Six common reasons to contest a will

The number of families contesting wills has risen dramatically since the recession. In 2008 some law firms estimated that the amount of wills being contested in court had doubled, or even tripled, in the UK. Studies indicate they have continued to soar since then.

A high proportion of these court cases are caused by incidents which are entirely preventable, meaning thousands of pounds worth of money is being wasted on legal costs every year. Let’s explore some of the main reasons why people decide to contest a will.

Wills are ‘unfair’

The main cause of a will being contested in the UK is that a family member believes that it is unfair on them. When writing their will, some people believe they have the right so spread their money however they like, but that’s not necessarily true. Family members do have a legal right to contest a will if they have not been allotted what they deserve. If the deceased leaves one son out of their will, whilst keeping all their brothers and sisters in, this could legally be deemed unfair.

Lack of mental capacity

Wills can be contested if it is believed that the testator lacked the mental capacity to write a sensible will. If it can be proved that the testator lacked the capacity to understand how much property they owned, the identity of their loved ones or the basic logic behind what a will is then a will could be contested. This type of contest would typically occur if the testator had a mental illness when writing their will.

Duress

If it can be proved that the testator was forced or blackmailed into executing their will a certain way, it can be contested.

Fraud

If the testator was deceived into writing their will a certain way, this could be judged as probate fraud. In this case, there are two main types of deception. The first of these is fraud in the execution, such as making the testator believe they are signing something other than a will. The second type is fraud in the inducement, which could involve deliberately mis-leading the testator in order to change their course of action.

Disputed ownership

If the deceased appears to be giving away something that doesn’t actually belong to them, then this represents strong grounds for appeal.

Incorrectly drafted will

A will can be contested if it is believed that an accidental error was made. This contest might come in the form of a lawsuit against the person who drafted the will. It can be hard to prove though. If the wronged person was left out of the will altogether is not a family member and was left out of their will altogether, they have no grounds for appeal.

The common theme linking all six of these scenarios is that the odds of them occurring are significantly reduced when the testator hires a professional will writing service. These services are staffed with experts on probate law and will can offer advice that can prevent wills being appealed against once you die.

The small fee paid to the professional will writer could save a family thousands of pounds in legal costs later on down the line.

The Divorce Process: Where to Begin

Most couples do not begin their marriages with the anticipation of ever getting divorced. However, as statistics consistently show, close to half of all marriages end in divorce today. When a husband or wife decides to end his or her marriage, that individual may wonder what steps to take and how to begin the process. The process to get a divorce may take some time; however, following these steps can ensure that each party’s best interests are addressed and that the matter is settled as fairly as possible.

Start Saving Money

Because most couples share bank accounts, a husband or wife may not have immediate access to the funds needed to file for divorce. If possible, a person should try to set aside money out of each paycheck and save these funds for the divorce proceedings. It may take a few months to save enough money to file; however, without the needed money, people may not be able to file, especially if they do not qualify for free legal services through the state or social organizations.

Retain a Good Lawyer

People can certainly file for divorce on their own at the courthouse. However, in most cases, this idea is not advisable. A divorce lawyer is trained to advocate for clients and to ensure that each petitioner’s interests are protected. An attorney can help a client go through what is referred to as a discovery process where the couple’s assets are identified and the reasons for the divorce are solidified. Through his or her divorce attorney, a person can work toward a mutual agreement with the other spouse without having to go to trial. If, however, an agreement on the matter cannot be reached, a person can be well served by having an attorney by his or her side as the case goes through the trial process.

Finding a good divorce lawyer can be a relatively hassle-free process if people take several things into mind. With the Internet now a popular referral tool, people can search online and find experienced attorneys in their area. For example, a search would be done online for an Orlando divorce lawyer for plaintiffs in the central Florida area, to obtain a list of local lawyers knowledgeable in divorce law. They can consider previous clients’ online recommendations, as well as ask friends and family members for advice. Clients can also discover if an attorney can help by going to an initial consultation. Retaining a lawyer for the divorce can make this process less traumatic and difficult.

