Due to the passing of the Tax Cuts and Job Act (TCJA) of 2017, traditional divorce planning is proving to be more difficult. Divorcing couples that have large net-worth are under pressure to settle their divorce as quickly as possible, before December 2018 when certain tax benefits will no longer be available. Starting in 2019, alimony payments will be considered the same as child support payments, meaning that it is not deductible.
Currently, the alimony payor could deduct the amount of alimony from their income and not have to pay taxes on it, and the recipient would pay a lower tax rate. This benefitted all parties involved as the payor would be more likely to make higher payments so they would have to pay fewer taxes at the end of the year. However, with the new law in effect in 2019, the payor might not be so inclined to make larger payments, therefore, the recipient might not get as much money. This can be devastating for those who rely on alimony as their main source of income after a divorce.
It’s now more imperative than ever when going through a divorce to find an attorney who is knowledgeable in high asset divorces as well as in the new tax law so you can strategically plan how to protect your assets and maximize tax benefits. Ideally, both parties will be amicable to ensure a smooth transition financially otherwise a contentious divorce can be financially draining on both sides in the short and long term.
While prenuptial agreements are more common, a postnuptial agreement is a contract that couples enter after they are married to help ensure a smooth division of assets in the event of a separation such as a divorce, or after a spouse’s death.
Especially for couples who are on their second marriage or simply couples who are getting married later in life, there is a lot of assets that were earned prior to the marriage. A postnuptial agreement can be used to show that there’s a mutual respect amongst partners stating that anything acquired prior the marriage and during the marriage. It also makes the divorce processor quicker in the event the relationship turns south.
Usually, the partners have separate lawyers representing them understanding the mutual goals of the postnuptial agreement. Each partner will have to take inventory of their assets. The postnuptial agreement will also address issues such as spousal support and property in the event of a death. However, if there are children – child support and custody cannot be determined in the postnuptial agreement.
In order for the agreement to be enforceable the following conditions must be met:
It must be in writing
It must be done voluntarily
It must be done with full disclosure
It must be done in good faith (not lopsided)
It must be signed by both spouses
If you would like to inquire about drafting a prenuptial agreement, please contact one of our family law attorneys in South Jersey.
In New Jersey, there are two different types of custody: physical custody and legal custody.
The residence of the parent in which the child lives, that parent has what is known as physical custody (sometimes referred to as residential custody).
A parent who has legal custody has the power to make decisions affecting various aspects of the child’s life such as health, education, safety, and welfare. Day to day activities are usually at the discretion of the parent who has physical custody but any major decision that involved religion, medical treatment and education will be made by the parent who has legal custody.
Shared Physical Custody
Shared physical custody refers to any child that spends around 2 overnights per week with each parent. One parent will have primary residence while the other parent has alternative residence. This is important when determining things like child support.
This is different than visitation time which is when a child has a parent that has sole physical custody and the other parent has “parenting time” or visitation with the child.
Joint Legal Custody
Joint legal custody means that both parents have the legal right to make decisions on the child’s behalf. Even if the child has one parent that has sole physical custody, both parents can have joint legal custody.
During the divorce process, deciding who has custody, whether it’s legal or physical custody, is always one of the most contentious parts. To make sure you get an agreement that is beneficial to you, hire an experienced child custody lawyer.
When you are going through a divorce, it is difficult for everyone involved. It can be difficult for the extended family, the kids, and even the pets. Animals can feel the emotion of the room. The emotional toll of divorce will weigh in on your pets. It is important to not forget about them and their needs as well.
The laws regarding a pet in divorce are dependent on the state the divorce is being processed in. Since there aren’t any pet custody laws, pets are generally treated like property. This means they are an asset, like cars or furniture, and will be awarded as so.
Although, a case can be made that the bond between a pet and a child is important. If your divorce attorney is able to make this argument, the court may rule that the pet is awarded to the parent that as main custody.
When you are going through a divorce, things between your ex and you can get a little heated. It is important to keep others in mind during these rough times.
Helping New Jersey Residents With Their Family Needs