1. Soul Searching.  Spending some serious time alone analyzing your relationship with your spouse is a critical first step in making the decision whether or not to divorce. Do you still love your spouse? Does your spouse still make you laugh? Are you just having a bad month? How will your life be different without your spouse? How might your child’s life be impacted without the consistent presence of both parents?  These are the types of questions you need to wrestle with, being totally honest with yourself, before moving forward with your decision.
2. Counseling.  I highly recommend scheduling an appointment with a professional counselor to explore your feelings. Perhaps consider both individual counseling as well as marriage counseling. It is well worth it to yourself and to your family to exhaust all avenues of saving your marriage before making the decision to divorce.Counseling can also provide both of you with insight on how to handle a separation with your children. How do you tell the children you are separating? When do you tell them?  Remember, if you have children, your relationship with your spouse does not end at divorce. The two of you still have children to parent and perhaps even grandchildren to share. The manner in which you handle this will impact your future relationship with your entire family.
3. Gathering Documents. Copy any and all documents related to your finances including your federal tax returns for the past three years, current paystubs, and bank statements from all bank accounts for the last year.  Make copies of documents related to all of your assets including the deed to your house, car titles, investment accounts, retirement accounts, stock accounts, stock options, life insurance policies, etc. Copy documents related to any and all debts including mortgage statements and credit cards for the last year, and all cell phone statements for the last six months.  Once you secure copies of all the appropriate documents, store them in a secure place – perhaps a friend would keep them for you, or at your office.
4. Hiring an Attorney.  It is very important to schedule an appointment with a divorce attorney early on in the process so you can become familiar with North Carolina family law. Nearly every aspect of the dissolution of your marriage is controlled in some way by what the law requires.  Seeking legal advice can certainly help you avoid problems down the road. Remember, it is difficult to change things once they have been done.  Attorneys prefer to be proactive and plan ahead rather than work to fix something that has already happened, especially when it could easily have been avoided. Selecting a divorce attorney who you feel comfortable with and who is a right “fit” for you should be done carefully. At the initial meeting, be prepared with a list of questions you want to ask the attorney. The attorney’s answers should provide you with a level of comfort and confidence with the attorney.
5. More Soul Searching.  Once you have sought counseling, you have gathered documents’, and you have explored good legal advice, you should ask yourself again if you are indeed ready to separate.
6. Don’t Move.  Unless there are issues regarding safety or abuse, you should not move out until you have at least done items 3 and 4 above and have sketched out a roadmap of where you are going.
7. Retain an Attorney.  If you have taken the steps above, and you conclude that separation is inevitable, then be sure to hire a caring and experienced attorney before you proceed.

Divorce is never easy, but taking your time and working with skilled professionals to help you rationally sort through these decisions will give you the confidence to move forward.

By Rose Stout

What should my filing status be?

Your marital status on December 31, 2011 dictates your filing status for the entire year. If your divorce was final by New Year’s Eve 2011, you may no longer file a joint return.  However; if you are separated but still going through the divorce process, you have the option to file a joint return or as married and file separately.  Talk to your accountant about which filing status while provide the best tax status for you, both now and in future years.  If you need an accountant, I would be happy to refer you to a qualified accountant who is experienced with your situation.

How will alimony payments affect my taxes?

Alimony is taxable as income to the person who receives it and tax deductible for the person paying it. You should know that the IRS will not consider payments to be actual alimony unless certain requirements are met and clearly defined in the appropriate documents.  Note that if you pay alimony, you will need to report your former spouse’s Social Security number in order to claim the alimony deduction.

How will child support affect my taxes?

Unlike alimony, child support is not taxable to the parent who receives it nor is it deductible by the parent who pays it.

How will my custody agreement affect my exemptions for dependents?

If you were named the custodial parent in the divorce, you may claim your child as a dependent on your tax return. Generally, to be considered a custodial parent, your child must have lived with you for more time during the year than with your former spouse.  It is possible for divorced couples to negotiate the non-custodial parent claiming dependency, but an attorney should be consulted to ensure this is done in a valid manner.

How do I handle the changes related to our house and investments?

Determining how to properly report division of assets on your tax return, such as real estate and retirement accounts, may involve significant complexity.  Consulting with an experienced tax professional is usually advisable to help you sort through your rights and obligations.

With the aid of a knowledgeable professional, you can easily reduce the stress as April 15th approaches. Our firm is always willing to connect you with experienced tax professionals who can help.