Make Lifestyle Adjustments as Necessary

As they approach a new life path, people may need to adjust their lifestyles accordingly. If a person does not have a job, for example, that individual could be urged to find employment and begin working before the divorce is filed. Having an independent income can make adjusting to post-divorce life easier. Likewise, if a person is under-employed or does not have benefits like life and medical insurance, that individual may be advised to look for a higher paying job and retain these benefits as soon as possible. People going through the divorce process must learn to rely on themselves rather than someone else for their well-being. Adjusting their lifestyle and planning ahead can ensure that they successfully rebuild their lives after they are divorced.

Knowing how to begin divorce proceedings can empower people who are no longer happy being married. Retaining experienced legal counsel and allowing a lawyer to advocate for them in court can be the most crucial aspect of the divorce process. An attorney can help a person come out of the divorce with their best interests intact.

Lisa Coleman encourages employing experienced legal counsel during the process of a divorce while handling the emotional transition into an adjusted lifestyle. Katz & Phillips, P.A., a client-focused divorce firm, is experienced in all aspects of divorce law and can represent and counsel a client through their divorce proceedings.

Signs that a Nursing Home is Being Negligent

elder neglectWe’ve always been told to “respect our elders”, but looking at the news and hearing the horrific stories of elder abuse, it’s clear that not everyone holds elders in high regards.  Elderly individuals, over the age of 60, are at higher risk for maltreatment and such elderly neglect takes place everywhere, but most often in the nursing home setting.  In nursing homes, residents are vulnerable as they often rely on others (such as nursing aides) to assist them with everyday living.  Unfortunately, many elders are physically, mentally, sexually, financially exploited, making them victims of a large and sometimes “silent” problem, elder abuse.

According to the Centers for Disease Control and Prevention (CDC), over 500,000 older adults (aged 60 +), in the U.S., are believed to be abused or neglected each year.  However, the startling and overwhelming statistics are most likely underestimated due to the number of elder abuse that is not reported.  Like many abuse victims, many elders are unable or afraid to report the abuse to police, family, friends, or others who can protect them.  Family and friends who have a loved one in a nursing home facility should stay involved, informed, and be on the lookout for any suspicious behavior in either the resident or a worker.

Warning Signs of Elder Abuse in a Nursing Home

When visiting a friend or family member in a nursing home pay attention to the way he/she looks and acts.  If you suspect elder abuse, report it.  Protect seniors by bringing suspected abuse to the attention of the appropriate authorities such as a local adult protective services agency.  Many people are afraid to report suspected abuse because they fear they might be wrong, but if you don’t report suspicious activity, your elderly loved one could continue to be abused and in worse cases, die because of the abuse.  Take action and report if you see, hear, or suspect the warning signs of neglect in a nursing home:

–          Your loved one might be Financially exploited if:

  • He/she has a lack of affordable amenities and comforts in their room.
  • Uncharacteristic or excessive giving of gifts or financial reimbursement for care and companionship.
  • The victim is not getting proper care to fulfill needs, even if money is available for such costs.
  • Has made legal or monetary transactions, but does not understand what they mean.

 

–          Your loved one may be a victim of physical or emotional abuse if he/she:

  • Has inadequately explained fractures, bruises, welts, cuts, sores, or burns
  • Unexplained sexually transmitted diseases
  • Unexplained or uncharacteristic changes in behavior, such as withdrawal from normal activities, or unexplained changes in alertness
  • Caregiver is verbally aggressive or demeaning, controlling, or uncaring

 

–          Your loved elder may be a victim of overall Neglect if he/she:

  • Lack of basic hygiene or appropriate clothing
  • Lack of food and basic needs
  • Lack of medical aids such as glasses, dentures, medication, hearing aids.
  • An individual with dementia is left unsupervised
  • An individual confined in bed is lacking care
  • The room is cluttered or dirty or in need of repairs and lacks amenities
  • Untreated bed sores or pressure ulcers (indication of lack of care)

Elder abuse and neglect in a nursing home affects thousands of innocent senior citizens each year.  Many suffer in silence because they are unable to communicate and they live in fear.  Be the voice for neglected elders.  Respect your elders; don’t turn your back on them.

