Love in a Time of Podcasts

Love in a time of Podcasts

By: Jason Weis, Esq.

Two incredibly popular podcasters recently weighed in on marriage and divorce with some thoughtful advice.  

First, Dennis Prager, provocative American talk show host and conservative commentator, recently published a “Fireside Chat” proposing the most important question couples should ask themselves prior to marriage is: “Do you actually enjoy each other’s company?”  He postulates that some unhappy marriages arise where couples love each other, but do not actually like each other.  “Ask yourself:  do you miss the person when you are not together?”  Whatever your political leanings or thoughts about Mr. Prager, there very well could be something to the old adage “marry your best friend.”  Love, while beautiful, can sometimes create feelings of obligation or even burden that, in turn, could create negative momentum over time.  Of course, not liking a person (or not loving a person) is not grounds for divorce in Virginia. 

In Virginia, the fault-based grounds of divorce remain: 

  1. Adultery, sodomy, buggery; 
  2. Felony conviction resulting in confinement for more than one year;
  3. Cruelty; and 
  4. Willful desertion.

 

Explorations of Virginia Fault-Based Grounds for Divorce and Virginia No-Fault-Based Grounds for Divorce can be found elsewhere on our site.

 

Second, Jordan B. Peterson , a controversial author, intellectual, and clinical psychologist, recently interviewed Warren Farrell, a best-selling author and notable advocate for both men’s and women’s rights.  In their near-three hour discussion, titled “The Four Dos and Don’ts of Divorce, Jordan offers his view that marriage is mostly about children, not adults:  if adults exercise their free choice to have children, marriage effectively binds those adults together to raise their children.  Warren then posits four “must do’s” if parents want children of divorce to do as well as children of “intact families.” 

He believes divorcing parents should: 

(1) Strive to ensure the children have an equal amount of time with each of them; 

(2) Live within about 20 minutes’ drive time of one another; 

(3) Not expose the children to any bad-mouthing or negative body language directed toward the other parent; and 

(4) Effectively manage the administrative aspects of child-rearing, possibly with the assistance of a third-party.  

Each item above roughly aligns with Virginia’s Best Interest of the Child Statute in one way or another, but, like most issues in divorce, there are always important exceptions.  Child custody and child visitation are delicate and often highly contested matters.  Explorations of Virginia Child Custody and Virginia Child Visitation can be found elsewhere in our blog.  After adultery, perhaps no other family law issue evokes a “burn the boats – do whatever it takes at whatever the cost” response from clients than contested parenting time and contested parenting behaviors.  Divorce can be a positive or negative for your children and selecting the right family law attorney may help each parent maintain a healthy relationship with his/her children following divorce.  


Behavioral Economics and Its Impact on Divorce Negotiations

By Steven Goldman, Esq.

Stemming from my background in finance and business, combined with an interest in psychology, I have always been enamored by the field of Behavioral Economics – the study of psychology as it relates to economic decision-making. Over time, reading and studying Behavioral Economics became a hobby of mine and something I would apply in daily financial decisions.

I eventually began to think about how the field of Behavioral Economics, and understanding how people make decisions generally, could help me in my practice as a family law and divorce attorney. After reading several books written by pioneers in the field (Thinking Fast and Slow, Daniel Kahneman; Misbehaving, Richard Thaler; Predictably Irrational, Dan Ariely; etc.) and wanting to dive further into the subject matter, I enrolled in – and recently completed – a Behavioral Finance course through the University of Chicago.

In this blog, I will provide a few lessons about how Behavioral Economics can be utilized in matters of divorce and family law.

First, a primer on Behavioral Economics. An online search will tell you that the average adult makes more than 35,000 decisions per day, with 90% of those decisions made subconsciously. Daniel Kahneman describes two systems for decision-making: System 1, which is instinctual, automatic, and does not require effortful thought processes (e.g., driving, eating); and System 2, which is deliberate, controlled, and requires significant mental energy (e.g., mathematical calculations, deciding on an expensive purchase such as a house or car).

