You may ask why this is necessary since you are mediating your divorce in part to “avoid divorce lawyers”. Won’t hiring separate attorneys defeat the goal of mediation to save costly attorney fees? Isn’t a qualified mediator, who is being paid for “knowing his or her stuff” all the professional advice you need?

        Even though mediation is about cooperating to work out financial and parenting issues, each spouse has individual concerns, and legal rights and responsibilities. Mediators are neutral parties and do not give legal advice to either spouse, even though the mediator may be a trained and/or licensed as an attorney. The settlement decisions you make as a part of your divorce should be based on “informed consent”. Working with your own attorney helps to protect you and achieve your mediation goals by:

        ● Understanding the law and identifying legal issues that may apply to you;
        ● Having a private place to discuss your concerns and weigh your options;
        ● Getting support from a legal professional who is “in your corner”;
        ● Diagnosing how much information is reasonably necessary for you to make your settlement decisions;
        ● Getting practical feedback on your ideas for settlement and creative suggestions about difficult issues;
       ● Having the knowledge that an attorney has helped to protect your legal interests by reviewing the final legal settlement agreement before you sign it.

        Despite what many people believe, mediation is not only for “friendly” spouses. Couples less prone to uncontrolled conflict are particularly suited for mediation. Couples separated long enough to have survived their “emotional divorce” are usually better able to mediate in a constructive and calmer environment. While some couples who elect to use nonadversarial approaches can act civilly, most people going through divorce are experiencing extreme emotional distress. However angry, fighting, grieving and otherwise emotional people can still share the goals of avoiding the adversarial process and protecting their children from parental conflict and emotional damage from the divorce.

So, you can be consistently “unfriendly” throughout the process and yet avoid adversarial approaches. The more grounded you are with private legal information and advice, the less likely that you will question your settlement decisions later no matter where you and your spouse are on the “friendliness – high conflict” continuum.

          Consider your work with an attorney as your investment in feeling confident about some of the most important decisions you will make in your life.

Tracey Thorn released this song to begin her new album in April, but somehow its only now caught up with me … worth a listen …..

In some divorces, particularly with a high net worth, all of the mortgage interest of the individual may not be deductible. IRS Publication 936 offers specific guidance in that regard. On page 3 of IRS Publication 936 is a chart that illustrates whether it is necessary to consider this limitation on the mortgage interest deduction.  Tthis chart can be confusing, so this article attempts to clarify the rules related to this limitation on the mortgage interest deduction.

Home mortgage interest is a tax-deductible expense.  Mortgage interest is reported on Form 1040, Schedule A along with other itemized deductions such as real estate property taxes, medical expenses, and charitable contributions.
Mortgage interest includes interest you paid on loans to buy a home, home equity lines of credit, and construction loans.  The amount you can deduct may be limited, however.  A taxpayer can only deduct interest paid on the main home and a second home.  Interest paid on third or fourth homes, for example, is not deductible.

You need to meet the all the following requirements in order to deduct your mortgage interest:

1. You must file Form 1040 and itemize deductions on Schedule A.

2. You must be legally liable for the loan.  You cannot deduct payments you make for someone else if you are not legally liable to make them.  Both you and the lender must intend that the loan be repaid.  In addition, there must be a true debtor-creditor relationship between you and the lender.

3. The mortgage must be a secured debt on a qualified home.  A qualified home is your main home or your second home.  According to IRS Publication 936, a home includes a house, condominium, cooperative, mobile home, house trailer, boat, or similar property that has sleeping, cooking, and toilet facilities.

Recordkeeping. You should receive a Form 1098, Mortgage Interest Statement, from each mortgage lender.  This form reports the total interest that you paid during the tax year.  The financial institution will also send a copy of Form 1098 directly to the IRS.  Make sure that the mortgage interest deduction you claim on Schedule A matches the amounts reported on Forms 1098. The amount you can deduct may be less than the amount you paid, based on limitations of the mortgage interest deduction.

Home acquisition debt limit.  The total amount you can treat as home acquisition debt at any time on your main home and second home cannot be more than $1 million ($500,000 if married filing separately).

Refinanced home acquisition debt.  Any secured debt you use to refinance home acquisition debt is treated as home acquisition debt.  However, the new debt will qualify as home acquisition debt only up to the amount of the balance of the old mortgage principal just before the refinancing.  Any additional debt not used to buy, build, or substantially improve a qualified home is not home acquisition debt, but may qualify as home equity debt.

