Monthly Archives: April 2016

Ending ongoing spousal support

When a couple in North Carolina divorces, one of the parties may be ordered to pay the other alimony. There are usually situations that signal an end to alimony payments like when the recipient remarries, but payments can continue for a long time in some cases. The actor David Hasselhoff has paid alimony to his ex-wife Pamela Bach since their 2006 divorce, and he pays $21,000 per month.

The “Baywatch” actor and recent reality star is asking a judge for permission to stop paying alimony as he wants to retire soon and reportedly had to spend some of his retirement savings to keep making payments. His gross income is $112,000, and the 63-year-old man also uses a portion of that income to take care of the couple’s two daughters as he has physical custody. He has also been dating 34-year-old Hayley Roberts for five years.

Hasselhoff and Bach were married for 17 years, and 52-year-old Bach has appeared on “Celebrity Big Brother” after the couple’s split. However, Hasselhoff claims that his former spouse is talented and could work as an actress or a producer. He alleges that she could become self-supporting if she tried to find work.

Alimony typically goes to the party who made less money or contributed to the marriage in some other fashion, and it is intended to help them keep the same standard of living. Alimony and child support are different, so one could receive both or only one depending on the situation. If the alimony recipient has become employed and no longer needs additional funds, a family law attorney could be of assistance in petitioning the court for a modification or termination of the order.

Summer Tax Checklist

Written By: David Amiss, CPA, CVA

Carr, Riggs & Ingram, CPAs and Advisors

 

New Year’s Resolutions and Spring Cleaning are initiatives that focus on motivating individuals to address a perceived need. Accordingly, the aim of this article is twofold. First, to convince you of the perceived need of giving your taxes adequate attention on the eve of summer; and second, to give you a list of things to consider and do related to taxes.

New Year’s Resolutions and Spring Cleaning are initiatives that focus on motivating individuals to address a perceived need. Accordingly, the aim of this article is twofold. First, to convince you of the perceived need of giving your taxes adequate attention on the eve of summer; and second, to give you a list of things to consider and do related to taxes.

Visit any of your local CPA’s office and the examples would be replete of clients engaging in a significant transaction and informing their CPA subsequent to executing the transaction. ‘If only we would have talked to you before’ or some variation thereof is what typically ensues after the first of the year when the client comes in to drop off their tax information. The resulting conversation reveals that the CPA could’ve saved their client significant amounts of cash had they been informed of the transaction prior to its execution.

That example may sound a bit dramatic. However, that which is true with significant amounts of cash is also true with lesser amounts of cash. Further, the benefits to engaging your CPA at multiple times of the year, as well as, prior to major decisions have other benefits as well, just as visiting your doctor and dentist does.

With that said, and hopefully the importance thereof established, what are some things to consider on the eve of summer? First things first, finalize your 2015 tax return. For those that have requested an extension of time to file their tax returns, acquire the necessary data to complete the tax return and provide it to your CPA. For the most part, you know now what it will take to finalize your tax return. Move quickly to complete it. Completing the tax return now has several benefits, including but not limited to allowing you to move forward to focus on a year you can plan for and assessing your 2015 tax return which brings us to the next ‘to do’.

As with most anything, a prudent response to your 2015 tax return is to evaluate it. What went well? What didn’t go well? Did your return match your expectations? Did your return match your plan and or, if applicable, your projection? Did you learn anything about your tax return? Were you made aware of opportunities moving forward? Are you confident in the competence and care that you’ve received from your CPA? These questions are a good start towards evaluating your 2015 tax return in hopes of making improvements for 2016, which leads to our next task.

Once you’ve tied a bow on the 2015 tax return it’s time to turn our attention to 2016 and beyond. Some of the leg work should have already been completed with our evaluation of the 2015 tax return. For those run of the mill components to your return such as wages, interest, dividends and other annual recurring revenue, are you satisfied with your payment of estimated taxes and subsequent liability or refund? Are your withholding and/or estimated taxes adequate for your tax liability? Do you typically owe tax or receive a refund when you file a return? Are you satisfied with those results? Are you aware that you potentially could be subject to penalties on the underpayment of estimated taxes? Further, are you aware that if you don’t pay your total tax liabilities by the due date in April you will be subject to additional penalties and interest? Now, to be sure, some individuals are aware of and content to pay penalties and interest as a result of paying their taxes later. This is due to the fact that they have the ability to use the cash now in such a way as to derive a return greater than the penalties and interest creates. If this matches your prerogative, that is certainly fine. The aim of this article however, is awareness to those facts to enable proactive planning and reducing surprises.

Another strategy is to give consideration to future transactions that you can begin planning for now. Thinking of the pieces to the puzzle now will have a direct impact on your future cash flow. There are numerous tax strategies that can be employed to minimize tax liabilities. Further, potential transactions can be structured in such a way to further reduce liabilities.

This time of the year is also a good time to make adjustments to wage withholding in order to avoid underpayments or excess refunds. Additionally, the June 15th due date for second quarter estimated tax payments is fast approaching. Be sure to pay in an appropriate amount by this date. Furthermore, if you’ve extended your tax return you may need to double up and pay for first and second quarter estimated tax payments to avoid estimated tax penalties.

Lastly, consider making aware and introducing the various professionals you work with, such as attorney, CPA, financial planner, etc. with one another. These are the trusted individuals in your lives that are charged with caring for you and your posterity to various degrees. It’s helpful for these professionals to know one another in order that they may act with prudence and efficiency when called upon.