By Max Rodden

Forward-looking and positive resolutions are helpful, and necessary, for individuals who are in the throes of a separation or divorce.  These folks may feel largely helpless, like they are at the mercy of the lawyers, the legal system and the opposing party.  Feelings of lack of control can make it very difficult to stay positive and to bring about a resolution to the matter at hand.

In an effort to help you regain your power in this process, I want to offer the following five New Year’s Resolutions for your consideration:

1.   Educate Yourself.  Make it your business to know your business.  Create a comprehensive list of assets and debts, including the names and contact information of creditors and account holders.  If your name is associated with the asset or debt, or you otherwise have access to that information, gather it and keep it in one, organized place.  Pull your credit report and ensure that you know where your obligations lie.  And finally, create a comprehensive monthly budget and start tracking those expenditures.

2.   Pick Your Battles.  People who are separated or divorced likely do not communicate well with each other.  Acknowledge that you communicate differently than the other, and resolve to let the little miscommunications slide.  If you turn each phone call or email into a battle, your energy will be zapped, and your focus will be turned away from those core issues that truly matter.

3.  Pick Your Team.  Don’t do this by yourself.  You need a team of good professionals who can help guide you through the process.  Attorneys, Certified Public Accountants, Financial Planners, Realtors and Mental Health Professionals are almost always indispensable.

4.  Take Care of You.  In addition to having good friends and family who you can lean on through this process, consider working with a therapist (see “Pick Your Team” above).  Do not underestimate the emotional toil that this process can take on you, and make sure that you are caring for your basic needs – those needs don’t just include food and shelter.

5.   Make Business Decisions.  Separation and divorce are emotional issues for the parties involved.  If you are going through it, make sure that you have objective guidance from your lawyer, and make sure that lawyer constantly counsels you on the financial effects of particular actions.  If you have to pay a lawyer $5,000 to roll the dice in court over a $2,000 issue, the right decision is usually to avoid court.

Throughout the year, you’ll see me revisit some of these resolutions in more detail in my posts.  I hope you will find some of these tips helpful, and that you can adopt them as your own.

Happy New Year!

by Lynn Wilson Lupton

The national first-tier rankings is featured in U.S. News & World Report’s November 15th Money issue. The national and metropolitan first-tier rankings are featured in the “Best Law Firms” standalone publication was distributed to 30,000 general counsel and in digital format to 58,000 private practice lawyers worldwide; the rankings in their entirety are posted online at http://bestlawfirms.usnews.com.

Click here to read the full article: Lousy real estate market makes it harder for couples to split

Smith Debnam is proud to congratulate attorney

A Wake County native, John Narron grew up in Wendell and received his B.A. from East Carolina University in 1974 and earned his J.D. from the University of Mississippi in 1977. John returned home and has been practicing law in North Carolina since 1977 and has been a partner with the Raleigh-based law firm of Smith Debnam since 1987. John is also recognized as Board Certified Family Law Specialist by the North Carolina State Bar. He is head of the firm’s litigation practice, which focuses on family law, and he serves as a managing member of the firm’s Executive Committee. John is a well-known and respected litigator, mediator, and local leader making a significant impact on his workplace and our community.

John was honored at the Leaders in the Law awards luncheon on September 22 at the Marriott Center City.

Smith Debnam will be holding a Separation and Divorce Seminar in our Raleigh office, “Navigating the Legal, Financial and Emotional Aspects of Separation and Divorce.”

Tuesday, February 21, 2012
6:30pm – 8:15pm
at Smith Debnam, 4601 Six Forks Road, Suite 400, Raleigh, NC 27609

The seminar is designed for those going through or contemplating a separation or divorce. Because we understand that going through a divorce or separation is much more than a legal procedure, we will offer valuable information and provide supportive professional resources from a legal, financial and emotional perspective. Participants will come away with practical knowledge and a road map for navigating through this challenging process.

Topics include:

• Your legal rights and options: Max Rodden, Board Certified Family Law Specialist, Smith Debnam
• Important financial concepts you will need to know: Robert T. Watral, Jr., CFP®, CMFC®, CDFA™, Financial Advisor, Ameriprise Financial Services, Inc.
• Healthy ways to recover from divorce and separation: Donna Moore, LCSW, Divorce Therapist

There is no charge for the seminar, but we ask that you pre-register online at freedivorceinfo.eventsbot.com, call Crystal Mathew at (919) 250-2157 or email cmathew@smithdebnamlaw.com.