The Internet and social media are creating issues in divorces

Are you the type of person who posts every detail of your personal life on Facebook? Do you tweet pictures of yourself engaged in questionable behavior? Do you check in on Foursquare everywhere you go? If so, be careful. What you post on social media sites has the potential to undermine your divorce.

It’s become common for divorce lawyers in Wisconsin and elsewhere to share their clients’ estranged spouses’ Facebook posts in the courtroom. Courts have allowed discovery of people’s private posts to Twitter. Things posted online are traceable and are never permanently deleted. More and more often in divorce, legal issues are created because of one spouse’s social networking activity.

Let’s take a look at how this can happen. A picture of you enjoying a ski vacation can undercut your claim that you unable to work due to disability and therefore need alimony. If there’s an issue of adultery in your divorce, you aren’t helping your case by updating your Facebook status to “in a relationship.” Posts about drinking or drug use or check-ins at adult clubs may bolster your ex-spouse’s claim that you are an unfit parent in a child custody dispute.

The bottom line is to be smart about what you post. Ask yourself if you would mind if the post or picture was projected on a big screen for the entire court room to see. If you haven’t been as discreet as you should have been in your past social networking, make sure to let your divorce attorney know so that any negative effects can be mitigated as much as possible.

Source: The Huffington Post, “Step Away From the Computer: Why Divorce And The Internet Don’t Mix,” Jason Marks, Oct. 15, 2012

Divorcing couples must consider federal income tax implications

When a Wisconsin couple decide to divorce, most of the legal issues to be resolved will be governed by Wisconsin state law. But there also are federal income tax implications that should not be overlooked. Some advanced planning will be required to ensure that there are no surprises for either ex-spouse at tax time.

The first area of concern relates to the deductibility of alimony payments versus child support payments. If a divorce decree designates a payment as alimony, it is deductible by the person making the payment and taxable to the recipient. With child support payments, however, this is not true. Another issue relates to exemptions for dependents. The parent with child custody for the majority of the year generally is entitled to the exemption but may waive it in favor of the noncustodial parent.

Another consideration is how the timing of a divorce will affect tax filing status. If a divorce is finalized before year-end, each ex-spouse must file their federal income tax returns as unmarried individuals. If a couple wants to avoid the “marriage penalty,” it may be to their benefit to finalize their divorce before the end of the year.

There are other tax implications with respect to property received and then sold in a divorce settlement, the sale of the marital home, benefits in retirement plans or IRAs, and life insurance policies. An experienced divorce attorney can advise as to the tax implications that arise at the end of a marriage. The attorney also can help make sure a divorce settlement accurately reflects the parties’ intentions with respect to tax and other financial matters.

Source: The Willits News, “TAXES & FINANCES: Watch for tax angles in divorce agreements,” Jim Angell, Nov. 7, 2012

Wisconsin man learns of divorce years after the fact

A Wisconsin man returned home after an absence of many years to learn his wife had divorced him. She also sold the house they owned together even though he never signed papers allowing the sale. The case illustrates the importance of ensuring one’s interests are represented in a family law proceeding.

When the man’s wife filed for divorce, she never personally served him with divorce papers. He had moved out of state and his wife served him by publication only. Then, when he did not appear in court, she was awarded divorce by default. The divorce court awarded the house to the wife, and she sold it with the help of a forged signature on the quit claim deed.

When the man learned what happened, he successfully petitioned the court for a post-divorce modification. The court acknowledged that it did not have authority to transfer property in a default divorce proceeding when the defendant had not been personally served. The court ordered the ex-wife to split the sale proceeds. The man then sued the title company for conspiring with the ex-wife to transfer title to the home by forgery. In 2008, a jury awarded actual and punitive damages to the man. The title company appealed, and on Dec. 4, the Wisconsin Court of Appeals upheld the earlier jury verdict.

In any divorce proceeding, it is important to have qualified legal representation. An experienced family law attorney can advise people about the long-term implications of any decisions and agreements to be made. The attorney also can help ensure property division issues are addressed fairly and in accordance with the law.

Source: State Bar of Wisconsin, “Divorce Court Lacked Jurisdiction to Transfer Property, Title Company Loses,” Joe Forward, Dec. 4, 2012

Financial tips for women who are divorcing

The month of January tends to see more people filing for divorce than any other time of the year. The timing may be the result of a personal resolution to make a fresh start in the new year. It could be based on practical considerations, such as tax filing status. Whatever the reason, a woman planning to file for divorce in 2013 is well-advised to take some year-end steps to ensure a smooth process.

First, gather your financial documents. The end of the year is a great time to collect year-end bank, credit card and other financial statements. Make copies of these documents and store them in a safe place to avoid the hassle of gathering them later. Be vigilant for discrepancies that could mean your spouse is hiding assets. Also keep a close eye on credit card statements for any suspicious-looking charges, like gifts your husband may be purchasing for another woman. Obtain a copy of your credit report. If it contains any misinformation, correct it. Good credit will be important to your financial future as a single woman.

