Professionals across the board are struggling to determine what changes the Tax Cuts and Jobs Acts (TCJA) which was signed into law on December 22, 2017 will have on their businesses and their client’s businesses. The TCJA is 479 pages long and the IRS is still writing regulations as to how they are going to interpret it.  Simply put this is going to be a long process.

An issue of particular importance to business owners going through a divorce is what effect the TCJA will have on any business evaluation that might occur as part of the divorce. Often a business is the largest asset in a marriage.  Getting a proper value of that asset is essential.

The TCJA has changed not only the tax laws, but how business appraisers are going to perform their appraisals. Some of the provisions in the TCJA for businesses are permanent; and some are temporary.  Knowing which ones are permanent; or temporary is vital.  The TCJA brought numerous changes to how businesses are taxed which effects how they are valued.  One of the largest changes is the reduction of the effective tax rate for corporations and small and medium pass through entities.  The TCJA also changed the calculation of taxable income for businesses.  These two changes together can be significant if a business evaluation is being performed using an Income Approach.  In theory there should be more income for businesses.  Does this equate to a higher value?  Maybe yes, maybe no.

Also of concern is not all companies are treated the same under TCJA. For example, many professional service companies lose out under TCJA when compared to other businesses because the deductibility of qualified business income phases out.  Once it phases out they are taxed at a higher rate.  Professional service companies are any business who provide professional services such as:  lawyers, accountants, doctors and performing arts to list a few.  The type of business being appraised is a significant factor in its value.  An appraised value for an accounting practice with $315,000 in income could be vastly different than an appraised value for a construction company bringing in the same income, even if they are both LLCs.

This is the tip of the iceberg that attorneys and business appraisers are facing for their client’s in having businesses valued under the TCJA. The best way to protect yourself with regards to a business evaluation is to retain not only an attorney well versed in the issues involved, but a business appraiser who is familiar with the new tax law.  If you have questions regarding business appraisals please contact the attorneys at Iandoli & Edens, LLC at 908-879-9499.

TaxesPreviously we wrote about the new tax law (known as the 2017 Tax Cuts and Jobs Act) and how it will impact alimony and child support, but as promised we are still following the law and its potential impact on family law cases.  One of the latest concerns is how the law will affect pre-nuptial agreements.  Often one of the primary goals of a couple entering into a pre-nuptial agreement is to determine the terms of alimony both in duration and amount in the event of a divorce – this is agreed to prior to getting married through the pre-nuptial agreement.  The pre-nuptial agreement is a contract with certain terms and understandings on the part of both parties.  In the case of alimony and pre-nuptial agreements that were entered into prior to 2018 the most likely understanding was that the alimony would be deductible income by the party paying it and reportable income by the party receiving it.  However, under the new tax law if the parties are divorced after January 1, 2019 alimony will be a non-taxable event.  Effectively the new tax law has changed the terms of the contract.

Where does this leave the parties?  Is the pre-nuptial agreement still enforceable if a major term of the contract has changed?  What can married couples do that have an existing pre-nuptial agreement?  What should potential couples do who are planning on entering into a pre-nuptial agreement?   The answer to these questions is the parties should discuss their concerns with qualified legal counsel.  There are numerous ways to proceed.  The parties could renegotiate the alimony portion of the pre-nuptial agreement to reflect the reality of the new tax law.  The concern of course is if one term of the pre-nuptial agreement is being renegotiated does that open-up the possibility of renegotiating other terms.  Is this something a happily married couple wants to do?  Another option would be to leave the pre-nuptial agreement as is.  It’s possible that the new tax law might be changed in the future.  Every pre-nuptial agreement, like all divorces, is fact sensitive.  If you have a pre-nuptial agreement we suggest that you review it with legal counsel so that you understand your agreement in terms of the new tax law; and that you understand the options open to you.

Next week we will address the new tax law and its possible impact on a business evaluation during a divorce.

If you have any questions regarding the new tax law and how it may impact your divorce we are available to discuss your concerns with you, please call our firm at 908-879-9499.

eyeTechnology has changed the way we all live. The way we get our news.  The way we purchase products.  The way we learn.  The way we communicate with our spouse and children.  And the way we stalk.  Yes, the way we stalk.

A recent unpublished Appellate Court decision upheld a Final Restraining Order entered by the trial court which found the Husband guilty of stalking under the Domestic Violence Act because he used his iPad and iPhone to record his estranged Wife’s movements and communications within their home while he was on an out of state trip. The parties were already in the middle of a divorce at the time but continued to live in the same home.  The trial court found that the Husband was recording the Wife’s conversations and movements with an iPad and iPhone in order to achieve an upper hand in the divorce.  The Husband’s actions were egregious enough that he was found guilty of stalking his Wife.