Mortgage treated as used to buy, build, or improve home.  A mortgage secured by a qualified home may be treated as home acquisition debt, even if you do not actually use the proceeds to buy, build, or substantially improve the home. This applies in the following situations:
1. You buy your home within 90 days before or after the date you take out the mortgage.  The home acquisition debt is limited to the home’s cost, plus the cost of any substantial improvements within the limit described below in (2) or (3).

2. You build or improve your home and take out the mortgage before the work is completed.  The home acquisition debt is limited to the amount of the expenses incurred within 24 months before the date of the mortgage.

3. You build or improve your home and take out the mortgage within 90 days after the work is completed. The home acquisition debt is limited to the amount of the expenses incurred within the period beginning 24 months before the work is completed and ending on the date of the mortgage.

Home equity debt. If you took out a loan for reasons other than to buy, build, or substantially improve your home, it may qualify as home equity debt.  In addition, debt you incurred to buy, build, or substantially improve your home, to the extent it is more than the home acquisition debt limit, may qualify as home equity debt.

Home equity debt is a mortgage that:

1. Does not qualify as home acquisition debt or as grandfathered debt, and

2. Is secured by your qualified home.

Home equity debt limit.  There is a limit on the amount of debt that can be treated as home equity debt. The total home equity debt on your main home and second home is limited to the smaller of:

1. $100,000 ($50,000 if married filing separately), or

2. The total of each home’s fair market value reduced (but not below zero) by the amount of its home acquisition debt and grandfathered debt.

It is important to note that all of the information above assumes a mortgage initiated after October 13, 1987.  Such mortgages prior to that date are subject to additional rules not addressed above.

Connecticut requires parents in divorces and other family  matters involving children to take a mandatory parenting education course. The six hour course is designed to educate parents to help the children adjust to their changing family situation in a healthy way.         

The course includes:

• Information about children’s developmental stages and how divorce impacts children differently depending on their age and development;
• Ways to help children adjust not only to the divorce but to reduce stress for them;
• Cooperative parenting skills;
• Parenting plan alternatives;
• Conflict resolution techniques

Information about the authorized courses and locations can be found at http://www.jud.ct.gov/Publications/FM151.pdf.

In order for a parenting education course to meet the requirements of Connecticut law, it must satisfy certain requirements as set by the Judicial Branch and be approved by the Judicial Branch.  

Some parents have attempted to satisfy the parenting education requirement by taking an on-line course.   On December 22, 2009, the Court Operations Division of the Judicial Branch issued cease and desist letters to two out of state on line providers for unauthorized administration of parenting education programs.  These providers apparently state or imply that their courses are somehow approved and acceptable in Connecticut.

The cease and desist letters state that participation in an on line course would only  satisfy the parenting education requirement if the parents obtain the permission of the judge before taking the course (or any other course not on the authorized list).   The judge must determine that the request to take an unauthorized course is appropriate and that the course is comperable to the courses that are authorized.

The speaker was Susan Batkin, Director of Casework at the Medicare Rights Center. Her presentation was very informative as she sorted out the morass of Medicare, Medicaid, Medicare Prescription Drug plans, Medigap, and Medicare Advantage.

Most importantly, I learned about an important nonprofit organization, The Medicare Rights Center that works to ensure access to affordable health care for older adults and people with disabilities through counseling, educational programs and public policy initiatives.

Visit their website http://www.medicarerights.org/ to learn about all that they have to offer including:

• A national hotline for one-on-one telephone counseling (1-800-333-4114)
• Detailed information about the Medicare rules and regulations, including an interactive “counselor”
• Webinars to provide instruction on Medicare issues
• In the NYC/Westchester area, community programs to educate the public about Medicare.

Last but not least, the website can fill you in on volunteer opportunities and, most importantly, how to donate!

“He is furious that she introduced the kids to her boyfriend and he is digging in his heels.”

