Divorce and Taxes Part II – Child Support, Alimony, and Taxes

The certainties of death and taxes are inescapable, as is the certainty that divorce will change your tax situation. If you’re getting divorced, you may need to think about child support, alimony, and taxes – along with other tax issues.

In this series we look at some of the key issues surrounding divorce and taxes, so you can gain the clarity you need to have informed conversations with your attorney and your CPA. That can be important to help them protect your interests.

Last time in the series, we discussed four things to consider when mediating or negotiating your divorce decree. When it comes to our topic for this installment – child support, alimony, and taxes – you may find some surprises.

Child support and taxes 

If you receive child support, you don’t have to report it as income.

If you pay child support, you don’t get to deduct it on your taxes… and you don’t get to claim the child on your taxes just because you pay support. The parent who gets to take the dependency exemption for the child depends upon your Divorce Decree, temporary order, and/or the tax code.

Alimony and taxes – a different animal

Alimony (spousal support) is altogether different than child support when it comes to tax rules. If you receive alimony, you have to report it on your taxes as income. If you pay alimony, your spousal support payments are tax deductible.

Getting slick with spousal support and taxes – a sticking point for the IRS

If your decree structures alimony payments to be high in the first couple of years and then drop off, the IRS may consider those payments to be a property settlement rather than alimony and you may not be able to deduct them.

Know your decree

Be mindful of child and spousal support tax implications when you’re negotiating or mediating your decree – including who will claim exemptions for the children.

 

A word about backsies

If you reach an agreement and a temporary order or final decree is entered, but your spouse changes their mind later, you may want to file your taxes before your spouse. That is unless you need them to sign IRS Form 8332 and they refuse. If that happens, talk to an experienced attorney about enforcement options as soon as you can.

If you don’t need your spouse to sign Form 8332, and they tell you they’re taking the dependency exemption when they aren’t entitled, you may come out ahead if you file first because the IRS will credit the first person who files and claims the exemption.

For more on filing child support and taxes and alimony and taxes, see IRS publication 504.

Next in the series

Next time in the series we look at things to think about when negotiating the property settlement agreement in your divorce.

 

This article should not be construed as legal advice. Situations are different and it’s impossible to provide legal advice for every situation without knowing the individual facts. 


Author, Hightower Reff  Partner Attorney Tracy Hightower, holds both a Juris Doctor and  a Master of Laws in Taxation. For more about Tracy, visit her profile page.

If you need help with an Omaha area divorce or other Omaha family law case, contact Hightower Reff Law today and come visit with one of the attorneys at the Omaha office. 

Nebraska Child Custody Relocation – Guide to Removal Cases

childcustodyrelocationIf you’re contemplating a move out of Nebraska with your child in the coming new year and you have a custody order in place, you’ll have to get the court’s permission beforehand. As the name of this article implies, these kinds of cases are called Nebraska child custody relocation, or removal cases.

Nebraska child custody relocation cases can be tricky. These are some basics to help make more clear how Nebraska child custody relocation cases work:

 

No temporary orders

Temporary orders allowing you to remove your child from the jurisdiction aren’t allowed in Nebraska. That’s why there’s a faster litigation process and final hearing than in a typical family law litigation case. A faster final hearing allows families to get on with their lives as quickly as possible.

Your contribution is key in your Nebraska child custody relocation case

Whether you’re the parent requesting the move, or the one opposing it, the more evidence your lawyer can show the court to support your position, the better your chances of winning. You play a key role in your lawyer’s ability to do that. You know your circumstances and your child best and can best help your lawyer understand the key elements that he or she will need to prove to the court.

It’s especially important that you communicate well with your attorney and work side by side with them during your Nebraska child custody relocation case. That will enable them to have all the key information about your situation and present it to the court.

Get a lawyer experienced in Nebraska child custody relocation onboard ASAP

Removal cases can be hard to win. It takes an experienced attorney to navigate the sometimes murky waters of Nebraska law when it comes to proving to the judge whether moving away from their other parent is truly in your child’s best interests.

