Ms. Hess has been selected by her peers for inclusion in the 2014 Best Lawyers in America Publication. Best Lawyers is one of the leading referral guides in the legal profession. Ms. Hess will be listed in the Washington D.C. and the Baltimore's Best Lawyers special advertising supplement in the The Washington Post, The Baltimore Sun, The New York Times, and all local editions of The Wall Street Journal on Friday, September 27, 2013.
Are My Legal Fees Deductible?
Many clients wonder if the attorney fees they have incurred during their divorce are tax deductible. Generally, the IRS says no. According to Internal Revenue Code (IRC) § 262 (a), personal, living, or family expenses are not permissible deductions. Therefore, a spouse may not deduct attorney fees incurred in connection with a divorce or separation because these matters are considered to be personal. However, there are exceptions to this rule.
Legal fees in connection with advice regarding alimony qualify as a legitimate legal fee deduction. Why? IRC § 212(1) allows a deduction for expenses incurred for the production or collection of income. Therefore, those legal fees attributable to obtaining alimony or incurred to collect alimony arrears are deductible. However, attorney fees incurred by a spouse to defend an award or collection of alimony are not deductible.
Another legitimate deduction is for expenses related to tax advice. IRC § 212(3) allows deductions for all ordinary and necessary expenses paid or incurred during the taxable year in connection with the determination, collection, or refund of any tax. In the context of a divorce case, this means advice regarding transfer of property; dependency exemptions; characterization and treatment of alimony obligations; and income, estate, and gift tax consequences resulting from a trust to discharge an alimony obligation are permissible deductions to the taxpayer who incurs these expenses.
If you are planning to deduct some of your legal expenses, your attorney will need to determine what portion of their bill relates to deductible advice and provide an itemized bill. Otherwise, your legal fees will likely not be considered legitimate deductions by the IRS. Since tax laws continually change it is important to consult with your attorney and/or a tax professional for specific tax advice.
Spending Time with the Kids: 2013 Duck Splash Festival
Are you recently separated or divorced and looking for an activity to do with the kids that would be fun but not cost a lot of money? How about attending the 2013 Duck Splash Festival at Washingtonian Center in Gaithersburg, Maryland.
The event, to be held on September 28th from 11:00 a.m.-4:00 p.m., promises free activities and live entertainment. At approximately 3 p.m., 10,000 yellow ducks will splash into the lake. Anyone who adopts a duck ($5) will be entered for a chance to win great prizes. All proceeds benefit Arc Montgomery County which supports children, youth, adults, and families affected by intellectual and developmental disabilities.
If you attend, don’t forget to take lots of photos so that together you can relive and discuss the memories you made together.
A new school year can be stressful for any family, but it can be especially stressful for a family when parents are newly separated or divorced. Questions may arise such as: Whom does the school call first if there is a problem? Who pays for school supplies? Do you need school supplies in both households? What activities will your child participate in? Some of the answers may be addressed by your Court Order or Agreement, but if you do not have one, or even if you do, there may not be clear answers.
Many experts agree that divorced or separated parents should be on the same page when it comes to their child’s school. The most important things parents should do are communicate, coordinate, and cooperate. For some this may be easy, but for others this can prove to be difficult, especially if your divorce was not amicable.
Did You Know? Getting Over A Divorce Can Take Time, A Long Time.
At Hess Family Law we get to see people going through one of their most difficult and trying times in their lives, a divorce or other family law disputes. In addition to experiencing emotional turmoil and mourning their lost relationship, divorcing persons also have the additional stressor of having to navigate the legal process.
There is a healing process. And it takes time. How much time? Elizabeth Bernstein in her article “After Divorce or Job Loss Comes the Good Identity Crisis” points out that experts say most people need two years to recover from a separation or divorce.
You need time to recover from the grief of your lost relationship. You need time to restructure and rebuild your life. Know that it is okay to not be okay, for a while.
Here at Hess Family Law we are aware that each client has different abilities and limitations as they go through the healing process. We approach each client as an individual, and assist each client through the legal process in a manner each client can effectively handle.
Practical Advice for Successful Co-Parenting
Dr. Edward Farber, a licensed Clinical Psychologist in Virginia and Maryland, and a partner at the Reston Psychological Center, recently published a book titled “Raising the Kid you Love with the Ex you Hate.” Based on his years of experience, Dr. Farber’s book offers practical advice for successful co-parenting. This book will tell you the why's and the how's of:
Both parents together telling the children about the separation and/or divorce.
Determining the right time for you and your spouse to inform the children about your separation and divorce. Over the weekend and in the early afternoon is a good time so that there can be several conversations throughout the day. A conversation at bedtime is not a good idea unless you want your child to be up all night.
Knowing what to say, and not to say, to your child about separation and divorce.
The importance of being honest with your child.
The importance of providing concrete information about how the separation will affect the child's daily and weekly routine, but not providing too many specifics that may overwhelm the child.
The how and when of introducing your child to your new residence, which should be done slowly and in stages.
Coping with child support and other money issues.
Handling the holidays and special family occasions .
Choosing and adjusting to new schools .
The when and how of introducing your child to a potential new partner.
Co-parenting when an ex has a personality disorder, addiction problem, or is a bully.
- Raising a healthy child while co-parenting.
I highly recommend this book to clients who have children and are contemplating or in the process of a separation or divorce. And, despite the title, I recommend this book for all clients, not just those in a high conflict divorce and co-parenting situation.
Governor Martin O’Malley recently made history when he appointed the first female chief justice to the Maryland Court of Appeals. Mary Ellen Barbera is not only the first female chief justice, but she is also the first chief justice from Montgomery County.
