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When a couple divorces and children are involved, there is a lot of discussion that goes into the tax implications of custody and support. However, the tax consequences of every aspect of divorce should be considered, especially when it comes to businesses and real estate. The division of income producing property, businesses, and real estate can have significant impacts on the final division of assets and liabilities in a divorce.
Tax Implications for Businesses
Income producing property, such as rental property or commercial buildings, can add a whole new level of complexity to a divorce case. Depreciation of income producing property decreases the value of the property over time, yet any improvements made to the property increase the underlying basis. It is important that you have a professional evaluate the adjusted basis of the property before determining how it should be divided in a divorce.
Despite court and family efforts, there are times when it is in the best interests of a child to terminate a parent’s rights. This means that a parent will no longer be legally responsible for a child, does not have to pay child support, and cannot make any decisions regarding a child’s welfare. However, Illinois has a fairly unique and strict set of rules regarding when one parent is allowed to petition for the termination of the other parent’s rights.
Parental Right Termination Law
In Illinois, one parent is not allowed to simply petition for the termination of another parent’s rights. Under Illinois law 750 ILCS 50/1, a parent’s rights can only be terminated in conjunction with the Adoption Act or in a juvenile case. State legislators determined that it is in the best interests of a child that both parents retain their rights, except in extreme circumstances —a negligent parent still has an obligation to pay child support, even if he or she is absentee.
Children of divorce cannot freely travel between states like the children of married parents. Custodial parents who wish to move their child outside of the state, or even remove them temporarily, must get permission from the court first. In addition, the parent must demonstrate to the court that the removal is in the best interests of the child or provide some type of guarantee that the child will return.
Illinois Removal Law
Under 750 ILCS 5/609 of Illinois law, the court may allow any custodial party to remove their child or children from the state of Illinois if it is in the best interests of the child or children. In order to be granted approval, the party seeking removal must show that this is, in fact, in the best interests of the child or children.
Very few divorce cases are uncontested, where the divorcing couple agrees on all aspects of the split. In a contested divorce, the spouses have a couple of options when deciding how to resolve their issues. One option is to litigate the matters, but another viable option for divorcing spouses is through mediation.
What is Mediation?
Mediation is a process where a neutral third party handles all of the issues in your divorce. You and your divorcing spouse sit down with a mediator and discuss the contentious issues in a private forum. Then, the mediator helps to craft a solution in which both parties are satisfied.
The spouses then take the mediated agreement to court, where it can be approved by the family law judge. Mediation can cover all contested issues in a divorce, including child custody, visitation, spousal support, tax considerations, disposition of the residence, division of property, and the division of debt.
The Illinois Department of Child and Family Services (DCFS) handles all cases involving allegations of child abuse or neglect in the home. Any person can report suspected abuse or neglect to the DCFS, and they have the right to investigate the case in addition to removing a child from a home. Every child protection case in the state follows the same timeline, so you can know what to expect as the case moves forward.
Within 48 Hours of Removal
On the first day of a child protection case, emergency removal is used to take the child from the home by DCFS for his or her safety. Excluding weekends and holidays, within 48 hours of the removal a temporary custody hearing is held. The court decides whether there is probable cause, urgent and immediate necessity, and in the best interests of the child to place him or her in the custody of DCFS.
Along with the division of assets and spousal support, if children are involved, a final divorce decree also includes a child custody agreement and an order for child support. The purpose of child support is to protect the best interests of a child and provide support to the parent with primary custody.
However, sometimes a parent will fail to pay their child support obligation, and it can have negative consequences for everyone involved.
Consequences of Failing to Pay Child Support
If a parent fails to pay child support, the other parent can petition the court to impose penalties. A family law judge can sanction civil and criminal punishments against the parent in arrears, dependent on a number of factors involved in the case. Penalties associated with failure to pay child support can include the following:
Paternity refers to the relationship between a child and his or her legal father. A father, mother, and child can all benefit from establishing paternity, which gives a legal father rights and responsibilities regarding a child. It is important to note that the legal father of a child does not need to be the biological father, and Illinois law provides for many different ways that a mother or potential father can establish paternity.
Benefits of Establishing Paternity
There are several benefits to establishing paternity for both parents involved and the child. From a father’s perspective, he can create and nurture a relationship with his child. He can also pass on his family name, culture, and anything else that is important to him. The mother of a child also benefits from establishing paternity. She can apply for support from the father if they are not married and have another adult present to support the emotional development of the child.
As part of any divorce settlement where children are involved, a child visitation schedule details when a child should spend time with each parent. However, sometimes one parent does not wish for their child to see the other parent and will deny him or her the right to see the child. Known as visitation abuse, a parent cannot be legally kept from their child when a custody schedule is set by the court, and there are legal remedies available to help.
Illinois Visitation Abuse Law
Visitation abuse is considered a civil concept in Illinois. Defined in 750 ILCS 5.607.1, visitation abuse occurs when a parent denies another parent visitation as decided by the court or exercises his or her visitation rights in a manner that is harmful to a child or a child's custodian.
In our society, parental rights are fundamental rights, meaning they are the type of rights that are guaranteed to citizens of the United States by virtue of the Constitution. Because of this fact, to terminate parental rights, the government needs to prove that there has been some behavior or misconduct so bad that it causes harm or a threat of harm to the well-being of a child, and therefore the government has the right to intervene on the child(ren)’s behalf.
Misconduct, Neglect, and Abuse of Children
When we think about misconduct or behavior that is considered neglectful or abusive, generally we think about actions taken by parents to injure or hurt a child from infancy until the child is no longer a minor. However, Illinois law (among other jurisdictions in the United States) has found that misconduct while a fetus is still in utero may trigger termination of parental rights once the child has left the womb. Under our law, how can the government enforce the termination of parental rights for neonatal abuse?
Reasons for Premarital Agreements
A premarital agreement is a contract made between two potential spouses regarding any and all aspects of a marriage. There are several different reasons why couples agree to sign a premarital agreement before marriage. One person may be wealthier than the other and may want to protect that wealth in the case of a divorce. Additionally, if one party comes into a marriage with an existing business, a premarital agreement can protect those interests.
A prenuptial agreement can also be made to ensure predictability, to plan for the future, and to provide security for both parties involved. It can guarantee future life insurance, pension, or military benefits even in the case of divorce. It can also limit future support, to an extent, so that in the case of divorce both people feel like they are exiting the marriage with some level of support.
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