Because things usually move quickly in removal cases and in the circumstances that typically surround the need for an out of state move, it’s important to get a lawyer experienced in Nebraska child custody relocation cases on board as soon as you find out an out of state move is on the horizon – whether you’re the parent moving, or the parent on the other side of the case.

 

This article should not be construed as legal advice. Situations are different and it’s impossible to provide legal advice for every situation without knowing the individual facts. 


For details about the author, Hightower Reff  Partner Attorney Tracy Hightower, visit her profile page.

More information about Nebraska child custody removal cases is available here. 

If you need help with a Nebraska child custody relocation or other family law case, contact Hightower Reff Law today and come visit with one of the attorneys at the Omaha office. 

Changing Child Custody or Support Your Holiday Wish? 4 Things You Should Know (Infographic)

holiday-modification-mediumFrustrations over repeated problems can be a bigger deal during the holidays. That can be a pain, but it can also be a benefit in the long run because it can make clear to you things that need to change. Sometimes those things include child custody or child support orders that aren’t working for your family anymore. If changing child custody or support is your holiday wish, there are 4 things you should know:

 

In a Nebraska child support modification, if a parent is looking to reduce the child support they owe because their income has gone down, the court will look at what caused their income decrease. The court will also look at whether the parent caused it on purpose.

Unfitness not a necessity for changing child custody

You don’t have to prove that the other parent is unfit for the judge to grant a custody modification. Showing that changing child custody is in the child’s best interests may get the job done. For example, the court may find that changing child custody is in the child’s best interests if the parent with primary custody is no longer giving the child a stable living environment.

The court’s decision will turn on the very specific, individual facts of your case, and the needs of your children. Your attorney’s skill in clearly and effectively showing the court those things is critical.

Experienced legal support is essential

Choosing the right attorney for a Nebraska child custody modification or Nebraska child support modification is crucial. It’s also crucial to your peace of mind during what can be a long court proceeding. Having an attorney in your corner you are confident in, who gives you clear information and who is committed to your case is key.

Also remember that experience goes a long way. When you choose your attorney for your child custody modification case or child support modification case, look for a lawyer who works daily in this specialized area of the law.

Look also for a lawyer who’s familiar with the judges in your area, and how they may view the facts of your case. While no attorney has a crystal ball, or can guarantee the outcome of a case, familiarity with “the bench” in the county where your case will be heard can help your attorney know how to approach your case in the most effective way.

 

This article should not be construed as legal advice. Situations are different and it’s impossible to provide legal advice for every situation without knowing the individual facts. 


For details about the author, Hightower Reff  Partner Attorney Susan Reff, visit her profile page.

Find out more about how Hightower Reff can help with custody and support modification. 

If you need help with a child custody modification case, or a support modification case, contact Hightower Reff Law todayand come visit with one of the attorneys at the Omaha office. 

Reasons to Consider Settling Your Nebraska Family Law Case Out of Court

img_3340Divorce, child custody, and other family law cases are among the most emotionally intense kinds of litigation. There are several sound reasons to consider settling your Nebraska family law case out of court.

Court proceedings aren’t punishment

Going to trial isn’t a good way to try to punish or penalize your spouse for their wrongs. Nebraska is a true no-fault divorce state. That means that, in the vast majority of circumstances, your spouse’s status as a giant jerk isn’t going to have any bearing on the outcome of your case.

Also keep in mind that emotions can get the better of you during a family law case. It’s usually a really hard time in your life. Very rarely – if ever – does a trial do anything positive to ease the raw nerves or wounded feelings of a divorcing spouse or to heal a hurting family.

Different options, same outcome –  settling your Nebraska family law case

Whether you reach a divorce settlement agreement through the collaborative divorce process, mediation, or negotiations between your lawyer and your spouse’s lawyer – this infographic outlines some good reasons to consider settlement:

 

Additionally, settling your family law case out of court can save money in the long and short run. Settlement can be less expensive in the short run because it saves the costs of trial – which can be very expensive. In the long run, you and the other party are more likely to follow an order upon which the two of you agreed, as opposed to one decided by the judge. That means you’re less likely to have to spend money going back to court in future.

