Children and Taxes: Dependency Exemptions after Divorce

October 20th, 2014 at 9:25 pm

 IRS tax deduction, Illinois divorce attorney, Illinois family law attorney, Divorce is a process with many different moving parts, and people going through it often focus on the major ones, issues like child custody and property division. While these are absolutely life-altering decisions, there are other, smaller questions that can still be incredibly important. One such question is which parent gets to claim the child as a dependent after the divorce. While this seems to be a fairly minor point of tax law, it is actually quite important. According to IRS regulations for 2013, a person’s being able to claim the dependency exemption could save them almost $4,000, and that is just for a single child. The answer to this question turns out to be a little complex and it depends on both IRS rules and Illinois law.

The IRS Answer

The IRS answer is known as the Custodial Parent Rule, and it can be found in section 152 of the Internal Revenue Code. It states that the custodial parent is the only one who gets to claim the exemption. If there is a joint custody agreement in place, then the parent who has custody of the child for more of the time qualifies as the custodial parent. However, there are two exceptions to this rule. First, if the parents have a multiple support agreement in place, then this rule does not apply. Second, and more importantly, the parents are allowed to agree between themselves who gets to claim the child’s dependency exemption, which is where Illinois law gets involved.

Illinois Law

Illinois courts have the authority to force one parent to give the dependency exemption to the other as part of a divorce decree. The courts can also shift the exemption between the parents as part of the post-decree divorce proceedings. For instance, in at least some districts in Illinois the court will award the dependency exemption to the parent who is contributing more of the support to the child from a financial perspective. Courts in Illinois have actually taken a fairly sophisticated approach to determining exactly what “more support” means. For example, there have been some very close cases where the parents have been contributing very nearly equal amounts to the child’s support. In those cases, the courts have assigned an alternating dependency exemption. Each parent was allowed to claim the exemption in alternating years. In the end, courts have a wide degree of latitude to determine the answer to this question as they see fit, so it is important for parents to understand their divorce decree when it comes time for them to fill out their taxes.

If you are considering filing for divorce or have recently been served with divorce papers, contact an experienced DuPage County divorce attorney today. Our firm is here to help you through this legally complex and emotionally difficult time.

Children’s Rights during Child Custody Disputes

October 16th, 2014 at 10:43 am

Illinois child custody lawyer, child representative, children's rights, The American court system is set up to be adversarial in nature, which means that it pits the two parties in the courtroom against each other. Unfortunately, this is the same system that American courts use in divorce, which can lead to spouses getting involved in bitter fights as they try to assert their rights against each other. This setup often obscures the third party being affected by the divorce, the children. Children in a divorce have some rights too, though often limited ones, and it is important to understand these rights during the process. For instance, in some circumstances, Illinois law gives children the right to be represented by an attorney or a guardian ad litem, a lawyer who has their best interests in mind. Additionally, children have a right to be heard in child custody proceedings, although this right is often misunderstood.

Guardians ad Litem

Guardians ad litem, along with attorneys for the child and children’s representatives, are lawyers who work to advocate for the best interests of the child. Each of these professionals has slightly different roles and powers. For instance, the guardian ad litem, which the court can appoint on its own or at the request of one of the parties, undertakes an investigation of the facts of the situation. They interview the children, the parents, and other important witnesses, and they gain a full understanding of the facts of the divorce. Then they prepare a written report for the court, making a variety of recommendations about child custody with the best interests of the child in mind. Children’s representatives are similar except that rather than preparing a report, they undertake an investigation of the situation, and then make legal arguments to the court based on the evidence, acting more like the child’s lawyer.

Choosing the Custodial Parent

Another major right that children have is one that is more commonly discussed than guardians ad litem. Children of a certain age have the right to express a preference during a child custody decision that the court makes. Often, this right interacts with the guardian or other representative expressing the child’s preference to the court. However, this right is commonly misunderstood or exaggerated. First, many people think that there is some specific age after which the child has a right to be heard. This is not the case. Once a child forms the ability to articulate a preference, they may be heard, but not all preferences are equal. This is because of the other common misunderstanding, the belief that the child’s preference is binding. This is not the case. The court takes the child’s preference into account, but it is just one of many factors that go into the decision, usually with an older child’s preference carrying more weight.

If you would like to file for divorce and anticipate child custody issues, contact an experienced Wheaton family law attorney today. Our firm’s skilled professionals are here to help answer your questions, and guide you through the complex legal process.