These are a few of the phone calls I have received from attorneys. If a Divorce Coach (specifically a skilled mental health professional, trained in mediation, couples counseling and collaborative practice) had been involved in these cases from the beginning, most likely none of the above situations would have occurred and I never would have received the calls. Here’s why:

• A COLLABORATIVE TONE: Many clients expect a battle. They frequently believe they will not be heard or understood. The Divorce Coach provides pathways to communication beyond resentment, sadness or anger. Individuals and couples are guided in ways that help them work collaboratively with their attorneys and with each other.
• CREATING A SAFE ENVIRONMENT: Divorcing clients deserve both reassurance and comfort. Because the office of a Divorce Coach is not primarily connected with the legal process, it is a comfortable location for a couple or individual to explore the process at its beginnings.
• INSIGHT: An experienced Divorce Coach quickly comprehends emotional and behavioral issues and dynamics. Communicating these to attorneys, with permission from clients, helps everyone both humanly and strategically develop a successful divorce process.
• COMMUNICATION SKILLS: When discussions move into uncomfortable territory, a Divorce Coach has the skills and experience to assist clients in using communication tools that will help them move forward. The Divorce Coach can assist either a couple or an individual client.
• CHILDREN: It is essential that a Divorce Coach be knowledgeable about gender patterns and child development. Although stemming from love and care, some parents’ ideas about shared time with their children may not be beneficial at certain ages. The seasoned Divorce Coach will share developmental information with clients and attorneys so that the children’s best interests are understood by all.
• PARENTING FIRST: It is both wise and pragmatic to work on a parenting plan early on, using a Divorce Coach to assist in its development. Cooperative planning is easier for a divorcing couple when an initial focus is on what benefits their children. With experience in couple communication and family dynamics, a qualified Divorce Coach can help them do this, with attention to even the thorniest of subjects. Once accomplished, guidelines for cooperation are created for on-going work with attorneys.

My own experience has been one of successfully helping couples and individuals transcend the emotional difficulties of divorce. Together, we have successfully created specific parenting arrangements that don’t require additional attention as time goes on. Together we have found new roads to communication. The process of coordination with attorneys and the end results have been satisfying to all.

My MAIN MESSAGE here is this: Don’t wait to make a phone call like one of those above before you engage someone like me in the process! By then, it can be too late to perform a rescue operation.  Whether you are an attorney or a potential client reading this article, include a Divorce Coach as an integral part of your divorce team at its beginning.

Linda Keller has collaborated with attorneys throughout Connecticut on both mediated and litigated divorces.  She is an accomplished divorce coach, parenting coordinator, and therapist to couples, individuals, children and teens.  You can call her at (203) 222-0250.

Each new divorce case in CT is assigned a Case Management Date. The parties to the case need to report the status of the case to the court by that date: ready to finalize the divorce, moving in a nonadversarial direction, or moving in an adversarial direction. This report is provided using the Case Management Form(”CMA”).

Cases fall into three categories:

• Uncontested
• Limited Contested
• Fully Contested

An uncontested case is one where the parties have completed their Parenting Education Program (if there are children), arrived at an agreement on all issues and prepared all of the necessary forms. For these cases, the parties can appear in court on the Case Management Date and get divorced. However, as procedures may vary from courthouse to courthouse, you should check with the clerk if you want to get divorced on that date to make sure that the court will hear the divorce on the Case Management Date.

If your case is uncontested but you want to get divorced on another day, then check with the court clerk’s office for days that your court will hear uncontested divorce cases. The date is filled into the CMA. If the spouse has an attorney who has appeared on his/her behalf int he court, the attorney(s) can sign the form and file it with the court. If a party is self represented, then he or she must sign the form.

Limited contested cases are those where the parties have agreed to a parenting responsibility plan but have not yet agreed on the financial terms so are not yet ready to set an uncontested hearing date. For these CMA’s, if the spouse has an attorney who has appeared on his/her behalf int he court, the attorney(s) can sign the form and file it with the court. The new rules do not require client signatures on CMA’s if the client is represented by an attorney. However, the rule allows each courthouse to require client signatures on the CMA so you need to check that local rule. If a party is self represented, then he or she must sign the form.

In limited contested cases, the parties and their attorneys must appear in court on the Case Management date. However, this court appearance can be avoided if the following documents are attached to the CMA when filed:

• Sworn Financial Affidavit
• Signed Parental Responsibility Plan

The new rules also address fully contested cases (where child custody and parental responsibility are disputed), notice regarding status conferences, and pre-trial and trial management procedures.

For a full text of the new Standing Orders go to http://www.jud.ct.gov/external/super/Standorders/Family/default.htm

ISSUE: Payment of college expenses.

