A Kosciusko, Mississippi man was sentenced to 10 years in prison and ordered to pay $68,215.87 in back child support. According to the article, he will serve 2 of the 10 years in prison for failing to pay the child support. The Mississippi attorney general's office prosecuted the case. It is good to see Mississippi in the news prosecuting those who fail to uphold their financial responsibilities to their children.
For those contemplating a divorce or just considering their options, you might find the answers to your questions in my recently completed C.D.--the Mississippi Divorce Guide. In the C.D., I discuss:
If interested in obtaining this free C.D., click on this page.
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Bernie Ebbers' wife filed for divorce from her imprisoned husband in Madison County, Mississippi this last week. Ebbers was sent to prison in 2006 after his conviction for securities fraud and conspiracy while head of WorldCom. He is not expected to be released from prison until 2028. According to the Clarion-Ledger article, the couple married in 1999 and Ms. Ebbers still resides in their Bridgewater home in Ridgeland, Mississippi.
Tricia Walsh-Smith is now the poster child of what not to do when going through a divorce. Unhappy with how her husband is treating her in the divorce and unhappy with the prenuptial agreement she signed, this wife decided to make a video where she talks about how she is being mistreated, how her sex life with her husband (or lack thereof), and other various complaints. Then she posted the video to YouTube for everyone to see. While it can make fascinating video for our voyeuristic society, it will do little to advance her cause in court. In fact, it will most likely hurt her case.
Maybe she was after her 15 minutes of fame. If so, she definitely got it as the video has been viewed over 150,000 times and stories surrounding the video are everywhere. The Washington Post, Chicago Tribune, Los Angeles Times, CNN, People Magazine, and London Daily Mail have all run stories on the video. However, if she was attempting to help her case, I suspect the judge will be less than pleased with her starring role in her version of the War of the Roses.
Word of advice. Don't make a video lashing out at your ex or soon to be ex--it will not be well received in court.
]]>In an update to a previous post, the House killed a bill enacting covenant marriages in Mississippi. An amendment was added to HB 1088 by the Senate which would have authorized covenant marriages. However, the bill died in the Mississippi House on April 10th.
Given this is the tax season, we are reminded by a number of news reports that the Internal Revenue Service is stepping up its audits of small businesses and individuals. According to a recent article, one of the areas which gets divorced couples in trouble is the non-reporting of alimony as income as well as those paying child support seeking to deduct those payments from their taxes. As discussed in a previous post, the general rule is recipients of alimony must report it as income and child support payments are neither included as income or as a deduction. However, if you have a question regarding your taxes, consult a tax professional.
Remember, tomorrow is the deadline to either file your return or your request for an extension.
The downturn in the housing market is impacting the ability of some to divorce. Quite frankly, they can not afford to divorce given they owe more on their home than it is worth. In an article out of California, the impact of the housing downturn is amplified. While housing prices were up, it was easier to split the couple's assets with the home usually being the largest asset. As one person quoted in the article said, "the hardest thing was picking a Realtor." But with the downturn in housing prices, it is more difficult. Even if one spouse wants to stay in the home, they must be able to afford the house payment as well as pay off the other spouse for their share of the equity (although that is diminishing as prices slide).
More troubling is when one spouse wants to sell and the other does not. This puts the courts in the position of deciding whether to order a sale or wait in hopes the real estate market will rebound. As the article points out, these economic times raise many issues when homeowners divorce.
It must be reiterated that a divorce decree or order from a court dividing an asset does not change the relationship with the institution holding the mortgage. If your name is on the mortgage, you are responsible for paying the mortgage until your spouse or soon to be ex-spouse refinances the home and has your name taken off the debt. Your credit will be impacted if payments are not made and you could be looking at the mortgage company coming after you for payment. See my previous post on this issue.
While most of these issues can be resolved during the divorce, it becomes more difficult when the housing market is down, mortgage payments are up, and the household income is down due to a divorce. That is why it is important to ensure you are represented during a divorce to ensure your rights are protected.
]]>Similar to the case previously reported out of Lauderdale County, Mississippi, a district clerk in Nacogdoches, Texas has been arrested and charged with theft by a public servant. She also resigned her position the same day and apologized for her "wrongdoings." The clerk is accused of taking over $15,000 in child support payments which she is responsible for depositing in the bank. The clerk bonded out and awaits trial.
