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Who Gets to Claim the Children on their Taxes during a Divorce/Dissolution?

April 24, 2013Filed Under: Dissolution, Divorce, Property Division, Taxes

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Who Gets to Claim the Children on their Taxes during a Divorce/Dissolution?

This is a common problem among my clients, so I thought it would be appropriate to give a general overview on here.

Taxes can be very complicated. It is hard enough to sort out when a child is a child on line X, but not line Y, and when a qualifying dependent qualifies for the purposes of C, but not D. But who actually gets to claim the children in the first place? Like so many other legal questions, the answer is “It depends, and what it probably depends on is the judge.”

In many if not most cases, ex-spouses simply agree on who gets to claim the children. Parents who retain joint legal custody, especially in situations with 50/50 parenting time arrangements, frequently decide to split each year. This can be done by each taking half (in the case of four children, each spouse claims two), or, more commonly, the parents go year by year (Dad claims the children in year 1, Mom in year 2, etc.). The latter is generally more preferable not only because of the legal absurdity of chopping a child in two in the case of an odd number of children, which you cannot do on Ohio or Federal tax returns, but claiming multiple children frequently qualifies parents for a more favorable tax bracket, such as head of household, or qualifies them for additional exemptions or credits, like the Earned Income Tax Credit (EIC), resulting in a net gain for both parents over two years.

The question gets more difficult when the soon to be ex-spouses do not agree. Even in the most amicable dissolutions, I like to inform my client how a judge would likely rule should an agreement not be made, if only for them to better understand what is fair, or more accurately put, what the Ohio legislature and courts believe is fair.

The Ohio Legislature has given the courts a large amount of deference when it comes to divorce/dissolution agreements. However, in regards to claiming dependents, the code uses the word “shall,” a word fairly obscure in Ohio domestic relations statutes (as opposed to “may”). The codes uses “shall” to dictate that when the parties of a divorce or dissolution agree who ought to claim the children as dependents, as in the court “shall designate that parent as the parent who may claim the children.” [See Ohio Revised Code 3119.82] In cases where the parties do not agree, courts may exercise their discretion in determining who may claim the exemptions.

When an Ohio court rules that the residential custodial parent (in the case that there is only one residential and custodial parent) may claim their children for tax purposes, that is likely the end of the business. No additional analysis by the court is mandated by law, and should the ruling be appealed, the appellate court will review the decision on an abuse of discretion standard (really high standard). The court may however award the exemption to a non-residential and non-custodial parent when it rules to do so would be in the child(ren)’s best interest. Factors the courts are to use in determining what is in child(ren)’s best interest include net tax savings between the parents, the relative financial circumstances and needs of the parents/children, the amount of time the children spend with each parent, the eligibility of either or both parents for the EIC, and any other relevant factor. While statute mandates these factors be considered, how to weigh them lies in the discretion of the trial court.

That is domestic relations tax law in a nutshell. Like any other legal determination, the wisest thing to do is retain an appropriately knowledgeable attorney that knows how local judges weigh and are likely rule on each issue. Additionally, it is important to understand that complicated tax issues must be handled by a tax attorney along with your domestic relations attorney.   I just hope this article clarified a few common questions my clients frequently have.

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Embarrassing Information: What to Tell Your Attorney

March 29, 2013Filed Under: Dissolution, Divorce, Misc Advice, Property Division

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Embarrassing Information: What to Tell Your Attorney

Everything.  Excuse me.  What I actually meant was ABSOLUTELY EVERYTHING. This is one of the biggest mistakes people make when they are going through a legal matter. They think “this is irrelevant” or that “if it is important, they will ask.” Also, the devil’s in the details. Leaving out details, misleading your attorney, or worse, lying to your attorney will do nothing but hurt you down the road.

Domestic Relations law is frequently seen as a messy business. Unfortunately, many parties in these cases (and sometimes even their lawyers) prove that representation true. It can be messy because we are not in the business of drafting patents or protecting corporations, but rather mending and moving lives and families. Keeping secrets from your attorney does not make the process less messy, it just makes you vulnerable. Even if no one in the world knows something except for you, if it could conceivably hurt you, undermine you, or make you look bad, your attorney needs to know it. We are duty bound to keep your secrets except in extraordinary circumstances (like if you were going to hurt someone or were about to defraud the court). Your attorney is on your side. Better put, our side is your side, so be as candid as you can.

Big Things to Tell Your Attorney

1. Assets

Make an inventory of all assets you and your spouse hold together and separately. Note when they were acquired and under what circumstances (purchase, inheritance, lease, etc.) and the date of acquisition. You absolutely must disclose all of your assets and liabilities to your spouse when you are going through a divorce or dissolution.    You will eventually testify under oath to the court that you made a full disclosure of these things.

2. Prior Legal Proceedings, Civil and Criminal

If you have been involved in any other legal proceeding, civil or criminal, your attorney really needs to know. Tell when it happened, what happened, and what the outcome of the proceeding was (settlement, damages, convictions, acquittals, etc.). Give the case number if you have it so we can look it up, and if it happened as a juvenile, look up the case as best you can. Your attorney may need your help to get access.

3. Violence, Threats of Violence, or Harassment by You or your Spouse

Interpret this broadly. Hardly any domestic relations matter occurs without at least some form of “violent” or intense contact. This includes shouting matches or particularly heated arguments. It probably means nothing, but we need to know. If you or your spouse has ever hurt one another, even accidentally, tell us. If you have ever threatened or been threatened with violence, even if no one in the world, if there, would have interpreted it as an actual threat (i.e. “to the Moon, Alice!”), tell us. We want you to be ready for anything. Lastly, outline all the contact you have had with your spouse since you began to consider divorce. Cooler heads prevail in domestic relations, but any ugly contact from you or your spouse needs to be known by your attorney.