Understanding Child Custody

October 13th, 2014 at 9:23 pm

parenting time, visitation, Illinois family law attorney, One of the central issues of any divorce is that of child custody. However, despite its importance to everyone involved, many people do not fully understand the different types and components of custody. For instance, the Illinois Marriage and Dissolution of Marriage Act allows for either joint or sole custody.

These two types of child custody relate to whether one or both parents have custody of the child, and they cover related issues like shared parenting time. Beyond this distinction, the law actually recognizes two different types of custody, physical custody and legal custody. Each of these two different types of child custody are important because each provide different rights with respect to the child.

Joint vs. Sole Custody

The legal distinction between joint and sole custody is one of how many parents have custody over the child. With sole custody, only a single parent has custody of the child, taking care of them full time. However, this may still include some forms of visitation. Additionally, a parent may be awarded sole physical custody with joint legal custody, a distinction that will become clearer later.

The opposite of sole custody is joint custody. In this child custody setup, the parents share physical and legal control of the child. While the law makes this an option to judges, it is not available to all parents. Instead, the court looks at whether it believes the parents will be able to cooperate in matters related co-parenting. This is because joint custody situations with uncooperative parents can often be difficult for the children to cope with. Notably, joint custody is not the same thing as having equal parenting time. As usual with family law, the court sets the parenting schedule in accordance with what the court perceives to be the child’s best interests.

Physical vs. Legal Custody

The other distinction that the law draws in relation to child custody is that of physical custody versus legal custody. Physical custody is the type of custody that people most often think of when they think of custody. It refers to the physical control over the children, issues like whose houses they stay at, when, and similar concerns. Legal custody is a more nebulous right, but one that is just as important. Rather than dealing with the physical issues of raising a child, legal custody pertains to control over decisions which need to be made about the child’s upbringing. For instance, legal custody gives parents a voice in decisions about what school the child should attend and what religion they should be raised in.

If you are thinking about filing for divorce or have recently been served with divorce papers, reach out to an experienced DuPage County divorce attorney today. Our team of experienced professionals is here to represent your rights and to help you understand this complex legal process.

Supreme Court Rejects Same-Sex Marriage Cases

October 9th, 2014 at 8:09 pm

Illinois same-sex marriage, Illinois family law attorney, SCOTUS, On Monday, October 6th, the United States Supreme Court rejected petitions from five separate states requesting that the Court make a final ruling on the issue of same-sex marriage in the United States. This decision is a victory for same-sex marriage advocates since the petitions were appealing five appeals court rulings upholding same-sex marriage in Indiana, Wisconsin, Oklahoma, Utah, and Virginia. This rejection surprised many experts who were expecting the Court to take at least one of these cases, possibly to issue a final decision on same-sex marriage, especially since the Court had issued a stay preventing these marriages from going forward while it deliberated. With these petitions denied, marriages in these states can now go forward.

The Petition Process

The way this decision happened from a practical standpoint is affected by the process by which cases get to the Supreme Court. There are three levels of Federal courts, just like there are for courts in Illinois. The first level is the district court, where trials are held. Then, losing parties are automatically allowed to appeal to the second level, the circuit courts, which exists to watch over the district courts and correct mistakes. These courts are based geographically, which each court covering several states. For instance, Illinois sits in the Seventh Circuit, which covers Illinois, Wisconsin, and Indiana. Finally, there is the highest level, the Supreme Court. Unlike the circuit courts, to which parties automatically have access, the Supreme Court gets to choose which cases it takes. Parties file “petitions for certiorari” that ask the Court to review their case. Ordinarily, the Court chooses cases in which different circuit courts have ruled differently on the same issue, a condition known as a “circuit split.”

What This Means

This decision represents a victory for same-sex marriage advocates because in all five cases the circuit courts upheld people’s right to same-sex marriage. Before this decision, 19 states, including Illinois, had legalized same-sex marriage. The court’s rejection of these petitions pushes that number up to 30. This is because, in addition to the five petitioning states, the circuit courts’ rulings also apply to all the other state’s within their jurisdiction.

Court watchers think that the reason for the rejection is the lack of a circuit split. Thus far, every circuit court that has ruled on the issue of same-sex marriage has upheld it. The Court is likely waiting for a circuit court to oppose it before taking a case on same-sex marriage, especially in light of the recent decisions the Court has already made on the subject.

This decision represents just one of the many complexities that can arise in the area of family law. If you have questions about family law or divorce, contact a DuPage County family law attorney today.

