Menu / Navigate
The Law Offices of Oliver R. Gutierrez
Se Habla Español - Free Initial Consultation

Redwood City Family Law Blog

IRS rules for divorced parents who claim dependent children

A divorce requires California parents to decide who gets to claim the children as dependents on federal tax returns. Claiming children could produce significant tax savings via the Dependent Care Credit and Child Tax Credit. A custody, divorce or separation agreement can specify who gets the privilege of claiming the dependents. In the absence of such an agreement, then IRS rules determine who can claim children on a tax return.

The IRS grants parents top priority when non-parents make competing claims. Residence also matters to the IRS when the agency decides who has the right to claim dependents. The custodial parent who has children in the household for the majority of the year will generally get to claim them for tax purposes. Joint custody that places children in two households for equal amounts of time will cause the IRS to look at another factor. Child credits will go to the parent who has the highest adjusted gross income.

Texting and social media may make divorce easier for kids

Parents in California and other parts of the country are understandably concerned about the possible dangers and risks associated with texting and social media use. However, there's a new study that suggests texting and social media can help keep parents and children stay connected when a marriage comes to an end. Interestingly, it didn't seem to matter how well former spouses got along with one another.

While it's generally agreed that contact between parents and children after a divorce is often better in person, there are times when this isn't possible. But, according to the study's co-author, texting and social media can let children know they are cared for and loved between scheduled visitations. In order to test the long-held theory that how well divorced parents get along is the main factor that determines how children handle divorce, the study team looked at roughly 400 parents no longer together with kids between the ages of 10 and 18.

What should I do if I think my spouse has hidden assets?

When divorcing in California, a couple’s community property is typically divided so that both spouses end up with roughly the same value in assets and debts. However, sometimes one spouse will hide assets to prevent those assets from being divided in the divorce.

Behavior like this is both unethical and illegal, but when a family has a complex financial situation, sometimes one spouse believes he or she can get away with hiding assets. Fortunately, there are ways to uncover this kind of dishonest behavior.

Planning for a business during a divorce

California business owners often do not consider the potential for divorce when they decide to marry. Still, the presence of a business means that entrepreneurs may need to consider additional protections before or after they tie the knot. Many equity investors may even insist on protections that could safeguard the business from being divided or destroyed in case of the end of a marriage. In many cases, both spouses are deeply involved in a business' success or failure. Making an agreement does not need to mean that one spouse is deprived of the value they deserve, but simply creates a framework for fair distribution.

One of the most important ways that people can protect their businesses is by signing a prenuptial agreement or even a postnuptial contract. The agreement may classify the business and its value before marriage as separate property. Even if it recognizes growth as marital property, it could specify a certain cash value or percentage to be paid to the other spouse, rather than dividing the business itself. This kind of agreement can also specify which partner would buy out the other in a divorce, in case both are full partners in the enterprise.

Planning for divorce

Married California couples may not want to think about the necessity of planning for a divorce, but it might be something to consider. According to statistics, the rate of divorce in the United States is at almost 50 percent. This means that nearly 2 million divorces occur each year. Being prepared for a divorce means understanding the divorce process and planning for what comes before, during and after a divorce.

People who go through the divorce process will have to go through three stages. They will have to file necessary paperwork, conduct discovery, or research on the financial background of themselves and their spouse, and attend a disposition. For the couples who want to end their marriage without having to go through the expense and stress of a trial, they have many options. For example, they can have a collaborative divorce or go through the mediation process, whichever option is most suitable for their situation.

Reducing the impact of divorce on children's college education

Preparing for college costs can be a daunting task for any parents in California. This process can be even more complicated for divorced parents. It's estimated that two-thirds of married couples have no financial plan in place in case of divorce or death of a spouse. Even though divorce can strain finances, there are some ways parents may be able reduce the impact of a split on their child's education.

College-related expenses generally range anywhere from around $20,000 to nearly $50,000. Regardless of what the tally ends up being, former spouses who are actively co-parenting are generally advised to put child support for minor children, spousal support and other family obligations first.

Formulating parenting plans with child development in mind

When drafting parenting schedules, many divorced parents in California tend to focus too much on their own time instead of discussing the developmental needs of their children. However, effective co-parenting requires more than just cooperation. Experts say it should also take into account how children react to the separation as they grow up. An effective parenting plan establishes child custody and visitation provisions in accordance with research on developmental traits.

When creating a plan, parenting time should be maximized for babies and toddlers. Otherwise, there may be attachment issues later in life. Some babies will spend much of their time with non-parental caregivers. However, they should also be given opportunities to bond with each parent for two or three days a week for several hours. When it comes to parenting plans for babies, it's better to avoid modifications because consistency is paramount at this age.

The basics of child support

Some divorced or single parents in California need extra financial assistance to help care for their children. These types of payments are referred to as child support. While they're usually paid by the noncustodial parent to the custodial parent, this may not always be the case. The specifics of child support will depend on the state where the recipient lives and the nature of the agreement involving the two parties.

The first step with child support is the identify the non-custodial parent. It's important to remember that parents do not need to be ex-spouses for child support to be ordered. The amount of the payments is normally based on the income of both parents. Each state has guidelines that are used to calculate payments, which are sometimes directly taken from a non-custodial parent's wages.

Divorce more likely when wife gets sick

Several studies suggest that couples are more likely to get divorced if one of the spouses gets sick. The risk of divorce for California couples depends on the strength of the relationship and the specific illness involved, and an increasing number of studies say divorce is more likely when the husband gets sick than the wife. A 2015 study published by the Journal of Health and Social Behavior said that an elevated risk of going through divorce was found with a wife's illness but not with the husband's, for example.

Another study, jointly conducted by Purdue University and Iowa State University, found that having a stroke or developing heart problems does not increase divorce risk for men, but women's divorce risk is increased by these things. The study looked at 2,701 marriages and focused on the impact of cancer, lung disease, heart problems and stroke on the risk of divorce. One university sociologist who was not involved in the study suggested that men may gain more health benefits from marriage, and that women provide more support and care. When these marriage benefits are reduced due to illness, men are more likely to end the relationship.

How divorces can affect the super-rich

Given that the news of Amazon founder Jeff Bezos, the current richest man in the world who is about to divorce his wife of 25 years, citizens of California would not be faulted for wondering how his huge fortune will get split up. In fact, this story illustrates how the divorce proceedings of the ultra-wealthy differ from those of the average couple.

To start with, whereas average spouses have to worry about their retirement and savings accounts when getting divorced, extremely wealthy individuals often have an abundance of financial assets. Examples include stocks, bonds and derivatives, all of which can complicate divorce proceedings. In addition, the super-rich often have private art collections or bank accounts in the Cayman Islands.

Contact

The Law Offices of Oliver R. Gutierrez
600 Allerton St., Suite 200
Redwood City, CA 94063

Phone: 650-399-0962
Redwood City Law Office Map

Back to Top