 

Advantages and Disadvantages of Going Bankrupt

bankrupt

Believe it or not, people who go bankrupt do enjoy some advantages. Bankruptcy, in fact, exists so that people who make a mistake financially don’t have their entire life ruined for the rest of their existence. It gives people an opportunity to get a fresh start, to do things right and, after the bankruptcy has gotten off of their credit report, to start rebuilding their credit without having to repair a tremendous amount of damage that they may have caused in their youth. There are disadvantages to going bankrupt, as well, and you want to take these into account if you’re considering filing for bankruptcy.

Collectors Go Away

If you are considering filing bankruptcy, it’s likely that your phone is ringing off the hook with collection agents trying to get money out of you. One of the advantages of filing for bankruptcy is that you get a stay order against those collectors. Until your bankruptcy is resolved, those collectors cannot bother you about the bills you have with them without contacting the court first.

While this may seem like a small benefit from the outside, it is a huge benefit. It allows you to get time to consider your situation, to put together your bankruptcy claim and to not be constantly stressed by people who are reminding you incessantly of debt about which you are already well aware.

Keep Your Home

There are accommodations that allow people to stay in their homes if they declare bankruptcy. This can allow you time to get back in the good graces of your mortgage holder and ensure that you don’t end up out on the street. For some families, this is absolutely the best move possible.

Disadvantages

There are basically two types of bankruptcy that individuals can file for: Chapter 7 and Chapter 13. In a Chapter 7 bankruptcy, all of the existing debt that you have is liquidated, except for those debts that are guaranteed. Student loans, for instance, do not go away. In a Chapter 13 bankruptcy, you still pay off your debts, but you pay them off through the courts at a rate that is affordable for you.

The disadvantage to both of these types of bankruptcy is that they do stay on your credit report. It can make it much more difficult for you to get lending and, in some cases, to even get an apartment. Compared to having your wages garnished to pay back credit cards with ridiculous interest rates or other unsecured debts, however, bankruptcy may actually be preferable.

Talking to an attorney who handles bankruptcy law is the best way to determine whether or not it’s time for you to go ahead and file bankruptcy.

What is Balance Billing…Are you a Victim?

balance billingJanet, a professional accountant, was suffering from severe pain in her wrists, suspecting she had carpal tunnel syndrome from her years of repetitive computer tasks.  With the recommendation of a friend, Janet found a surgeon who worked at the hospital in her insurance network.  After she met with the recommended surgeon, she was more confident and happy with him than other surgeons she had talked to.  After her successful surgery, Janet was able to return back to work sooner than she’d expected.  Pleased with her progress and fast healing, Janet was happy that she didn’t wait any longer to have her debilitating condition fixed.  About a month after her surgery, Janet had received bills in the mail to cover some costs of her surgery.  Janet was confused as she made sure she chose the right hospital in her network so that the surgery would be covered, in full, by her insurance.  Upon further investigation, Janet realized that the surgeon who performed the surgery was not part of her insurance network even though he worked in a hospital that was in her network.  The bill that Janet received is called balance billing and it occurs when a health care provider (in this case, Janet’s surgeon) tries to collect money directly from a patient after getting partial reimbursement from an insurance company.  Janet knows that “balance billing” is illegal for Medicare recipients, but she’s not sure if it is legal for her private insurance company. 

How to Avoid a “Balance Billing” Nightmare

If you have recently become a victim of balance billing, there may not be a lot you can do other than refuse to pay the bill or seek legal advice.  The best way to avoid balance billing is to work out all of the details before you are billed for a medical procedure, exam, or hospital stay.

–          Choose within Your Network:  Sometimes in the event of an emergency, it is not possible to be treated by a health provider in your network, but if you are in charge of choosing a physician or surgeon (for example), you should make sure they are in your network.  Even if they work in a facility that is in your network, the individual doctor may not be in the network.  While you may want to go with a doctor that you have heard so many good things about, make sure he/she is in your network otherwise you may have to prepare to pay out of pocket.

 

–          Verify the Person is in Your Network:  If you rely on the information that comes in your insurance packet, it may be incorrect or even outdated.  When choosing a medical professional, do not go by what you read or see in a book or on the internet.  Call the office and double check that he/she is part of your insurance network.  Failure to double check might leave you with an unexpected bill.