Bifurcated Judgments and Divorce

October 6th, 2014 at 5:01 pm

marital negotiations, Illinois divorce attorney, divorce trial, Ordinarily, divorce proceedings are handled in a single hearing. This means that there is a single proceeding in which the court both enters an official judgment dissolving the marriage and settles issues like property division and child custody. However, there are certain circumstances under which the court can hold two separate hearings, one to dissolve the marriage officially and another to settle the practical issues like property division. These sorts of proceedings, known officially as bifurcated judgments, are allowed under Illinois family law 750 ILCS 5/401(b). Yet, the law only allows for these sorts of split judgments under a limited set of circumstances, and even when they are allowed, they come with a set of pros and cons that need to be weighed.

When Bifurcated Judgments Are Available

Illinois statutory law allows for bifurcated judgments under “appropriate circumstances.” This vague standard has left it largely to the courts to determine when such circumstances exist. Courts have been creating non-exhaustive lists ever since. Generally speaking, the circumstances are appropriate whenever one of the parties has an interest in terminating the marriage in a timely manner and it does not unduly prejudice the other spouse. For instance, there was a divorce case in which a woman was dying of disease, and was not expected to live long enough to make it through a conventional divorce. She was allowed a bifurcated judgment for estate planning purposes. In another case, a married woman was seeking a divorce so that she could marry another man. She was already pregnant with the other man’s child, and sought the bifurcated divorce so that she could marry him quickly. The court allowed this because the other man was better able to provide for her and the child’s medical care. These are just some of the many examples of circumstances where courts may consider using a bifurcated judgment.

The Pros and Cons of Bifurcated Judgments

As previously mentioned, bifurcated judgments often come with a variety of pros and cons. Usually, many of the benefits are specific to the individual cases, like the ones above. It may be an issue of estate planning, insurance, or some other legal formality, but generally speaking it is a situation in which formally ending the marital rights as quickly as possible is beneficial in its own right. Beyond that, there is also an emotional benefit to making a quick end of the marriage. The difficulties of these sorts of judgments are twofold. First, there is the practical issue that it will require two separate legal hearings, which means more time in court. Second, the end of the marriage is often a powerful factor in making spouses settle contentious issues. With that already taken care of, many parties become more stubborn, which can lead to a judge making more of the decisions.

If you believe you could benefit from a bifurcated divorce or you simply have more questions about the practicalities of the divorce process, contact an experienced DuPage County divorce lawyer today. Our professionals are standing by to answer any questions you may have.

Stay at Home Parents and Divorce

September 29th, 2014 at 7:00 am

DuPage County divorce attorney, file for divorce, stay at home parents, temporary alimony, prenuptial agreement, postnuptial agreementStay at home parents can face unique disadvantages in divorce, despite the fact that, according to U.S. Census data, there are tens of millions of stay at home parents taking care of children across the country. Stay at home parents often run into trouble following a divorce because they chose to give up careers to take care of their families. However, this can leave them without options to support themselves after the divorce.

In the past, this was less of an issue because permanent alimony was more common, but recent changes to the law have made temporary alimony a more likely outcome. Such alimony is designed to allow the stay at home spouse time to get back on their feet and reenter the workforce.

Difficulties Faced by Stay at Home Parents 

Stay at home parents who have been provided only temporary alimony by the court often face challenges for which they need to be prepared. First, many stay at home parents attempt to reenter the workforce too quickly because they know that they are working under the deadline of their alimony ending. While this impulse is understandable, and in some cases necessary, many parents can afford to take longer than they do to attempt to reestablish old professional contacts or to develop new marketable skills. Second, stay at home parents, especially those who reenter the workforce too quickly, can often find themselves without benefits, like health insurance, for which they had been relying on their spouse.

How They Can Protect Themselves

Unfortunately, the best ways for people to protect themselves from these issues are to take precautions before the divorce happens. For instance, people should maintain contact with the professional world after they stop working full-time. This could be as simple as seeing old colleagues for lunch every so often, or it may even involve working part-time or freelancing if their type of profession can accommodate that sort of a schedule. For those who have already cut themselves off from the working world, it may be beneficial to start moving back towards it before the divorce process begins. This could involve dredging up old contacts and rebuilding a professional network, or maybe even finding a new part-time job.

Another way stay at home spouses can protect themselves is through either a prenuptial or postnuptial agreement. These agreements allow couples to decide issues like spousal support for themselves, and thus allows for the creation of a safety net for the spouse who chooses to stay at home.

If you are considering filing for divorce and would like more information about the process, reach out to a DuPage County divorce attorney. Our firm is happy to help you better understand your rights and your options.