In conclusion, tell us everything. We are your advocate, and while I can only speak for myself, your attorney will not judge you. Your attorney only wants the most accurate picture possible so they can get you through this in the best position possible.

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5 Common Mistakes to Avoid in an Ohio Divorce

March 29, 2013Filed Under: Dissolution, Divorce, Misc Advice, Post Divorce/Custody Issues, Property Division

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Common Mistakes to Avoid in an Ohio Divorce

1. Unproductive/Negative Communications and Contact with your Spouse

This category is listed first because it is the one that seems to cause my clients the most downright misery. Unproductive, negative, and rude communication is likely a reason why you and your spouse are not compatible and seek separation. Whether or not they or you are at fault, it is a bad and ugly thing that must be avoided to the furthest extent possible, especially in divorce proceedings. Considering you have likely been so connected with your spouse (children, families, residence, etc.) for so long, it is likely impossible or unhealthy to cut off communication completely (that is of course unless there is a fear of violence), but do your absolute best to limit communications and contact to necessary and productive meetings. If your spouse insists on being negative, rude, or inflammatory, cursing at you, telling lies to friends and family, bothering you at work, etc. tell your lawyer about all this, and they will advise you on how best to react. The worst thing you can do is reciprocate or respond, even when you are in the right. Responding only fuels their anger, making them think they are getting to you.

2. Dividing any Assets before first making a Complete Inventory

A common thing that happens when spouses begin to talk about divorce, even at that first conversation or fight, is the phrases “Who gets what?” or “So you are gonna take X, so it’s only fair that I get Y.” I will simply say this is a bad idea, not as much that you might be forming oral contracts by these conversations (which you almost certainly are not), but this type of informal tit for tat could confuse later parts of your divorce proceedings or limit your scope of what is actually fair. Even before you have the first discussion with your attorney, write out all the assets and debts you and your spouse hold together or separately. List their respective values if you can. Note any sentimentalities you might have, and include the time the assets or debts were acquired, and under what circumstances they were acquired.

3. Communicating too much or too little of the Divorce process to your Children

Divorce can be awful for a child, but you are the person who has the biggest impact on how it affects your children. Unless your child(ren) is an infant, they will understand that something is going on, and if they are old enough, they will resent being kept completely in the dark. Conversely, the last thing you want to do is have your child intimately aware of or (even worse) involved in the disagreements you have with their other parent relating to the divorce. The vast majority of children want to be left completely out of a divorce. They may wish to be primarily with one parent or the other, but do not press them on the subject. If you believe your spouse is pressuring your child(ren) to say or feel one way or the other, consider asking the court to appoint a Guardian ad Litem to represent their best interests. What your kids want is support and love, show that to them, and insure them that you will do whatever is best for them. It will help both them and you get through this.

4. Letting Family Members (yours or theirs) have too much influence in Your Divorce Proceedings

Most will read this heading and think, “of course, I’ve already thought of this. This is my divorce, not theirs.” And that’s good. This section will simply list a few things to look out for. A lot of your friends and family upon hearing of your divorce will come up to you or call you to say “we are behind you, no matter what.” That’s awesome. Problem is, what are they doing back there? Many of your loved ones will want to be your sword and shield. Swords and shields are for warfare, and no matter how nasty a divorce gets, that’s not what you need. Better to have reason, closure, and security, and no one is secure when bullets are flying. So take charge. Tell your friends and family that you have this down. You will need anything and everything they can give you in love, support, babysitting, covering at work, ears when you’re pissed off and need a good rant. Tell them the best thing they can do for you is lift you up on their shoulders, not defend you from the nastiness of this split. You are strong enough to do that all on your own with so many shoulders to lean on.

5. Letting Your  Attorney Dictate your Divorce Proceedings

As much as it is aggravating when clients do not take my advice, this is not my divorce. It is YOURS. I work for you, and it is YOUR LIFE I am counseling you on. While we as attorneys are ethically bound to advocate your interests, and I personally can say that I have accumulated wisdom gained by past experience that can help you through situations I have experienced in the past, we cannot weigh your interests as accurately as you can. To effectuate the best relationship with your attorney, be candid about all the facts of your case, especially the facts that could make you look bad or those you think your spouse will use to make you look bad, and also of your feelings at each stage of the proceedings. A good attorney will likely know the best way for you to move forward, and will have the cool head to weigh the situation objectively, but only because they have witnessed persons like you in these situations, not You.

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Olivia K. Smith, Attorney at Law
Cornetet, Meyer, Rush & Stapleton Co., L.P.A.
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Olivia K. Smith, Attorney at Law
Cornetet, Meyer, Rush & Stapleton
123 Boggs Lane
Cincinnati, OH 45246
Phone: 513-771-2444
Fax: 877-483-2119
oksmith@cmrs-law.com

Family Law Attorney Olivia K. Smith, LLC represent clients in Cincinnati, Anderson Township, Batavia, Loveland, Mason, Milford and other communities in Hamilton County, Clermont County, Butler County and Warren County.

Disclaimer: The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. I invite you to contact me and welcome your calls, letters and electronic mail. Contacting me does not create an attorney-client relationship. Please do not send any confidential information to me until such time as an attorney-client relationship has been established.

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