To conserve energy, our minds complete as many decisions with System 1 processing as possible.  Because System 1 acts without deep thought, it relies on heuristics, or biases, which act as shortcuts to influence our decision-making processes. Some examples of biases that I will show in relation to divorce negotiations are as follows:

  • Status Quo
  • Loss Aversion
  • Anchoring
  • Endowment Effect
  • Confirmation
  • Overconfidence

It is impossible to ignore or eliminate our biases, but we can recognize the way they operate and use that to think more clearly with System 2. We can also use what is called Choice Architecture – designing choices and options in ways that influence the decision-making process.

Example 1 – Custody Negotiations

Custody issues are always one of the most difficult to negotiate. One reason is that both parties are strongly impacted by their Status Quo biases. Prior to a separation, each parent is accustomed to living in the same home as the child and now there is a necessary adjustment to two households. Any schedule, regardless of the split, will feel like a loss of time. Loss Aversion is the principle that drives people to protect and preserve what they already have. In this scenario, the entire family used to live in the same home and both parents will feel a strong sense of loss as soon as the child’s time is divided. Parents often have a hard time negotiating a parenting time schedule because it all feels like a loss of time and, therefore, the negotiation will feel like a loss regardless of the outcome.

One way that I support clients through Loss Aversion is to redirect the conversation around the issue of time. Working with a Divorce Coach or Child Specialist, as we often do in the Collaborative Divorce process, provides the parties with an experienced mental health professional to focus on the benefits of co-parenting. An expert is there to guide the parents and explain that a child will benefit from positive co-parenting and that the co-parenting relationship will have a greater impact on a child than a particular schedule. The schedule will still be an important component to the negotiation, but it can be viewed as one piece of the puzzle to address the child’s needs.

Example 2 – Expectations and Financial Negotiations

One of the biggest obstacles in divorce negotiations is overcoming expectations. Expectations are developed as early as a client’s initial consultation that includes a sales pitch and a promise. Unfortunately, legal advice can and usually does shift when more objective information becomes available.

The problem is that the initial expectations become Anchors from which it may be difficult to deviate. Receiving anything less than initially expected will seem like a loss, even if it is an objectively reasonable and likely outcome.

Another issue arises when there are drastic disagreements over subjective financial matters, such as valuation of property. People typically overvalue their belongings, which is known as the Endowment Effect. As a result, it may be difficult to settle a buyout of a house, which carries history, memories, and sometimes serves as a home base for custody-related reasons. In financial negotiations, parties are expected to be rational and value a home based on an objective financial analysis. In reality, one person must receive less than what he or she believes it is worth due to the Endowment Effect. That person then typically uses the money to purchase a new property unaffected by those same biases. The result is the feeling that the person received less for the marital home and acquired something worth less.

One way to assist in financial negotiations is to implement the aforementioned Choice Architecture, which is another way of saying that we can frame choices to influence decisions. One way I have accomplished this in a negotiation is by providing multiple options that account for the biases parties bring into their decision-making.

Example of Choice Architecture:

Mr. and Mrs. Smith are negotiating the issues surrounding their house and the amount of spousal support to be paid by Mr. Smith.

The goal is for my client, Mrs. Smith, to get the marital home and receive as much support as possible. My client is aiming for Option 3 in this offer.

  • Option 1: Mr. and Mrs. Smith sell the house and each receive $80K ($40K in closing costs, divided equally). Mr. Smith pays $2,000 per month for 36 months in spousal support
  • Option 2: Mrs. Smith buys the house for $100K. Mr. Smith pays $2,000 per month in support for 30 months
  • Option 3: Mrs. Smith buys the house for $100K. Mr. Smith pays $1,800 per month in support for 36 months

Option 1 is completely unacceptable under any objective analysis, but it is valuable because:

  1. The presence of Option 1 shows that a buyout is better for Mr. Smith (an extra $20K), which will immediately narrow the focus between Options 2 and 3;
  2. Even though Option 1 is the higher amount of support for the longer period, it serves as an anchor for both numbers.
    • Option 2 “saves” 6 months of support for Mr. Smith
    • Option 3 “saves” $200 per month for Mr. Smith

There are different benefits to each option, but my guess is that most people would choose $1,800 per month because all support payments are perceived as losses and it is easier to picture a smaller loss for a longer period (Present Bias).

We have therefore constructed options that are aimed at Mr. Smith selecting Option 3, which provides for $4,800 in additional support as compared to Option 2.