Pre-Pups: A New Trend in Divorce

September 24th, 2014 at 7:00 am

divorce trends, DuPage County family law attorney, prenuptial agreements, pre-pups, personal property, shared custody, shared pet agreement, pets and divorce, pet visitationThere is a new trend in family law aimed at protecting people’s relationships with their pets. Prenuptial agreements related to pet custody are now being referred to by some as “pre-pups.” These new agreements stem from a variety of factors. First, many are choosing to marry and start a family later in life. As a result, couples are embracing a joint pet as a stepping stone along that path.

However, according to a CBS report, this new trend is causing pet owners, overwhelmingly dog people, to try and protect their relationship with their pets once the relationship with their significant other ends. Second, the law treats pets as personal property for the most part. This means that shared custody and visitation—ideas that were developed for children—do not have legal relevance to pets. Hence, people need to make private agreements to mimic those ideas.

How the Law Views Pets

One of the driving forces behind these new agreements stems from the way the law regards pets. The law in relation to animals was developed during a time when animals were more tools than companions, and they worked on farms, lived as livestock, or were used for hunting. This meant that the value of the animals was more practical. Courts developed doctrines that considered animals, whether pets or otherwise, as ordinary personal property. Consequently, for purposes of divorce, deciding who received the family dog became an issue of property division rather than an issue similar to custody dispute over children.

However, there is some evidence that this legal view of pets is changing. The prevalence of disputes over family pets has led some jurisdictions outside Illinois to begin treating the issue of pet custody like child custody, and thus look to the spouse who will take better care of the pet. Additionally, Illinois is one of the few states that allows for pets to benefit from the protection of restraining orders, therefore signifying the special place companion pets hold in people’s lives.

What Pre-Pups Can Do

Pre-pups allow couples to determine what happens to their beloved pets in the event their relationship does not work out. While they can simply be used to determine which partner receives custody of the pet, they can also be more sophisticated. Some couples choose to use them as a way to mimic more complex custody arrangements like those that exist for children. These can include things like joint custody, visitation rights, and even support obligations for the couple’s pet.

If you are currently considering purchasing a pet with a spouse or significant other, contact a DuPage County family law attorney. Our firm can help you arrange for an agreement to help handle the logistics of owning a pet in the event the relationship ends.

New Study Suggests Wealthy Children Are More Affected by Divorce

September 19th, 2014 at 7:00 am

affected by divorce, children and divorce, divorce trends, life after divorce, wealthy children, Wheaton divorce attorneyWhile everyone acknowledges that divorce can be difficult on children, new research reveals that a family’s income level may play a role in just how much children are affected by divorce. A new study by researchers at Georgetown University and the University of Chicago, and being published in the journal Child Development, posits that young children of wealthy families may be more adversely affected by their parents’ divorce than similarly situated children of less well-off parents. The study’s authors did not focus on the causes of the difference, but they did put forward several theories.

What the Study Found

The new study examined data related to almost 4,000 children between the ages of three and 12 from the U.S. Bureau of Labor Statistics. The data included information about the children’s family income levels as well as surveys regarding the children’s behavior. The children’s behavior was analyzed using a 28-point survey that was developed to quantify adolescent behavioral issues.

The study’s authors analyzed the behavioral patterns of the children based on age and income level. They then divided the income levels into three groups based on those living at or below the poverty line, those living at one to three times the poverty line, and those living at more than three times the poverty line. The study found a greater increase in behavioral problems for the wealthiest group of children, provided that the children were under the age of six. Additionally, the study also examined the effects remarriage and blended families had on children. The authors found that children in higher income brackets and over the age of six fared better than their less wealthy counterparts when it came to reintegrating into a blended family structure.

Possible Explanations

Although the study did not focus on the reasons for this correlation, the study’s authors put forward a variety of theories as to why this trend might occur. One initial theory was simply that more well-off children were more likely to experience a substantial dip in income as a result of the divorce, and thus lead to behavioral issues. However, an analysis of the data showed that that explanation was not backed up by the facts. Instead, the authors suggest that it could be a function of the different social norms among the income brackets. Children of wealthy families tend to be more used to stable home lives, and their peer groups tend to involve traditional family structures. This means that the divorce process can be less familiar and more stressful for them, which may lead to their acting out if that stress is not properly managed.

If you are considering filing for a divorce and would like to know more about the process, contact a Wheaton divorce attorney today. Our dedicated professionals are here to answer your questions, and help you understand your different options.