The Governor also appointed the first black woman, Judge Shirley Watts, to the Court of Appeals. If the Maryland Senate confirms these appointments, Maryland will be one of only eight states to have a female majority on the high court.
Ms. Geraldine Welikson Hess and Hess Family Law has a case pending in the Maryland Court of Appeals. The case is scheduled for oral argument during January 2014. All seven judges of the Court of Appeals hear oral arguments unless a Judge recuses him/herself from a case. Ms. Hess is likely to appear before Chief Judge Barbera and Judge Watts in January 2014.
Worried your Soon to Be Ex-Spouse is Hiding Income?
Dawn and Kevin have been married for fifteen years and recently separated. Kevin owns a business which he agrees is marital property. Despite the fact that the business thrived during the marriage, Kevin insists the business has been steadily declining. Dawn is skeptical and wonders if business is truly declining or if Kevin is hidding some of the business income. Dawn worries whether she will be able to prove the real value of Kevin’s business, and Kevin's real income.
Dawn understands that Maryland is an equitable distribution state (equitable does not always mean equal), but it is important that she and her attorney determine whether Kevin’s business is really declining or whether he is hiding income. In his article, Hunting For Hidden Cash in Divorce Proceedings, Ben Steverman discusses how a Los Angeles based forensic accountant, Mark Kohn, finds hidden money.
Typically, forensic accountants are hired in divorce cases to help an estranged spouse discover hidden business income. Often income is hidden in the form of fake business expenses. Other times business owners hide income by taking payments in cash and underreporting revenue. Although a spouse may report a certain salary to the IRS, their lifestyle may suggest a much higher income. It is important to look at a person’s lifestyle, both pre-separation and post-separation, when determining whether assets are being hidden. Is a spouse’s spending consistent with their reported income? Do they drive expensive vehicles, take high- end vacations and/or live in large expensive homes, but report an income too low to fund thos expenses? Kohn cites an example of a husband who reported income of $500,000 but was actually earning $2 million. The extra $1.5 million was hidden in phony business expenses, and the cash was used to fund personal expenses.
If a business owner hires various accountants to handle different aspects of their business and personal affairs, Kohn suggests that a spouse should see this as a red flag. It implies that their soon to be ex-spouse does not want to reveal their full finances to any one accountant. A business owner can include doctors, lawyers, accountants and restaurant owners.
At Hess Family Law, we will help you assess your situation and options if you think your spouse is hiding income.
Are you wondering where to view the fireworks this July 4th? If you are planning to be in Montgomery County, Maryland, you have several options.
The City of Rockville will be hosting it’s annual Fourth of July Celebration held at Montgomery College Rockville Campus, 51 Mannakee St. The festivities will begin at 7:00 p.m. with music and dancing. Fireworks are expected to begin at 9:15 p.m.
Fireworks will also be shown in Gaithersburg at the Montgomery County Fairgrounds. Gates will open at 5:00 p.m. with entertainment beginning at 5:30 p.m. If you go, you can expect live music, strolling entertainers, and family friendly games and activities. Fireworks are scheduled to begin at dusk. If it rains, the City of Gaithersburg plans to hold the festivities on Friday July 5th.
Germantown Glory will host it’s July 4th celebration at the South Germantown Recreational Park beginning at 7:00 p.m. Fireworks are scheduled for 9:15 p.m. July 4th festivities begin at 7:30 p.m. at the annual Mid-County Sparkles July 4th celebration held at Albert Einstein High School in Kensington, Maryland. Fireworks are scheduled to begin at 9:15 p.m. Both locations plan a rain date on July 5th.
You should be aware that in Montgomery County it is illegal to possess or discharge fireworks, including gold label sparkers. You can have snap-and-pop noise makers, snakes and party poppers, but those are the only exceptions. It does not matter if you purchased the fireworks in another county or another state, they are still illegal in Montgomery County. Private fireworks displays are illegal, however, if you plan ahead and obtain the proper permits and licenses you can host a public fireworks display. See What's Legal and What's Not for more fireworks information.
Hess Family Law wishes you a fun filled and safe July 4th!
Couples who do not have Substantial Pre-Marital Assets can Benefit from a Prenuptial Agreement.
Most people believe prenuptial agreements are only for the wealthy. However, even couples who do not have substantial pre-marital assets can benefit from a prenuptial agreement. Jason Marks posted an article on Huffington Post, Prenups: Not Just for the Wealthy, where he outlines reasons couples should consider a prenuptial agreement.
1. Protect Future Earnings: A well drafted agreement can protect future earnings of a spouse’s business should the marriage fail.
2. Avoid Future Debts: A prenuptial agreement can address the parties’ respective liabilities and ensure that the debts of one party do not become the responsibility of the other.
3. Provide for Children from a Previous Marriage: Because spouses have certain rights to IRA accounts, life insurance policies and other assets, a prenuptial agreement can provide that these assets be left to the children, rather than to the spouse.
At Hess Family Law we believe that there are additional reasons couples should consider having a prenuptial agreement. Should the parties decide to separate, an artfully drafted prenuptial agreement can address who will move out, the conditions of the move, and the timing of the move. Such a provision will protect the party wanting a divorce so he/she will not be hindered by the other party refusing to separate. If the parties decide to use one party’s non-marital residence as their marital home but the intent is for the home to remain non-marital property, an agreement can state that any payments made by the other party toward the mortgage, maintenance, and/or improvement of the property will be considered a gift and not cause the property to become partly marital.
At Hess Family Law we can help you determine whether a prenuptial agreement is right for you, and if so, we can draft an agreement that will protect you and your assets should your marriage end in divorce.