Divorce During COVID-19 (February 2021)

The COVID-19, Coronavirus pandemic shutdowns have effected every one of us, from lost businesses, to school closures, to parents having to stay home with their children, to lost jobs, to unemployment applications, the list goes on. What we are starting to now see more of, are the emotional, psychological and relational stress on families, couples and children. Couples and families are now sharing closer quarters than ever before, working and learning from home, zoom classes, zoom meetings, puts every family member on top of one another. Parents are stretched to their capacity. Couples are spending more time together than they ever imagined. Most are lacking the other support networks they have relied on, such as work contacts, gyms, churches and friends and extended family.

People are at a breaking point. If this feels like you, or someone you know, remember that support systems are still there, but we have to work harder to find them. Therapy is happening via zoom, outdoor exercise classes, and friends are still just a call away. Now is a good time to get into couples counseling for the first time, or again, if you are feeling the strain. If you need referrals, ask a friend (or ask us! We have names we trust that have worked magic).  If you are ready to move on, getting advice in the early stages can save you a lot of grief later. The “how” the process starts can have more of an impact that any of the later steps in the process. We recommend getting the ‘how’ right, so that you can as gracefully as is possible, as smoothly as can be, transition to the next phase of your life, if that is what is happening. Getting the ‘how’ right, can impact your children for life. Although mediation is not longer happening in person, zoom is proving highly effective and some clients are preferring the separate space while in meetings. We have been doing zoom sessions long before COVID required it, and have found a seamless process to make the difficult, a little less so. The Santa Cruz County Self Help center is still meeting with people in person and filings are going through as usual. https://www.santacruzcourt.org/self-help

Going through a divorce during COVID is adding an extra layer of challenge, and through mediation, guidance with filing divorce paperwork, we can get you through.

New Tax Law in Divorce 2019

Tax Changes related to divorce will be far reaching from the the new Tax Cuts and Jobs Act (TCJA) applicable going forward.

Below are few areas to talk with your tax professional or attorney about related to the new tax law and your divorce, even if you have been divorced for years.

1. Pre- and post-nuptial agreements may be affected by the tax changes. Depending on how your agreement was written, some tax changes may affect your prenuptial or postnuptial agreements. You can review this with the attorney that prepared your contract.

2. As discussed in our blog posted in September 2018, alimony or spousal support that is paid will no longer be tax-deductible to the payor anymore and alimony received will no longer be taxable income for the recipient.

3. Those whom already have a spousal support agreement and finalized it in their marital settlement agreement with their divorce judgement will be grandfathered in and receive the tax deduction. If you modify your agreements in 2019 or beyond, you could be subject to the new rules, depending on the language in your contract. If you have modified your support agreement, is important to ensure you are able to deduct it correctly and should therefore check with your tax preparer.

4. Children won’t be the tax deduction they used to be. This tax deduction has decreased in its benefit. Therefore, it has become a less significant factor in negotiation in divorce. Your attorney or mediator can assist you with the specifics.

See more on the New Tax Laws and Divorce

Impact of New Tax Law on Spousal Support (Alimony)

The new Tax Cuts and Jobs Act (TCJA) (See IRS tax reform) that passed in December 2017 eliminates spousal support as a tax deduction. Agreements filed with the court before the year end of 2018 can still receive this tax benefit.

Historically, spousal support has been a deduction for the higher earner, the spouse paying support, and a treated a taxable income for the lower earner, the spouse receiving spousal support. The higher earner is typically in a higher tax bracket and therefore, receives a valuable tax benefit to claiming that deduction. The lower earner is typically in a lower tax bracket, and therefore pays a lower amount in taxes than the higher earner would pay for the same amount. The support calculations take this into consideration and effectively shares the tax benefit given to higher earner by providing an increased amount of support to the lower earner.

Simply put, both spouses gain from the tax deduction and save more money in taxes.

Some financial articles are fueling an unnecessary dispute between divorcing spouses, inaccurately stating that the benefit is only for the higher earner. This would be true if the law did not adjust the amount paid in spousal support. With the law adjusting the amount paid, removing this tax deduction is a loss for both spouses. Without this tax deduction, the law reduces the support amount that the lower earner receives, resulting in both parties receiving a net loss.

Spouses who have not yet filed for a divorce, may still start the filing process and as the law is interpreted today, may file a settlement agreement prior to the year end and be grandfathered in for the spousal support tax deduction for the life of the support. As the tax law is a significant change, tax advisors cannot guarantee how this will be interpreted down the road.

