A change in marital status means many changes to your tax situation. It’s important to inform the IRS of these changes and review the effects of your different options in order to get the most beneficial tax results.
If you have changed your legal address, the IRS has to be officially informed by filing Form 8822. If you change your name, you need to inform the Social Security Administration, using Form SS-5.
To avoid withholding too much or too little from your paychecks now that your family size and/or family income has changed, ask your HR department for a new W-4 form and make the necessary changes.
Filing Status
There are five tax-filing statuses: single, married filing jointly, married filing separately, head of household, and qualified widow(er) with dependent child. While the last option is not available to you, which of the other options you use depends on multiple variables.
The IRS considers your marital status as of midnight on December 31. If your divorce was finalized on December 30, you cannot file with either of the “married” options. If you don’t get divorced until January 1, you cannot file as “single,” even if you did not live together, because you were still married as of December 31.
If, however, you were separated for more than six months, you were paying the majority of household expenses, and you have at least one dependent, you can file as “head of household.”
Before determining your tax filing status, consider the tax effects of each of your options. While married filing jointly has a higher standard deduction, you are then both liable for whatever taxes are incurred. If your income is significantly lower than your spouse’s, you may be better off filing as married filing separately or as head of household, if that is an option. Remember, however, you cannot file as single if you are still legally married on December 31.
Claiming Dependents
If the divorce decree does not dictate who claims the children, the IRS rules that the parent with whom the children stay for the majority of the year (usually the custodial parent) can claim them as dependents. In the unlikely event that they stay with each parent the exact number of days in a year, the parent with the higher adjusted gross income can claim them.
The parent who claims the children is then eligible for other tax benefits: an increase in Earned Income Credit, possible Child Tax Credit, Child and Dependent Care Credit, and educational or medical deductions.
Alimony and Child Support
Child support is neither tax deductible by the payer nor needs to be reported by the receiver. The thought is that if the parents had not divorced, they would be paying for their children’s food, clothing, and housing, none of which is tax deductible, therefore child support is not tax deductible.
Alimony is handled differently, depending on whether your divorce took place before or after December 31, 2018.
For divorces prior to 12/31/18, the payer is able to deduct alimony from taxable income, and the receiver has to report the alimony as taxable income. For divorces after 12/31/18, the payer may not deduct alimony from taxable income, and the receiver does not report the alimony as taxable income.
This significant change is due to the Tax Cuts and Jobs Act, which went into effect for alimony as of January 1, 2019. Divorces prior to that date are grandfathered into the old tax law unless modifications are made to the divorce agreement.
Given the many changes that can take place in the first year or two after divorce, it’s best to work with a tax advisor who is familiar with the tax challenges associated with divorce. A good divorce lawyer should be able to recommend a tax professional who can help you.
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Divorce and Your Taxes
DivorceA change in marital status means many changes to your tax situation. It’s important to inform the IRS of these changes and review the effects of your different options in order to get the most beneficial tax results.
If you have changed your legal address, the IRS has to be officially informed by filing Form 8822. If you change your name, you need to inform the Social Security Administration, using Form SS-5.
To avoid withholding too much or too little from your paychecks now that your family size and/or family income has changed, ask your HR department for a new W-4 form and make the necessary changes.
Filing Status
There are five tax-filing statuses: single, married filing jointly, married filing separately, head of household, and qualified widow(er) with dependent child. While the last option is not available to you, which of the other options you use depends on multiple variables.
The IRS considers your marital status as of midnight on December 31. If your divorce was finalized on December 30, you cannot file with either of the “married” options. If you don’t get divorced until January 1, you cannot file as “single,” even if you did not live together, because you were still married as of December 31.
If, however, you were separated for more than six months, you were paying the majority of household expenses, and you have at least one dependent, you can file as “head of household.”
Before determining your tax filing status, consider the tax effects of each of your options. While married filing jointly has a higher standard deduction, you are then both liable for whatever taxes are incurred. If your income is significantly lower than your spouse’s, you may be better off filing as married filing separately or as head of household, if that is an option. Remember, however, you cannot file as single if you are still legally married on December 31.
Claiming Dependents
If the divorce decree does not dictate who claims the children, the IRS rules that the parent with whom the children stay for the majority of the year (usually the custodial parent) can claim them as dependents. In the unlikely event that they stay with each parent the exact number of days in a year, the parent with the higher adjusted gross income can claim them.
The parent who claims the children is then eligible for other tax benefits: an increase in Earned Income Credit, possible Child Tax Credit, Child and Dependent Care Credit, and educational or medical deductions.
Alimony and Child Support
Child support is neither tax deductible by the payer nor needs to be reported by the receiver. The thought is that if the parents had not divorced, they would be paying for their children’s food, clothing, and housing, none of which is tax deductible, therefore child support is not tax deductible.
