The timing and location of telling your children you are getting divorced is one of the first considerations when going through a divorce process. The first recommendation is for both parents to tell the children together that they have decided that they will no longer be married, are planning a separation or whatever event will occur. Both parents must actively tell and should never blame the other. The discussion should not be had by only one parent, as it should be shared. Continue reading
A closely held corporation owned by one spouse may be the most valuable asset in a divorce proceeding and may cause financial hardship to the business owning spouse. Traditionally, a divorce includes dividing assets, awarding spousal support, and if joint children are involved, awarding child support. The concept of double dipping complicates this divisional split. Double dipping traditionally applied to the division of assets for pensions. Double dipping, however, is now being applied in the context of businesses. Double dipping occurs when the business is categorized as property subject to equitable distribution and again as a stream of income subject to the spousal award.
On January 3, 1013 the American Taxpayer Relief Act was signed into law. The estate tax has been in a state of flux since 2001. The new Act makes permanent the 2012’s federal estate tax exemption of $5 million, adjusted annually for inflation. This basically eliminates the estate taxes for most of the population. If Congress had not acted, Estates above $1 million would have been subjected to federal estate taxes beginning in 2013. This would have been a significant change for estate planners and individuals. In 2000, $675,000 was the amount free of federal estate taxes. If you owned property worth more than $675,000 then your estate planner would have suggested doing some estate planning. After 2001, pursuant to the Economic Growth and Tax Relief Reconciliation Act of 2001, the $675,000 (with a 55 percent tax for anything above that amount) exemption increased in increments. In 2002 and 2003 the exemption was $1 million. In 2004 and 2005 the exemption was $1.5 million and in 2006 through 2008 the exemption was $2 million. In 2009 the exemption was $3.5 million.