If you and the other party are able to reach a settlement agreement:

  • your attorneys or the mediator will put it in writing
  • both parties will sign it
  • the judge still needs to approve and sign a Divorce Decree incorporating the provisions of your settlement agreement
  • that Decree will be the court order that you and the other party must follow, unless the court modifies the order down the road

Not for everyone

Settlement isn’t appropriate in every case. However, in the majority of cases, good attorneys can help guide you along the path to reaching an amicable and fair settlement for your Nebraska family law case.

 

This article should not be construed as legal advice. Situations are different and it’s impossible to provide legal advice for every situation without knowing the individual facts. 


For details about the author, Hightower Reff  Partner Attorney Tracy Hightower, visit her profile page.

More information about Hightower Reff’s family law practice is available here.

If you need help with a Nebraska family law case, contact Hightower Reff Law today and come visit with one of the attorneys at the Omaha office. 

 

How to Calculate Nebraska Child Support (Infographic)

This infographic on how to calculate Nebraska child support is a basic tool to help you feel more knowledgeable about your child support case. It may help you get an idea of what your child support award or payment could look like.


Hightower Reff Law is a team of confident, clear, committed attorneys representing clients in the Omaha metro and surrounding areas in family law and criminal defense/dui.


It’s always best to work with an experienced child support attorney like the ones at Hightower Reff Law in Omaha, so they can review your case and run a child support calculation using specially designed Nebraska child support calculation software. This tool will give you the knowledge you need to prepare for your meeting.

 

In Nebraska joint custody cases, (where each parent’s time exceeds 142 days per year) the court will use the joint custody calculation worksheet.

Nebraska child support law can be tricky

Nebraska child support law isn’t always as straight forward as it may seem. For example, in some cases, Nebraska courts may let you deviate from Nebraska Child Support Guidelines, or assign more or less income than you or the other parent actually makes.

When a client comes to see us  for child support case consultation at Hightower Reff, we run a child support calculation for them with specially designed Nebraska child support calculation software, and apply our knowledge of Nebraska child support law to the facts of their case.

Why a lawyer can make a difference in your Nebraska child support case

We often find facts that make a difference in child support as we work through a case with a client. For instance, income may not always be as it seems, or as the opposing party claims. Two examples are: when a party is self employed and what they really earn is different than what’s reflected in their tax documents, or when a party is capable of earning more than his or her current job pays – but chooses not to.

The best thing to do if you’re curious about child support is to consult with an attorney who knows Nebraska child support law.

This article should not be construed as legal advice. Situations are different and it’s impossible to provide legal advice for every situation without knowing the individual facts. 


For details about the author, Hightower Reff Partner Attorney Tracy Hightower, visit her profile page.

Learn more about Hightower Reff’s child support and custody practice here.

If you need help with a child support case, contact Hightower Reff Law today and come meet with an attorney experienced in that area of law at the Omaha office.

Need to Change a Nebraska Custody or Child Support Order? 4 Things You Need to Know

4thingsaboutmodificationhrlawAt Hightower Reff Law in Omaha, Nebraska, we often meet with clients who come in confused about what to do when their parenting plan isn’t working for them anymore and they need to change a Nebraska child custody order or change a Nebraska child support order.

Sometimes when a child support or child custody decree that was entered in the past doesn’t work anymore, there is something you can do about it. In some cases, you can change or modify custody. It’s called — simply enough — a modification case.

