Tuesday, January 3, 2012

Child Custody

THE MARRIAGE ZONE

Child Custody

By
Christopher C. Meyer September 2009


Colorado no longer uses the term “Child Custody”. Instead, such matters are referred to as “Parental Responsibilities”. Parental Responsibilities are divided into “Parental Decision Making” and “Parenting Time”.

In all cases involving children a “Parenting Plan” must be submitted to the Court.
A Court will approve the Parenting Plan if it is in the ”best interests” of the children. The parenting plan must include provisions for parental decision-making and parenting time.

Parental decision-making involves decisions that affect the child such as where the child goes to school, what church the child attends, what doctor the child sees, etc. Parental decision-making can be joint or sole. Parents usually agree on joint decision-making. Even if parents cant’ agree on much, they usually can agree on what is best for the child. Joint decision-making involves the parents consulting with each other and coming to an agreement about what action is in the child’s best interests. Sole decision-making authority may be appropriate in unusual circumstances involving, for example, one parent’s absence or severe mental illness.

Parenting time is an area where parents may have trouble determining what is in the child’s best interests. A child ‘s best interests regarding parenting time is not merely a competition between parents to see who can win the most parenting time. It is becoming common for Courts to award equal parenting time to both parents, even with very young children. It is difficult to argue against a child’s spending as much time as possible with both parents.

If parents cannot agree on parenting time, a Court may appoint a parenting time evaluator who will investigate and report to the Court with a recommendation as to the child’s best interests. The evaluator must meet certain standards and is usually a mental health professional (psychologist).

One of the best things you can do to show that you are serious about parenting time is to meet your child support obligation.

Child custody law is the same as other law. You must remember that: you may not understand it; you may not like it; and you may not think its fair; but it’s the law!



This article is for informational purposes only and does not constitute legal advice about your case.

Chris Meyer is an attorney practicing family law in Northern El Paso County. Chris’ law practice is limited to domestic relations cases. Chris has been practicing law since 1977. He is a former prosecutor and is licensed to practice law in Colorado, Florida, California and Wisconsin. Chris can be contacted at 719-488-9395. Chris’s website (www.cmeyerlaw.com) has additional divorce and family law information and many other articles.

Short Sale Of The Home - Tax Consequences

THE MARRIAGE ZONE:
Short Sale Of The Home – Tax Consequences
By
Christopher C. Meyer, Ruth Bolas, and Kristina Kesselring
 2010

Recent disturbing statistics show that 30 % of the homes in our area are worth less than what is owed on the loans on those homes! Ruth Bolas and I wrote a previous article about real estate short sales for this publication. We thought it would be helpful to expand on the short-sale subject by commenting on tax consequences, so we brought in our tax expert, Kristina Kesselring, CPA.

Whether you are involved in a divorce, or are just struggling to keep up with your monthly house payments, if you are thinking about a short sale as a way to get out from under your house and the mortgage, you must be aware of possible tax consequences.

It used to be that the amount of the loan that was forgiven in a short sale became taxable income to the seller. Talk about adding insult to injury! If John and Mary sold their house for $50,000 less than the mortgage amount, they would get an IRS form 1099 from the lender showing that they received $50,000 in income from the transaction! The amount of the debt forgiven (not paid back) was taxable income to the borrower.

Thanks to the anemic state of the economy, recent legislation and regulations eliminate the tax on this phantom income. The catch is that certain requirements apply.

The part of the loan that is forgiven must be on a mortgage on a principal residence. Sorry, vacation homes and investment properties do not qualify.

The amount of the mortgage debt that is forgiven can only relate to the purchase or improvement of the principal residence. If you refinanced your home to pay off credit cards, purchase a car, etc., that amount that is forgiven won’t qualify and will likely become taxable income to you.

The maximum amount of the phantom (debt-forgiven) income that can be excluded is $1,000,000 for a single taxpayer and $2,000,000 for joint filers. You have our sympathy if you need to exclude more than this.

You must take care that the appropriate forms are issued after the transaction.

In most instances you don’t have to worry about all these requirements if you are insolvent or bankrupt. Insolvent means your debts exceed your assets or you are unable to pay your debts as they become due. Most folks contemplating a short sale are probably insolvent. However, even if you are solvent, you can take advantage of this opportunity to get out from under your over-leveraged home without painful tax consequences, but you must meet the requirements. Of course, the better your financial condition, the harder it will be for you to convince your lender to approve a short sale.

Short sales typically result in no taxable income to you if you meet all the requirements, or you are insolvent or bankrupt. However, short sales are complicated transactions and can result in horrendous tax consequences for the unwary homeowner or person considering this option for in investment property. At a minimum, you should consult with a real estate broker who has expertise in these transactions as well as a tax expert.

A short sale can be an effective damage control device for homeowners, but it requires patience, knowledge, and expertise.

This article is for informational purposes only and does not constitute legal advice about your case.

Chris Meyer is an attorney practicing family law in Northern El Paso County. Chris’ law practice is limited to domestic relations cases. Chris has been practicing law since 1977. He is a former prosecutor and is licensed to practice law in Colorado, Florida, California and Wisconsin. Chris can be contacted at 719-488-9395. Chris’s website (www.cmeyerlaw.com) has additional divorce and family law information and many other articles.

Ruth Bolas is a licensed Real Estate Broker with Keller Williams and is also an attorney. She grew up in the Monument area and serves the Front Range specializing in working with buyers as well as home sales and short sales. Ruth Bolas can be reached at ruthbolas@msn.com or 719-488-3026 or 303-437-6010.

Kristina Kesselring is a licensed Certified Public Accountant in the state of Colorado. She has more than 15 years experience in small to mid-sized business accounting and management. She specializes in tax debt negotiation, bankruptcy and divorce accounting, business planning and taxation. Kristina Kesselring can be reached at klkaccounting@msn.com or 719-290-9871.