FACTS: The parties agreed to share equally college expenses (defined in the agreement) for their children not to exceed the cost of UCONN. The agreement included the following provision:
“All grants and scholarships … shall be applied first towards such college expenses and the balance equally assumed by the parties ….”.
For the first year, the oldest child’s college tuition was $42,700 and the cost of UCONN would have been $20,400. The child had $19,833 of grants and scholarships. The Husband proposed paying one half of the difference between $20,400 and $19,833. The Wife argued that the $19,833 should be applied to the total tuition, leaving a balance due in excess of $20,400 and that therefore each parent’s obligation would be $10,200.

HOLDING: The judge agreed with the Wife’s interpretation of the divorce agreement.

LESSON: If college expenses are going to be limited to UCONN as a term of the dissolution agreement, as a matter of contract drafting the provision should be clear regarding the mathematical formula to apply if the child attends a school with tuition in excess of UCONN.

ISSUE: Division of defined benefit plans.

FACTS:

1) The parties’ dissolution agreement included the following clause:
The parties shall divide the total balance of their retirement accounts with the Plaintiff retaining 50% and the Defendant retaining 50%. The agreement failed to provide a date of valuation and failed to address what would happen should the accounts increase or decrease in value from that date.

2) In attempting to correct mistake number 1, the parties signed a stipulation providing:
The parties stipulate to the court that the award from the GE Savings & Security Plan ($100,000) and Alstom, Inc., 401k Plan ($147,854) is the amount needed to equalize their retirement plans.
This agreement also failed to designate what, if anything, would happen if the amounts in the plan increased or decreased. Sure enough, when the QDRO’s were finally prepared and ready to qualification, the amounts had changed (one account didn’t even have enough to fund the full distribution).

HOLDING: The Superior Court ruled that under CT law, property is valued as of the date of the dissolution of marriage if the parties have not ruled otherwise. Therefore, agreement number two recognized that the proper distribution amount was one half of the balance in the accounts as of the date of dissolution.

LESSONS:

1. If using a percentage in the QDRO for division of a defined benefit plan, designate the date of valuation and whether or not the value on that date, when the benefit is actually distributed, will reflect increases or decreases in value in the intervening period.
2. The same is true if the agreement designates an amount rather than a percentage.
3. Prepare the QDRO prior to the divorce allowing full discussion of the necessary provisions. Attach the QDRO to the dissolution agreement and incorporate its terms. Retain jurisdiction in case the plan administrator does not approve the terms.
4. If the QDRO is not ready on the date of dissolution, include in the divorce agreement a clear recitation of every term that will be in the QDRO as it can not do anything more or less than is in the initial agreement. Retain jurisdiction in case the plan administrator does not approve the terms.

The spouses negotiate the terms of their own divorce settlement. The parties can either fill out the Dissolution Agreement form provided by the court on their own (not recommended) or one party can hire an attorney to prepare the agreement and the other documents needed to finalize the divorce. The divorce agreement is a final, binding legal document so each party should get legal advice before signing the agreement and submitting it to the court. Frequently called “uncontested divorce”, the judge reviews and approves the written agreement and makes it a court order.

Divorce Mediation

A single neutral professional acts as the mediator for the couple, helping them to negotiate an agreement. The mediator helps the couple reach agreement, and complete the required paperwork. Mediators do not give legal advice. Each party should retain attorneys as “coaching counsel” for legal advice on specific issues and the final agreement. No one should finalize the divorce without legal advice and review. Divorce mediators may be lawyers, financial professionals or mental health professionals depending on the issues the family needs to deal with.

Collaborative Divorce

Each spouse retains his or her own trained collaborative lawyer to advise and assist in negotiating an agreement on all issues and the preparation of the required paperwork. A divorce financial professional assists by providing financial information. Mental health professional mediate parenting and any emotional issues. Everyone signs an agreement that the lawyers and spouses cannot go to court or threaten to go to court and the financial professional cannot participate in any subsequent litigation. Each client has built-in legal advice and advocacy during negotiations, and each lawyer’s job includes guiding the client toward reasonable resolutions. If no agreement is signed disqualifying the attorneys if the process fails, this process is called a “cooperative divorce”.

Adversarial Divorce

Each spouse retains his or her own lawyer to represent him or her throughout the divorce process. All lawyer efforts are aimed primarily at preparing for trial,
including use of formal discovery and/or temporary motions in most cases, while at the same time trying to negotiate a settlement. Settlement usually results by the time of trial but, throughout the process, the spouses are generally discouraged from negotiating with each other. When there is no settlement of temporary or permanent issues, the judge enters court orders resolving the disputes after an evidentiary hearing including testimony of witnesses and introduction of documentary evidence.