Can’t I get a divorce by just filling out some forms?  I saw online where I can get the divorce forms for a lot less than the cost of a lawyer, is that a bad idea?  These are questions that come up periodically and the answer to both questions is “yes.”  To explain, a no-fault divorce can be very simple for a lawyer to put together for a client and can take very little time by the lawyer to do so.  But, the final product you see is the culmination of years of education, experience and familiarity with the differing requirements of chancery court judges along with careful drafting of documents that address the client’s unique circumstances  For divorces, there is no “one size fits all” form.

Proper preparation of divorce documents is critical.  Lawyers look at both the immediate goal of obtaining a divorce as well as the long-term consequences of the divorce judgment.  Usually, parties that try to get divorced without the benefit of a lawyer create documents that are so awful, they often end up being completely unenforceable or void.  If that happens, it is almost certain that the parties will end up paying much more money in legal fees to repair the mess that they would spent to do it correctly in the first place.

The decisions you make in a divorce, and the documents that result, can control aspects of your family for tens of years and drastically impact your finances and property.  Nothing that important should be relegated to a do-it-yourself kit.  While there are certainly legal documents you can create without a lawyer that will serve you well, in a divorce, there are no short cuts.  Do it right the first time to avoid major problems in the long-term.

When child support payments are set by court order and there is a desire to either increase or decrease the amount of the payments, the person seeking the change must show that a substantial and material change in the  circumstances of either the parents or the child has occurred since the date of the child support judgment.  The process is begun by the party seeking the modification filing a Complaint for Modification and having it, along with a summons and court date, served on the defendant.  In reviewing a request to change the child support amount, the court considers the increased needs of older children, higher expenses, a child’s medical needs, the parents’ financial situation, the health and needs of the parents, the monthly living expenses of the party ordered to pay child support, the parents’ tax obligations, the respective costs of each party’s residence and any other facts and circumstances the court considers relevant.  However, the most common reason for either party seeking a change in child support amount is a change in the payor’s income.

A modification cannot relitigate issues already decided in the original decree.  Modifications must be based on facts that occurred after the court established the original child support order.  If you were not satisfied with the original order then the remedy was to ask the court to reconsider and/or appeal the decision, but there are strict time frames in which that must be done.  Also, the change in circumstances sought to be used as the basis for a change in child support amount must be unanticipated at the time of the original decree.

Lifestyle decisions cannot be used to justify a child support modification.  For example, a payor cannot purchase a new car and then claim he should pay less child support because the car loan is too expensive.  Additionally, a payor cannot have child support reduced because he or she decides to have more children.

Typically, a modification is brought because the person receiving child support discovers that the payor has received an increase in pay.  If so, a substantial increase in pay will justify a modification with the court considering the child support guidelines.  Likewise, if a payor receives a substantial decrease in pay, a downward modification may be appropriate.  However, if the payor created the decrease in pay, the situation may be a little more difficult to address because courts are traditionally reluctant to take child support away from a custodial parent simply because the payor wanted to take a lower paying job.  In those situations, the court is likely to pay close attention to the motivation behind the payor’s actions.

If a modification is sought, it is important to act quickly because a modification is generally only effective from the date of the complaint to modify (at the earliest) or the date of the court order modifying the amount.

One of the most overlooked issues in divorces are the potential tax consequences.  Often, spouses are so focused on just getting divorced that they take actions that are not in their financial best interests.  It is also common for spouses to be so emotionally distraught over the course of a divorce that they refuse to consider options that will benefit them when filing their tax returns.  One example is when spouses have the option of filing a joint return but stubbornly refuse to do so, without realizing that the tax burden could be lessened for both parties.  Here is a good article from Time.com that addresses some important taxation issues in divorces.  And since it is tax time, here’s another that addresses some common mistakes people make in filing their annual returns.

This isn’t really divorce related, but worth addressing.  Wesley Snipes looks like he’ll be spending the next few years in prison for tax evasion. He was convicted of tax evasion but while he appealed the conviction he was out on bail.  Now that the appeal is concluded, so is his freedom, at least for a while.  While Snipes intentionally sought to evade taxation, and will pay a heavy price, normal people can find themselves with a financially devastating tax situation if they neglect their taxes.  While not a criminal offense normally, failing to file returns or to pay the required tax results in penalties and interest and a debt collector that you really can’t hang up on.  In the middle of a divorce, the last thing a divorcing person needs is delinquent tax debt.  File your returns, pay your taxes and avoid significant financial consequences.  Remember – the IRS will still be married to you even if your spouse is not.

Recently, a company called SafeGuard Marketing Management, Inc. began selling a product called “Divorce Insurance.”  You certainly have to admire the ingenuity of a company to come up with a product like this.  However, the value of the product is questionable both morally and financially.  If you are contemplating marrying the love of your life, but at the same time anticipating a divorce, then you should probably just skip the pain and not get married.  The concept of “divorce insurance” trivializes marriage and in my view, encourages people to make no effort to resolve their differences.  In fact, it would actually provide an incentive to divorce and contribute to the destruction of many families.  If potential spouses want “insurance” against divorce, then their money would be better spent by investing in premarital counseling and marriage counseling, if problems arise.   Here is an article written by an attorney in California that expands further on the topic.

