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Rockville MD Divorce Law Blog

Importance of proper documentation of alimony payments

In many Maryland divorces, one spouse is awarded alimony, even though it is not a requirement. What is required, though, is keeping proper documentation regarding this form of spousal support. Although most spouses detest having to pay alimony, one benefit is that it is tax-deductible. In a messy divorce, it's not uncommon for one spouse to challenge amounts paid or received. Without proper documentation, the IRS or court could order additional alimony payments or cause the payer to lose his or her tax write-off. Read on to find out what records the payer should keep.

Each monthly payment should be thoroughly detailed in a spreadsheet or other document. It should include the amount, date paid, check number and the address the check was sent to. Include carbon copies of all checks used to pay alimony. If using cash, make sure to create a receipt and have the recipient sign it to confirm that he or she has received the amount for alimony payment.

How does a high asset divorce impact my tax liability?

When Maryland couples divorce, there are many issues regarding property division. This is especially true in the case of a wealthy dissolution. There are often multiple homes, stocks, bonds, retirement plans and much more to split up. There are often many disputes about asset division because of the tax implications involves - something that most couples don't think about. Find out how a high asset divorce can affect your tax liability.

Generally, when spouses transfer assets to each other, no taxes need to be paid. However, when you receive assets that have risen in value since you first acquired them, you are liable for the capital gains tax. This applies to real estate as well. However, if you reinvest the proceeds from the home sale within two years, you won't have to pay the capital gains tax. There are residency requirements that apply as well.

How does a pay increase after divorce affect alimony?

One of the realities that Maryland couples will likely face after divorce is that one spouse will be obligated to pay spousal support to the other. In most cases, the monthly payments will last forever - that is, until one of the spouses dies. What happens when the payor ends up with a sizable increase in income decades down the road? Is the recipient entitled to an increase in alimony?

Alimony is different from child support. It's not uncommon for custodial parents to ask for a modification in child support when the payor receives a raise. But with alimony, the guidelines are different because the money is being used to support a former spouse, not a minor child. Plus, if the increase in income occurs many years after a divorce, it's unlikely that the recipient spouse helped the paying spouse earn that money. So if a spouse receives $50,000 a year in alimony and is able to comfortably live on that amount for 10, 20 or even 30 years, there's no reason why they would suddenly need more money just because the paying spouse recently received a raise.

Who should determine asset division - my ex and I or the court?

If you live in Maryland and you and your spouse are headed for divorce, you likely have many questions about the process, especially if you've never divorced before. Depending on how long you were married, you may have accumulated many assets together. Who gets to keep what, and do you have any say in the decision? Believe it or not, you have more power over the final outcome than you may think.

Ideally, you and your ex-spouse would divorce on friendly terms and be able to discuss asset division amicably. Many couples use mediation to help settle issues such as property division and child custody. This method often allows the divorce process to move forward more quickly, and allows couples to have a say in such major issues. However, many couples are unable to effectively communicate without arguing, making mediation and negotiation useless. When this happens, the courts must step in and make decisions.

Options for enforcing child support

In many divorce cases where children are involved, one party is typically considered the custodial parent while the other pays child support. Many custodial parents rely on this source of income to get them through tough financial times. Unfortunately, many never see the payments arrive. Some parents do whatever it takes to avoid having to give up a portion of their paycheck to a former spouse. They may quit their job, move to another state - or even another country - and disappear from their child's life forever, just to avoid having to pay this monthly obligation. This can be frustrating, but there are some things that can be done to force the parent to comply.

When the noncustodial parent fails to pay child support on time, the debt builds and builds. If the parent does not inform the court of the reason why the payment is not made, they are now in contempt of court. This can lead to legal ramifications for the parent. They could be jailed and forced to give up a driver's license or professional license.

What are unmarried Maryland fathers' child custody rights?

In the past, Maryland couples often waited until marriage to start their families. Today, however, with the divorce rate hovering around 50 percent, many couples are delaying marriage or even foregoing it altogether. Nonetheless, many of these couples are having children out of wedlock, which can lead to child custody disputes, should the relationship end. Although the mothers primarily received custody in the past, a growing number of fathers are actively seeking custody and want to understand their legal rights.

First of all, paternity needs to be established. When the man is unmarried, he can be considered the father if he is listed on the birth certificate, has provided a written statement acknowledging he is the father or has been ordered by the court to provide child support.

A high asset divorce is complicated; don't do it alone

Maryland couples who have been through a divorce can attest that the process can be very expensive. In order to save as much money as possible, some couples may try to settle everything without help from a lawyer.

In fact, more than 70 percent of the matters related to divorce are handled by the couples themselves, who choose to act as their own legal representative. While some tasks, such as filing paperwork, can be done without the help of a legal professional, a couple should never attempt complex asset division alone, especially in the event of a high asset divorce.

Property division: What will happen to my business in a divorce?

More and more people are quitting corporate America and becoming their own bosses. While this may seem like the dream life for many Maryland residents, starting a business can be a risky venture. With no regular paycheck to count on, many entrepreneurs work 80-hour weeks and make many sacrifices to keep their businesses afloat. So when their marriages fail, these entrepreneurs may worry about what will become of their business, especially if it is profitable. Will they have to split it 50/50 and have their ex-spouse as a business partner for eternity?

Unfortunately, there is no one-size-fits-all answer to this question when property division is involved. For the most part, anything acquired before the marriage is considered separate property. However, a business started before the marriage may be sustained by the marriage and therefore be considered marital property.

Working toward the best solution in a child custody dispute

A Maryland divorce is often filled with emotion and drama, especially if children are involved. Both spouses fight over child custody and argue over who is the better parent. The parents focus on what they want rather than tend to the best interests of the child. Unlike other assets, it's difficult to split a child, which is why it is important to have a family law attorney who understands your situation and helps you work with your spouse toward a fair outcome.

Child custody issues can be complicated and almost impossible for parents to settle on their own. There are many legal aspects involved, which is why parents should consider all the resources, knowledge and experience a family law attorney has to offer. For example, lawyers can help draft parenting plans and visitation agreements. If a parent wants to move out of state, modifications can be requested. Lawyers can also turn to litigation to enforce agreements. Not only do they fight for the parents' rights, but also for the rights of grandparents and even the children themselves.

What qualifies as 'income' factored into child support payments?

When many Maryland residents think of income, they may think solely of the money they receive from their jobs. This is typically in the form of a weekly, biweekly or monthly paycheck. However, when a parent must make child support payments, the courts consider just about any type of money received to be included in his or her actual income amount. According to General Assembly of Maryland, income is a broad term that encompasses a variety of monetary sources.

Besides the obvious - salaries and wages - income also includes job-related income such as commissions and bonuses. If the parent is disabled, injured or unemployed, any money that they receive from state or federal sources - such as disability insurance, workers' compensation, unemployment and Social Security - is counted. If the parent has income or interest from retirement accounts - such as pensions, trusts and annuities - this is included in the actual income as well.

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Gaithersburg Divorce Lawyers Video

http://www.mckeonlawfirm.com 202-742-1800 The McKeon Law Firm handles marital property issues in divorce. The attorneys are experienced in business valuation & tracing assets. Contact us in Gaithersburg, Maryland for property division matters.

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