Compare the above choices to a typical offer – I want $1,800 per month for a period of 36 months. $1,800 will not feel like $200 savings and 36 months will still seem too long. If I go even higher with my only offer, as most clients wish to do in order to give “negotiating room,” you run the risk of the offer coming across as unreasonable and not advancing the negotiations.  Alternatively, you are negotiating all of the terms and slowing the negotiations to a crawl.

That is not to suggest that Choice Architecture will guarantee success, but that it is designed to account for our biases and instinctual decision-making processes.

Example 3 – Timing of Negotiations

Lastly, whether due to a lack of time, distractions, or even for perceived strategic advantage, settlement negotiations are often saved until just prior to a trial. Objectively and behaviorally, this is one of the worst times to settle a case for several reasons – mainly the following:

  • Confirmation Bias: Through Confirmation Bias, we seek ideas and evidence that confirm our beliefs while reacting negatively to anything that contradicts our beliefs. As a client and attorney prepare for trial, they analyze the information in a light most favorable to their argument. It is likely that they ignore or even overlook the counterarguments. The positions become even more ingrained and the case becomes harder to settle.
  • Overconfidence: Related to and often resulting from Confirmation Bias is Overconfidence. If we continue to support and confirm our beliefs while simultaneously devaluing contradictory information, we become overconfident in our chances of success. A client is less likely to negotiate a fair outcome if he or she is overconfident about his or her chances in Court.
  • Sunk Cost Effect: The Sunk Cost Effect occurs when a person continues his or her behavior because of previously invested resources. Once we are invested in something, we have a hard time giving up on that investment. I have had clients openly admit that they would probably have accepted an offer if it came earlier in the case, but now that so much was spent on attorney fees, they feel it is “worth it to roll the dice” at trial.

    Objectively, the amount spent on attorney fees should have no bearing on whether to accept the deal. Additional attorney fees have no effect on the outcome of the case. Even more puzzling is that proceeding to trial will cost even more money to take the same risks.

If attorneys are aware of these biases, they should be making a concerted effort to gather the necessary data and proceed to negotiations much earlier in the litigation process. Doing so would lessen the impact of these biases on the negotiations and increase the chances of success.

Behavioral Economics clearly plays an important role in the way we think about money and make financial decisions, but its principles also guide the way we make decisions in many other areas of life.

In matters of family law, it is important to have an attorney who accounts for our natural tendencies and considers those in his or her counsel. If you have questions about a Virginia divorce or other family law issue, or wish to discuss a fresh approach to your case, Curran Moher Weis has experienced family law attorneys who can assist you through the process.

Please check out our reviews. You can request a consultation on our website or by calling us at (571) 328-5020.


I Made (or Lost) Money on GameStop Stock ($GME): What Happens in a Virginia Divorce?

By Steven Goldman, Esq.

 

Over the past week, GameStop (NYSE: GME) and other “meme stocks” (e.g., AMC and Nokia) have dominated headlines as hordes of retail traders attempted to squeeze hedge funds and other high profile short sellers, creating a highly volatile market. Within a matter of weeks, shares of $GME rose from approximately $20 to nearly $500 per share before almost immediately crashing back down to less than $100 per share. Fueled by easier and cheaper methods of investing with apps like Robinhood and TD Ameritrade, along with free trades becoming ubiquitous, nearly everyone has a friend or family member that got in on the action. Naturally, some people earned a lot of money in a short period of time while others lost just as much.

As a family law attorney, I expect to receive a lot of questions from clients as to who gets the “winnings” or, unfortunately, what to do about the losses in asset division and other matters of divorce. The following is a primer as to how investment gains and losses are generally treated under Virginia law:

Overview

In a Virginia divorce, investment accounts (including all stocks and other forms of investments held within the account) are assets subject to division if they are deemed to be marital property under Virginia Code §20-107.3. Irrespective of which spouse is the account holder, an account is considered marital property if it was acquired or contributed to during the marriage (with limited exceptions). As with all other marital assets, they are subject to “equitable distribution,” which is to say that they will be divided “fairly and equitably” after considering the factors listed in Virginia Code §20-107.3(E). Booth v. Booth, 7 Va. App. 22, 27-28 (1988).

