What is the difference between legal and physical custody?

In accordance with Massachusetts General Laws c. 208, § 31, legal and physical custody are defined as follows:

  • Sole legal custody:  one parent shall have the right and responsibility to make major decisions regarding the child’s welfare including matters of education, medical care and emotional, moral and religious development.
  • Shared legal custody:  continued mutual responsibility and involvement by both parents in major decisions regarding the children’s welfare including matters of education, medical care and emotional, moral and religious development.
  •  Sole physical custody:  a child shall reside with and be under the supervision of one parent, subject to reasonable visitation by the other parent, unless the court determines that such visitation would not be in the best interests of the child.
  •  Shared physical custody:  a child shall have periods of residing with and being under the supervision of each parent; provided, however, that physical custody shall be shared by the parents in such a way as to assure a child frequent and continued contact with both parents.

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Divorce and Taxes

 As if taxes are not complicated enough, it can only get worse during your divorce proceedings. Here is some basic information to make the divorce process a little less overwhelming.

1.  What is your filing status- Married Filing Jointly, Married  Filing Separate, Head of Household or Single?

According to the IRS, for tax purposes your marital status is based upon whether you were married or not on DECEMBER 31st. If you are legally married on December 31st, then you are married for the whole year. Similarly, if you are divorced by December 31st, then you are considered divorced for the whole year.  For instance, if your divorce was final before December 31st, 2012,then you do not have the option of filing as a married person for Tax Year 2012.

Additionally, you are considered unmarried for the whole year, if you have obtained a decree of annulment, which holds that no valid marriage ever existed. You must then file amended tax returns for all tax years affected by the Annulment that are not closed by the statute of limitations.

Once divorced, your filing options are reduced to either Head of Household or Single. In order to qualify for Head of Household, which may provide a slight tax advantage over Single or even Married filing Separate, you must meet the following requirements:

  • Whether you (the taxpayer) paid more than ½ of the housing costs during the year?;
  • Whether you (the taxpayer) lived apart from your spouse during the second half of the tax year in question?; and
  • Whether dependent child(ren) lived in your home for at least 1/2 of the year?

 2.  Who can claim the children as dependents?

The IRS regulations state that the parent with whom the child spends more time may claim that child as his or her dependent. However, this is often discussed and negotiated during divorce proceedings and does not always follow this rule. Warning: this issue is important to address during divorce negotiations, as the IRS may run social security numbers to  reveal if both parents are improperly claiming the children.

Child Care Exemption:

If you received any dependent care benefits from your employer during the year, you may be able to exclude from your income all or part of said benefits. To see if you may be eligible, contact a certified tax professional and/or refer to http://www.irs.gov/pub/irs-pdf/p503.pdf.

3.   Are both Child Support and Alimony considered taxable income? 

The simple answers are alimony – yes! And child support- No! The IRS will not accept a deduction for paying for the support of one’s own child(ren). As the agency sees it- it is a parent’s obligation to financially support his or her children.

In most circumstances, spousal support is tax deductible to the paying spouse and taxable income to the receiving spouse. (Always consult an experienced tax professional as to the tax ramifications of Alimony/spousal support).

4.  Transfer of Property from one spouse to another during divorce proceedings- Not taxable. 

Whether it is real estate, an investment account, a retirement account, cash or personal property- if made pursuant to a divorce, it may not be a taxable event. This also includes gift taxes. As the law sees it, you are not making a gift, but rather you are dividing and receiving your share of the marital estate- property that already belongs to you.  The property transferred will retain its original basis for tax purposes. When the asset is sold, cashed in or otherwise disposed of in the future, the tax basis is the same as it was with the spouse who originally held title to that asset.  However, in order to ensure that this is done properly and the asset remains not taxable, contact an attorney and/or an experienced tax professional to ensure that you are complying with the proper procedures, if any.

The information contained above is for informational purposes only and not intended to be tax advice or in any way creating an attorney-client relationship. Before acting upon or making any decisions based upon the general information contained within this page, you should first consult an attorney and/or an experienced tax professional.

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Ten Tips To Remember During Your Divorce Proceedings

1.  Avoid social media.

Until the resolution of your divorce proceedings, stay away from social media sites (e.g. Facebook, Twitter, and MySpace). It may seem like common sense to most, but this helpful hint is often forgotten and/or ignored.  Social media sites play an increasingly more prominent role in divorce proceedings. Any and all profile pages, status updates, online photographs, and comments can be used as evidence to help prove infidelity, dissipation of assets, emotional instability, and/or substance abuse, or even as evidence to contradict statements previously made by you.

In a February 10, 2013 Article, the American Academy of Matrimonial Lawyers (AAML) set forth that approximately 81 % of AAML members cited an increase in the use of evidence from social networking websites during the past five years. Approximately 2/3 of the AAML attorneys surveyed reported Facebook as the primary source of this type of evidence. It is better to be safe than sorry. Either stay silent or be cautious. Remember that everything you type, post and/or tag will be viewed by the opposing party, if not the Judge.