Next, open bank accounts in your own name, ideally at a different financial institution than where you have joint accounts with your spouse. Also, apply for credit cards in your own name. If you don’t work, new regulatory changes will make it easier for you to obtain credit based on total household income.

Finally, begin to assemble your divorce team. Research divorce professionals who can help you navigate complex legal and financial issues. The cornerstone of your team will be a qualified divorce attorney. The attorney can help you identify the other experts you will need, including a financial planner and even a counselor.

Source: Forbes, “Five Best Financial Tips for Women Divorcing in 2013,” Jeff Landers, Dec. 18, 2012

Divorce and social media

The rise of social media in people’s daily lives is giving estranged spouses just one more thing to argue about during a divorce proceedings. This is particularly true when children are involved. A mother may not appreciate her ex-husband posting pictures of their children on his online dating profile. A man may take offense to a woman creating a Facebook profile for their unborn child, complete with an ultrasound profile picture. Unless the child is being harmed, each parent generally may handle their child’s social network presence however they deem appropriate. That’s why it’s important to address issues related to the children’s online exposure as part of a child custody agreement.

A blanket rule prohibiting either parent from sharing anything about the children on any social media site likely would be viewed as too restrictive. The reality is social media has become a convenient way to share information and photos of the kids with extended family members, especially those who live far away. But it is appropriate and prudent for a parent to seek some boundaries regarding what is shared about their children and with whom.

First, it is reasonable to request that the custody agreement set some expectations regarding online privacy. For example, the parties could agree that the children’s photos will be shared only with certain people and not be posted publically. Additionally, the agreement might address the types of information that can or cannot be shared. Finally, each parent should be mindful of posting anything that would reflect poorly on their own parental judgment like photos or status updates that could embarrass or upset the child.

If you are concerned about what your ex-spouse is posting about your children, a knowledgeable divorce attorney can assist your efforts to set some parameters.

Source: St. Louis Post-Dispatch, “Who gets custody of the Facebook profile info after a divorce?,” Aisha Sultan, Dec. 31, 2012

Pros and cons of a secret bank account

Perhaps the two most common regrets of Wisconsin women going through divorce are not having been more involved with the family finances during their marriage and not having maintained control of their own money. Keeping a separate, secret bank account may be one way to take a more active role in one’s finances and avoid regrets during divorce. There are both advantages and disadvantages to this approach, however.

On the plus side, it can be empowering, both financially and emotionally, to have one’s own source of funds. A separate account may alleviate some of the loss that a woman may feel about giving up her career and her financial independence to stay home and raise a family. An additional bonus of a separate account is having funds that a spouse cannot access or control, particularly if there is concern that he or she may clean out joint accounts and use underhanded tactics to run up divorce expenses.

On the other hand, it may be considered a breach of trust to maintain a separate, secret account during marriage. The spouse with the secret account could be accused of hiding assets or dissipating marital funds, which could negatively impact his or her credibility in a divorce proceeding. To avoid such accusations, it is important that the fund include only one’s separate property, such as assets held before marriage or inherited. Also, the fund should be disclosed on one’s financial affidavit during the divorce proceedings.

An experienced family law attorney can help answer any questions about what constitutes marital property and what may be deemed one’s separate property. The attorney can also assist in developing an appropriate strategy for the division of marital assets.

Source: Forbes, “Pros And Cons Of Keeping A Secret Fund In Case You Divorce,” Jeff Landers, Feb. 14, 2013

How to value the marital residence in divorce

For many couples in Wisconsin, the home is the largest asset in the marital estate. If a couple divorces and one spouse wants to keep the home after the divorce, an accurate valuation of the property becomes a crucial component of property division. If the home is valued too high, spouses keeping the homes will owe more equity to the other spouse than what would be paid if the home is valued accurately. If the homes are valued too low, the spouses who are vacating the home will not get all the equity to which they are entitled.

There are three ways to value a home in the event of divorce. The first and most reliable method is to hire a licensed appraiser. This is the most expensive method. The cost of an appraisal may go up to several hundred dollars depending on the market. However, the value of an accurate appraisal easily justifies the additional cost.

The second method to value the home is through a comparative market analysis. It involves comparing the home to homes that have been sold in the same area. A comparative market analysis can be done by a realtor for little or no cost. However, it is less accurate than an appraisal because it does not take the home’s specific condition into account.

The third method is for the parties to do their own research by using websites designed for the purpose of valuing homes. This is the least accurate and most unreliable method. If both parties are not in agreement, the valuation may be given little weight by the court. Experienced family law attorneys in Wisconsin may advise as to the specific options available for valuation of the home in your case to ensure an equitable property division.