If an investment account is held in the name of only one of the parties, the statute provides for a “monetary award” that may be payable to the other party in lieu of dividing the account.

How Should the Investments Be Divided?

Generally, passive appreciation from investments is divided in the same percentages as the rest of the account. For example, if an investment account is to be divided equally, then any investment gains would be divided equally as well. This is true even if those investment gains occurred after the parties’ separation because passive appreciation did not necessarily require any additional contributions by either party to earn that additional money.

However, Virginia Code §20-107.3(E)(2) demands consideration of, “the contributions, monetary and nonmonetary, of each party in the acquisition and care and maintenance of such marital property of the parties.” Although every situation is unique, the amount of money earned through active investing post-separation should be considered.

For example, let us imagine that Spouse A had $1 Million in an investment account as of the date of the parties’ last separation and the entire account was marital at that point in time. In January 2021, Spouse A actively traded on the account and earned another $1M from the purchase and sale of $GME. Although Spouse A utilized marital funds to invest in the market, it is at least worth considering the “contributions…in the acquisition and care and maintenance” of such marital property in awarding a greater percentage of the gains to Spouse A. This could potentially result in Spouse A receiving more than 50 percent of the assets from the account.

What About Investment Losses?

Once again, generally, passive losses from investments will not affect the division of an asset. However, let us now imagine that Spouse A had the same $1M in an investment account as of the date of the parties’ last separation, but that Spouse A then loses $500K from the purchase and sale of $GME.

Under the same statute, it could be argued that Spouse A made a “negative” monetary contribution to the acquisition and care and maintenance of marital assets. Spouse A was in control of the assets and took tremendous risk with Spouse B’s share of the funds. As a result, an equitable division of assets may result in Spouse B receiving a greater percentage of the remaining assets.

Further, it could be argued that marital assets were “wasted” or “dissipated” as a result of the risky investments. In considering such an argument, “once the aggrieved spouse shows that marital funds were either withdrawn or used after the breakdown, the burden rests with the party charged with dissipation to prove that the money was spent for a proper purpose.” Clements v. Clements, 10 Va. App. 580 (1990). Gambling and speculative stock trades, in anticipation of divorce or after the date of the parties’ separation, are oft-cited examples of marital waste.

Who Pays the Taxes?

At the end of each year, financial institutions issue a Form 1099, which states the gains or losses incurred throughout the course of a year. All investment income is then claimed on the individual’s tax return for that year. The financial institution will not know whether the account holder is married or getting divorced and so if the parties are to file taxes separately, then only the account holder will be liable for any taxes owed.

“Meme stock” activity saw a lot of people buying and selling their investments in the same month. Any stocks held for less than one year result in “short-term” capital gains and losses, which are taxed at the same rate as ordinary income. For high-earners, the tax consequences for short-term capital gains will be substantial.

Once again, Virginia Code §20-107.3(E) provides that “tax consequences to each party” is a factor to be considered in the division of marital assets. This is to say that if Spouse A is required to pay a monetary award for Spouse B’s share of the investments, capital gains taxes should be calculated into the award because Spouse A will be left with the entire tax liability.

Conversely, capital losses will have been accrued in the scenario where Spouse A lost $500K from the purchase and sale of stock. Capital losses may be quite valuable because they are used to offset gains from the sale of other assets or, if there is a net loss that year, deductible against ordinary income up to $3,000 per year. See I.R.C. §1211

For example, let’s consider that Spouse A lost $500K from the purchase and sale of $GME but the parties also have $100K in capital gains from the sale of investments in a joint brokerage account. During that year, the capital losses can be used to offset the $100K in capital gains so that no taxes are paid on the investment income from the joint account. Spouse A will also have $400K in “capital loss carryover,” which can be used to offset gains in future tax years.

Capital loss carryover, especially in a situation described above, is a significant asset that must be considered when dividing assets in a divorce. See Attiliis v. Attiliis, 2009 Va. App. LEXIS 261 (2009). If the capital loss carryover is not considered, Spouse A will have $400K in losses to offset future gains, which has the potential to be worth well over $100K in future tax savings if Spouse A is a high-income earner.

Conclusion

If you or a spouse have engaged in volatile stock trades, it is important to consider the consequences this may have in the division of the assets used for trading – whether that be tax implications for capital gains or how to consider the value of capital losses.