1.  No Magic…but Some Musts 

There’s really no magic number of months or years to wait to try a change a Nebraska child custody order. However, to convince a court to modify a domestic relations order, your case has to meet some basic criteria:

  • The child domestic relations order has to be a final order (temporary orders can’t be modified)
  • There  material change in circumstances that:
  • happened after the entry of the original decree or any previous modification, and
  • was not contemplated when the decree or last order of modification was entered
  • If it’s an order of child support, Nebraska law considers a material change in financial circumstances to be:
    • One that results in a change of 10 percent or more, but not less than $25, upward or downward, of the current child support obligation, child care obligation, or health care obligation

and

2. The Why’s Matter 

If the parent’s income is lower when the original order was entered, the court will look at the reason for the reduction and whether it was in bad faith if the parent did it on purpose in a Nebraska child custody modification case. The biggest consideration, however, is best interests of the child.

In addition to financial issues, the court will also consider other circumstances of the parties or the child – like  health –  when it’s as a material change in circumstances for modifying Nebraska child support.

3. Other Orders/Issues that may be Able to be Modified:

  • parenting time
  • spousal support
  • removal of the child from the jurisdiction if a parent wants to relocate with the child

4. Orders From Elsewhere 

If  a court in another state entered the Nebraska child support order in question, you may be able to modify it in Nebraska.

That’s a question of jurisdiction that will need to be addressed after an in-depth consultation with an experienced attorney, like those at Hightower Reff Law, because whether you are likely to be successful in your attempt to change your Nebraska child support or child custody order can change in your based upon small changes in fact.

This article should not be construed as legal advice. Situations are different and it’s impossible to provide legal advice for every situation without knowing the individual facts. 


For details about the author, Hightower Reff  Attorney Scott Hahn, visit his profile page at our main website.

To learn about Hightower Reff’s Family Law Practice, visit our main website.

What to Expect from Your Lawyer – The Bill. Five Tips for Controlling Your Legal Fees

shutterstock_124994786-thumb-400x500-65288Lawyers can seem like they’re from a foreign land with their own strange customs and language. And, let’s face it, sometimes (okay, a lot of times) some lawyers seem unapproachable, which can make the client experience less than a good one.

At Hightower Reff, we do our best to be approachable, be clear about our legal fees, and have a productive relationship with our clients. A big part of that productive relationship is helping our clients know what to expect in all areas of their cases so they can be realistic about their goals.

In this series, What to Expect from Your Lawyer, Hightower Reff Partner Attorney Susan Reff will give you some useful information to help you understand why your lawyer handles things the way they do and to maintain reasonable expectations regarding your attorney and your case.

This week: The Bill. Five tips for controlling your legal fees.

1. Pick Your Battles

We covered this in detail in the last artcle of this series, and it’s so important when it comes to controlling your legal fees, that it’s worth repeating.

Money is an important form of “fuel” to help you reach your goals in life in many areas, including reaching your legal goals.

If your lawyer charges by the hour or by the task, the more issues you choose to fight, the more hours it will take. The more hours it takes, the more money you spend. Unless your money fuel tank is unlimited, you have to decide where to focus your money fuel.

If you spend it all fighting over things that really don’t matter in the end, you may find you don’t have any left for the issues in your case that truly matter to your life and your child’s. Pick your battles and put your money fuel where it counts.

2. Practice Phone Efficiency 

In an earlier article, we talked about what to expect from your lawyer regarding phone calls. Phone calls are a fast way to run up your bill. Remember: each time you call, you get a charge on your legal bill.

Unless it’s something urgent or time sensitive, put off the call if the question can wait until the next time your lawyer calls you, or until you have more than one question. We recommend our clients make a list of these “little” questions that are bound pop up and ask them all at once.

If you need regular reassuring from your attorney personally, and if your attorney is willing and able, you may want to schedule a weekly phone call with them when you’re in the active phases of your case. That way, you can have peace of mind by touching base at least once a week, and have your “little question list” ready to go for the weekly call.

3.   Keep Your Eyes on the Prize

When you talk to your lawyer, stick to the legal issues in your case. As compassionate as your attorney may be, and as much as they may care about your case, they are a counselor at law, not the kind for emotional or mental health support. In other words, your lawyer is qualified to give you legal advice, not emotional therapy.