I hope that this article has illuminated the need to be engaged in your tax situation on the eve of summer, as well as throughout the year. Additionally, that there are some specific tasks that you can address in the here and now. Finally, that in doing so you’ll receive multiple benefits which will be the proverbial ‘proof in the pudding’ of this call to action.

Parental alienation issues in divorce cases

When a North Carolina judge deals with a contentious divorce situation involving issues such as one parent claiming that the other has abused their child, there can be challenges in assessing the validity of such a claim. In some cases, allegations of child abuse may be justified and accurate. In others, however, a parent may have brainwashed a child into believing that the other party is abusive, resulting in false accusations. Unfortunately, legitimate claims of parental abuse could backfire on the accusing parent and the child.

The issue of parental alienation has become quite controversial because of the potential for the rejection of legitimate abuse claims. In some cases, the accused parent can end up with full physical and legal custody because of a judge’s view that the other party has acted maliciously in an effort to poison a child’s view. In fact, an early study of the issue involved 240 cases of alleged parental alienation, and in 80 percent of these cases, the accusing parent lost custody.

When alienation is actually occurring, a loving parent and extended family members can be rejected as a child pulls away. A custodial parent whose false accusations have been believed could interfere with the child-parent relationship for years to come as the non-custodial parent faces limited contact and involvement in the life of their child. The outcome can vary from one courtroom to the next based on the views and methods of a given judge.

In a hypothetical scenario, a parent dealing with a situation involving an abusive spouse might seek legal advice prior to filing for divorce in order to develop a strategy for documenting issues such as child abuse. Proof of issues such as drug use or other negligent behavior might be helpful in supporting a request for full custody.

Is Love Enough? 6 Big Questions to Ask Before Marriage from Your Divorce Attorney

The institution of marriage has changed drastically in the last 50 years. Back in the day, a young woman would marry the similarly aged young man that lives down the street. Their respective parents would approve of the marriage, finding the perspective wife to be a decent care giver and the perspective husband a hard worker with income earning abilities. Together they would build wealth, raise children, and contribute to social status of the joined families. These marriages will remain solid with hard work, social and religious constraints, and self-sacrifice.

Today, more often than not, people marry for love. We want not only someone to raise children with but we want to marry our soulmate, someone who will be not only a companion but a best friend and an even better lover. The bar has been raised for committing to a spouse today, we desire someone truly special. However, when the honeymoon period of love fades, and it will, unless you and your spouse are one of those sickening perfect couple everyone loves in the movies but despises in real life, it’s important to know what to expect underneath the crown of love. There may be other questions you may personally want to ask your partner, but consider the six questions listed below as a starting point to open the channels of communication about committing your lives to each other.

1. Do you want children?

This is very important to discuss honestly before marriage. If the answers are different, no matter how much love you have, one party will resent the other for pressuring the decision one way or the other. If the answer is yes, then the follow-up questions are, how many? when? and will you help change the diapers? It is also important to discuss what role each will play as a parent.

2. How important is religion?

Are both partners equally entrenched or removed from their respective religions? Are there differences in each other’s families when it comes to religion and how will you deal with that? How will you as a couple celebrate religious holidays? If you plan on having children, how big of a role do you see religion playing in the education and upbringing of the child?

3. Is it my debt or our debt?

When it comes to divorce, your debt is my debt, but couples can still keep finances physically separate during the marriage. Discussing finances is crucial, as it is often a big source of arguments that arise during marriage. Will you and your partner be sharing bank accounts or would someone prefer to keep resources separate? When seriously contemplating marriage, disclosing debts is very important. Additionally, if your incomes greatly differ it might be helpful to budget according to each owns proportional income. Ask yourselves how much you’d be willing to spend on a luxury item, like a car. This question, in particular, will let you know whether your partner is cautious or reckless when it comes to spending habits.

4. How important is sex to you?

They say there are three true pillars to a happy and loving relationship: trust, laughter, and affection. Partners need to be able to trust each other, which comes by way of honesty and being open, discourse not distance. Partners need to have the same sense of humor, whether it’s sarcasm or void of humor altogether – happiness is love. Equally as important, couples need to be on the same level of desired affection. A healthy relationship will involve discussing what each partner enjoys about sex, how often they desire to have sex, and how important it is to them in the relationship. It is imperative that both partners remain sexually satisfied throughout the marriage.

5. How did your family handle conflict?

Was your family the type that screamed and threw objects across the room, calmly sat down and discussed issues, or did your family distance themselves from each other when disagreements arose? A person’s family dynamic often reflects on how they handle conflict, or it may have drastically changed the way a person desires to handle disagreements. It is important for couples to be on the same page when it comes to dealing with conflict. There will be many hard times during the span of a marriage, and if one partner shuts down while the other craves open, honest discussions, the marriage will likely not last long.

6. Where are we 10 years from now?

What are each partner’s relationship goals? What are their personal goals? If one partner desires to go back to school to get his PhD., knowing this will take another 5+ years of dedication, and perhaps relocation to a different state, the other partner might have concerns if she is ready to start a family and wants to stay close to her family. This is also an opportunity to discuss each other’s opinions on divorce and what their expectations of marriage are. It might be that one person truly isn’t ready, and will never be ready, to commit to marriage.

If you don’t deal with an issue before marriage, you deal with it during the marriage. Honesty is, as always, the bedrock of a strong and fulfilling relationship. Being completely honest with each other before marriage when answering the above questions, and more not included, will spur important discussions that will hopefully give couples a chance to explore these very intimate and important areas of their life before committing to marriage. Of course, the answers to the questions could change with time, as people do change, but getting started in the same direction as your spouse will let you know the love is accompanied by compatibility.