If you have questions pertaining to your Virginia family law issues, it is recommended that you obtain legal and financial advice from professionals prior to and throughout the divorce process. Curran Moher Weis has experienced family law attorneys who are skilled in financial matters and can work with your financial advisors to plan for your best course of action.

You can request a consultation here on our website or by calling us at (571) 328-5020.

 

All investments involve risk of loss. Nothing contained in this website should be construed as investment advice. Any reference to an investment’s past or potential performance is not, and should not be construed as, a recommendation or as a guarantee of any specific outcome or profit.

 

The information contained within this article is provided for informational purposes only and should not be used as a substitute for obtaining accounting, tax, or other guidance from a licensed tax professional.

 


Curran Moher Weis Promotes Nicole Grejda, Esq., to Partner

We are pleased to announce that Nicole Grejda, Esq., has been promoted to partner at Curran Moher Weis. Ms. Grejda has been with us since 2017 and has since successfully represented our clients in multiple complex, high net-worth divorce cases, earned a certification in collaborative law, and, as of this past summer, is a trained professional mediator.

Our Managing Partner Grant Moher, Esq. said it best, “Ms. Grejda is a highly effective attorney. She is sharp and focused, both in court and at the negotiating table. She also cares deeply for her clients, and it shows in her work. We are proud to add her as a partner to our firm.”

Read the official press release here, and learn more about Ms. Grejda’s background and how to book a consultation with her here.


Child Support in the Time of COVID-19

By Grant Moher, Esq.

As we continue to navigate the ongoing public health crisis of COVID-19, parents are facing limited options for summer child care, as well as the potential that their children’s schools may be entirely or partially online in the upcoming 2020-2021 school year.  This presents a particularly difficult situation for divorced couples who share custody.  Every situation is different, but the following are some things to bear in mind for those navigating this issue:

  1. Child support is always modifiable. Child support can always be modified if there is a change in circumstances that warrants modification.  This could be a change in the income of either or both parties, a change in health insurance, or a change in the cost of work-related child care, to name a few.
  2. Work-related child care is typically included in child support. The cost of work-related child care – that is to say the cost of summer camps, day care, before and after school care, and other similar programs is typically included in child support.  That means the custodial parent who has work-related child care typically determines the type of care, and the cost of the care on a monthly basis, then that monthly amount is factored into the child support amount that the non-custodial parent pays.
  3. Older children. There is no set age cutoff after which work-related child care is no longer applicable.  Courts will look at the individual circumstances of each case; however in my experience, courts will typically start to view the necessity of child care for children over the age of about 12 or 13 with skepticism.  However, this may change as parents who have to work away from home grapple with how to provide their pre-teens and young teens with distance learning.  While children in this age range may be able to care for themselves for long periods of time, they may well need an adult presence to ensure their school work is being completed.
  4. The other parent’s ability to care for the children may be a factor. Under section 20-108.2 of the Virginia Code, when determining whether to include the cost of work-related child care into child support, the Court must consider “the willingness and availability of the noncustodial parent to provide child care personally.”  Thus, if the non-custodial parent is laid off or working in such a way that he or she is able (and willing) to provide care personally for the children, the Court must consider that.
  5. Nannies and Au Pairs. Requests to contribute to the cost of nannies and au pairs can often be a source of controversy, and whether the cost is reasonable will depend greatly on the individual circumstances of the case.  With school-age children, sometimes nannies and au pairs aren’t providing child care for large portions of the day and are instead doing other things for the household like cleaning and running errands.  Should the non-custodial parent have to pay for that?  Like in many situations, it depends on the circumstances.  Would it be possible to get a nanny only for the times of day the children aren’t in school?  Is the custodial parent’s job such that a live-in person is required (e.g. the parent is in a job that requires unpredictable work hours).  The current pandemic may make nannies and au pairs necessary in many households.  If a parent has to work away from the home, and children are not able to be in physical school during those work hours, a nanny or au pair may be the only available option for child care.
  6. Work-related child care must come at a cost to be included. Courts can only factor the cost of work-related child care into the child support guidelines if it comes at a cost.  Often grandparents or other relatives will provide child care, but if this care is given for free, it will not be included in child support.  In my experience, Court will look with some degree of skepticism upon claims that relatives are paid for providing child care.  Claims will depend on the circumstances of the case.  Has this relative always been paid for child care?  Is the relative paid consistently in a form that is easy to verify (e.g. by check), or is he or she paid inconsistently, and in a format that can’t be verified, like cash?