2.  Be aware of attorney-client privilege pitfalls related to email communication.

Communication between you and your attorney is protected by attorney-client privilege. However, introducing third parties to this electronic conversation can and will destroy this privilege. Below are several rules to remember when using email communication:

  • Use a secure personal email account to communicate with your  attorney.  Be sure that no one else has or has had the password to this account!
  • Never use a work email account. As email has become increasingly prevalent in the work place, employers have implemented policies that no emails are private  and that all emails belong to the employer.
  • Never copy (cc) anyone on emails to your attorney. This again breaches attorney-client privilege and leaves open the opportunity for this information to be requested during the discovery phase.
  • Never forward emails from your attorney to your spouse! This is not as obvious as it sounds! It can be tempting to forward an email from your attorney (and meant for your eyes only) to your spouse. This is even harder to resist, if the email articulately explains something that you have been trying to communicate to your spouse for sometime. However, you must avoid the temptation!

3.  Do not hide information from your attorney.

Whether it stems from distrust of attorneys or as an attempt to maintain control over the situation, some individuals withhold information regarding their future plans or financial assets. The reality is, in order for your attorney to do an effective job, he or she must know the truth and entirety of your situation. Most likely whatever information is being withheld will be revealed in the discovery process. In order for your attorney to represent you well, he or she must be armed with all the information you have. You do not want your attorney to be taken by surprise by opposing counsel or the court.

4.  Consider meeting with a therapist.

A therapist can help you deal with the new range of emotions that you will experience during your divorce. Unlike your attorney, a therapist can provide an expert opinion on how to relax, how to prepare your children for the process, and even how to react in court, if (and when) your spouse pushes your buttons.

5You should discuss the divorce process with your children on a “Need to Know Basis.”

Do not talk to your children about the divorce process and do not speak disparagingly to your children about the other parent. If your spouse has parenting time on the weekends, your children should not know if that was court ordered or what parenting time the other parent requested. Rather, explain to your children the new parenting schedule and that this schedule will be the “new normal.” You can even create a calendar with your children, so that they have a better understanding of the new schedule.

If your children try to discuss the divorce proceedings, refocus their energy and the discussion, so you can relax and enjoy your parenting time with the children. Spend your time helping them with homework and going to see movies or playing at the park. Though you should be comfortable talking with your children about the divorce, the point of the divorce is to relieve stress on you and your family; not create more.

6. Don’t “Settle” Early.

You should not forfeit your financial security simply because you want out of your marriage immediately or want the divorce proceedings to be behind you. At the onset of your divorce, make sure that you are completely aware of all your assets. Do not sign a settlement or separation agreement without fully reviewing the agreement, understanding the short and long-term effects of the document and, if possible, seeking legal counsel.  In the long run, a few extra months or even a year is worth ensuring your financial future.

7. Take a look at your credit history.

Are you completely aware of all credit cards in your name? Either prior to or at the beginning of your divorce proceedings, it is imperative to run your credit history. This will reveal  the full extent of your credit card debt, reveal joint credit cards, and identify if you are an authorized user on any credit cards.

8Do not compare your divorce proceedings to your friend’s or neighbor’s divorce.

This is easier said than done. However, remember that every marriage is different and every divorce is different. You will never know all the details of someone else’s marriage and/or divorce proceedings. And, frankly, you do not want to! Seek the advice of a family law attorney, he or she is much more qualified to assist you than your neighbor.

9. Do NOT forget about the tax ramifications of your legal decisions.

Divorce proceedings involve assets, property, estates, retirement money, which all have tax implications. Remember when liquidating and/or dividing estates take into consideration if you have to pay capital gains? Even when negotiating alimony/spousal support versus child support remember that the former is subject to taxes, while the latter is tax-free. It is often helpful to retain the services of a financial planner.

10.  IMPORTANT: Written Communication can be evidence.

Every type of written and/or electronic communication has the potential to leave a written communication trail. That means your emails, tweets and text messages could possibly be used by your spouse and/or his/her attorneys to strengthen their case.

According to the AAML, 94% of surveyed AAML attorneys have cited an overall rise in the use of text messages as evidence in the last five years. “As smart phones and text messaging become main sources of communication during the course of each day, there will inevitably be more and more evidence that an estranged spouse can collect,” said Ken Altshuler, president of the AAML. “Text messages can be particularly powerful forms of evidence during a divorce case, because they are written records of someone’s thoughts, actions and intentions.”

You must draft every text message, email, or written letter with the assumption that the court and/or other court-appointed investigators may read it. Hopefully, this will help keep you from sending out any reactionary or inappropriate messages.

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