Senior Citizens and Cohabitation Agreements

September 15th, 2014 at 7:00 am

cohabitation agreements, DuPage County family law attorney, senior companion, cohabitation, cohabiting seniors, legally binding contract,  cohabiting couplesWhen people discuss cohabitation, they often focus on young couples who have moved in together as a step before marriage or similar couples who think marriage is unnecessary. However, there is a new demographic now entering into cohabiting relationships with more and more frequency: senior citizens. In fact, according to U.S. Census data reported by The Washington Times, the number of cohabiting seniors has nearly doubled from 2000 to 2008, rising from 1.2 million to 2.2 million.

There are a variety of reasons that seniors choose to live together without opting to enter into a formal marriage. Some seniors who have already lost spouses do not want to replace them, but are still looking for companionship. Cohabitation strikes a balance between those two factors. Other seniors simply do not see the need to formalize their new relationships so late in life. Formal marriages between seniors can also cause problems with social security, pensions, estate planning, and debts from medical care. Still, there is a way for seniors who are living together to legally organize their affairs and their relationship without dealing with a full marriage. These seniors can enter into cohabitation agreements.

Cohabitation Agreements Explained

Cohabitation agreements are contracts that lay down the rights and responsibilities of the two people who are in the relationship. In some senses, this is very similar to a marriage, which also functions as a legally binding contract. However, these cohabitation agreements are much more limited. For instance, provisions of cohabitation agreements that relate to children or child custody will not be enforced. Instead, cohabitation agreements focus on how to deal with the end of a relationship and divide up the property in the event that the relationship ends. In this way, these sorts of contracts function much like a prenuptial agreement would during a divorce.

The Benefits of Cohabitation Agreements

Cohabitation agreements are a low-key way to ensure that winding down a relationship occurs as easily as possible, regardless of whether it is the result of a simple parting of the ways or the untimely death of one of the participants. Cohabitating couples often acquire property together in much the same way that married couples do, but they do so without the safeguards that come along with a marriage contract, with no default rules that allow for a division of that property. The use of a cohabitation agreement allows both members of a relationship to set their own rules for division ahead of time, so that they, or their family members, are not stuck figuring out what to do with property that the couple acquired together.

If you are a senior and are currently living with a romantic partner, contact a DuPage County family law attorney with any questions you may have about cohabitation agreements. Our experienced attorneys can help you better understand your options.

Business Owners and Divorce

September 12th, 2014 at 1:22 pm

business owners, business owners and divorce, business valuation, DuPage County divorce lawyer, business value, business and divorce, business assetsDivorce is a stressful and emotionally trying time for any couple, but it can have added layers of complexity if one or both of the spouses owns a business. If spouses are not aware of these extra wrinkles heading into the process, then they can make for an unfortunate surprise when going through divorce. A recent case involving the divorce of an Oklahoma oil and gas magnate highlights some of these issues.

First, there is the issue of valuing a company for the purposes of division. This will require experts to come in and testify as to the company’s worth, and may require expensive financial analysis. The second major issue that business owners face is the loss of control of their company in a divorce. If they are forced to cede equity to their former spouse, or if they are forced to sell their equity interests because they need the cash, they may find themselves without a controlling stake in the company.

Valuing the Company

The first hurdle that business owners have to face will be the valuation of their company during the divorce. This can be especially complex because most companies, unlike the oil and gas company above, are not publicly traded. This lack of an open market on which shares can be bought and sold makes it harder to figure out the actual price for the whole company. Consequently, valuing the company will likely require a person to retain an expert witness who has the skill to understand the different methods available for valuing private companies.

These different methods can be financially complex, but they can be broken down into three basic styles. Some valuators may look at other transactions such as the sale of similar businesses or past sales of the same business. They can then use these sales prices as a starting point to analyze the business value. Others may focus more on the company’s income. By examining the company’s cash flows, the valuator can make estimates about the total worth of the company. Finally, some valuators simply choose to value the business’ assets individually and then subtract out any debts that the company may owe.

Losing Control of the Company

The other issue related to business owners and divorce is whether they can maintain control of the company throughout the divorce. If the company was founded after the marriage, then it qualifies as marital property and both spouses have a stake in it. This requires the founding spouse to either split the company with their soon-to-be-ex or to negotiate a buyout. While many spouses are amenable to a buyout, having no interest in running a company with their ex, pulling together the cash to do it can be difficult. Consequently, savvy business owners should be aware of this possibility and make sure they have the cash to handle the buyout, lest they find themselves selling off equity in order to fund it.

If you are considering filing for divorce and have questions about the nuances of the legal landscape, reach out to a skilled DuPage County divorce lawyer today. Our team of dedicated attorneys stands ready to help answer any questions you may have.