 

The more “legitimate” the arrangement appears, the more likely a Court will view the child care arrangement as valid and include the cost in with the child support.  In light of the global pandemic, more grandparents and relatives may be providing care for school age children during times the children otherwise would have been in school or camps.  Payment to these relatives may have to be considered.

 

As you continue to determine the best path forward through the current COVID-19 pandemic, the attorneys at Curran Moher Weis are here to support you with child support, custody and other family law matters. Follow our blog for additional information and tips or contact us here for a consultation.

 


Child Support and the CARES Act Stimulus Checks

By Daniel Schy, Esq.

As millions of Americans begin receiving stimulus checks from the recently passed Coronavirus Aid, Relief, and Economic Security (CARES) Act, many are wondering what impact these payments might have on child support payments.  Whether you receive or pay child support, we’ve answered some basic questions below:

Who qualifies for a federal stimulus check?

Individuals can qualify for payments of up to $1,200, and couples can qualify for payments of up to $2,400.  Those who qualify and have dependent children under the age of 17 are eligible for up to $500 per child.  Here’s who qualifies for the full credit:

  • Individuals whose Adjusted Gross Income (AGI) is $75,000 or less;
  • Individuals who are the head of household and whose AGI is $112,500 or less; and
  • Couples whose AGI is $150,000 or less

Those whose incomes exceed the thresholds mentioned above will still receive payments, though the payments are reduced $5 for every $100 your income exceeds the threshold.  Individuals with AGIs exceeding $99,000 and couples (without children) whose AGI exceeds $198,000 will not qualify.  The qualification threshold generally increases by $10,000 per child.

Remember: if you’re separated but not yet divorced, then your marital status on December 31st of the a given tax year determines your eligibility to file jointly.  If you’re still married, you can elect to file either jointly or as married, filing separately.

Are these payments considered income?

No.  These payments function as a tax credit rather than a deduction, meaning that it reduces your 2020 tax liability on a dollar-for-dollar basis.  Virginia calculates child support based upon gross income (Code of Virginia §20-108.2(C)), so these payments won’t affect your gross income for purposes of child support.

What impact will the tax credits have on support?

In most circumstances, none.  Virginia utilizes presumptive child support guidelines, meaning that unless the Court determines that “the application of such guidelines would be unjust or inappropriate,” the presumptive amount as set forth in the Code of Virginia §20-108.2(B) will be awarded.  If either party asks the Court to deviate from the guidelines, the Court must consider the tax consequences to the parties including claims for exemptions, child tax credit, and child care credit for dependent children,” pursuant to Code of Virginia §20-108.1(B)(13).

What if back child support is owed?

Unpaid child support may be offset against these payments, but typically only if the Division of Child Support Enforcement is involved and has reported the arrearage to the U.S. Department of the Treasury.

If you have questions pertaining to your child support matter or any other Virginia family law issue, we’re still available during the COVID-19 stay-at-home order.  You can request a call or a virtual meeting with a Curran Moher Weis attorney through our online form.

The information contained within this blog is provided for informational purposes only and should not be used as a substitute for obtaining accounting, tax, or other guidance from a licensed tax professional.

 


Divorce Without Court: Options for a Less Cumbersome, Stressful Process

By Grant Moher, Esq.

Current quarantines and mandated closures resulting from the COVID-19 outbreak will impact many people’s lives and businesses in very serious ways. One aspect I want to focus on, as it is currently affecting many of our clients, is the assumption that divorce must happen through court.

With Virginia courts halting all non-emergency hearings, couples pursuing litigation will experience substantial delays. For those couples, and those contemplating divorce, it is more important than ever to know: divorce doesn’t have to mean court.  In fact, the vast majority of our cases  (even those that start with court filings) resolve by other means.

Below is a guide to help you understand the various options for resolving your case without the expense, difficulty, delay, and uncertainty of court.

