Alimony Deduction: No Rush to a 2017 Final Judgment

While the House Tax Reform Bill provided for the elimination of the alimony deduction in divorces as of January 1, 2018, a last minute change in the final ”compromise” House-Senate Bill instead eliminates the deduction effective 2019.   That is, alimony will no longer be deductible to the payor, nor includable as income to the payee, in divorces entered in 2019 and thereafter.

The original bill and the 2018 deadline had litigants and matrimonial attorneys nationwide rushing to enter final Judgments of Divorce in the final weeks of 2017 to preserve the deduction in pending matters.  The modification from 2018 to 2019  now gives litigants and lawyers alike time to consider the tax change and more properly plan for the loss of the deduction.  The revised timeline is particularly important in cases where parties in pending matters have negotiated alimony obligations assuming the income would be includible to the payee and deductible to the payor.

The House and Senate have passed the revised bill and news sources report that President Trump may sign it into law as early as next week.

If you would like additional information on this topic, please contact Tracy Julian at tjullian@pashmanstein.com.

Disclaimer by Pashman Stein Walder Hayden, P.C.: This article is for informational purposes only and is not offered as legal advice regarding any particular matter. No reader should act on the basis of this publication without seeking appropriate professional advice.  Before making your choice of attorney, you should give this matter careful thought.  The selection of an attorney is an important decision.

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Court Recognizes “Economic Abuse” as Type of Domestic Violence

When one thinks of “domestic violence,” the first (and perhaps only) thought that typically comes to mind is physical abuse. Indeed, this State’s Prevention of Domestic Violence Act (“PDVA”), N.J.S.A. 2C:25-19, lists out eighteen (18) specific offenses that constitute domestic violence under the statute, and as one may expect, nearly all of them pertain to acts of physical abuse (e.g. assault, false imprisonment.) In a recent opinion, however, the court addressed the interesting issue of whether non-physical abuse, such as economic harassment and coercion, are also domestic violence that would warrant the issuing of a restraining order under the PDVA.

Understanding the Importance of the Case Information Statement in Divorce Actions

In a divorce proceeding, once the Complaint for Divorce and Answer are filed, the parties, with the help of their attorneys, must next each prepare their own Case Information Statement (“CIS”).  Parties to a divorce often view the CIS as an intimidating and burdensome part of the divorce process.  However, the CIS is arguably one of the most essential documents in a divorce action.  It is relied upon throughout the proceedings in order to answer written discovery, as well as in negotiating child support and alimony payments, even if those issues are uncontested.  Therefore, it is of utmost importance that clients take the time to provide their attorney with an accurate representation of their financial circumstances.  The CIS can essentially be broken down into three main sections – income information, monthly expenses, and assets and liabilities.

Disability Status and Its Effect on Support: Does It Ever End?

As published in the New Jersey Law Journal, October 26th, 2015

This article explores the impact that a determination of disability may have on support obligations, discusses the Social Security Administration’s (SSA) requirement for disability status, surveys the case law, and makes recommendations for practitioners handling such matters.

When an individual is deemed disabled by the SSA, that status creates a rebuttable presumption of a limited ability to work. This reduces the ability of the nondisabled spouse to argue that the disabled spouse should be imputed income commensurate with that spouse’s earnings capability, were he or she not disabled.

For the rest of the article, click here.