A licensed professional counselor can be an important support during stressful litigation. Their hourly rate is probably quite a bit lower than your attorney’s and may be covered by your health insurance. Legal fees are 100 percent out of your pocket.

4. Know How Your Attorney’s Firm Bills  

Attorneys can bill by the hour, by the task, with a flat fee or by a percentage of the money you recover. Aside from attorney fees, legal costs like depositions can add up. So you don’t have any surprises, find out up front your firm’s billing method and what costs your attorney expects may be involved in litigating your case.

Also, if your lawyer bills by the hour, find out in what increments they bill. A lawyer who bills in a fifteen minute increment will end up costing you more than one who bills in a six minute increment. For example, at $275 an hour, a four minute phone call will cost you $27.50 at a firm that bills in six minute increments. The same phone call will cost you $68.75 if your firm charges in fifteen minute increments.

5. Put It in Writing

Signing a Contract for Legal Services with a law firm may seem daunting, but it’s as important for your protection as it is for the firm. The contract sets the rules between you and your lawyer on how your representation will be handled – including fees. Make sure you have a contract that includes clear language regarding the firm’s rates for the attorneys and support staff and the method of calculating your legal fees. Read it thoroughly before you sign.

If there is ever a disagreement about how you’re being billed, a contract that is clear in its terms can be a good thing to refer to in deciding whether billing is happening according to your agreement with the firm.

Next Time…

Watch for Part IV of our series – unnecessary roughness in the practice of law and why it could mean a flag for your case.  

Let Us Know if We Can Help 

To find out more about Hightower Reff and how we can help, call us at 402-932-9550, or contact us online.

This article should not be construed as legal advice. Situations are different and it’s impossible to provide legal advice for every situation without knowing the individual facts. 

What to Expect from Your Lawyer – Five Key Reasons You Need to Pick your Battles in Court

shutterstock_268621781-thumb-400x267-65274Lawyers can seem like they’re from a foreign land with their own strange customs and language. And, let’s face it, sometimes (okay, a lot of times) some lawyers seem unapproachable, which can make the client experience less than a good one.

At Hightower Reff, we do our best to be approachable, talk like real people and have a productive relationship with our clients. However, like many lawyers, despite our best efforts to do this, we sometimes fall short of our clients’ expectations.

In this series, What to Expect from Your Lawyer, Hightower Reff Partner Attorney Susan Reff will give you some useful information to help you understand why your lawyer handles things the way they do and to maintain reasonable expectations regarding your attorney. 

This week: five of the most important reasons to pick your battles when you are involved in a court case.

Focusing Expectations & Picking Battles

Picking battles is important to help you focus your expectations and develop your strategy for your case. Each court case is made up issues to be decided. In criminal cases those issues, in large part, involve proof as to whether or not the defendant did what he or she is accused of doing. In civil cases – like divorce and child custody – the issues involve who is entitled to what property, and who should have what time and decision making power with the children. 

Sometimes an entire case can rise or fall on one issue, especially in criminal law, and your biggest (and perhaps only) battle choice may be whether or not to enter a plea agreement. Sometimes, however, you have more choices to make regarding your battles and focusing your expectations. This is especially true in family law. 

When your lawyer advises you to back off on an issue, there is a reason. Here are five of the key reasons to listen to that advice, focus your expectations and pick your battles:

1. You Don’t Want to Spend the Rest of your Life (or what feels like it) in Court

Even when the two sides aren’t fighting over every little thing, court cases take a long time. Every issue you choose to fight about adds weeks or months onto the clock. 

First, the lawyers will go back and forth trying to reach an agreement, then, they may have to file motions or other papers with the court about that specific issue asking the judge to decide. Depending on the issue, there may be a special hearing, or it may be dealt with at trial. Either way, chances are it will add time onto your case. 

In some cases, like criminal cases where your freedom is on the line, and your attorney believes the law is on your side, it may be worth all the time in the world to fight nearly every issue. However, in other cases – including divorce and child custody – you should weigh the time it will take to fight over the issue against the likely outcome and ask yourself if the battle is worth it. 