  1. Kitchen table” negotiation. So-called “kitchen table” negotiation is where you and your spouse discuss the terms of your divorce on your own and come up with a resolution.  One of you then hires an attorney only to draw up the agreement, and you both sign it.

It is crucial that an experienced attorney be the one to prepare the written agreement.  Some of the most difficult and costly situations I have seen in my nearly 20 years of practice were the result of couples signing agreements they drafted and signed on their own that contained conflicting provisions, vague terms, or were entirely unenforceable. Kitchen table negotiation can work well for low-conflict situations where there is a good deal of trust between the parties and everyone has full information about the situation, but you must work with an attorney who is well-versed on this process.

  1. Attorney Negotiation. Attorney negotiation involves both parties hiring an attorney (or one hiring an attorney and the other spouse representing his or herself directly), and those representatives negotiating back and forth to resolve the couple’s situation.  Attorney negotiation can be very effective for situations where a couples’ communication has broken down, or there is a power imbalance between the parties.
  2. Mediation. Mediation usually involves a series of meetings between a divorcing couple and a professional mediator who is trained to help them seek effective solutions to their disagreements.  Mediation is often a good alternative for situations that can’t simply be resolved through a “kitchen table” negotiation.

It is advisable that each spouse have their own attorney to advise them throughout the process, but the attorneys don’t necessarily have to attend the mediations. When I represent a client during mediation, I most often support that person by outlining a strategy in advance of or following a session.

In a situation where several mediation sessions are required, it can be useful for each party’s attorneys to attend and assist the couple in resolving remaining issues. I also typically recommend that one party’s attorney, rather than the mediator, draft the written agreement after the parties reach agreement in principle. It has been my experience that mediators sometimes do not draft agreements as “tightly” as the attorneys representing the   individual parties do.

  1. Collaborative Divorce. Collaborative divorce is a process by which a couple signs an agreement committing not to go to court, and to resolve issues pertaining to their divorce over a series of meetings with attorneys who have received special Collaborative law training. The process may also involve other professionals such as a neutral financial professional to help with the division of assets and support, if appropriate, or a mental health professional to help with emotional aspects of a case and / or issues involving the parties’ children.

The Collaborative process delves into the difficulties between divorcing parties more deeply than mediation or other processes.  As a result, the agreement reached can often be a better foundation for separation and divorce.  This can be very important for parties divorcing with youn children, as they will need to work through issues involving those children for years to come. You can find more information about the collaborative process here.

Of course, it’s not always possible to resolve a case outside of court.  But your attorney should always discuss the various options to resolve your case outside of court – and he or she should do this in the very first meeting you have.

Curran Moher Weis has several experienced family law attorneys who are trained in Collaborative divorce, and all of our attorneys are skilled in resolving cases outside of court. Schedule a consultation with one of our Virginia divorce attorneys through our website here or by calling us at (571) 328-5020.

Check back here at our blog regularly for other news and tips we provide to support you as you navigate separation, divorce or child custody issues.


Accounting for Shared Custody in the 2020 U.S. Census

By Daniel Schy, Esq.

In the midst of the upheaval caused by the COVID-19 pandemic, one of the last things on your mind may be responding to the 2020 U.S. Census.  Nevertheless, the U.S. Constitution mandates this decennial accounting, and your response is required by federal law.

Each person is to be counted at his/her usual place of residence.  For many, their usual place of residence is obvious, but for those parents with shared custodial arrangements, there may be some questions about how their children should be accounted for in their Census response.

Fortunately, there are clear answers: which residence should be considered your child’s usual residence will depend on your specific custodial arrangement.  Generally, though, that is the residence at which your child lives or sleeps most of the time.  If you are the primary caretaker, then your residence should be used.  In the event of a 50/50 custodial arrangement, then the residence at which your child resides on Census Day (April 1, 2020) should be used.

Learn more information about residence criteria for purposes of the 2020 Census here.

If you have questions pertaining to your custody arrangement or other family law matters, particularly during the current COVID-19 stay-at-home mandates in Virginia, Maryland and D.C., request a call or virtual meeting with a Curran Moher Weis attorney through our online form.


Divorce During a Global Health and Financial Crisis: What to Know About Dividing Assets

By Grant Moher, Esq.

