Tag Archive for: Attorney Fees

First meeting with divorce attorney: How can I prepare?

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divorce attorney

You can save a lot of money on attorney fees if you are organized and provide your divorce attorney with concise and complete information.  Here are some tips on how to prepare for your first meeting with divorce attorney.

Be prepared to discuss your marital problems with your divorce attorney but keep it concise and honest.

  • The longer you talk about the the lies, affairs and financial disagreements that ended your marriage, the longer your meeting will take and the more it will distract from the legal aspects and business transaction of your divorce proceedings. Talk to your mental health professional if you need a more emotional connection. Talk to your financial expert if you need assistance understanding the family finances and planning for your future. Do your best to simply state. Why, in your honest opinion, your marriage has come to an end.
    • Romantic infidelity?
    • Financial infidelity?
    • Financial Disagreements?
    • Life review?
    • No longer in Love?

An idea of what you want to get out of the divorce proceedings financially.

  • If you do not know what you want; Wellspring Divorce Advisors can build a plan for your financial future and communicate the results with powerful analysis and reports.
  • Some examples
    • Keep the House – Can you afford it?
    • Financial Security – What does this mean to you?
    • Long term spousal support
    • Not to go back to work
    • Children’s college education paid for
    • Financial autonomy
    • Purchase a new home

You should bring the following information to your first meeting:

  • Family information, including the names and birth dates for yourself, your spouse, and your children
  • The date and place where you were married
  • Current employment information for you and your spouse
  • An estimate of financial status including
    • Income (current pay-stubs and last three years tax returns would be best)
    • Expenses (if you have a budget bring it, if not let us know and we can help you prepare one)
    • Assets and Debts (account statements for mortgage, 401K, brokerage accounts, bank accounts, credit cards)

 

We suggest meeting with a Wellspring Divorce Advisor before or immediately after your first meeting with divorce attorney. We will help you put together a complete and detailed picture of your family finances before the attorney heads down the path of expensive formal discovery. We can also help you choose the right attorney and divorce process if you do not yet have one.

Divorce and Taxes: How they can affect your financial future

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taxes, divorce financial analyst

Taxes are guaranteed to be a complication of every divorce financial settlement. Misunderstanding the tax code, even worse completely ignoring it, can have devastating effects on your financial future.

The errors get more costly and more common when estates and incomes get larger and people start getting creative. Negotiating a creative and mutually beneficial divorce financial settlement can be complicated when you have significant assets and income. Make sure you and your attorney have the help of a financial expert skilled and experienced in navigating the tax codes of divorce. Here are some common errors.

Exemptions

Failure to consider the value of dependency exemptions and filing status for income taxes. High earners are often phased out of using dependency exemptions, failure to negotiate the use post divorce could waste tax dollars.

 

Child Support

Not understanding the difference between child support and spousal support for tax purposes. Spousal support is taxable to the recipient, tax deductible for the payer.

 

Spousal Support

Structuring future changes in spousal support in close proximity to an event or mile-stone related to your children. This is also known as the Child Contingency rule and could cause tax deductible spousal support payments to be re-classified as non-deductible child support.

 

Attorney Fees

Failure to deduct attorney fees related to spousal support dispute as a miscellaneous itemized deduction. Yes your attorney fees are deductible to the extent they were incurred in the process of seeking tax advice or spousal support. You will need to ask your lawyer for an itemized break out of the litgiation costs. This can be incredibly valuable in protracted, expensive litigation.

 

IRS

Running afoul of Section 1041 of the internal revenue code. Section 1041 is the IRS code that allows spouses, married or divorcing, to transfer assets to one another without tax consequence. There are however rules to follow like how ling you have to complete a transaction.

 

Incorrect Assumptions

Assuming your CPA understands the tax code related to divorce. They can certainly look things up but it is a bad idea to assume your CPA understands the tax intricacies of divorce. The last time I spoke to a California Society of Certified Public Accountants group there were 200+ CPA’s in the room and 200+ questions after the presentation.

 

 

wellspring divorce advisors

Wellspring Divorce Advisors helps individuals and couples address the financial aspects of divorce in a civilized, equitable, and efficient manner by providing expert divorce financial planning and advice.

Contact us to find out how we can help you through this process.