According to N.J.S.A. 2C:12-10 a person is guilty of stalking, a crime of the fourth degree, if he purposefully or knowingly engages in a course of conduct directed at a specific person that would cause a reasonable person to fear for his safety or the safety of a third person or suffer other emotional distress.

Technology is increasingly used as a method to stalk, intimidate and harass. Trial courts have found defendants guilty of harassment under the Domestic Violence Act as a result of sending a series of harassing text messages to the victim and sending harassing messages via Facebook.  New Jersey even has a cyber-harassment statute independent of the Domestic Violence Act.  The cyber-harassment statute is not limited to the realm of family law.  Three middle schoolers in Sussex County were charged in 2017 with cyber-harassment.  Both adults and children should be aware of the fact that communications via e-mail, text, Instagram, Facebook, Snapchat and whatever the next technology trend is can and will be used against them if used inappropriately.

If you have any questions regarding the Domestic Violence Laws in New Jersey we are available to discuss your concerns with you, please call our firm at 908-879-9499.

Hopefully, everyone by now has filed their 2017 taxes. Or at the very least filed for an extension.  Unfortunately for 2018 that’s not the end of the story.  The next step should be to review your 2018 withholdings.  Withholdings are something that should be reviewed periodically to ensure that you are not withholding too much or too little from your paycheck.  Neither is generally a good thing.  As family law attorneys we are keenly aware of the importance of withholdings to our clients’ bottom line.  When parties get divorced withholdings should always be reviewed and most often changed as your filing status is changing.

Now the Federal Government has given us a new reason to review withholdings – the Tax Cuts and Jobs Act which was passed in 2017. The new law changes among other items: tax rates, tax brackets, deductions and exemptions.  Whether you support or oppose the new law there is little doubt that it’s going to affect your taxes.

Of particular significance to divorced parents is the removal of personal exemptions from the tax code. Prior to the new tax law the issue of who could claim the children was often fiercely negotiated.  The parent who was permitted to claim a child in any given year also received an exemption for that child.  Typically, the right to claim a child on taxes was alternated between the parents from year to year.  Now there is no exemption to receive so who claims the child may matter less.  Or it may matter more because the child tax credit has been expanded.

The best way to review your withholdings and your tax returns would be to speak to your tax professional. However, we at Iandoli & Edens, LLC will keep monitoring how the revised tax code will affect our clients and keeping you updated.

If you have any questions regarding your separation, divorce or custody we are available to discuss your concerns with you, please call our firm at 908-879-9499.

Last week we posted about the Parents’ Education Program which is one of the ways the New Jersey Courts help parents who are going through a divorce or separation address custody and parenting time issues. The Parents’ Education Program provides parents with an introduction to the Court system and to the concepts connected with how to successfully make one household into two.  Few issues are as emotionally charged as those dealing with children.  The New Jersey Courts not only recognize this but offer parents Custody and Parenting Time Mediation to help them to control their own future and that of the children.  It is generally accepted that families are happier if they are the ones making the plans.  Custody and Parenting Time Mediation give the parties not only the opportunity to do make the plans,  but the assistance of a trained mediator to assist them.

The mediator addresses the different types of custody – legal and physical.  Most often joint legal custody is recommended.  Joint legal custody allows both parents to have equal say in significant issues such as health, education and general welfare.  Both parents have a say regardless of  whom the children live with the majority of the time.  It is important to remember that divorcing your spouse does not mean divorcing your children.  Both parents can be meaningfully involved in their children’s lives while living in separate houses, sometimes when living in separate states.

Physical custody is connected to where the children spend their time. Whomever has the children the majority of the time has physical custody.  That parent is designated at the Parent of Primary Residence and the other parent is designated as the Parent of Alternate Residence.  The mediator will help the parties reach an agreement on weekday schedules, holiday schedules, summer vacations and birthdays.  As well as any other event that might be significant to that family.  An important part of mediation is its flexibility.  Different families have different needs.  There is no one plan fits all.  Through mediation each family can craft a plan that serves them best.

If mediation is successful, the mediator will prepare a Memorandum of Understanding, which will be sent to the parties, or their attorneys if they are represented by counsel.  If the Memorandum of Understanding is accepted by the parties it will be incorporated into a Custody and Parenting Time Consent Order.  This allows the parties to focus on other aspects of their litigation knowing that the issues surrounding their children have been resolved.  There is substantial financial and emotional savings to the parties if they can resolve custody and parenting time through mediation.

If you have any questions about custody and parenting time we at Iandoli & Edens, LLC will be happy to discuss your concerns with you, please call our firm at 908-879-9499.