As the world halts in a collective effort to slow a global pandemic, financial markets are in a volatile state. A bull market boosted investment portfolios for the last decade only to turn to a bear market that dropped stocks to historic lows last week, and has since been an erratic roller coaster.

While the market will recover at some point, couples who had been in the midst of, or were considering, a divorce before the crash have reached out for clarity on how to divide assets that have decreased significantly in value – once daily life resumes.

Here are 4 tips to divide and protect shared assets without having to liquidate them:

  1. Retirement Accounts. If you and your spouse are dividing assets in a retirement account, like a 401(k) or 403(b), generally these are divided with court orders called Qualified Domestic Relations Orders, or QDROs for short.

 

QDROs can be usually be drafted to take market fluctuations into account.  For example a QDRO could provide that an account is to be divided as of a certain date, and that any market fluctuations that take place after that date are simply applied to both parties’ shares of the account.  Further, there are no tax implications to the transfer.  The plan simply creates a new account for the spouse getting their share of the plan.  That spouse can either keep their account with the plan, or transfer their share to a 401(k) or IRA in their name.

 

  1. Thrift Savings Plans. If you or your spouse are federal government employees looking to divide a Thrift Savings Plan (TSP), that can be done with a Retirement Benefits Court Order (RBCO). The rules for dividing a TSP are similar to the rules for dividing a private sector retirement plan; however, there are a few nuances.  For example, the Order can provide that market gains and losses will be applied to the TSP balance, but that those gains and losses will only be calculated based on the TSP funds the individual was invested in on the date used to calculate the other spouse’s entitlement.  If the member changed those investments after that date, the calculations of gains and losses would have to be done by hand.

 

For additional information on dividing a TSP, please see the government’s official publication here:  https://www.tsp.gov/PDF/formspubs/tspbk11.pdf.

 

  1. Dividing Brokerage Accounts. Spouses looking to divide non-retirement accounts, like traditional brokerage accounts, should generally divide these accounts by shares to the greatest extent possible. For example, if you have 100 shares of stock in a particular company that are to be divided in half, rather than liquidate that stock you can typically divide so that each spouse gets 50 shares of the stock. In a case where spouses are able to reach an agreement to divide an account by shares, the individual or institution that manages their accounts should should be able to work with them to determine an equitable split.

 

  1. Loss Carryovers. Experienced family law attorneys are able to recognize and address when loss carryovers are an issue.  These sorts of carryovers come in many forms: 1) capital losses; 2) net operating losses; 3) passive activity losses; 4) charitable contributions; and 5) Alternative Minimum Tax credits.A full treatment of these loss carryovers would be too extensive for this post, but suffice it to say that if you have brokerage accounts and you’ve experienced losses, your attorney should be readily equipped with the knowledge and solutions to address these issues with you. A CPA or other financial professional should also be enlisted to help determine your options.

 

There are many intricacies to consider with investment and other asset division in a divorce. While many divorces are currently on hold as citizens take necessary quarantine and shelter-in-place measures, our attorneys at Curran Moher Weis are available to answer your questions through phone and virtual consultations.

 

You can request a consultation here on our website or by calling us at (571) 328-5020.

 


For Second Year, Curran Moher Weis is Primary Sponsor for Annual Fairfax Law Foundation Run for Justice

Author: Curran Moher Weis

Curran Moher Weis has signed on as the primary sponsor of the annual Fairfax Law Foundation Heroes vs. Villains Run for Justice 5K, for the second year in a row. As we enter a new decade, 2020 also marks the 8th consecutive year that the firm has sponsored the race, which raises money to support pro bono legal services and educational programs for Fairfax County residents and students.

“We represent many individuals and families in Northern Virginia, often through some of the most challenging times of their lives,” said Grant Moher, Esq., managing partner of Curran Moher Weis. “It is important to us to give back to this community in ways that support families and children having better access to education and resources to improve their well-being and opportunities.”

The 5K is a family friendly event, where big and little runners (and non-runners) are encouraged to come out, have fun and wear their superhero or villain best. Curran Moher Weis will be announcing the race winners, and will have a booth on-site all day with free items, games and activities.

While the race is typically held in mid-April, given the essential need for individuals and communities to aid in the containment of the novel coronavirus, the 5K will this year, occur in Summer 2020. The exact date will be announced soon as further information is known and decisions are made.

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