Source: Huffington Post, “Three Ways To Value Your Home In A Divorce,” Joseph E. Cordell, March 1, 2013

Filing taxes following divorce

Like many Wisconsin residents, you may view tax preparation as an unpleasant chore. But if you recently have divorced or are now going through divorce, you may find yourself facing new challenges this tax season. Things you previously took for granted, like your filing status and dependent deductions, may prove fertile grounds for confusion. Here are a few things you need to know when preparing your taxes after a divorce.

One area of confusion may be the appropriate tax filing status to use. The relevant date is December 31. If you were still married on that date, you must file either as married filing jointly or married filing single. If your divorce was final by December 31, you may file as head of household, provided you meet some specific requirements relating to your living arrangements during the tax year, or as single. There may be tax advantages to filing as head of household, so ask your attorney or tax advisor if you meet the requirements.

Another source of confusion is dependent deductions. Unless the former spouses reach an agreement to the contrary and execute an IRS Form 8332, the deduction belongs to the parent with whom the children resided for more than half the year. Note that if you pay child support, the payments you make are not deductible.

While you may be taxed on alimony payments that you receive, any property that is transferred to you pursuant to the terms of a divorce is not taxable, either as income or as a gift. The property retains its original tax basis, which you will use to calculate any taxes owed when you later sell or dispose of it. Given the potential tax implications of divorce, your best bet may be to consult with a qualified attorney or tax advisor before you file.

Source: Huffington Post, “Preparing Your Taxes In The Year Of Divorce,” Kathleen B. Connell, March 21, 2013

Reasons why a prenuptial agreement may not be enforced

Divorce attorneys in Wisconsin and around the nation are taking note of a recent court case in which the judge threw out a prenuptial agreement that a woman had signed prior to marrying her multimillionaire husband. Previously regarded as difficult to void, prenuptial agreements have become increasingly common, especially for people with high net worth or those entering second marriages. How enforceable are they in light of the recent court case?

A prenuptial agreement is a legal document signed prior to marriage documenting the future spouses’ understanding regarding which of their assets will become marital property and how property division will be handled in the event of divorce. There are several circumstances under which a court may refuse to enforce a prenuptial agreement. If one party undervalued or failed to disclose assets at the time the prenuptial agreement was signed, the court may refuse to enforce it on the grounds of fraud. Accordingly, full disclosure of all assets and liabilities is important to the future enforceability of the agreement.

A prenuptial agreement also is subject to revocation if it was coerced or executed under duress. The agreement should be negotiated and finalized well in advance of the wedding, not presented for the first time shortly before the bride is to walk down the aisle. It should be signed by both parties in the presence of a notary public or other witnesses who can confirm that it was executed voluntarily and without coercion.

Poorly drafted agreements and those containing a number of errors also are susceptible to being thrown out. Agreements that contain unconscionable provisions, such as a stipulation that no child support will be owed under any circumstance, also are subject to challenge. The best way to ensure the effectiveness of a prenuptial agreement is for both parties to have their own legal representation in the negotiation and drafting of the agreement.

Source: Forbes, “Five Reasons Your Prenup Might Be Invalid,” Jeff Landers, April 2, 2013

Divorcing spouse may be liable for ex

A common question for Wisconsin residents who are divorcing is whether they can be held financially responsible for a former spouse’s credit card debt. The answer may surprise some. Because Wisconsin is a community property state, a credit card company can pursue the cardholder’s spouse for credit card debt even if the spouse is not a joint account holder. The spouse is presumed to be jointly liable for the debt unless he or she can prove otherwise.

In a divorce decree, the court divides the former couple’s assets and debts between the two parties. If one spouse was incurring credit card debt without the other spouse’s knowledge and without the other spouse benefiting in any way from the expenditures, the court should be so advised. The judge likely will take these circumstances into consideration when allocating debt between the parties, particularly if the expenditures contributed to the end of the marriage.

Even though the court may allocate the credit card debt to one spouse as part of the property division, this may not get the other spouse off the hook for the debt as far as the credit card company is concerned. The court does not have jurisdiction over agreements the parties may have with third parties, meaning a creditor may try to collect from one spouse if the other does not pay, regardless of what the divorce decree says. Accordingly, it is important to make sure the credit card debt is paid off as a condition of the divorce settlement.

In the event that one spouse has incurred significant debt, the other spouse should take certain steps before divorce. First, document the status of all accounts held by the couple, including credit cards, mortgages, bank accounts and the like. Second, obtain a credit report to ensure there are no other unknown accounts. Close as many joint accounts as possible, making sure to comply with any conditions imposed by the divorce court first. Finally, a spouse may also want to consult with an experienced divorce attorney.

Source: Fox Business, “Is Wife Liable for Ex’s Card Debt?“, Sally Herigstad, May 07, 2013