Alimony is handled differently, depending on whether your divorce took place before or after December 31, 2018.
For divorces prior to 12/31/18, the payer is able to deduct alimony from taxable income, and the receiver has to report the alimony as taxable income. For divorces after 12/31/18, the payer may not deduct alimony from taxable income, and the receiver does not report the alimony as taxable income.
This significant change is due to the Tax Cuts and Jobs Act, which went into effect for alimony as of January 1, 2019. Divorces prior to that date are grandfathered into the old tax law unless modifications are made to the divorce agreement.
Given the many changes that can take place in the first year or two after divorce, it’s best to work with a tax advisor who is familiar with the tax challenges associated with divorce. A good divorce lawyer should be able to recommend a tax professional who can help you.
Modifying Your Divorce Agreement
DivorceWhile an appeal to a divorce decree must be completed within 30 days, a modification to a divorce agreement can be requested at any time after the divorce. It is not uncommon that, after significant time has passed, circumstances have changed enough to warrant an alteration of the divorce agreement.
If both spouses agree to the changes, the process is fairly simple. The agreement must be in writing and submitted to the court in which the divorce decree was issued. Sometimes there is a hearing to ensure that both parties truly agree, then the judge signs off on the agreement and it becomes a court order. Working together with your lawyer to ensure the divorce agreement is written properly is the easiest and best way to make changes to a divorce agreement.
However, sometimes former spouses cannot agree. In this case, the person who wants the modification must file a motion for modification with the court that issued the divorce and serve it on the other spouse. Getting a modification from a court is not easy because you will have to present proof of significant, long-term, or permanent changes that justify the modification.
Courts rarely modify property or debt distributions in the original divorce agreement, but changes to spousal and child support and changes to custody and visitation are not uncommon. Where children are involved, the person seeking modification must prove that the change is in the best interest of the child.
Reasons for modification of support
A significant change in income is often grounds for modification, whether you are the payer or the receiver. If the payer gets a significantly higher paying position, the receiver may request more spousal or child support. Additionally, if the receiver loses a job, more support could be requested.
Conversely, if the payer loses a job or gets a significantly lower-paying job, the payer can request a decrease in the amount of support paid. This is also true if the payer has more children with a new spouse, demonstrating a need to support other children. One caveat: A parent cannot purposely take a lower-paying job in order to request a change in support. This may be difficult to prove, but if suspected, it could be considered contempt of court.
In the case of child support, the receiver may demonstrate a significant change in the child’s health or condition to warrant an increase in support or the payer may demonstrate that the child now needs less support. In these cases, courts will keep in mind the best interests of the child.
Reasons for modification of custody or visitation
A change in the condition of parents or children can justify a request for modification.
If one parent was ill-fit for joint or sole custody at the time of the divorce and can now prove he or she is fit, a case for modification may be made. However, a formerly unfit parent cannot demand sole custody if the parent who currently has sole custody is still a fit parent.
If a parent who has sole or joint custody becomes unfit, or if any child abuse or substance abuse can be demonstrated, custody provisions can be modified, keeping in mind the best interests of the child.
If your child is spending more time with you than is listed in the custody agreement, you may wish to modify the agreement so that you can legally protect this precious time together. The additional time also means an increase in child expenses on your part, suggesting a need to modify support as well.
Your next steps
In any of these situations, you will need to show significant evidence in order to convince the court to change the agreement. Laws that govern the standards to be met in each case vary from state to state, so be sure to talk to a lawyer who is expert in the divorce laws of the state in which your divorce was issued. We here at Ulmer are experts in Pennsylvania law. Reach out to us to see how we can help you.
Contested Adoptions
AdoptionIf the natural parent(s) do not agree with the adoption, there is a hearing to determine if their rights should be involuntarily terminated. In this situation, an attorney must be appointed to represent the interests of the adoptee(s). An attorney may also be appointed for the parent contesting the adoption. When presiding over a petition for involuntary termination, the court must first consider whether grounds for involuntary termination have been established. Grounds for termination include instances where a parent has failed to perform any parental duties for at least six months, where a parent has demonstrated incapacity, abuse or neglect, or the child has been removed from the care of the parent(s) by an agency and parents have not been able to successfully remedy the situation which led to removal.
Once grounds for termination are established, the court then turns to the needs and welfare of the child(ren) involved. A major factor is the emotional bond between the parent and child and potential consequence of severing that bond. A parent’s representation of love and affection for a child without further corroboration, are not sufficient to prevent termination of their rights based on the best interests of the child. The role of the attorney appointed for the adoptee(s) is to elicit and relay the position of the children involved. The attorney may also weigh in as to whether the adoption proceeding would be in the child’s best interests and whether the benefit of adoption outweighs any harm from the termination. Other parties, such as social workers involved in the case, can also offer an opinion as to the welfare of the children and any possibility of irreparable harm in severing the parent-child relationship. If a final decree of termination is entered by the court, the case may proceed with adoption.