In a follow-up to my post yesterday about the Wall Street Journal article on men receiving alimony, Good Morning America is now seeking men who are receiving alimony. Here's your chance for 15 minutes of fame. So if you are a man and receiving alimony from your ex-wife, click here for details on contacting GMA.
The Wall Street Journal ran an interesting article this morning about the rise in men receiving alimony. According to the article, the number of men receiving alimony from their former wives rose from 2.4% to 3.6% in a five year period ending 2006. Today, females make more money than their spouses in 33% of all families.
And it also appears the distaste some have for paying alimony crosses gender lines. As one woman said, "I feel financially raped" while another woman said she would spit on the alimony checks she wrote each month to her ex-husband.
As a Mississippi divorce lawyer, I've seen my share of tax issues arise during a divorce. Three common tax issues are: whether alimony payments are taxable, whether child support payments are taxable, and which spouse gets to takes the tax exemption for the children.
With regard to alimony, the Internal Revenue Service states that alimony "is a payment to or for a spouse or former spouse under a divorce or separation instrument." To be alimony, certain requirements must be met and the rules are different for documents executed after 1984 and those executed before. However, generally alimony payments are deductible from your gross income for those making alimony payments and generally are included in the gross income of a person receiving alimony payments. Again, a word of caution. You must determine whether you are paying or receiving alimony as defined by the Internal Revenue Service. Additionally, if you are receiving alimony, you may need to make estimated tax payments as no tax is withheld from alimony payments. Again, a qualified tax professional can answer these questions.
The final issue is which parent gets to claim the tax exemption for their dependent children. This is where many newly divorced spouses get themselves in trouble if they do not address the issue in the divorce decree. Usually, the divorce decree will state who is allowed to claim the child as a tax exemption and require the other spouse to execute a waiver, IRS Form 8332. In most cases, the exemption goes to the custodial parent when the child resides with that parent for more than 6 months out of the year unless the spouses have agreed to apportion it differently. Click here for IRS Publication 501 (Exemptions, Standard Deduction, and Filing Information) which discusses the issue more in-depth.
Although I've discussed three common tax issues in a divorce, there are many others tax issues in a divorce. The Internal Revenue Service publishes a great document which discusses these and many other tax issues in a divorce. Click here for Publication 504 (Divorced or Separated Individuals). Also, you should consult a qualified tax professional to answer your specific questions prior to filing your return.
As CPAs, accountants, and others are burning the midnight oil preparing tax returns, a recent article provides some helpful tips for those undergoing a divorce or recently divorced.
In my next post, I will discuss some common tax problems in a divorce.
During this legislative session, the idea of a new form of marriage, “covenant marriage,” was introduced. In the “covenant marriage,” the couple agrees to undergo premartial counseling before applying for a marriage license. O.K., not a bad idea so far. But here is the kicker. By entering into a “covenant marriage,” you agree to modify your rights to get divorced.
As currently proposed, if you entered into a covenant marriage and then later chose to divorce, your complaint for divorce must be on file for one year before you can get divorced as opposed to the normal sixty-day waiting period. Further, during this one-year waiting period, you and your spouse are required to attend marriage counseling in an attempt to resurrect your marriage. Again, nothing wrong with marriage counseling as long as both parties believe there is a chance to make their marriage survive. The problem is forcing couples to undergo one-year of marriage counseling before they divorce.
So you might ask: Why would anyone enter into a “covenant marriage?” Does it make you a better couple or make your marriage better? No. The fact is that all it does is put the focus on counseling, albeit a bit compulsory. Again, premarital counseling and marriage counseling are good tools. Both allow parties to identify issues and attempt to work through issues before they arise or fix those that may have damaged the relationship. I’m just not a fan of our government telling me I have to do it. So, you don’t. Just don’t enter into a covenant marriage if this bill should finally become law.
By the way, where was the bill that required all parents going through a divorce to go through parenting classes to minimize the impact on children in a divorce? If counseling is mandated, maybe the focus should be on protecting those who did not voluntarily enter into the marital relationship—the children.
]]>Here is an story that will leave you with more questions than answers. A man and wife (or so they thought) were married for seven years before getting divorced. Then the wife looked through an old high school yearbook and discovered that her "ex-husband" was a woman in high school. The woman went back to court and was granted an annulment of the marriage. The question remains--how were they married seven years without the wife figuring out her partner was not a man? Especially since the "ex-husband" was still physically a female?
