Chicago Divorce Planning for the New Year

With 2019 coming to an end, now is a great time to take a moment and think about the new year ahead. The new year signals a fresh start – the opportunity to change your approach, your mindset, and possibly, your life. If you find yourself in the midst or on the verge of a divorce, we hope the new year brings closure, happiness, and the chance to reinvent yourself as you move forward. In order to put your best foot forward, it’s important to think about what lies ahead so that you can prepare and act accordingly – especially so when you are going through a divorce. The moving parts of a divorce impact everything from your financial position, to your time available, to your mental and physical health, and it’s important to think about what you may encounter in the year ahead in order to ensure you are prepared and ready to move forward!

Tax returns –

Parties can file a joint tax return for a particular calendar year so long as they are legally still married on the last day of that year. Accordingly, although you might have recently filed for divorce, or have been involved in a pending divorce for quite some time as you begin to think about your taxes, you can still file jointly with your soon-to-be ex-spouse. Many parties elect to do so despite the fact that they are divorcing in order to share in the benefits and incentives offered vis a vis the “married, filing jointly” status. Ultimately, if it will save the parties money or create a larger refund to be divided between them, filing jointly is advised as it is presumably in the best interest of all involved.

There are a few considerations to keep in mind if you find yourself filing your taxes jointly: first and foremost, filing jointly requires a certain amount of cooperation. Both parties are responsible for providing all of the necessary information in order for the taxes to be prepared – so any delays in cooperation or failure to disclose complete documentation by either party ultimately impacts both of them. Additionally, the taxes should be prepared by a trustworthy third party; in many instances, parties have worked with an accountant or tax preparer throughout the marriage, and he or she is a natural choice. However, if this is not the case and a new preparer must be chosen, this will again require the cooperation and agreement of the parties.
Should the parties’ tax return result in a liability, there will need to be arrangements made to make the payment. These arrangements depend in large part on whether the liability is marital or non-marital; if the tax is owed based on income earned by one party during the marriage that benefited the family as a whole, it is often considered a marital liability that should be paid with marital funds. Similarly, if the parties are entitled to a refund that is deemed marital property, how the refund will be shared between them must be determined as well. The parties can agree on these arrangements, or they can be left for the court to determine in the ultimate division of their property.

Jobs and income changes –

It’s also a great time to look at your employment and or your spouse’s employment and related income as you take stock of the coming year. Are either of you expecting or eligible for a promotion, and potentially a salary increase? Do either of you typically earn a bonus, and if so, when is the bonus received? If it is a discretionary bonus, how will you know if your spouse earns it? Are either of you expecting any alternative forms of compensation (vesting stock options or other benefits)? Additional income and earnings may impact either party’s support obligation (during the pendency of the divorce as well as on an ongoing basis thereafter), and payouts, stock options, and other assets could also potentially affect the property division. If the two of you are no longer sharing a joint bank account, this is something to be mindful of; keep in mind that both parties have an ongoing duty to supplement their discovery production, so bank statements and paystubs should continue to be exchanged throughout the pendency of the divorce so that parties’ actual incomes and assets can be ascertained.

Children’s schedules and related expenses –

If you have children, will anything be changing about their current living arrangements?
If you are still living in one house but plan to transition into two separate households in the coming year, advanced planning can help make the transition as smooth as possible. If one or both parties will be moving out of the marital residence, it’s important to take into consideration the children’s schools and other activities – moving within a reasonable distance so that the children can continue attending the same schools and participating in the same activities is often the parties’ principal goal. Of course, this is not always possible; if not, the parties will want to begin exploring new school options as soon as possible once one or both new residences are located. Along with a potential move also comes a potential change in the parties’ parenting time schedule. Will an entire new schedule need to be established?
Although it is far off, it also helps to look ahead to the summer. For young children who have summers off from school, figuring out their plans for the summer, and who will care for them, is extremely important. If one parent has a more flexible work schedule, it may make sense for them to have additional parenting time during the summer; often times, parents also rely on the help of additional caregivers like grandparents to bridge the gap during these times. If parents prefer for the children to attend day camps, this option should be explored sooner rather than later so plans can be solidified and costs can be ascertained.

Whether children are in private school or public school, attend day camps or stay home during the summer, or are involved in activities every day of the week, there are costs associated that parents must be prepared to cover. These costs can be cyclical and increase significantly at certain times of the year – a large fee may be due at the beginning of the summer for day camp, tuition may be paid in quarterly installments, and so on. Even if a support obligation is in place and/or the parties are ordered to share certain costs, it helps to be aware of times when higher expenses may be due so that parties can plan accordingly.

Vacation and holiday plans –

Additionally, many families have routine summer vacation trips that they take, or have standing holiday plans with one side of the family or the other that require travel and/or a few days away from home. If this is the case for your family, it’s something to think about far in advance so that you can work out any scheduling issues that may arise, especially if you are in the process of negotiating a parenting time schedule. While it may not be possible to continue these plans every year as had been done in the past during the marriage, by voicing the desire to continue attending these events with the children as frequently as possible, parties can ensure that they are taken into consideration as the schedule is finalized.

Importantly, voicing these concerns in advance makes it feasible to seek the court’s intervention in the event that the parties cannot agree. In the alternative, if a party makes a last-minute request to travel with the children to attend a holiday event with his or her family and the other party does not agree, there may not be time to petition the court and for the court to decide the issue before travel plans need to be made; additionally, courts are not often favorable to parties who wait until the last minute and seek emergency assistance when plans could have been made, or the court’s assistance could have been sought, in advance.

The experienced family law attorneys at WARD FAMILY LAW, LLC know how to help you in planning for the next year, as well as your future. We know the questions to ask, the points to consider, and how to guide you as you consider the challenges ahead, and we look forward to helping you overcome these challenges as you begin your new life ahead!