Spouses who have filed but have not completed their divorce, can file a partial settlement agreement.

In either case, you would need to act fast to gain this benefit to you both.

Spouses who have already divorced prior to the law will be grandfathered in, and not affected.

Read more: https://www.oc-divorce.com/impact-new-tax-law-alimony/

How is Wevorce different from Divorce Mediation? (November 2015)

It’s not. There is no standardized certification for mediation or divorce mediation, so Wevorce is aiming to create one. Lack of standardization has sometimes given mediation a bad reputation with complaints of gender bias, aggressive mediators, and non-attorney mediators unable to provide the law. Wevorce is a company’s effort to ensure that only trained, attorney-mediators oversee the mediation. They then connect clients to financial or child specialists as needed.

Wevorce’s model is very similar to the collaborative practice model where clients use consulting attorneys, a neutral mediator, financial advisors, and child specialists, as needed. (See Collaborative Practice) A critique of the collaborative practice model is the lack of structure, allowing the success of the process to rely upon the professionals’ expertise. Wevorce tries to create more structure thereby putting the reigns on the exploding financial costs we have seen in collaborative practice. Wevorce states an average cost of $9K for a divorce. (See Wevorce) . While this is lower than many collaborative divorces, most mediated divorces should have a much lower price point.

Additionally, lack of certification for mediation has resulted in mediating attorneys that run the spectrum of haphazard mediations that lack legal content and legal protections, to ongoing and relentless mediations that fail to settle. Wevorce is creating a structure that many mediations lack, aiming to help mediators provide efficient yet legally protective mediations.

Whether using Wevorce or another divorce mediator, things to look for in your mediator are: 1) attorney member with their state Bar Association; 2) trained and experienced in divorce mediation; 3) offering a structured mediation process; and 4) collaborating with paralegals, financial advisors and child specialists.
For clients that do not have these options available locally, Wevorce can fill this gap.

Is Conscious Uncoupling just a trend? (October 2015)

Conscious Uncoupling become present in the media when Gwyneth Paltrow called her separation a conscious uncoupling rather than a divorce. She has tried to illustrate how fantastic divorce can really be. Yes, fantastic. It certainly seems like a stretch, but more and more couples are exclaiming this to be true. Paltrow’s blog says: ‘You’ll see that although it looks like everything is coming apart; it’s actually all coming back together.’ The marriage and family therapist, Katherine Woodward Thomas, who coined the phrase “Conscious Uncoupling”, created a program for individuals to work through who are going through separation or divorce. (See more at: Conscious Uncoupling, Katherine Woodward Thomas )

The idea is that individuals who complete the program will come through separation with positive change and happiness. She created the program based on her own experience and learning in her own separation. One concept behind it is delaying the asset division and final decisions until the emotions have subsided to avoid making permanent decisions out of anger or loss. Couples will then make temporary financial arrangement and put off any larger decisions. Couples considering Conscious Uncoupling could use mediation to reach temporary financial decisions, including expenses, cashflow, temporary custody, temporary living arrangements. The temporary financial decisions could be memorialized in a written legal agreement pending a final agreement. While this program will not address how to divide assets, debts, custody and support, it certainly will make those decisions easier when the time comes.

Conscious Uncoupling broadens the black or white concept of whether to divorce or not. For years we have assured clients that they can in fact craft their own version of what works for them. Many couples uncertain of their future together chose to create a postnuptual financial agreement, finding that this alone can actually help support the marriage reducing some tension off of financial conflict. Other couples may chose to file for divorce, have a financial contract prepared and filed with the court, but then delay closing their actual marital status. Some couples complete a traditional divorce and yet remain in partnership with one another, living together or sharing finances together. Every couple’s and family’s circumstances are unique and there are creative solutions for every situation. Looking into these creative solutions can often take a lot of the pain out of a black and white divorce.

What is a Status Conference Date? (October 2013)

In Santa Cruz County, the Family Law Court provides status conference court dates six months and a day from the date of serving the Petition. This does not mean that you have to complete your divorce on that date, nor will you automatically be divorced then. There are many things that need to happen before the court will grant your divorce. This six month date is best looked at as a ‘check in’ by the court, and the first date that you could finalize your divorce, assuming you have completed all aspects by then. Many people will agree to ‘continue’ their status conference date 2 weeks prior by filing a status conference statement (http://www.santacruzcourt.org/self-help). If you are mediation, you can inform the court of your progress and ask for a new status conference date to check in again. If you do not file this statement in time, you may have to go into court on the date of the status conference hearing and ask the judge to continue the date in person. This can be a long morning of waiting, so we always encourage people to continue the date prior and save themselves the time and trouble of having to go into court on that date. In Santa Cruz County, our Family Law Court has started to encourage people to move along with their divorces as efficiently as possible. While this means that you can continue your status conference date, you will be encouraged to move along and may not be granted endless continuances.

