Divorce and Religion

Katie Holmes has filed for divorce from Tom Cruise in the state of New York.  Given her possible issues with the religion of Scientology, Retired Superior Court Judge in California, Eugene Hyman believes she will receive more favorable treatment by a New York Court.  So, how does religion play a part in divorce?

Judge Hyman says that religion in a divorce case comes up very infrequently but when it does, courts try to stay out of it because of the concerns with respect to the First Ammendment and a person's right to practice religion, and scientology is a religion.   If one parent feels strongly that a particular religion is not in the best interest of the child, the religion is not in of itself a determining factor.  The question is is how it's practiced and what is in the best interest of the child when talking about the religion and if it's being practiced in a way that's detrimental to a child.

In the case of Katie Holmes and Tom Cruise, there are two other children, from his previous marriage involved and one might wonder if that would have an impact on any decision a judge would make.  Judge Hyman says that if he were the judge on this case, he would want to know how the other two children were doing and if there was any odd behavior.  He would want to know what Katie Holmes observed during times spent with the other two children in terms of religious practice.  He would also want to obtain information from a psychologist and see if there were any detrimental effects if the child was exposed to the religion.

Judge Hyman adds that in the state of California, religious promises made in a pre-nup are not binding because of the best interest of the child standard and that standard is viewed at the time this is brought before in a court.

Honorable Judge Eugene Hyman has received numerous awards and recognition for his work with families and children and has appeared on numerous television news shows.  For more information, visit www.judgehyman.com.  He is also a featured commentator on The Family Law Channel and The Legal Broadcast Network.

Divorce And Taxes

In divorce cases, there are simple rules applying to taxes.  Most people, however, get this wrong, even with professional help.  According to Attorney Robert Wood, one of the nation's premier experts on taxation, taxable damages, structured settlements and qualified settlement funds, the fundamental rule that causes most tax problems, is section 1041 of the internal revenue code: transfers between spouses during marriage or on cessation of marriage aren't taxed an unlimited amount of money.  There are also timing rules about how long after a marriage ends that the rules apply.

Robert Wood says, "the notion that something is a tax-free transfer doesn't mean that you don't have to plan for taxes in the future."  If a home is given to one spouse during the divorce settlement and the value of the home has increased, that spouse has to assume the tax liability of the home.

Alimony, or spousal support, is actually considered income to the spouse receiving the alimony and tax-deductible by the spouse paying the alimony.  Seems simple enough, right?  There are numerous IRS audits on both sides of a divorce finding that someone who is receiving alimony thinks it should be a property settlement and not income - and someone who is paying property settlement thinks it's like alimony and should be able to deduct it. 

Bottom line is when it comes to divorce, whether it's involving sizable amounts of money or not, the help of a professional is advised to help navigate through the tax rules.

Read Attorney Robert Wood's article on Forbes.com about this topic and for more information on Robert Wood, visit his website at www.woodporter.com.

Robert Wood is also a featured commentator on The Legal Broadcast Network and the Tax Law Channel.

Can Divorce Documents Remain Private?

For celebrities, being a public figure comes with the territory.  The question is, what part of their private lives should remain private? 

No one likes airing out their dirty laundry and high-profile people are no exception.  That’s why most celebrities and high-profile figures keep the details of their divorce settlements private, especially when child custody issues are involved.   Unless it is a juvenile case, it is impossible to seal an entire judgment, according to notable retired Superior Family Court Judge of California Eugene Hyman.  With good, smart lawyers however, parts of the judgment can be sealed.

There are different laws in different states in terms of allowances of what and what cannot be filed in terms of a judgment.  Judge Hyman says that what can be done is to start with a basic document and that document makes reference to other documents that is the existence of other documents, without the specificity of what those other documents provide.

Another alternative to keep judgments private is going to private judges, through arbitration or mediation where orders are made by the arbitrators or mediators and these orders reference certain documents.  It takes some effort if both parties want things private but as soon as one says no, it’s public.

Regarding child custody issues, in the divorce case of Tom Cruise and Katie Holmes, if Tom wanted to hypothetically send their daughter Suri to scientology camp and Katie says no and it can’t be resolved themselves, they would need to go to a courtroom, decreasing the likelihood it would remain private.  Source: www.celebuzz.comValuations of a child would remain private but the decision a judge would make would likely be public.  Parties can go to a private judge to keep things private as well.

Typically, when there is a child involved, both parties usually want to keep things private, as this is in the best interest of the child.  When this is the motivating factor, it is more likely both parties will work together to achieve that.

Eugene Hyman is a retired Superior Court Judge of California for the County of Santa Clara.  In addition to his numerous appearances on tv news shows, he is a featured commentator with The Legal Broadcast Network.  For more information, visit www.familylawchannel.com and www.judgehyman.com.

Allstate Financial announces "Divorce structured settlements" now available

Allstate Financial today continued it's tradition for innovation and expansion in the structured settlement marketplace by announcing to brokers nationally that Marital Property Transfers, ie Divorce settlements, are now eligible to be structured using their Allstate International Assignments, Ltd, facility and Allstate Life Insurance Company as the funding mechanism.

 

This one area of structured settlements has been for the settlement planners who specialize in structured settlements in taxable damage situations, sort of the holy grail, as it is an area of the legal profession where there is a lot of activity and financial planning stress due to the nature of the situation involved. Now with the ability to use a structure to bridge the negotiation gap between parties, the potential exists to provides real value to both sides of the transaction in money saved and security added. 

Mark Wahlstrom, the host of The Settlement Channel will be doing a commentary on the entire process later this week on Settlement Expert TV, and at that time will provide a more detailed tutorial on how structured divorce settlements work, the tax implications and advantages for both parties if they elect to structure a divorce settlement and who might be most interested in pushing funds into future years and securing cash flows. 

Obviously the initial benefit of a marital property transfer being funded through a structured divorce settlement is the payer gets a full tax deduction for the amount funded, while the beneficiary of the payments has a secured cash flow from a AA+ rated credit and only pays taxes on the funds in the years in which they receive them. Mark will discuss the creative application of this powerful tool in his commentary later this week. Until then to learn more about the Allstate Financial divorce structured settlement program, go to Wahlstrom & Associates web site and contact Mark Wahlstrom for more details. 

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