 

–          Don’t Fear Price Negotiation:  You may be forced to visit a specialist who is not in your network.  If this is the case, try to find out the bill for your procedure.  According to a patient advocate, Jane Cooper, after you find out how much your bill will be, check with your insurer to see how it matches with the out-of-network service pay.  A patient, who is prepared with this important information, may be able to negotiate successfully with a doctor.   If you are stuck with balance billing, try to negotiate a payment plan to keep your bill from heading to collections.  If you are able or need to, also consider talking with your insurance company to see if they will be willing to front some of the balance bill.

 

“Balance Billing” can be an unwelcome and financially frustrating surprise.  If you are recovering from an accident or a medical procedure, your focus should revolve around your healing not the overwhelming worry of how you’ll cover the bill.  The doctor’s may be in control of your health, don’t let them control your finances!

Protecting Your Assets During a Divorce

protect your assets divorceWhen John and Emily married 15 years ago, they both thought the marriage would last a lifetime.  After 10 years in a colonial-style home, 2 children and 3 dogs, their marriage looked picture perfect, especially with the white picket fence that surrounded Emily’s prize winning roses.  Last year, John lost some investments and started gambling to ease his stress.  His secret gambling made financial issues even worse.  Emily, unaware of their family’s financial distress, continued her duties as a homemaker and volunteering at her daughter’s school.  Had Emily known of the financial distress, she would have taken a job to help ease some of the debt, but because John was always in charge of finances, Emily had no idea of how bad their situation was.  One weekend, John had gone on a “business trip” (which ended up being an expensive trip to Las Vegas) and Emily was unable to withdraw funds from an ATM machine.  Shortly after John’s unsuccessful gambling trip, there marriage began to fall apart and divorce seemed to be the best option for their young children.  Because Emily has little control of their money, she doesn’t know how to proceed with protecting her assets during the divorce. Charles Ullman and Associates understands that during divorce, life has been turned upside down and can cause financial and emotionally challenging moments.  What can Emily do?

Avoid Losing Everything: Protect Your Assets

Often times, in a marriage, one spouse takes charge of finances. Unfortunately, in the event of divorce, the other spouse has no idea how to deal with their finances, leaving her/him at great risk for financial distress after a divorce.  Protecting your assets during divorce can make the whole process a little less stressful:

  • Familiarize Yourself with Financial Statements:  Financial statements, tax forms and other important financial paperwork can be overwhelming, hard to organize, and even harder to understand, but it’s helpful to know how your household’s income is being spent.  Even if you are not the “breadwinner”, you have the right to know where the money goes.  If you find something suspicious or something you don’t understand (and don’t feel comfortable confronting your soon-to-be ex), talk to a financial planner, lawyer or accountant.  Additionally, make sure you make copies of all the financial information and keep it in a safe place.  When you meet with your divorce lawyer, he/she will help you decide what information you will need for your settlement.  It’s better to be over prepared than not.

 

  • Establish Your Own Credit:  If you have a shared credit account with your spouse, it’s important to pay close attention to credit card statements, as one spouse may use a credit card more often than the other.  If your spouse has poor credit, it may affect you, even after the divorce.  If you are able, try to get your own credit card account before you divorce.  While may stay-at-home, non-income earning spouses find it difficult to establish credit, The Credit Card Accountability Responsibility and Disclosure Act (CARD Act) made changes allowing non-working spouses set up their own line of credit, according to the Consumer Financial Protection Bureau.  Additionally, it may be wise (if you don’t already) to set up your own bank account.

 

  • Make Sure Your Name is One Everything You Own with Your Spouse:  Depending on what you purchased together, if it is a valuable asset, make sure that your signature (as proof of part ownership) is on all the proper documents.

Divorce can be a financially, emotionally, and mentally exhausting process.  While you should always have a good handle on your finances, even if you don’t make all the money, it is even more important during the separation or divorce process.  Don’t let your divorce leave you penniless and powerless; get your documents in order!

Injured On The Job? Workers Compensation Procedures

Most companies are required to maintain workers compensation coverage for their employees. Injuries, illnesses, or exposure to dangerous chemicals can make cause damage to an employee and lay the grounds for a workers’ compensation claim. The injuries covered under this policy can be minor or major. One are that is not covered under this general liability coverage is under the coming and going rule. This rule references any injuries that occurred on the commute to or from the work-site. Although these injuries would not be covered under a workers’ compensation claim, other injuries that occur while transporting goods, traveling, or running errands for your employer may be covered.