It’s difficult to tell by the weather outside and the snow that’s lingering on the ground, but for many families in New Jersey Spring Break is upon us. Which raises the question:  Where will your children be spending Spring Break?  People often think that custody is highly litigated in divorce actions.  This is true sometimes, however as a general rule it’s not custody that causes problems, but parenting time.  Holidays, weekends and vacations are a vital part of parenting time because they are the fun part.  Weekdays are all about work for parents and children – getting to school, getting home from school and getting ready for school the next day.  Weekends are about fun.  How to split up those weekends is less fun.

Fortunately, the New Jersey Courts have systems in place to help parents resolve these issues. Initially, if a Complaint for Divorce is filed in New Jersey and there is a child under the age of 18 both parents are directed to attend a Parents’ Education Program.  The goal of the Parents’ Education Program is to promote cooperation between the parties and to assist parents in resolving issues connected to their children that may arise during the divorce or separation process.  A few of the goals of the program are:  Understanding the legal process and cost of divorce or separation; understanding the financial responsibilities for the children; understanding the interaction between parent and child and the family relationship during a divorce or separation; understanding how children react to divorce or separation and understanding how parents can help their children during the process.

The parents are scheduled for separate programs. The programs themselves are offered throughout the month, both during the day and after work, in order to make it convenient for parents to attend.  This is the first tool that the New Jersey Courts have to help in parents in understanding the process and hopefully in being able to reach an agreement as to parenting time.

Which still leaves the question of: Where will your children be spending Spring Break?  Or maybe this year the question is:  Do your children have Spring Break or did they lose it to snow?

If you have any questions about custody and parenting time we at Iandoli & Edens, LLC will be happy to discuss your concerns with you, please call our firm at 908-879-9499.

Is child custody in divorce cases moving towards (or already at) a presumed 50/50 split?  That is one of the first questions that is frequently asked at an initial consultation with a divorce attorney.  The answer is complex, bringing in many factors.  It is true that the Courts seem to be leaning towards the children having as much contact with both parents as possible.  One of the factors to be considered, however, includes the ages of the children, whether they are very young or teenagers.  Another dynamic is the working responsibilities of the parents, such as frequency of business travel or shift work.  Further, since one of the factor in child custody is the best interest of the children, their individual personalities come in to play.  To find out more about whether 50/50 custody is the best answer in your divorce, call IANDOLI & EDENS now at 908 879 9499 for a free consultation with our divorce and custody experts.

Now that a member of Trump’s staff has resigned because of allegations of domestic abuse perpetrated against two ex-wives, the topic is again being brought to the forefront.  Many people still believe that domestic violence only occurs in families with drug addictions, alcoholism or poverty.  Over and over we hear, “how can it be possible?” (s)he is a CEO, doctor, businessperson.  He or she is liked and well respected in the community.  Everyone should be reminded that domestic violence crosses into each and every part of our society.

In New Jersey, marital settlements are determined by many different factors, including, length of the marriage, assets each party may have brought in to the marriage, as well as intangible issues such as how “fair” each party wants to be with the other, or how much do they want to fight. Although many if not most celebrity divorces are sealed, it was known that Tiger Woods paid $750,000,000 in his divorce, Mel Gibson $425,000,000 in his and Michael Jordan $168,000,000 in his.  Obviously, each of these divorces have a wide and varying range of facts, the most important first step is to speak with an attorney and get the factors that will affect your particular case.  Your settlements will most likely not be in the range of these celebrities, but to get the facts for your case call one of our experienced attorneys at IANDOLI & EDENS (908) 879-9499.

The passing by the House of Representatives and the Senate of their respective tax reform bills has certainly been headline news over the past month. President Trump, Representatives and Senators on both sides of the aisle have provided sound bites on the reform.  What has been significantly overlooked by the mainstream media (at least in the opinion of a divorce attorney) is the proposed changes to alimony.  Under the current tax law alimony paid by one spouse to the other is deductible by the spouse paying alimony and includable in the gross income of the spouse receiving the alimony.  This has been the law for decades.  Under both versions of tax reform bill this would no longer be the case.  Alimony would not be deductible by the payor spouse.  Nor would it be included in the payee’s income.  The tax impact on the parties could be significant.  Fortunately, it appears that parties who were divorced prior to the end of 2017 will be grandfathered in under the current law.  However, moving forward the new tax law will certainly have an impact on alimony negotiations between parties.  Additionally, there are many other potential changes in tax reform bill, including changes to the tax brackets and allowable deductions.  It is likely that not only alimony, but child support will need to be reevaluated based upon the new tax reform bill if it becomes the law of the land.  We at Iandoli & Edens, LLC will be following the status of the tax reform bill closely in order to serve our clients.  If you have any questions about the divorce process, please call Iandoli & Edens at 908-879-9499.

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