Anyone getting a divorce in Santa Cruz County, whether in mediation or litigation, whether the case is simple or complicated, will have a status conference date. Only folks going into litigation will have a motion for a proper court hearing for a Judge to make a decision for you, or typically called an Order to Show Cause. An Order to Show Cause is when one party brings a motion to the court asking for the Judge to hear a specific matter. Even if one party has filed a motion and you have a court date for the Judge to hear it, you two can always agree to delay the court date while you are working on mediating an agreement outside of court. The moving party must take the steps to continue a motion they have brought.

Whether you have a motion or a Status Conference date, it is important to continue the date at least two weeks in advance if you are hoping not to have to attend.

Clearing up the Confusion: Date of Separation, Legal Separation and “We are Separated” (Sept 2013)

The terms around separation are used casually and interchangeably, so much so, that few people going through the process are clear about what they mean. Are you legally separated? Do you first have to legally separate before you get your divorce? What if you are living separately?

Let’s start with the first topic: legal separation. Legal separation is a parallel process to divorce, either you chose to start your Petition filing for legal separation or for a divorce. You do not need to do a legal separation prior. Few people would in fact benefit from filing for legal separation, but those that do, usually chose it for religious or emotional reasons. Additionally, some health insurance plans would allow the other party to remain on their spouses plan after being legally separated. However, they are other, often better, ways to handle this issue. When filing for legal separation, you would pay the court filing fee, need to exchange financial disclosures and go through all of the steps that you would for a divorce. If you completed the legal separation and later wanted a divorce, you would need to start a new. However, if you did decided to switch the process to a divorce before you finish, you can do so without having to start all over. This gives you a bit of leeway during the transition if you are unsure whether to file for legal separation or divorce.

The date of separation is another frequently confused topic. On the Petition, you are asked to fill in this date. Many people believe once this is written on the Petition, it is fixed. In fact, the Petitioner is merely claiming the date they believe this to be. This date is a gray area in the law and practically. It is not necessarily the date the Petition is filed, or the date one person moves out. It could be, but not necessarily so. The law defines it by the date that “one party knew the marriage could no longer be repaired.” As you can imagine, there can be a variety of interpretations with this. Luckily, in mediation, you typically do not need to put much weight on this one date as we usually make decisions about assets based on other factors. Many people even write ‘to be determined’ on their Petition for the date of separation. This can reduce a lot of unnecessary stress on such a potentially complicated topic.

Living separately is neither a legal separation, nor a date of separation. It could certainly influence what a court may believe your date of separation to be, but it is not the determining factor. However, colloquially, people do say ‘we are separated.’ This can be important for a couple’s own labeling as they move towards a decision about divorce, but it does not define either of the other legal terms.

It is important to keep in mind that once any of the above ‘separations’ occur, couples always have the opportunity to reconcile. In this process, you are never on a train that you cannot stop toward divorce. You both together have the ultimate power over the direction you take.

The Impact of Defense of Marriage Act (DOMA) Ruling on Dividing Retirement Plans in Divorce (Aug 2013)

The recent ruling striking down the Defense of Marriage Act (DOMA) has had a significant impact on divorcing same sex couples, including their retirement plans. Divorcing opposite sex couples have had the benefit of dividing their retirement plans through a Qualified Domestic Relations Order (QDRO), which is a federal protection. A QDRO allows a spouse to access a share of the employee spouse’s pension without paying any taxes or penalties, by simply rolling a portion of the plan into their name. This is a significant benefit, and sometimes critical for spouses that do not have other assets to offset the value of a retirement plan, meaning there is no other way to buyout the non-employee spouse of his or her interest in the retirement plan. QDROs are typically done at the time of a divorce judgment and cannot be done prior. Up until the recent Windsor Supreme Court Ruling, striking down the Defense of Marriage Act (DOMA), same sex married couples did not have the same benefit. The ruling will now allow same sex married couples to divide their plans through a QDRO as well. How will this effect Domestic Partners? It is unlikely they will afford them the same protections, but we are yet to have all of the answers on how the law will be interpreted. It is unclear whether any benefits may be provided retroactively. We shall stay tuned.

