Tax Aspects of Divorce in Oregon

The following is intended to address some of the oft-asked aspects relating to tax issues during or after a divorce. As a disclaimer, nothing in this entry is meant to provide legal advice to your particular situation. There are unique circumstances in every divorce, and the tax consequences may vary from case to case.

A. Alimony (or spousal support): As a basic rule, recipients of alimony must count the money collected as income; payors may deduct alimony payments on their yearly tax return.

The practical effect of this rule, for payors, is that it makes sense to include as much of your support obligation under the alimony umbrella as possible. That is, if you agree to a $1,000 per month alimony payment, and the child support calculator says you should pay $1,000 in child support, for tax purposes it would help to classify as much of the total support award as spousal support as possible.

B. Child Support: There are no tax consequences for child support. The recipient of child support does not include child support as income in their tax return, and the payor cannot claim a deduction for paying child support.

C. Dependency Exemption: The parent who has physical custody (defined as having more than 1/2 the overnights) is entitled to the dependency exemption. The party who is entitled to the exemption may waive that right and give it to the other parent if they wish. Certain requirements must be met to follow internal revenue standards.

D. Tax Returns: Many divorcing couples want to file joint returns in order to capture some of the financial benefits associated with doing so. Notably, you can only file jointly if you are still married on the last day of the tax year in question. In other words, even if you are separated, and the divorce papers have been served, you can still file jointly as long as the judge has not signed the divorce judgment. As always, you can choose to file separately if you so choose.

Please visit Portlandfamilylaw.com for more information on Bobzien McGuire, LLC, a law firm specializing in all aspects of domestic relations law.

The Basics of Compensatory Spousal Support in Oregon

Determining the correct amount of spousal support is one of the most difficult tasks in family law. There is no pre-set formula or statutorily imposed calculation that determines the correct support amount. For this reason, the amount and duration of spousal support vaiers widely from case to case.

There are several important factors that a judge considers before ordering spousal support. The following is a non-inclusive list highlighting some of the more prominent issues:

1. Calculation of the income discrepancy between the parties.

2. The level of contribution one party makes during marriage to the “education, training, vocational skills, career or earning capactiy of the other party.”

3. The age of the parties.

4. The education level of the parties.

5. The health of the parties.

The general goal of spousal support is to allow both parties to enjoy the same standard of living that they did during marriage. Oftentimes this is an impossibility simply because there isn’t enough money to go around. In most spousal support cases one party earns a significantly greater yearly income, and even though that income can comfortably support one household it is often a stretch for that money to cover two households.

The lawyers at Bobzien McGuire specialize in all facets of domestic relations law, including spousal support. You can reach an attorney at Bobzien McGuire by calling (503) 245-0894. Alternatively you can learn more about the firm by looking at our website which is located at Portlandfamilylaw.com.

Administrative Law Child Support Hearings

Parties with minor children can petition the State of Oregon to modify child support payments every three years, or anytime there is a “substantial change of circumstance”. ORS 25. 020 (8)(b)(B). A substantial change of circumstances typically means one of the parties experienced an increase or decrease in gross income, or there is a significant change in the parenting time schedule.

Before the Administrative Hearing occurs both parties have the opportunity to participate in a process called discovery. That is, before the hearing you can request financial documents, health insurance records and other pertinent documents for puposes of calculating child support.

The actual hearing is done telephonically. Both parties call a pre-arranged phone number and have a conference call with the presiding judge. The parties present on the conference call are the judge, the parents, and their respective attorneys, should they choose to have legal representation.

The telephonic hearing is conducted in standard courtroom procedure. Both parties (or their attorneys in their stead) have the opportunity to make opening and closing statements. Everybody who testifies does so under oath and the penalty of perjury applies. There are opportunities for direct and cross-examination as well.

Once the hearing concludes, the Administrative Law Judge will typically mail their findings of law and fact to the respective parties within one week. The resulting findings include your new child support payment amount. If either party is dissatisfied with the findings, they have the opportunity to appeal the order in Circuit Court.

The lawyers at Bobzien McGuire have experience in all facets of child support proceedings, including the administrative child support process. Call (503) 245-0894 today for a consult.

The Ins and Outs of a Prenuptial Agreement

Obtaining a prenuptial agreement can be one of the best financial decisions someone makes in their entire lifetime. A valid prenuptial agreement can protect virtually any asset. The following is a partial list of assets that a prenuptial can protect:

1. Equity in real property

2. Retirement accounts

3. Brokerage accounts

4. Future or present inheritances.

Once again, this is not meant to be a complete list of assets that a prenuptial agreement can protect, just a sampling.

Without a prenuptial agreement in place it is possible that your assets will be subject to an equitable division, should divorce occur. In other words, your future partner could be entitled to up to half of your assets.

In Oregon there are several legal steps you need to take in order to make the terms of the prenuptial agreement valid and enforceable.

1. The agreement must be in writing. Oral agreements or oral modifications to a prenuptial are not enforceable.

2. Both parties should have independent legal counsel. That is, each party should have unassociated attorneys to advise them of their respective rights with regards to the terms of the prenuptial.

3. The agreement should be signed at least 30 days in advance of the wedding. This requirement effectively eliminates a parties’ ability to challenge the prenuptial based on surprise.

4. Bother parties to a prenuptial have a duty to disclose all assets that they intend to protect and their estimated value. If you are unclear about the value of a specific asset it is advisable that you overestimate rather than underestimate the value of the asset.

The law firm of Bobzien McGuire can help guide you through the process of creating a valid and legally enforceable prenuptial agreement. Call 503-245–0894 for more information about this process.