Assets Acquired During a Marriage may include the following:

– Real estate (including the family home and rental properties)

– Retirement and pension plans

– Businesses and professional practices

– Savings

– Items purchased

– Property attained during the marriage that is not considered marital property includes any gifts given to one spouse or property inherited by one spouse.

Equitable Division of Property

In Georgia, when people divorce, each spouse is entitled to an equitable share of all property and assets acquired during the marriage. Likewise, each spouse will also receive an equitable share of the debts and obligations of the marriage.

“Equitable division” does not necessarily mean equal division. Rather, it means “fair division”, as determined by the trier of fact (judge or jury) or by agreement of the parties.

Marital vs. Non-Marital Property

Property can be divided into two categories at the start: non-marital and marital property.

Non-marital property is any property acquired by one of the spouses before the marriage. Generally, this property remains the separate property of the spouse and is not subject to equitable division. Property that is inherited or received by gift during the marriage is also generally considered separate property.

Marital property is property or assets that were acquired by the parties during the marriage. In Georgia, it doesn’t matter whose name the property is in or how the property is titled. If it was acquired during the marriage (except by inheritance or gift), it is generally considered marital property – although there are some exceptions.

In Georgia, there is no fixed formula for determining the equitable division of property. Rather, the law gives the judge or jury the right to consider certain factors when deciding what is equitable, among other things:

– The source of funds used to acquire and maintain the marital property;

– The length of the marriage;

– The intent of the parties regarding the ownership of the property;

– The value of service contributed by each spouse to the marriage; and

– Whether there has been misconduct by one of the spouses. For example, in Georgia, when adultery is proven to be the procuring cause of the separation, the adulterous spouse is barred from receiving alimony but may still receive a portion of the assets of the marital estate.

Retirement, Pensions, Profit-Sharing and Deferred Compensation

Although these accounts may be held in the name of one spouse or the other, any contribution to the retirement or pension plan that was made or acquired during the marriage is marital property. Transfers in a divorce of part or all of these accounts from one spouse to another or to their children can be done without incurring the same penalties or tax consequences that would otherwise result from making withdrawals from these accounts.

This requires exacting findings by the judge in the Final Order and Decree of Divorce or the Separation Agreement, and the filing of a special order called a Qualified Domestic Relations Order (QDRO).

Is Your Spouse Hiding Assets?

If you want an equitable division of your assets, first you have to know what assets you have. When it turns out one spouse is hiding assets, there is no way to distribute them fairly. If you suspect that your spouse is not being truthful about the current assets within the marriage, there are things you can do to try to protect yourself.

You deserve to know about all the assets you share with your spouse. Our detailed team at Brenner Law Group can strategize with you and call in the proper experts to get to the bottom of the issue. We can also review prenuptial agreements, analyze your asset portfolio, and file QDROs on your behalf.

Get Brenner Law Group on Your Side
Want to ensure that you receive or retain the assets you are entitled to during divorce? Contact us today to schedule a consultation with Ms. Brenner.

Alimony Basics in Georgia

Alimony is a financial allowance made by one spouse to support of the other when they are both living apart. The purpose is to give economic support to a spouse in need, although this is not the sole basis of the determination, as the ability to pay will also be considered.

Alimony can also affect child support, because alimony shifts the before-tax (gross) income of the spouses. Child support calculation is based on a percentage of gross income. Lowering gross income by way of alimony can be a way of lowering the payment of after-tax dollars used for child support.

Here are some salient facts about alimony:

A judge does not have to award support payment; and alimony can be structured in different forms or combinations of forms:

Lump-sum: A one-time payment that either stands alone, or is made in addition to other periodic payments.

Fixed-term: Payments made over time, where the total amount to be paid is either stated in advance, or calculable from its terms (e.g. $1,200 per month for 20 months = $24,000); this type of alimony is probably not modifiable.

Open-ended: Periodic payments without either an explicit termination or total amount paid. This type of alimony is subject to termination or modification upon the occurrence of certain events, like: Remarriage of the receiver; Proof of a cohabitated relationship; and Material changes in circumstance affecting one party’s ability to pay or the other party’s need.

Payment to third parties on behalf of spouse or children: Open-ended alimony does not have to be a payment for a specific amount each month made to the receiving spouse. It can also be a payment to third parties for anything from the mortgage, to utilities, insurance payments, or payments for the kids’ orthodontia so long as the payment is pursuant to a written agreement.

Percentage of income from paying spouse’s business: If you are an entrepreneur or business owner it is important that you understand how alimony can impact your assets. Scenario: The paying spouse has a business and the receiving spouse feels that he or she contributed to the development of the business. Alimony can be expressed as a percentage of the business income. This form of alimony has the unique tax advantage of not being subject to IRS recapture rules. This is one place that expert tax-planning input can make a tremendous difference in the financial impact of your divorce.

How Much Will I Have to Pay in Alimony?

There is no statutory guideline in Georgia for determining the amount of alimony that should be paid. Rather, the code sets out factors that should be taken into consideration including the standard of living, how long the marriage lasted, the age, the resources available to each spouse, any contributions to the household during the marriage, the earning capacity of each spouse, and more.

Alimony is paid with pre-tax dollars. That is to say that the alimony is a deduction to the paying spouse, and income to the receiving spouse. For that reason, it is important to consider the relative marginal tax rates of the paying and receiving spouses when thinking about alimony as part of the overall financial settlement in a case.

How Does the Judge Decide Whether to Award Alimony?

The factors that the judge or jury may consider when deciding whether or not to award alimony, and if so, how much, are set out in the Georgia code and in various cases. Some of these factors include:

– Adultery or desertion on the part of either spouse – if it is proven that the separation between the spouses was caused by the adultery or desertion, the culpable party will be barred from receiving alimony

– The needs of the spouse seeking alimony, and the ability of the other spouse to pay

– The cause of the parties’ separation

– Evidence of conduct toward the other

– Alimony can only be awarded if there was a valid marriage and then a divorce. So, if the marriage was invalid, or no divorce granted, there can’t be alimony.

You may think that if you don’t say anything about alimony in your agreement, then there won’t ever be any. That is not necessarily true. The Court could reopen the issue later upon request of either spouse. You can waive alimony, but that has to be in writing in your agreement.

It’s important to understand that alimony is NOT automatically a charge against the estate of the person who is required to pay.

Alimony and Marital Conduct

The law surrounding spousal misconduct is a little different in regard to initial determinations in the divorce, and when it comes to grounds for modifying or enforcing judgments after the divorce. One thing is certain: conduct (such as adultery) is relevant to determining whether one is entitled to alimony at all.

However, it is not absolute by any means that an adulterous spouse will not get alimony. First, you must prove the adultery, which has become more difficult because of recent case rulings that restrict the kind of evidence that can be used. Secondly, one has to prove that the adultery is the actual procuring cause of the dissolution of the marriage. This is not always so easy to do. Finally, the fact that there has been adultery does not preclude the parties from agreeing on alimony.

Also, bear in mind that in Georgia there is no punitive alimony. In other words, a greater amount of alimony than might otherwise be warranted will not be awarded just to punish someone.

After the divorce, having a cohabitated relationship can be grounds for modifying an alimony award. So, it is important for your attorney to clarify in any final judgment or settlement agreement language that will make it easier for you to modify based on a live-in lover if you are paying alimony, and harder if you are the receiver.

Please see the section on Modification of Judgments to learn more about how cohabitation affects modification of alimony awards in Georgia.

Alimony and Taxes

The IRS may treat as alimony any payment made on behalf of a spouse that meets the IRS definition of alimony. Therefore, even if you don’t call it “alimony”, the IRS may treat it like alimony. For example, each of the following qualify as alimony payments:

– An ex-spouse’s health or life insurance

– An ex-spouse’s student loans

– Maintenance or mortgage payments on property that the receiving spouse uses, but the paying spouse still owns (e.g. husband retains title to marital home, wife is awarded possession of house, husband pays mortgage)

– If you haven’t specified in your property agreement whether a payment is or is not taxable alimony, you are opening the door to a tax windfall for one party and unexpected tax liability to the other.

Alimony, the IRS, and Maintenance Recapture

If you are in a higher income bracket than your spouse, the IRS would love to “recapture” payments you have made as alimony back into your income. Why? Because they can tax the money at a higher rate! And, since this will probably be discovered well after payments have been made (for example, during an audit), it may mean penalties and interest, as well. You should be aware of these two recapture rules:

The Steep Stair-Step Rule
Alimony payments in the first year cannot exceed the average payments for the second and third year by more than $15,000. Payments in the second year cannot exceed payments in the third year by more than $15,000. Also, be careful because temporary alimony that is paid according to a Court Order is not subject to recapture, but temporary alimony that was not paid pursuant to a Court Order DOES count in the steep stair-step rule and is subject to recapture. There is no recapture if the payment is based on a percentage of business income or business profit for at least three years.

The Related Contingency Rule
If your plan calls for alimony to be reduced automatically upon the occurrence of a contingency related to a child, or a time which can clearly be associated with such a contingency, the IRS may deem that your alimony is, in fact, child support.

The tax law affecting alimony, child support, and property division can be complex and can change significantly, which is why you need to get expert advice. If you have a question about alimony, child support or property division, don’t hesitate to contact us. Brenner Law Group will stand with you!

Real Estate and Your Financial Portfolio

We understand that real estate is one part of your financial portfolio, and may be there for different reasons. You may be using your real estate for personal enjoyment, to generate income, or to generate write-offs. However, the way you use your real estate now may change in light of the divorce. You want to make educated, strategic decisions, and you want to get your fair share.

Brenner Law Group can help you look at the big picture when making decisions about real estate during your divorce. If necessary, we can call in experts in appraisal, tax and estate planning, or forensic accounting to assist us with determining the best plan of action in your unique situation.

Whether your real estate is located in Georgia, in another state, or in a foreign country, Emily Brenner has the legal knowledge and experience needed to help you.

We Work with Business Valuation Experts

In a divorce, a business is considered marital property and is subject to equitable division. Oftentimes, spouses will disagree about how much a business is worth – therefore requiring the assistance of a business valuator. At Brenner Law Group, our family law team works with business valuation experts to determine how much a business is truly worth, which ultimately allows us to determine how the business can be divided between the spouses.

Uncovering Hidden Assets During Divorce

If you suspect your spouse of hiding revenue or overstating expenses, it may be necessary to hire a forensic accountant to do an in-depth investigation into the business to uncover information your spouse may be hiding. Initially, your divorce lawyer will uncover the necessary documents and records, which a forensic accountant will then examine for any red flags or withheld information.

If business ownership is involved in your divorce, it’s important to hire an attorney who understands how to frame the issues at hand and where to dig to make the case. Ms. Brenner knows how to build a case for the court that’s in your best interest.

Contact Brenner Law Group to Protect Your Assets

If you require business valuation during your divorce, contact Brenner Law Group to get in touch with our team. We can help you achieve a fair distribution of the business.

What Happens to Pensions After Divorce?

Pensions, social security, and other retirement accounts are considered marital property. During the marriage, contributions made to 401Ks and IRAs through salary deductions can be a large portion of both party’s net worth. The process of dividing retirement assets can be extremely complicated due to federal and state regulations that dictate how the assets can legally be divided. When dividing a pension plan or 401K, you need a qualified domestic relations order.

Qualified Domestic Relations Order

A qualified domestic relations order (QDRO) is a judgment that informs the administrator of the retirement plan and the amount of a spouse’s pension or 401k that will be given to his/her non-working ex-spouse after the divorce has been finalized. A QDRO can be included in your final divorce settlement or can be decided on at a later date as a separate order.

While most firms hire outside QDRO specialists, at Brenner Law Group, we manage the division of these assets ourselves. When necessary, we will hire QDRO specialists to determine how the retirement benefits will be divided.

Brenner Law Group is Committed To You

Our firm is dedicated to helping families, entrepreneurs, and small business owners plan their future after divorce. We take a sophisticated, tax-savvy, approach to asset divisions while also considering emotional attachments you and your family may have to certain property.

If you are considering divorce but are worried about how the division of retirement assets might affect your future, contact Brenner Law Group today!