First Steps: File A Claim

The first step when you have been injured on the job is to file a workers compensation claim. Your supervisor or boss will provide you with the proper claim form to complete. If your employer contests the claim, a court hearing will be scheduled. It’s very important that you file your claim form as soon as possible after the injury. Some of the more long-term injuries from the incident may not appear until a few weeks or months after the initial accident, which is why it’s so important to have an attorney representing her interest in court. If you need an attorney, the time is now to contact Salvi Law.

What Happens Next?

After you have filed a claim, the insurance company will select a doctor to perform an independent medical examination. Preparing for this exam is incredibly important, since the doctor will send a report to the insurance company that is used to generate an offer for your compensation. Write notes about the appointment after it is over, and come prepared with your own list of questions for the doctor. Do not underestimate the severity of your symptoms during this appointment.

What Happens If My Claim Is Approved?

In general, the monetary payment under an approved workers compensation claim will represent up to 66% of your typical income, but what sets workers compensation apart is that these monies are tax-free. Since there are no taxes on these funds, it’s likely that your payment will be similar to your former income. All medical expenses will also be covered under a workers’ compensation claim, so long as those medical expenses are related to the workplace injury.

Should I Accept a Settlement?

If a worker has been on long-term disability for some time, one common tactic for companies is to offer that individual a settlement. In the short term, these settlements can be appealing. Over the long run, however, the settlement may not be in your best interest. For example, if your medical costs increase or you incur other complications as a result of your initial injury, the settlement may not be enough to provide for your future medical expenses. Especially when you are not represented by a lawyer, the company will usually undervalue the settlement offer. You can reject the settlement, and it’s recommended that you have a conversation with an attorney about your best options.

Divorce and the Division of Debt

(U.S. Family Law and generally) Almost everyone dreams of one day meeting the person that they’ll grow old and die with. Movies like Titanic, Romeo and Juliet and Eternal Sunshine of a Spotless Mind give people hope that a perfect love exists out there for each of us. Unfortunately, individual love stories can end much more abruptly, and sadly, this can leave one or both of the spouses struggling with debt. Most people fail to realize that debt is distributed much like property after a divorce, so it’s important for every individual to recognize the consequences of marital debt prior to ending their nuptials.

Division of Debt after DivorceWhen two people get married, they basically legally become one. This means that the debt that accrue is shared. When the two get divorced, they must distribute this debt in a fair and equitable manner. A few states make the distinction between “community” and “separate” debts. Community debts would be those that each spouse had an equitable share in (ie. mortgage, car loan) while separate debts would be those which were mainly accumulated by one spouse (ie. loan for golf clubs).Community debt, in the applicable states, is divided equally amongst the spouses while they hold onto their own separate debts. In equitable distribution states, however, everything accumulated during marriage, including debt, is divided equitably between the two spouses. The majority of states in the United States handle divorces in this matter.

Consequences of Marital Debt

There are a number of consequences of marital debt after the committed relationship ends. Unfortunately, a person is often left with debts that they now have to pay on just one salary as opposed to two. Even worse, many marriages end with only one spouse having worked throughout the relationship, so the other spouse can be left with huge bills and no means of paying them.

The worst thing that can happen after a divorce, however, can occur once debts are distributed by settlement. The simple fact is that this debt distribution only works if both spouses can be trusted to take the debt seriously. If one spouse chooses not to pay on an owed debt, a creditor isn’t going to care that the marriage is over; they’re just going to want their money from one or both of the former spouses. In the end, this can destroy a person’s credit without them even realizing it.

Avoiding Debt Issues after Divorce

There are several ways to handle debt during a divorce. One of the best ways of doing so is to pay off all debt before filing for divorce. This will ensure that it’s unnecessary to keep up with whether or not an ex-spouse is making proper payments on a shared debt. In addition, divorce settlement negotiations can be used to decide who owes what, but as previously mentioned, this simply places faith in a spouse to keep up with payments.

Unfortunately, many spouses only end up thinking about the shared debt of marriage after it has caused damage to their credit. In these cases, it’s pertinent to speak with a credit repair and counseling agency. Though it may be possible to settle debts on one’s own, a person will usually end up spending much more on a settlement than they need to. Professional companies can work on consolidating, transferring and reducing a person’s overall debt after a divorce.