An experienced attorney can advise you regarding your chances of success if you fight a certain issue in your case, and how much time it is likely to take. With that information, you are better equipped to decide if your time investment is worth the likely return.  

2. Other Things are More Important   

Before you decide to fight a battle over an issue in your case, decide your intentions and priorities and make sure winning that issue is in line with them. In other words, focus on what’s important to you.

If you choose to prioritize one issue in your case, and you are successful, it may be at the expense of something else. This is especially true in family law. The court is going to try to make things “equitable,” so issues left up to the court are likely to go a little your way, and a little not your way. 

For example, when it comes to a divorce property settlement, it may mean that you get the boat, but you don’t get the savings account with a value comparable to the boat. Maybe that’s fine with you because you really like boating. But, if you go after the boat just to keep your spouse from having it, and you really need the money instead, you could end up cutting off your nose to spite your face. 

In child custody issues, relationships are usually the most important consideration. First, you should consider how any issue at hand may affect your child’s relationship with the other parent and/or with you. Next, consider how the issue will affect your relationship with the other parent and – as a result – your ability to effectively co-parent your child. If the impact of fighting about an issue on any of these areas will be worse than if you reach a compromise, don’t fight. Work it out. Even if it means giving a little more than you really want. In the end, the return on your investment of sacrifice is likely to pay off.  

3. There are Long Term Consequences  

Decisions you make in your case – especially in family law – could affect you, your spouse, and children for many years.

As an example, in a divorce, you may really want your ex’s mother’s casserole dish. Maybe you really love it, because you loved your mother-in-law & she has passed, so you just want this one reminder of her… or maybe you know your spouse really wants it, so you want to take it to spite them. Either way, decide whether the casserole dish is worth it in the scheme of life.  

In twenty years, is it going to have been worth your time fighting over a piece of bakeware? Probably not. Perhaps the long term consequences will result in damage to your integrity and your ability to remain amicable with you spouse. Those things could render the battle a lost cause – regardless of how it turns out.  

The consideration of long term consequences is especially important when children are involved in a divorce. 

4. Your Money Tree Died

You may have heard the saying that all problems have a solution so long as you have the time and money to find it and make it happen. In other words, time and money are fuel to reach a goal. The same can be said in many court cases. 

Along with costing time, court cases cost money. In most of them, your lawyer charges by the hour. That means every additional battle adds to the bill. Unless your money fuel tank is unlimited, you are going to have to decide where you want to focus your money fuel. If you spend it all fighting over things like casserole dishes, you will soon find you don’t have any left for the issues in your case that are truly impactful in your life and your child’s. Put your money fuel where it counts. 

5. Your Case is About the Law – Not Principals

Very rarely (perhaps almost never) is a court case about principals. Rather, court cases are about the law. When people involved in a court case talk about principals, they are talking about what they feel or believe is “fair” or what they deserve. They are talking about emotions. However, what you feel or believe you deserve isn’t relevant in court. The law is only thing that is relevant. 

If your lawyer is being honest, they will tell you the same. It’s your lawyer’s job to guide your expectations accordingly. That means focusing on the law, not your emotions. 

For example, if you enter your divorce with the goal of taking your spouse to the cleaners because he or she was unfaithful or was a poor excuse for a spouse – “out of the principal of the matter” – you are going to end up disappointed. 

The court does not care whether your ex is an ass. The court can only concern itself with enforcing the law. In most aspects of divorce, and even child custody, being an ass does not mean you are entitled to less money, property, or time with your child. Further, your spouse getting less of any of these things is not going to change a thing about your spouse or what happened between you.

Don’t Make Your Battle Plan Alone 

There is no substitute for the advice of an experienced attorney to help you pick your battles.  Hightower Reff can help. Call us at 402-932-9550, or contact us online.

Next Time…

Watch for Part III of our series when we explore ways you can help control your legal fees.   

This article should not be construed as legal advice. Situations are different and it’s impossible to provide legal advice for every situation without knowing the individual facts.