Notice Requirements for Adoption
AdoptionIt is always necessary to give all interested parties proper notice of pending adoption proceedings. A copy of the adoption petition should be served on all interested parties, e.g. persons with parental rights to the minor child(ren) involved. Acceptable methods of service include personal service or certified mail, return receipt requested, restricted delivery. With personal service, an affidavit of service would then be filed with the court detailing date, time and place of service. With service via mail, verification of delivery would come back from the post office with the signature of the party served. Proof of service should be filed with the court and/or submitted at the time of the hearing.
A copy of the notice for hearing must also be served on all interested parties. At least ten days’ notice of any hearing must be served by personal service or registered mail to the parties’ last known address. If the rights of the natural parents have already been terminated, you are not required to give them notice of the subsequent adoption hearing date since they are no longer an interested party. If you do not have an address for an interested party, you can petition the court to allow service by an alternate method. This would usually entail publication in the newspaper in the county where the interested party was last known to reside.
Overcoming the Stress of Divorce
DivorceStress after divorce is to be expected. You’re embarking on a new stage of your life, but things will be different socially, emotionally, and financially. Looking at the big picture can cause anxiety, but by allowing yourself time to adjust and by taking things one at a time, you can manage the stress and anxiety and come out stronger on the other end.
It’s important, first of all, to allow yourself to feel many different emotions. Do not try to bottle them up. And give yourself time to perform at less than full capacity. You may be juggling new responsibilities, or the feelings themselves may be slowing you down. It’s okay. Don’t worry about what others may think of you, everyone has a different way of coping.
Don’t go through this alone, though. It’s important to have the strong social support of friends or family with whom you can share your feelings and who make you feel better. You may also need to reach out to a support group or professional counselor, especially one who is an expert in helping people adjust after divorce.
Keep yourself physically healthy. Exercise and a good diet improve your mental and emotional health. Get involved in activities you enjoy, indulge in hobbies to lift your spirits.
Positive self-talk is crucial. Don’t blame yourself for past mistakes, real or imagined. Focus on a better future. Understand that you can’t control everything, but you can control some things. Write down everything that worries you and brainstorm solutions. Friends may also have ideas. If there are some concrete things you can do to improve the situation, take one challenge at a time, and celebrate your progress.
Financial concerns can be a major stressor. If your spouse handled most of the finances, you’ll need to learn how to do so now. A financial professional can help you make a budget and suggest ways to improve your financial situation. If necessary, look into further professional training in order to get a job that will bring in more money.
If you have children, you’ll be understandably concerned about them. Give them extra attention and make sure they know they can rely on you. But they also need consistent routine and clear discipline, giving them structure and security during this insecure time.
After your divorce, things will be different, but they can still be good – maybe even better. By focusing on your emotional health, you will be able to cope better and also help your children cope. A good divorce lawyer should be able to refer you to appropriate support services. At Ulmer Law, we are committed to helping our clients not only get the best settlement but move beyond their divorce with the best possible future before them. Call us for a consultation.
Surrogacy Contracts
BlogSurrogacy is the process whereby a third party is used to assist couples in having a child. Surrogacy may be traditional wherein the third party will have a biological tie to the child but has agreed to relinquish any legal rights as a parent. The other option is gestational surrogacy where the third party is just a carrier and the egg and sperm of the intended parents are implanted in the surrogate. Pennsylvania does not have a statute in place as it relates to surrogacy, however, case law has established courts are willing to uphold the provisions of a surrogacy contract. In J.F. v. D.B., the carrier mother attempted to keep the children following birth despite having entered a surrogacy agreement. 897 A.2d 1261 (2006). The court eventually held she didn’t have standing for a custody action and turned the children over to the intended parents per the contract.
Another case which upheld a surrogacy agreement is In re Baby S, 2015 Pa. Super. 244 (2015).
In re Baby S, involved celebrity couple Sherri Shepherd and former husband, Lamar Sally. The couple had entered into a surrogacy contract to assist in having a child. Several months into the pregnancy, Shepherd refused to sign additional forms to have her listed on the birth certificate as the intended parent of the child because of the pending dissolution of her marriage to Sally. Sally ended up taking care of the child and subsequently sought support from Shepherd. The court ruled that Shepherd was an intended parent evidenced by the signed surrogacy contract and accordingly, ordered her to meet her child support obligation. Accordingly, parties who intend to use a surrogate should consult with an attorney first and draft a clear, unambiguous agreement.
You may also need a pre-birth Order to ensure the names of the intended parents can be listed on the birth certificate at the time of birth.