Divorce can be devastating financially as incomes are split, property is sold at a loss and the financial burden of single parenting takes effect.  For this reason, the financial toll must always be considered when couples are considering a divorce.  According to a recent article on findings by the Census Bureau, a study over a period of 15 years showed that couples who remained married during that time built up nearly twice the net worth of people who remained single.  Considering the visible toll on finances caused by divorce and the findings by the Census Bureau, a stark picture is painted for those that end their marriages.  Of course, situations differ among couples and a thorough evaluation of your finances is a critical component in understanding the pros and cons of divorce and reconciliation.

In divorce cases, there is a common misunderstanding among divorcing spouses about the taxation issues associated with payments for both child support and alimony.

Child support is defined by the Internal Revenue Code as a “payment which the terms of the divorce or separation instrument fix (in terms of an amount of money or a part of the payment) as a sum which is payable for the support of children of the payor spouse.”  26 U.S.C.A.  71(c)(1). Basically, child support is a payment ordered in a divorce decree that the divorce decree labels as child support.  There are situations where payments labeled as “child supprt” may not qualify as child support but we won’t get into those right now.  The tax code treats any payment of child support, so long as it meets the requirements of Section 71, as a non-taxable event, meaning that the receiving spouse does not include the child support in gross income (which means it is received tax-free) and the paying spouse receives no deduction for the payment of child support.  26 U.S.C.A.  71.

Alimony, on the other hand, is considered income to the receiving spouse (must pay taxes on it just as if earned at a job) and may be considered a deduction by the paying spouse.  26 U.S.C.A. 71.  There are situations where the Internal Revenue Service may consider a spouse to be receiving alimony even if the payment is not called alimony.  Obviously, this would be a huge problem if the receiving spouse had not been including the alimony payments on her income tax return.  We’ll get into alimony is more detail in a later post.

Many people try to prepare their own divorce documents to save money on legal fees but often their efforts to save money result in unintended tax consequences.  It definitely pays in the long run to get the divorce documents drafted correctly.  You do not want to find out during an audit that the tax-free money you’ve been receiving is not really tax-free.

An article was posted on FOX News this morning that leaves you waiting for the punchline.  Unfortunately, it is not a joke.  The headline reads, “Florida Priest Seeks Custody of Child From Stripper.”   The article needs no explanation other than to say that issues pertaining to custody of children and child support know no societal, economic or professional boundaries and that when you think you’ve heard it all, you soon realize that you have not.  A link to a more thorough article on the matter is here.

Typically, the husband and wife both sign a document called a Joint Complaint in which they ask the court to grant them a divorce on the basis that irreconcilable differences have arisen between them.  Usually there is a written agreement attached to the Joint complaint that addresses the division of assets and debt, provides for custody and visitation and addresses other issues important in a divorce.  Both spouses will also need to complete a financial statement, unless they agree to waive that requirement.  Once the Joint Complaint is signed, it is filed with the Chancery Clerk’s office in the county of either spouse’s residence, if both are Mississippi residents.  If one of the spouses is not a Mississippi resident, then it should be filed in the county where the Mississippi resident lives.  The Chancery Clerk will require the parties to pay a filing fee at the time they file the Joint Complaint.

Once the Joint Complaint is filed, it must remain on file for at least 60 days before the judge has the authority to grant the divorce.  In comparison to divorces based on grounds such as adultery, the 60 day period is pretty quick.  During that 60 day waiting period, it is important to remember that you are not divorced.  Even though an agreement has been reached on a divorce, no spouse likes to see their husband/wife displaying their new “companion” in public and such actions often result in litigation.

Once the 60 day waiting period is over, your lawyer will meet with the judge to present the written agreement for approval.  The Court will review the agreement, along with the financial statements, to determine if the agreement is adequate and sufficient.  If so, the Court will sign a document called a Judgment of Divorce that, when filed with the Chancery Clerk, will grant the divorce and end the marriage.

There are other ways to obtain a divorce on the ground of Irreconcilable Differences and there are variations to the process, but this procedure is the most common.  If you are considering a divorce, you should contact an attorney to discuss your options.  Because of its simple procedure, many people try to get divorced without an attorney.  While this may save a little money on the front end, you may end up with a really bad divorce agreement that you cannot change.  It is well-worth the investment in an attorney to make sure your divorce is done properly.

The first step in the process is calculating the amount of monthly adjusted gross income. This generally is done by taking the gross amount of money earned in a month (which includes all earnings, even if paid in cash) and deducting from that the amount withheld for federal, state and local taxes as well as social security contributions. If the paying parent is required to pay child support for another child pursuant to a court order, then that amount should also be deducted from the monthly gross pay. If mandatory contributions to a retirement plan are made, then a deduction is taken for those contributions. (All of these mandatory deductions, including taxes and social security contributions, are most easily calculated by reviewing the payor’s W-2 form). Finally, if the paying parent is also the parent of a child living with him, then the court may subtract an amount that it deems appropriate to account for the needs of that child. The amount remaining (if calculated on a monthly basis) is the monthly adjusted gross income. If the calculations were done from a W-2 form then the net amount must be broken down into a monthly amount by dividing the net amount by twelve.

Once the monthly adjusted gross income is calculated, the next step is to multiply the monthly adjusted gross income by the correct child support percentage to come up with the amount of monthly child support. The percentages are:

1 child: 14%
2 children: 20%
3 children: 22%
4 children: 24%
5 or more children: 26%

There are some exceptions to these rules, but this summary should assist anyone who wants to take a shot at coming up with a ballpark child support calculation. It is important to remember though that the Court is the final authority over the amount of child support and it evaluates child support amounts carefully to make sure that the law is followed.