Divorce is a disheartening time in anyone’s life, and unfortunately, if unprepared, the accumulation of debt can make these times even more difficult than they otherwise would’ve been. Luckily, there are a few surefire methods to decrease, if not eliminate altogether, many of the consequences of marital debt. Just because a person’s marriage is ending doesn’t mean their life has to, and handling marital debt appropriately will ensure this.

Author Catherine Stephens also works as a small business consultant and contributes this article to raise awareness marriage debt. At www.debtpaypro.com you will find one of the largest providers of customer relationship management software systems within the finance industry. These tools are important in helping a credit counseling agency to properly track and negotiate your debt to make certain there are no unresolved issues after the divorce is final.

Some things you didn’t know about your finances during a divorce

Guest family law blog post regarding finances and divorce.

Going through a divorce can be a difficult time emotionally never mind debating who is going to get the house, the car and even the cat. One of the most argued elements of a divorce will always be the finances regardless of how much or how little that couple had. Here are some things you might not have known when it comes to divorce proceedings and your finances.

First steps and temporary agreements                                                                                                                      

Self-divorce, divorce legal adviceNormally before any divorce proceedings take place there will be a separation period for both partners. During this time it can be difficult to support yourself, especially if your partner was the one bringing home the majority of the household earnings. You can apply to the court for interim maintenance or maintenance pending suit if you were married or in a civil partnership. This can be quite costly and the legal costs may be more than you are awarded so it is always worth talking to a legal advisor before making a decision on this. It may be that your partner is willing to make some kind of arrangement for maintenance payments before divorce proceedings go through.

Financial settlements

One of the most cost effective way to agree on a financial settlement is to do it between you and your partner, as opposed to involving mediators, lawyers or even going to court. If this can be done then you will find the break up to be a lot easier and also save you plenty of money on legal aid. If you make an agreement between the two of you then it is not necessarily legally binding. There are some ways to ensure that your financial settlement is more formal and would therefore stand up in court. Make sure that you write down the agreements that you have made together and take this to a solicitor for their advice. The solicitor can then send this agreement to a county court judge who will make a decision based on how fair they feel it is. As long as the outcome is ‘fair’ to both of you and you both have had independent legal advice then it is much more likely to be accepted.                                                                                                           

Lump sums                                                                                                           

In most divorce casMoney and divorcees there will be a maintenance payment and perhaps a lump sum of money from one partner to another. This could be to share the assets more fairly between partners, to enable one partner to purchase a house to live in or a lump sum to replace ongoing maintenance payments. A capital lump sum will tend to be paid in one go and can enable a ‘clean break’ so that partners no longer have to communicate. The best thing to do with a lump sum settlement is talk to an accountant who will be able to advise you further on investing the money wisely.

Hopefully this article will have touched upon some points that may have been unclear when you first start divorce proceedings. Remember to ask for legal help when needed and also seek the advice of an accountant if large sums of money are involved.

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Some things you didn’t know about your finances during a divorce

 

Going through a divorce can be a difficult time emotionally never mind debating who is going to get the house, the car and even the cat. One of the most argued elements of a divorce will always be the finances regardless of how much or how little that couple had. Here are some things you might not have known when it comes to divorce proceedings and your finances.

First steps and temporary agreements

Normally before any divorce proceedings take place there will be a separation period for both partners. During this time it can be difficult to support yourself, especially if your partner was the one bringing home the majority of the household earnings. You can apply to the court for interim maintenance or maintenance pending suit if you were married or in a civil partnership. This can be quite costly and the legal costs may be more than you are awarded so it is always worth talking to a legal advisor before making a decision on this. It may be that your partner is willing to make some kind of arrangement for maintenance payments before divorce proceedings go through.

Financial settlements

 

One of the most cost effective way to agree on a financial settlement is to do it between you and your partner, as opposed to involving mediators, lawyers or even going to court. If this can be done then you will find the break up to be a lot easier and also save you plenty of money on legal aid. If you make an agreement between the two of you then it is not necessarily legally binding. There are some ways to ensure that your financial settlement is more formal and would therefore stand up in court. Make sure that you write down the agreements that you have made together and take this to a solicitor for their advice. The solicitor can then send this agreement to a county court judge who will make a decision based on how fair they feel it is. As long as the outcome is ‘fair’ to both of you and you both have had independent legal advice then it is much more likely to be accepted.