Adoption Fees
AdoptionThere are a number of costs involved in an adoption action. The total amount of expenses will vary depending on the nature of the adoption. For example, a kinship or family adoption where the natural parent(s) are cooperating with the adoption will have different costs than a case where the adoption is contested by the natural parent(s) or if the adoption is not kinship. There is a filing fee due to the court for an adoption petition. Other filings that may be necessary depending on your circumstances can include a request for a home study, notice of intent to adopt, petition for involuntary termination and/or confirmation of consent. Each county will determine which pleadings require a filing fee as well as the amount. On average, it can be several hundred dollars just in filing fees. This may be something to consider if you have multiple options available in terms of counties with proper venue for your adoption case.
In addition to filing fees, the home study, where required, is at your expense. Due to the intensive inquiry that must be completed, this is usually a fairly substantial cost. Keep in mind, a home study is not required for a family adoption. If you are planning to be married, it may make sense to get through the wedding first before the adoption to skip this step. Finally, due to the strict requirements and specific procedures for a successful adoption, an experienced attorney is strongly recommended. Most attorneys will charge by the hour for the time they spend working on your case. To that end, this expense can also fluctuate quite a bit depending on the nature of your case and whether everything goes smoothly and all parties cooperate versus if it is particularly contentious and additional litigation is required.
Wills for Heroes
BlogWills for Heroes is a program in conjunction with the Pennsylvania Bar Association that provides free wills, living wills, and powers of attorney to first responders and their families. Appointments are required along with proof of military or public service. There is also a limit on the size of the estate to utilize this service. Appointments can be made online at the Pennsylvania Bar Association website. Each appointment slot is one hour. Each participant will have their final, notarized documents to take home with them by the conclusion of their appointment. If a spouse or significant other is also participating, their appointment will be immediately following that of the first responder. The program is made possible through the time of volunteers including attorneys, reviewers and witnesses.
Bucks County has two “Wills for Heroes” events coming up. On Saturday, April 6, 2019 an event is being held at the Bucks County Public Safety Training Center located at 1760 South Easton Road (Route 611), Doylestown, PA. Another event is scheduled for May 18, 2019 at the Trevose Fire Company located at 4900 E. Street Road, Feasterville-Trevose, PA. Appointments begin at 11 a.m. For more information and events at other locations throughout the state, you can visit www.pabar.org/wfh/. Our firm is also able to assist with estate planning documents at a reasonable cost including trusts, wills, living wills and powers of attorney. Please contact our office if you would like additional information or to set up an appointment.
Blended Families
AdoptionDivorce and remarriage is fairly common and can include new children in your life. Adoption may be an option to make those children your own legally. An adoption by a stepparent qualifies as a kinship adoption such that some of the statutory requirements for adoption are waived. As the prospective adopting parent, you will need to have three background checks completed prior to filing an adoption petition. Presently, the required background checks for Pennsylvania include (1) Child Abuse History Clearance; (2) PA State Police Criminal Record Check; and (3) FBI Criminal Background Check through the Department of Welfare. Your spouse and natural parent of the children would join as a petitioner in the adoption matter.
The rights of the other biological parent will need to be terminated in connection with the adoption. Their parental rights can be terminated voluntarily or involuntarily. With voluntary termination the other natural parent will sign a consent to the adoption which is subsequently attached to the Petition for Adoption. There must be at least thirty (30) days between when the consent is signed and when adoption petition is filed with the court since there is a thirty (30) day revocation period. With involuntary termination, you will plead the applicable grounds for involuntary termination within your adoption petition. A filing fee is payable to the county at the time you file your petition for adoption. After filing the Petition, you will receive notice of when you are scheduled for your hearing. You will need to notify any party that is required to receive notice of the hearing per the adoption statutes in advance of the hearing.
Interstate Adoptions
AdoptionThere are additional requirements to satisfy if you are adopting a child out of state. The Interstate Compact for the Placement of Children, which has existed for more than forty years, addresses adoptions where a child is to be transferred across state lines. It creates uniform legal and administrative procedures for interstate adoption matters. All U.S. states are members of the Compact and follow the same procedures. The state where the child presently resides must approve of the transfer across the state lines for placement. A copy of the approval is then submitted to the court for filing in the state where the adoption will ultimately take place. In order to get approval, a packet must be created with relevant information on the child or adoptee, the prospective parent(s) and the intended place of residence.
After the sending state is satisfied that the packet covers all the relevant areas, it is sent to the receiving state for their review as well. The receiving state would be responsible for having a home study completed for the intended residence typically through the local social services agency. If the receiving state is satisfied following the home study, it notifies the sending state and sends them a copy of the home study. At that time, following approval by both states involved, the interstate adoption may be completed. The Pennsylvania office of the Interstate Compact for the Placement of Children is located in Harrisburg and can be reached at (717)772-5503 for non-agency placements or (717)772-5502 for agency placements.