under the new law.

Written by Canterbury Law Group

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.

Written by Canterbury Law Group

5 Divorce Mistakes to Stay Away From

Sure, every divorce has unique attributes that make the experience different for each person. Having said that, there are a myriad of mistakes we find to commonly observe during a divorce. If you’re even considering divorce, divorce attorneys in Scottsdale recommend the following critical advance checklist to help you avoid these unnecessary issues.

 

Settlements That Assume Status Quo

One of the main goals of a divorce is to establish an “equitable split” of assets, which requires an understanding of your current situation and true market valuation of all your assets. At times, this necessity to focus on the present state of affairs can result in an analysis that doesn’t take into consideration potential future events. Unfortunate events can occur at any point after a divorce and may include things like job loss, disability, health changes or asset depreciation.

Complications can always arise when it comes to paying for college when a settlement agreement focuses too heavily on the maintenance of the status quo. For example, if college costs are to be split based on salary, what happens if/when you or your spouse lose your job? Unforeseen future events can put you in a difficult situation and pay for a large expense (e.g. maintenance, college tuition) you hadn’t previously planned for.

When negotiating your divorce settlement, remember to consider what might not be the same in the future. You will want to speak with your attorney or financial adviser about considering these potential changes.  There are many moving parts and you should trust seasoned legal counsel to navigate you through the process.

Unrealistic Lifestyle Expectations

Divorce means there is no longer one household, but two households.  The standard of living is likely to drop for both parties post-Decree.   Difficult decisions about who should keep the house, or if it should be sold, have emotional, practical, and financial implications for both parties for years to come. Housing is just one of numerous lifestyle decisions faced when a divorce takes place. Unfortunately, too many divorcees expect to live a similar lifestyle in divorce, including for their children. This is a false reality—both parties are still making the same money, but now two roofs and two sets of bills must be paid.  Quite often, there is simply not enough money to go around for anyone to live the same, let alone better after the divorce.

Avoiding The Details

Facing the logistics of a divorce can be exhausting, especially if it’s a complicated situation (which it usually is). Lengthy legal proceedings require you to reveal the details of your life. At the same time, you’re asked to gather a large amount of data and information to support negotiations, and this usually doesn’t end just because the divorce comes to a close.  Get ready to gather documents and disclosures the likes of which even your worst mortgage refinance would have ever taken.  It’s a reality and part of the process.

Lack of Financial Literacy

One of the main reasons these rampant mistakes occur during a divorce is that both parties lack even a basic financial education. Modern financial literacy is generally learned through experience rather than in school. Take time to educate yourself so you don’t run into problems.  Better still, hand the entire process over to a seasoned professional who has handled hundreds of divorces before yours ever began.

Written by Canterbury Law Group

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.

Written by Canterbury Law Group

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.

Written by Canterbury Law Group

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.

Written by Canterbury Law Group

Three Tips to Enduring Divorce

Divorces are difficult for everyone. While nobody wants to go through the process of divorce, it is, of course, can be necessary.

According to Psychology Today, nearly 40% of marriages ended in divorce in 2017. Think about that. That’s quite many people terminating their marriages.

When marriage trendy headed south, what should you pay attention to reduce overall stress and financial burdens in your life?

Divorce lawyers in Scottsdale recommend these three tips to make the divorce process as smooth as possible. Or you can choose not to file.  Either way, knowledge is power.

UNDERSTAND BOTH PARTIES’ FINANCIAL ASSETS

Before you can even begin negotiating marital assets, each spouse should seek to understand the others’ financial status. Too often, one spouse is in the dark about exactly what assets their significant other has/owns. It’s important to consider ALL financial assets: pensions, retirement accounts, bank accounts, properties, vehicles, etc. Having just a general understanding of these assets can lead to problems during divorce.

Here is the good news: If you file for divorce, your divorce attorney will seek and acquire all the “hidden assets” from your spouse through Court appointed rules and regulations.

AVOID EXPENSIVE LAWYERS

While many people feel the need to hire an “established lawyer” right away, you will be draining your finances more than you really need to. Since the system immediately starts generating work for the attorney (as soon as you submit your filing), you will be charged from the get-go. Things that will be set in motion include, but are not limited to, include financial relief for child support and counsel fees.

Sooner rather than later, you are thousands of dollars in the hole, and that may not even include a court appearance. Initiating the divorce in such an aggressive manner will not only prove to be costly but will also lead to greater tension and potential resentment.

Rather than rushing into the legal process, approach things amicably and have productive conversations. If both parties agree to work together in a civil manner, mediation may be a better option. Not only is this more affordable, but it can alleviate things quicker and more efficiently.

DETERMINE THE RIGHT TIME

Instead of rushing to make divorce official, consider all of the financial matters that come into play when deciding to file for divorce right then and there or at a later time. Timing can also largely impact the “equitable distribution of assets and liabilities.” Your house, amongst other assets, can be a huge factor in determining when you want to file.

Written by Canterbury Law Group

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.

Written by Canterbury Law Group

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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