Family Law Lifeline : Chicago Family Lawyer & Attorney : John Steele Law Firm : IL Divorce & Adoption

Today my client sent me my monthly payment for services in a Thank You card that read in part, " Thanks for helping me to feel that I am not alone in this mess!" Last week I got a baby gift from a client who found out my significant other is expecting a baby.  Having happy, or grateful clients, who leave my office better than when they came in is a much more rewarding feeling than simply making money.   Of course one can say such lofty comments when one is not worried about the mortgage I suppose.  But I do remember my dad reminding me every so often that if a man enjoys what he does, he never works a day in his life.  And to my client who sent me the card, thanks for making my day! 

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Arghhhh! Why do a few of my clients feel the need to lie, shade the truth, omit facts, or whatever you want to call it? (I know the answer, I am being rhetorical). If you pay me to represent you, I do not pass judgment.  I am not your conscious.   When you do not tell me the truth, I will still get it.  Sometimes I get it while standing in front of a judge on the 16th floor of the Daley Center when opposing counsel is showing written proof that the statement I just made about you is total crap.  But I eventually do get the truth.  The only time I have decided to withdraw from a case is when the client kept lying to me, and wasting my time. So the moral of the story is: Tell your attorney everything.  Do not lie, and do not ask him to lie.   The only thing I have to disclose is an obvious thing like if you tell me you are going to go kill your spouse tomorrow.  I have to try to convince you to change your mind, and then I have to tell the police.  So in other words, do not kill your spouse.  If you must, don't tell me.  
Lastly, and relatedly, do not become my associate attorney, and figure out a case strategy, thereby determining what I need to know and what I do not need to know. That is my rant I had to get off my chest.  And for the 2 clients this rant is about, be happy that my venting on my blog saves you money, since I won't yell at you as much tomorrow.  

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What a wonderful time of the year for those of us who are not married, almost married, or with someone we might want to marry.  (Sarcasm alert)  Of all the Hallmark holidays, this is the one I think is most unfair, both to those who build it up to impossible expectations and to those who have to pay for the expensive dinner and gifts. Given my feelings about this special day, I filed two Divorces this morning in Cook County.  But to truly get in the spirit, I had to take it to the next level. So in honor of Valentine's Day, I am giving a presentation to a local networking group about divorce and child custody.  I was able to help educate people interested in information about the mechanics of leaving their loved ones, and all the related pieces of legally severing 'till death do us part.'  I think the heart and cupid decorations might have been a little over the top, but you have to add a little humor to a topic like divorce (or bankruptcy, or wills, or . . You get my point).For those of you who are happily in a great relationship, enjoy this day with your loved one.  I promise I am not jealous . . .  ok, maybe a little.

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Complying with a court order, or any legal agreement/obligation for that matter, is not enough.  You have to be able to prove you complied.  Why is it that people forget this simple rule.  It seems obvious to me.  Let's propose a simple hypo: You are ordered to pay child support in the amount of 1000 dollars a month.  You pay it on time in cash every month to the spouse for one year.  The spouse takes it, thanks you, and doesn't write out a receipt.  How much support did you pay at the end of the year?

Answer=$0.00

Sure the ex-spouse may testify that they got the money, and does not want the court to force the ex to pay the $12,000 again.  Right.  Back to reality .  .  .

On a related note, do not create bad paper trails.  By this I mean nasty emails or other correspondence that forces your attorney to have to defend stupid comments made in the heat of a divorce.

In summary, you want proof that you are complying with the court and do not want proof that you are a jerk. Easy right?

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No this is not a post about the two certainties in life, but rather how one affects the other.

I will not pretend to even scratch the surface of tax law in a blog post, just a couple of helpful tips:

If you are married at 12:00 midnight on December 31st of Year X, you can file a joint return.  If you get divorced on Dec 30th, you CANNOT.

Alimony (its now called Maintenance for P.C. reasons) is not taxable to the person giving it, it is taxable to the receiver.  The opposite is true for child support.  This is very important (see the next point)

Oftentimes, the two spouses are in different tax brackets.  So $1000 in gross income might equate to $650 in after tax income to one spouse and $800 to another.  If spouse 1 in the higher tax bracket can shift the tax burden to spouse 2, spouse 1 can give more money and still pay the same in taxes:

Scenario #1

Spouse 1 pays $1000 in monthly child support, no reduction in taxable income or tax bill. His tax bill on the money he does not see is $4200. Ouch.

Scenario #2

Spouse #1 pays $1200 in monthly alimony, reduces his taxable income by $14,400, reducing his tax bill by  $5040. Reduce that savings by the extra $2400 he pays for the year ($200 a month more), and he still saves $2650. Spouse 2 has to pay tax on alimony, but since their tax bracket is normally MUCH lower, spouse 2 either pays none, or minimal tax. Even if Spouse 2 is in the 20% bracket, they only pay $2,880. The difference between $5040 and $2880 equals $2160 insavings due to simple financial planning. The bigger the numbers, the bigger the savings.

There are many legal tricks available to save parties money, and more importantly, get the two sides to agree.  If spouse 2 gets more money than they would otherwise, and Spouse 1 saves more then he would otherwise, compromises become a lot easier.

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 I know, this blog is about divorce, but I also do estate planning, and the two are intertwined.   So here is short article I wrote for a newsletter:

DIFFICULTY LEVEL - EASY

Payable on Death Accounts- you designate a person to receive all the money in a given bank account upon your death.  That person only needs your death certificate and I.D.  Best for single people.

Retirement Accounts- Great because they skip the entire probate process.  Simply name a beneficiary and like P.O.D. accounts, proof of death triggers the account custodian to hand over the money to the beneficiary.

DIFFICULTY LEVEL - MEDIUM

Joint Tenancy with right of survivorship-Simple way to designate ownership so that when one of the joint tenants dies, the remaining joint tenants own the entire property.  For example, if 3 people own a piece of land in joint tenancy, and one dies, the remaining two joint tenants own the land.  When one of those tenants dies, the last joint tenant owns the entire property outright.

DIFFICULTY LEVEL - GET A LAWYER

Revocable Living Trusts- An incredible legal tool designed to circumvent probate, it allows someone to place land, personal property, or essentially anything they have title to into the name of a trust, with a person who administers the trust who is called the trustee.  Technically the trustee now owns the asset, but they are required to keep it for the benefit of the "beneficiary".  An attorney, after reviewing your overall assets and related factors, will design one or more trusts that can

Will - Everyone should have them, only 30% do.  This is the centerpiece of your estate plan.  Many times, it can handle all of a person's needs.  Done properly, a will does not have to be replaced for many, many years, if ever.  Adjustments (named 'codicils') can be made to wills very easily. 

Why is all this planning good?  There are the standard reasons: Minimize taxes from the federal and state government, control the disposition of your assets, determine how you are to be cared for if you are incapacitated, make your final wishes known to your loved ones, the list goes on. 

But my personal favorite is that Wills and other estate planning tools reduces or eliminates family strife.  I have seen families torn apart by poor estate planning, as siblings fight over what they envisioned what their father would want.  Do not assume your children, or loved ones know how you want your property to be divided or your remains to be handled.  Additionally, family members tend to remember what they want to hear, whether it be how you wanted the house divided up, or what kind of care you wish to have if incapacitated.

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