                                                                                                           

Lump sums

                                                                                      

In most divorce cases there will be a maintenance payment and perhaps a lump sum of money from one partner to another. This could be to share the assets more fairly between partners, to enable one partner to purchase a house to live in or a lump sum to replace ongoing maintenance payments. A capital lump sum will tend to be paid in one go and can enable a ‘clean break’ so that partners no longer have to communicate. The best thing to do with a lump sum settlement is talk to an accountant who will be able to advise you further on investing the money wisely.

Hopefully this article will have touched upon some points that may have been unclear when you first start divorce proceedings. Remember to ask for legal help when needed and also seek the advice of an accountant if large sums of money are involved.

Five Tax Laws Affecting the Middle Class

On January 2 of this year, the American Taxpayer Relief Act of 2012 (or fiscal cliff deal) became law and was made retroactive to January 1. The act was designed to shield the middle class from the expiration of the Bush-era tax rates. While the law included tax increases directed at wealthier Americans, much of the act was targeted at the middle class. In particular, five key tax laws of the fiscal cliff deal affect the middle class and they are discussed below.

First Provision

The first provision of the tax changes was something omitted in the fiscal cliff deal and that is an extension of the payroll tax cut enacted by the president back in 2011. All taxpayers enjoyed a 2% reduction in their withholding due to the lower Social Security payroll tax rate of 4.2%. However, with the expiration of this tax cut, the rate returns back to 6.2%. Given that the maximum taxable earnings subject to the Social Security payroll tax is $113,700 in 2013, the tax increase affects the middle class more than it does top wage earners. This makes this tax increase a regressive tax increase and will result in a decrease of $100 a month in disposable income for households earning $50,000 a year.

Second Provision

The second provision affecting the middle class was the permanent extension of exemption amounts to the Alternative Minimum Tax (AMT). The exemption amounts for 2013 increased over 2012 levels and are now $50,600 for individuals, $78,750 for married people filing jointly, and $39,375 for people married filing separately. Also, the AMT exemptions are now inflation adjusted annually. This will insure that the AMT, designed to affect the wealthiest Americans, does not become the de facto middle class tax rate. If the AMT exemptions had not been increased, sixty million workers would have become subject to higher tax rates.

Third Provision

The third provision affecting the middle class is the permanent extension of the Bush-era tax rates of 10%, 25%, 28%, 33% and 35%. A new tax rate was added of 39.6% for income over $400,000 for individuals and $450,000 for couples. Absent this change, tax rates would have increased across the board for every worker and coupled with the expiration of the payroll tax cut would have been a substantial tax increase.

Fourth Provision

The fourth provision affecting the middle class is the permanent extension of the marriage penalty tax relief. For couples filing jointly, the standard deduction is exactly twice that of an individual’s standard deduction. This eliminates the disparity in the standard deduction for married people which disparity became known by the pejorative “marriage penalty tax”. The fiscal cliff deal prevented the standard deduction for married couples from decreasing to $10,150 from $12,120.

Fifth Provision

The fifth provision benefiting the middle class is the permanent extension of the Bush-era child tax credits of $1,000 per dependent child who is under age 17 by year’s end. The phase out for this tax credit remains the same at $75,000 for individual tax filers, $110,000 for married filing joint or $55,000 for married filing separate.

There are many other provisions in the American Taxpayer Relief Act of 2012 which directly or indirectly affect middle class taxpayers such as business tax extenders, small business expensing, and bonus depreciation. Also, tax credits for education were also extended. However, the provisions cited above were those which most directly affected the middle class. Covering all the tax provisions is beyond the scope of this article but they may be reviewed in greater detail by clicking on the link for The American Taxpayer Relief Act of 2012.

This article was written by Robert Tritter, an avid writer of law-related articles throughout the web. He writes this on behalf of R&G Brenner, your number one choice when looking for a Brooklyn Tax Consulting firm. Check out their website for more information on their services.