“Death and Taxes” Not So Certain, So How Do You Mediate Your Divorce?
Disclaimer: This blog doesn’t constitute legal advice. If you have any questions about your individual situation, it’s best to seek the advice of an experienced legal professional.
Sometimes it’s important to “get down to brass tacks.” As this New York Times article (https://www.nytimes.com/2019/04/19/your-money/taxes-tips-divorce.html)points out, at its most fundamental level, divorce is a business negotiation. In this negotiation, parties are looking to make a deal that’s profitable to them and mitigates the loss of their financial relationship. Since ex-spouses often have an ongoing relationship that includes activities such as coparenting, divorce seeks to make this relationship serve both parties and their children. This deal is made with careful planning that has to take into account tax considerations. In the past, divorcing couples might have gone into negotiations with an instinctive sense of how taxes could work for them. Now, since the recent tax overhaul, that’s not so clear. Radical changes to taxes must mean a new approach to negotiation. Who gets what and does what with their money is open to new interpretations that may not be obvious.
Get Help So You Don’t Lose the Road Map
When you’re dividing your assets, particularly more complicated assets, you need help with your divorce. At Divorce Options San Diego, our mediators have expertise in finance and mathematics. We’re a full-service divorce firm that does thorough research alongside your mediation sessions to help you get a comprehensive picture of your financial landscape. We ensure you go through the proper steps to have a divorce compliant with California law, and we even provide a document service if necessary.
When it comes to taxes, timing and organization are especially important. You’ll need to decide how to file if you’re still married during tax season, and you’ll have to figure out what to do about your assets in the future. You’ll also need to make a long-term plan that factors in your kids, if you have any. Some changes and challenges you might face in the current landscape are:
Spousal support – The biggest change in the recent tax updates was the removal of a tax credit that had been in the code since 1947: the ability of the paying spouse to deduct spousal support and income tax for the receiving spouse. This affects the divorce deal significantly, as it can seem less attractive for the paying spouse to give a generous sum of spousal support. There are ways to make the deal more attractive for the paying spouse, but it’s best to work with financial and legal experts who can help you decide how to manage your finances and remain compliant with tax and divorce law. The mediators at Divorce Options San Diego are certified financial planners who can help you make a careful determination on these issues.
Children – With a change to the dependent tax exemption and a new credit, you’ll have to be more careful in your divorce negotiations about how you assign money and time with the kids. The time you spend with the kids could also be significant in the future, as college applications will take into account the income of the lower-earning spouse when the kids spend more time with that parent. By using divorce mediation, San Diego couples can work out a strategy to take advantage of financial aid and pool their resources.
Filing your taxes – Should you file jointly or separately? This is a consideration that will have to be worked into your overall negotiations. What will you be losing out on next year when you’re divorced? How can you operate a profitable business together as long as you’re married? The value of mediation is that it helps you acknowledge and take advantage of mutual benefit, even if you and your spouse have a less than amicable relationship. At Divorce Options San Diego, we use tools such as game theory to draw a clear picture of your common and separate interests. Recognizing that compromising isn’t caving in and having your needs heard are essential to working out a good agreement.
What to do about the family home – With property tax deductions decreased, the decision about the family home becomes a more difficult one, as it makes holding on to the home less attractive financially. This can be a particularly emotionally charged decision, and mediation can help you work through this difficult choice in a neutral environment where you can approach the decision with care and consideration.
Our Services and How We Can Help
The mediators at Divorce Options San Diego are all certified financial planners who apply thorough financial analysis to your divorce to achieve an optimized result that will cover all aspects of your financial situation, including investments, property, and all other assets or debts. We provide a sophisticated review of your community property, separate property, potential community property allocations and divisions, cash flow, transitional processes, and sustainable financial planning for your divorce process.
When married partners are also business partners, a divorce/business mediation approach can explore solutions such as splitting a business, co-owning it, or whatever option is most suitable for your financial and emotional needs. To assist with this, we can do a full business appraisal and analysis. All our mediations start with thorough background research and information gathering, which flow through the mediation whenever necessary. As a full-service divorce mediation firm, we help you navigate the form-driven California divorce process. We help you draft settlement agreements that are fully legally compliant and take into account the needs of the whole family.
We can help you complete your divorce from beginning to end. All the practical, legal, financial, and psychological aspects of fair, respectful divorce agreements can be managed by Divorce Options San Diego’s experienced, trustworthy divorce mediators. San Diego couples can rely on our comprehensive process, which is so thorough that, in most cases, you won’t have to hire divorce attorneys, appear before a judge, or visit a courtroom to finalize the divorce. Our mediators are caring, educated professionals who build divorce around conflict resolution, closure, and practical solutions for your future life beyond divorce. We cater to those with busy lives who want the best for themselves and their children.
Mediation is a 100 percent confidential process, so you can be assured your divorce will be handled with care and privacy. We emphasize an efficient, caring process that leaves out no detail relevant to your emotional, financial, and legal situations. We have offices in Solana Beach, CA, but we can work with you remotely at your convenience using telephone, video-conferencing apps, and other forms of electronic communication. Please contact us at (858) 281-2628 for a discreet and confidential consultation to see how we can help.