Read more about how the striking down of DOMA as unconstitutional will impact legal rights here: http://www.foleyhoag.com/publications/alerts-and-updates/2013/july/supreme-court-finds-doma-to-be-unconstitutional

What is a Mediator? (July 2013)

There is no certification in California for mediators, so anyone can work as a mediator, regardless of training or background. This can create a lot of confusion for someone starting a divorce. Here is a breakdown to help distinguish the options.

Many attorneys offer mediation on the side of their litigation practice. No mediation training is required to offer this. Having an attorney acting as a mediator offers the benefit of the legal expertise in the room, however, its critical to have mediation training as well. Attorneys that are trained as mediators offer both sets of skills, that is, legal expertise and neutral mediation.

Many Marriage and Family Therapists (MFTs) also work as mediators including for those going through divorce. They often specialize in child custody matters or coparenting counseling, meaning they help you with scheduling plans along the way. Many other licensed in the field of counseling or psychotherapy do similar custody mediation or coparent counseling. I strongly recommend working with someone trained in this field for help with custody and coparenting. I believe that working with an expert in this field will prove beneficial over working with an attorney mediator for a few reasons. Firstly, they are truly experts in children and coparenting. They have brilliant ideas and solutions for how to handle everything from teenagers breaking rules at the other parent’s house, to how to split the week well with a varied work schedule. Second, they will save you money when compared to an attorney mediator helping you with custody. Many coparent counselors charge lower rates than attorneys and some of them even take health insurance. Finally, you can have an ongoing relationship with the coparent counselor as needed. Typically, the attorney mediator will help you get to your final divorce agreement, and then you will say your goodbye to the attorney never having to meet with him or her again. (We don’t take it personally!) A coparent counselor, it is ideal to find someone that you both like working with and that can help you over time, over the years that you have to coparent. This can prevent challenges from becoming battles.

Some mediators are neither attorneys nor trained therapists. For many areas of disputes, this kind of mediator can be appropriate. Mediation alone brings with it a certain skill set that can alleviate conflict and bring about resolution. In divorce however, the content is very specialized and without having the expertise in family law and custody, you may miss a big piece of the puzzle. I see the attorney mediator as the expert in the finances and family law, and the custody mediator as the expert in your children. Together, they make the ideal team.

Checklist for finding a qualified divorce mediator in your area:
–an attorney, licensed in your state
–specializes in family law
–the majority of their practice is mediation
–meets ONLY with both of you together as a neutral
–will NOT make a final decision if you two don’t agree (that is considered arbitration)
–the meeting will be confidential (court mediation in many counties, including Santa Cruz County, is recommending).
–you will not have to make any decisions on the spot or sign any content agreements in the session
–Will draft a final, legally binding Marital Settlement Agreement with full details of ALL aspects of your divorce.

Many Marriage and Family Therapists (MFTs) also work as mediators including for those going through divorce. They often specialize in child custody matters or coparenting counseling, meaning they help you with scheduling plans along the way. Many other licensed in the field of counseling or psychotherapy do similar custody mediation or coparent counseling. I strongly recommend working with someone trained in this field for help with custody and coparenting. I believe that working with an expert in this field will prove beneficial over working with an attorney mediator for a few reasons. Firstly, they are truly experts in children and coparenting. They have brilliant ideas and solutions for how to handle everything from teenagers breaking rules at the other parent

The Health Care Reform

In mediation, many couples working well together will ask or assume that they will stay on the same health insurance plan after divorce. Its tough news when I explain that is exactly one of the current problems with our health insurance. If one spouse has a preexisting condition, this becomes a significant problem because sometimes they cannot afford or even get on a plan at all. COBRA is available for the non-employee spouse, but is only for a fixed period of time and can be unaffordable. Often divorcing couples would even stay legally married for an extended period (while dividing their assets and finances completely) just to stay on the health insurance plan. Some would say an extreme action, others would say necessary. The Health Care Reform Bill will help with many of these issues. As of January 2014, no matter what your preexisting condition, insurance companies cannot deny coverage. This is significant. It will also provide immediate access to those that are uninsured with a pre-existing condition. Additionally, uninsured and unemployed will be able to purchase affordable health insurance if you are in a certain income bracket. The bill also prevents health plans from dropping you if you get sick or from placing a lifetime cap on coverage. The health care reform is certainly a complex topic and we will learn the consequences of it as time passes. However, for a non-employee spouse without health insurance, this is a big win.

To read more on health insurance and the impact on divorce: