Thursday, October 21, 2010
Wednesday, October 20, 2010
By All Means – Stop the Foreclosures (Part II)
Being forced to move from one’s home because one can no longer afford to make the payments is a problem devastating thousands of families throughout the United States in today’s tough economy. Borrowers whose equity has evaporated in the struggling economy have little or no excess funds to use to save their homes. Mortgagees have turned to the banks for assistance with home loan modifications and refinances as an alternative to the unavoidable humiliation and financial disaster resulting in a foreclosure, making it difficult – if not impossible – for them to maintain or acquire a new home mortgage for years after.
How bad is it? RealtyTrac, the online foreclosure listing service, reports that during the three summer months, the number of default notices, scheduled auctions of foreclosed homes and bank repossessions climbed to 930,437, up by nearly 4 percent from the previous quarter. During this period, one in every 139 houses in the United States received a foreclosure filing. Foreclosures in the United States grew 21% in 2009. At this time, there is no set number for 2010; however, one can bet it will be a daunting figure.
Foreclosures involve documents that must be properly submitted before the actual foreclosure can proceed legally. Homeowners, lawyers and analysts have been citing problems with foreclosure documentation for the last few years, but it appears to have reached such intensity recently that banks are beginning to re-examine whether the foreclosure papers are being prepared properly and whether homeowners are receiving proper statutory notice prior to foreclosures.
Today it is not uncommon for the original note and deed of trust signed by the parties to be sold to a mortgage servicer who does not maintain the original signed documents on-site. A deed of trust contains specific foreclosure language and procedures that must be followed in the event of a default. The servicer therefore has no clue as to what notices may exist in the note and deed of trust.
One of the leading culprits of the foreclosure crisis is a lack of communication within the banks themselves. While the loan modification department begins working with mortgagees to refinance and/or modify their existing loan, the delinquent loan is forwarded to the foreclosure department to initiate foreclosure proceedings. In some cases the home mortgagees are told to stop making payments so their loan will become “toxic.” They are led to believe that this will assist with the modification being pushed through. Unfortunately, by the time these families find out that they do not qualify for the loan modification, the home is already set on the foreclosure block or sold without proper notice to the homeowner.
Lawyers are discovering documents signed by Lender employees who say they have not verified crucial information such as the amounts owed by homeowners. Other problems involve questionable legal notarization of documents, in which, for example, the notarizations predate the actual preparation of documents — suggesting that signatures were never actually reviewed by a notary. Affidavits are placed on foreclosure documents that swear to the accuracy of the foreclosure proceeding even though the procedures stated have not been followed. Frequently the “affiant” has no personal knowledge when the affidavits are signed.
Other problems occur when notarizations take place so far from where the documents were signed that it was highly unlikely that the notaries witnessed the signings, as the law requires.
On still other important documents, a single official’s name is signed in such radically different ways that some appear to be forgeries. Additional problems have emerged when multiple banks have all argued that they have the right to foreclose on the same property, a result of a murky trail of documentation and ownership.
The sad shame of it all is that the industry that helped create the home mortgage crisis, is now feeding the crisis through bad business practices. Many believe the foreclosure crisis is having a ripple effect, a drop in city revenues, a spike in crime, more homeless and vacant properties. Cities are cutting revenues.
If you have received notice of foreclosure or you believe that your home has been improperly foreclosed on, contact counsel immediately. It is far easier, more effective and less costly to stop a foreclosure from taking place before the fact than it is to reverse a foreclosure after the fact.
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Sunday, March 7, 2010
Preventive Legal Care - Relatively Simple Things Make Large Differences in Legal Costs
A commentary by Dallas Attorney Mark Nacol
During the last 37 years of general practice in a number of civil areas, I have had the opportunity to observe repetitive mistakes and decisions made by clients in regard to whether or not preventive legal care is cost-worthy.
Most prudent people do not think twice about having their teeth cleaned, becoming vaccinated for the flu or other childhood illnesses, going to their doctor if they are dizzy, having speech problems or other symptoms of stroke diagnosed or changing the oil in their automobile.
The average person clearly acknowledges the flu shot is definitely preferable to two weeks in bed. Basic dental hygiene trumps a root canal every time. A blood thinner medication is far preferable to paralysis or brain damage, and early detection of cancer or other invasive diseases, may significantly improve prognosis for recovery.
On the other hand, when it comes to the ordinary individual’s legal needs, I have noted throughout the years and continue to note a juvenile and somewhat cavalier attitude. The result is denial and refusal to consider relatively small fees required to bring preventive legal care into play.
Depending on the size and nature of a man, woman or a couple’s estate, probate planning in the form of wills, durable powers of attorney, medical directives, medical authorizations, medical powers of attorney, testamentary and/or intervivos (living) trusts can avoid future attorney’s fees from 50 to 100 times the amount required for preventive care. Probate and/or litigation without a will in a large estate, disability, dementia, Alzheimer disease or other medical issues requiring guardianship and/or extraordinary legal procedures vastly exceed the basic costs of preventive care. The cost of fixing the legal problem after the event is extraordinary versus the simple matter of preventive legal care in the first place. Fees ranging from $500 to $5,000, depending on the complexity of the estate or matter, at first blush might appear large but may frequently be increased by 2 to 3 zeros in complicated, complex litigation that can last for years.
Marital prenuptial agreements are emotionally delicate, but may be a useful and significant tool to provide creditor protection throughout a marriage and reduce the cost of dissolving a marriage, an unfortunate circumstance, by thousands and thousands of dollars.
A properly prepared and executed contract for the purchase and sale of land or for the purchase and sale of a business when accomplished before the transaction is essential in fixing the rights of the parties, establishing enforceability of their promises and the cost necessary to force compliance with those promises. Time after time, I find a client who comes into my office and looks at me with dog eyes and says, “Can you help me in this business transaction? I’ve already signed the contract.” My response, of course, is “Yes, it is my pleasure. But, it is going to be far more expensive now than if you had simply prophylactically entered into an enforceable agreement prior to the conduct you allege is fraudulent or the subject of a breach at this time.”
The examples above may be extended into almost every area of the law. Why in the world would anyone want to market an invention, a well known mark of their business or trade, a manuscript or other written document without first having protected those items through trademarks, patents, copyrights or, at the very least, non-disclosure agreements? A common complaint echoed throughout the years has been the significant cost of the judicial system and the financial burden of enforcing ones right in the courts of law of the state or federal government. With a bit of foresight and ingenuity and the help of an ethical, competent attorney, and the willingness to spend a smaller sum of money, many of the problems, disappointments and disenfranchisements with the judicial system may be bypassed altogether.
In closing, I am reminded of the classical advertisement by Mr. Goodwrench. “Pay me now or pay me later.” Preventative maintenance of the most important legal aspects of your life are as important as preventive maintenance of your car. Have you priced a new engine versus a can of oil lately?
During the last 37 years of general practice in a number of civil areas, I have had the opportunity to observe repetitive mistakes and decisions made by clients in regard to whether or not preventive legal care is cost-worthy.
Most prudent people do not think twice about having their teeth cleaned, becoming vaccinated for the flu or other childhood illnesses, going to their doctor if they are dizzy, having speech problems or other symptoms of stroke diagnosed or changing the oil in their automobile.
The average person clearly acknowledges the flu shot is definitely preferable to two weeks in bed. Basic dental hygiene trumps a root canal every time. A blood thinner medication is far preferable to paralysis or brain damage, and early detection of cancer or other invasive diseases, may significantly improve prognosis for recovery.
On the other hand, when it comes to the ordinary individual’s legal needs, I have noted throughout the years and continue to note a juvenile and somewhat cavalier attitude. The result is denial and refusal to consider relatively small fees required to bring preventive legal care into play.
Depending on the size and nature of a man, woman or a couple’s estate, probate planning in the form of wills, durable powers of attorney, medical directives, medical authorizations, medical powers of attorney, testamentary and/or intervivos (living) trusts can avoid future attorney’s fees from 50 to 100 times the amount required for preventive care. Probate and/or litigation without a will in a large estate, disability, dementia, Alzheimer disease or other medical issues requiring guardianship and/or extraordinary legal procedures vastly exceed the basic costs of preventive care. The cost of fixing the legal problem after the event is extraordinary versus the simple matter of preventive legal care in the first place. Fees ranging from $500 to $5,000, depending on the complexity of the estate or matter, at first blush might appear large but may frequently be increased by 2 to 3 zeros in complicated, complex litigation that can last for years.
Marital prenuptial agreements are emotionally delicate, but may be a useful and significant tool to provide creditor protection throughout a marriage and reduce the cost of dissolving a marriage, an unfortunate circumstance, by thousands and thousands of dollars.
A properly prepared and executed contract for the purchase and sale of land or for the purchase and sale of a business when accomplished before the transaction is essential in fixing the rights of the parties, establishing enforceability of their promises and the cost necessary to force compliance with those promises. Time after time, I find a client who comes into my office and looks at me with dog eyes and says, “Can you help me in this business transaction? I’ve already signed the contract.” My response, of course, is “Yes, it is my pleasure. But, it is going to be far more expensive now than if you had simply prophylactically entered into an enforceable agreement prior to the conduct you allege is fraudulent or the subject of a breach at this time.”
The examples above may be extended into almost every area of the law. Why in the world would anyone want to market an invention, a well known mark of their business or trade, a manuscript or other written document without first having protected those items through trademarks, patents, copyrights or, at the very least, non-disclosure agreements? A common complaint echoed throughout the years has been the significant cost of the judicial system and the financial burden of enforcing ones right in the courts of law of the state or federal government. With a bit of foresight and ingenuity and the help of an ethical, competent attorney, and the willingness to spend a smaller sum of money, many of the problems, disappointments and disenfranchisements with the judicial system may be bypassed altogether.
In closing, I am reminded of the classical advertisement by Mr. Goodwrench. “Pay me now or pay me later.” Preventative maintenance of the most important legal aspects of your life are as important as preventive maintenance of your car. Have you priced a new engine versus a can of oil lately?
Wednesday, March 3, 2010
Supervised Visitation in Texas – Part 1
Former spouses often use informal visitation arrangements as an opportunity to assault, harass, stalk, and emotional abuse their children and former partners. In addition, some parents will use their children as a means to hurt the other parent by denying access to the child(ren) even though such access has been ordered by the court, i.e. failing to be at home during scheduled visitation periods, failing to bring the child(ren) to a scheduled location for the other parent to exercise their court ordered visitation, faking illness, etc.
Supervised visitation takes place between the non-custodial parent and his or her child(ren) in the presence of a third party who observes the visit to ensure the child’s physical and emotional safety. Though sometimes reasonably and successfully ordered, visits voluntarily supervised by friends and family in their homes can be fraught with danger for the child and parent, as well as the monitor, especially in cases of domestic violence. Family members may trust the parent whose visits are being supervised and therefore may not take proper or sufficient measures to assure the child(ren) are watched or monitored at all times during the visit.
Consequently, when supervision is indicated, possession / visitation supervised by a neutral third party with the capacity to enforce effective safety measures is normally ordered and enforced by the courts. The expenses of such supervision are often excessive and may in themselves create a detriment to possession by a parent. Such agencies may also provide reports and recommendations to the court based on the success or failure of the supervised visits. Such recommendations assist the courts in making informed decisions regarding supervision and whether continued supervision in the best interest of the child(ren).
If supervised visitation is requested, some type of compelling reason and evidence, based on the circumstances surrounding the child(ren) must normally be established. Such evidence may include denial of access, drug addiction, mental or physical abuse, neglect, or severe mental illness of a parent. The following is a potential list of acts and/or circumstances that may be considered contrary to a child’s best interest.
• Violence or physical endangerment – A noncustodial parent may be denied visitation rights if the parent has abused the child or threatened physical violence.
• Emotional harm – Where sufficient proof is offered of potential emotional harm or that standard visitation has detrimentally affected a child’s welfare, supervised visitation may be ordered.
• Child’s wishes – A court may consider the child’s wishes as to visitation. The weight given to a child’s preference is dependent on the child’s age, emotional stability, maturity and motives.
• Abduction – There must be a showing that there is a strong imminent probability of abduction to limit visitation on this basis.
• Substance abuse – A parent who abuses drugs or alcohol may be ordered to supervised visitation restrictions if the conduct endangers the child or if the parent uses abusive language and/or mistreats the child.
• Mental illness –Mental incapacity may be a reason for supervised visitation only if it is determined by the court that there is a reasonable potential for harm to the child due to such mental illness.
• Sexual behavior – Courts rarely deny visitation solely on the basis of a non-marital heterosexual relationship. Courts will, however, cancel overnight visitation by a child with a parent because of the parent’s cohabitation on a showing of an adverse and material negative impact on the child.
• Incarceration – Visitations due to incarceration may be suspended only on a showing that such visits are detrimental to the child.
To have more of your questions answered on supervised visitation in Texas, or for answers to any other Texas child custody concerns you may have, call Dallas Divorce attorney Mark Nacol of the Nacol Law Firm P.C.
Supervised visitation takes place between the non-custodial parent and his or her child(ren) in the presence of a third party who observes the visit to ensure the child’s physical and emotional safety. Though sometimes reasonably and successfully ordered, visits voluntarily supervised by friends and family in their homes can be fraught with danger for the child and parent, as well as the monitor, especially in cases of domestic violence. Family members may trust the parent whose visits are being supervised and therefore may not take proper or sufficient measures to assure the child(ren) are watched or monitored at all times during the visit.
Consequently, when supervision is indicated, possession / visitation supervised by a neutral third party with the capacity to enforce effective safety measures is normally ordered and enforced by the courts. The expenses of such supervision are often excessive and may in themselves create a detriment to possession by a parent. Such agencies may also provide reports and recommendations to the court based on the success or failure of the supervised visits. Such recommendations assist the courts in making informed decisions regarding supervision and whether continued supervision in the best interest of the child(ren).
If supervised visitation is requested, some type of compelling reason and evidence, based on the circumstances surrounding the child(ren) must normally be established. Such evidence may include denial of access, drug addiction, mental or physical abuse, neglect, or severe mental illness of a parent. The following is a potential list of acts and/or circumstances that may be considered contrary to a child’s best interest.
• Violence or physical endangerment – A noncustodial parent may be denied visitation rights if the parent has abused the child or threatened physical violence.
• Emotional harm – Where sufficient proof is offered of potential emotional harm or that standard visitation has detrimentally affected a child’s welfare, supervised visitation may be ordered.
• Child’s wishes – A court may consider the child’s wishes as to visitation. The weight given to a child’s preference is dependent on the child’s age, emotional stability, maturity and motives.
• Abduction – There must be a showing that there is a strong imminent probability of abduction to limit visitation on this basis.
• Substance abuse – A parent who abuses drugs or alcohol may be ordered to supervised visitation restrictions if the conduct endangers the child or if the parent uses abusive language and/or mistreats the child.
• Mental illness –Mental incapacity may be a reason for supervised visitation only if it is determined by the court that there is a reasonable potential for harm to the child due to such mental illness.
• Sexual behavior – Courts rarely deny visitation solely on the basis of a non-marital heterosexual relationship. Courts will, however, cancel overnight visitation by a child with a parent because of the parent’s cohabitation on a showing of an adverse and material negative impact on the child.
• Incarceration – Visitations due to incarceration may be suspended only on a showing that such visits are detrimental to the child.
To have more of your questions answered on supervised visitation in Texas, or for answers to any other Texas child custody concerns you may have, call Dallas Divorce attorney Mark Nacol of the Nacol Law Firm P.C.
Monday, February 15, 2010
Texas and Federal Confidentiality Laws – Use Caution with Your Texas Divorce
There are many legal and proper ways to obtain proof of a spouse’s infidelity. Take care to avoid tactics used to obtain private information that may violate federal and Texas confidentiality laws and a spouse’s right to privacy. You may be tempted by others to obtain proof of a partner’s infidelity by various inappropriate and/or illegal methods. Reading emails, recording telephone calls, installing spyware or geographical tracking devices or even setting up hidden cameras are just a few methods a spouse may be offered when entertaining the thought of catching a cheating spouse. However, such actions may expose both parties and their attorney to civil liability and possible criminal penalties. Under Texas law, it is a crime to install a geographical tracking device on a vehicle owned by another person. When emotions are running high, it is imperative that you seek proper counsel as to the proper legal action to be taken when establishing facts.
Both federal and state wiretapping laws apply to divorcing spouses. A spouse may sue the other spouse or their agents for invasion of privacy. Federal law regulates electronic surveillance of conversations and access to emails, faxes and voicemail. The law imposes civil and criminal sanctions for intentional interceptions of electronic communications. However, accessing email after it has been transmitted, i.e. downloading a text from your telephone or email from the hard drive of a family computer, is not an offense under the Federal Act. Texas has laws that also prohibit the interception of communications. Under such laws, counsel may also be held liable if they disclose information received from the intercepted communications provided by their clients.
Federal and Texas laws both allow recording of telephone calls and other electronic communications with the consent of at least one party to the communication. Under the one-party consent statutes, a spouse may record conversations in which he or she is participating. This has been extended to include parental recording of a child’s conversations with a third party, including the other parent. The parent can consent to the recording on behalf of the child so long as the parent has a good faith objective and a reasonable belief that it is in the best interest of the child, even if the child is unaware of the recording.
It is important that a spouse take great care in their means and methods of gathering information for your divorce in Texas. Information obtained by illegal means can expose one, even if he or she is a spouse, to civil liabilities and possible criminal prosecution. Texas recognizes that every person has a certain right to privacy. Such right is violated if a person intentionally intrudes upon the private affairs of another by offensive means. Accessing stored email or secretly recording a spouse can be a violation of a spouse’s right to privacy. If a suit is filed, the damaged spouse may recover monetary damages, including punitive damages.
For answers to your questions on gathering information for your Texas Divorce, contact Dallas Divorce attorney Mark Nacol with the Nacol Law Firm, P.C.
Both federal and state wiretapping laws apply to divorcing spouses. A spouse may sue the other spouse or their agents for invasion of privacy. Federal law regulates electronic surveillance of conversations and access to emails, faxes and voicemail. The law imposes civil and criminal sanctions for intentional interceptions of electronic communications. However, accessing email after it has been transmitted, i.e. downloading a text from your telephone or email from the hard drive of a family computer, is not an offense under the Federal Act. Texas has laws that also prohibit the interception of communications. Under such laws, counsel may also be held liable if they disclose information received from the intercepted communications provided by their clients.
Federal and Texas laws both allow recording of telephone calls and other electronic communications with the consent of at least one party to the communication. Under the one-party consent statutes, a spouse may record conversations in which he or she is participating. This has been extended to include parental recording of a child’s conversations with a third party, including the other parent. The parent can consent to the recording on behalf of the child so long as the parent has a good faith objective and a reasonable belief that it is in the best interest of the child, even if the child is unaware of the recording.
It is important that a spouse take great care in their means and methods of gathering information for your divorce in Texas. Information obtained by illegal means can expose one, even if he or she is a spouse, to civil liabilities and possible criminal prosecution. Texas recognizes that every person has a certain right to privacy. Such right is violated if a person intentionally intrudes upon the private affairs of another by offensive means. Accessing stored email or secretly recording a spouse can be a violation of a spouse’s right to privacy. If a suit is filed, the damaged spouse may recover monetary damages, including punitive damages.
For answers to your questions on gathering information for your Texas Divorce, contact Dallas Divorce attorney Mark Nacol with the Nacol Law Firm, P.C.
Forming a Corporation in Texas
A corporation is a legal entity that is granted a charter recognizing it as a separate legal entity having its own privileges, and liabilities distinct from those of its shareholders. When it is formed it becomes a separate entity from the people who own the stock of the corporation. For this reason, a corporation’s actions are made by the corporation and not by an individual person. This legal distinction is what separates the liability of the Texas corporation from the individual and is a major consideration in deciding to form a corporation.
Anyone can form a corporation in Texas. A corporation can form another corporation. Once the corporation is formed, the entity formed is responsible for all actions done in the corporate name. The new entity is required to file state and federal taxes and acquire any licenses to do business in the name of the corporation. The corporation can purchase insurance, own real estate and cars and other assets or personal property as if were a natural person. It is responsible for actions both good and bad done in its name. If a corporation fails, shareholders normally only stand to lose their investment, and employees will lose their jobs, but neither will be further liable for debts that remain owing to the corporation’s creditors.
Corporations can exercise human rights against real individuals and the state, and they may be responsible for human rights violations. There are five core characteristics of a business corporation:
•Legal personality
•Limited liability
•Transferable shares
•Centralized management under a board structure
•Shared ownership by contributors of capital
Generally, the corporation files articles of incorporation with the government, laying out the general nature of the corporation, the amount of stock it is authorized to issue, and the names and addresses of directors. Once the articles are approved, the corporation’s directors meet to create bylaws that govern the internal functions of the corporation, such as meeting the procedures and officer positions.
•Some of the advantages of a corporation are as follows:
•Shareholders have limited liability for the corporation’s debts or judgments against the corporation.
•Generally, shareholders can only be held accountable for their investment in stock of the company.
•A Texas corporation may deduct the cost of benefits it provides to officers and employees.
•A corporation pays 15% federal income tax on taxable income up to $50,000; 25% tax on income from $50,001 - $75,000; 34% tax on income from $57,001 - $100,000; 39% tax on income from $100,001 - $335,000; and 34$ tax on income over $335,001
There are some disadvantages to a corporation. The process of incorporating a business in Texas may require more time and money than other forms of organizations and the corporation may be monitored by federal, state and some local agencies and as a result require have more paperwork to properly comply with regulations. Incorporating may also result in higher overall taxes in some circumstances.
If you are in the Dallas, Fort Worth area and need help with forming a Texas coporation, contact The Nacol Law Firm, P.C.
Anyone can form a corporation in Texas. A corporation can form another corporation. Once the corporation is formed, the entity formed is responsible for all actions done in the corporate name. The new entity is required to file state and federal taxes and acquire any licenses to do business in the name of the corporation. The corporation can purchase insurance, own real estate and cars and other assets or personal property as if were a natural person. It is responsible for actions both good and bad done in its name. If a corporation fails, shareholders normally only stand to lose their investment, and employees will lose their jobs, but neither will be further liable for debts that remain owing to the corporation’s creditors.
Corporations can exercise human rights against real individuals and the state, and they may be responsible for human rights violations. There are five core characteristics of a business corporation:
•Legal personality
•Limited liability
•Transferable shares
•Centralized management under a board structure
•Shared ownership by contributors of capital
Generally, the corporation files articles of incorporation with the government, laying out the general nature of the corporation, the amount of stock it is authorized to issue, and the names and addresses of directors. Once the articles are approved, the corporation’s directors meet to create bylaws that govern the internal functions of the corporation, such as meeting the procedures and officer positions.
•Some of the advantages of a corporation are as follows:
•Shareholders have limited liability for the corporation’s debts or judgments against the corporation.
•Generally, shareholders can only be held accountable for their investment in stock of the company.
•A Texas corporation may deduct the cost of benefits it provides to officers and employees.
•A corporation pays 15% federal income tax on taxable income up to $50,000; 25% tax on income from $50,001 - $75,000; 34% tax on income from $57,001 - $100,000; 39% tax on income from $100,001 - $335,000; and 34$ tax on income over $335,001
There are some disadvantages to a corporation. The process of incorporating a business in Texas may require more time and money than other forms of organizations and the corporation may be monitored by federal, state and some local agencies and as a result require have more paperwork to properly comply with regulations. Incorporating may also result in higher overall taxes in some circumstances.
If you are in the Dallas, Fort Worth area and need help with forming a Texas coporation, contact The Nacol Law Firm, P.C.
Saturday, January 16, 2010
2009 IRS Tax Changes for Claiming Children for Exemption Deductions
2009 tax year and forward, the Child Dependent Exemption Tax Deduction rules related to divorce have been amended by the Internal Revenue Service.
The changes to the 2009 tax code are as follows:
1. The custodial parent, for 2009 & forward, is the one with whom the child resides the greater number of nights during the year, regardless of the divorce decree terms.
2. You must obtain IRS Form 8332 (Release of Claim to Exemption for Child of Divorce or Divorced Parents) to claim the exemption if you are the non-custodial parent. The divorce agreement or court order will not be used to substitute for IRS Form 8332.
3. The custodial parent can unilaterally revoke the release of a child exemption for calendar years 2009 & forward, even if the release was made prior to 2009.
The parent claiming a dependency exemption on the child/children is the only parent eligible for the following tax benefits:
* Dependent Exemption Deduction
* Child Tax Credit
* Child & Dependent Care Credit
* Education Credit or Education Expense Deductions
* Earned Income Credit
* Head of Household Filing Status
With all the new changes, all non-custodial parents who plan to take a dependency exemption should obtain IRS Form 8332 for 2009 & forward tax years. A divorce agreement or court order cannot be substituted!
In any future settlement agreements that include a provision for a non- custodial parent to take a dependency deduction for one or more children in one or more future tax years, have the custodial parent complete IRS Form 8332 when executing the settlement agreement. Sometimes it is very difficult to get ex-spouses to sign off on papers at a later date!
The changes to the 2009 tax code are as follows:
1. The custodial parent, for 2009 & forward, is the one with whom the child resides the greater number of nights during the year, regardless of the divorce decree terms.
2. You must obtain IRS Form 8332 (Release of Claim to Exemption for Child of Divorce or Divorced Parents) to claim the exemption if you are the non-custodial parent. The divorce agreement or court order will not be used to substitute for IRS Form 8332.
3. The custodial parent can unilaterally revoke the release of a child exemption for calendar years 2009 & forward, even if the release was made prior to 2009.
The parent claiming a dependency exemption on the child/children is the only parent eligible for the following tax benefits:
* Dependent Exemption Deduction
* Child Tax Credit
* Child & Dependent Care Credit
* Education Credit or Education Expense Deductions
* Earned Income Credit
* Head of Household Filing Status
With all the new changes, all non-custodial parents who plan to take a dependency exemption should obtain IRS Form 8332 for 2009 & forward tax years. A divorce agreement or court order cannot be substituted!
In any future settlement agreements that include a provision for a non- custodial parent to take a dependency deduction for one or more children in one or more future tax years, have the custodial parent complete IRS Form 8332 when executing the settlement agreement. Sometimes it is very difficult to get ex-spouses to sign off on papers at a later date!
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