February 23, 2012

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Husband could pay wife in retirement benefits

A husband could satisfy a $120,000 installment payment he owed to his ex-wife under their divorce agreement by transferring some of his retirement benefits to her, a Virginia court recently ruled.

The wealthy couple’s divorce decree required the husband to pay the wife a total of $1.2 million in 10 annual installments.

To make his first installment payment, the husband transferred to the wife $120,000 from his rollover IRA and 401(k) plans.

The wife argued that this violated the divorce decree because, due to taxes and penalties, she would net only $61,000 if she cashed out the retirement benefits right away.

But the court sided with the husband. It said the installment payment was okay because the property he transferred to his wife had a value of $120,000 at the time of the transfer.

Postnuptial agreement must be ‘fair’ at the time of divorce

A postnuptial agreement is similar to a prenuptial agreement – it sets out what each person is entitled to if the marriage fails. The difference is that a postnuptial agreement is signed after the wedding has taken place.

Postnuptial agreements are increasingly being accepted as legally valid. But they’re not foolproof, and sometimes a spouse can avoid their terms – especially if those terms just don’t seem particularly fair.

For instance, the Connecticut Supreme Court recently refused to enforce a postnuptial agreement that a couple had signed back in 1989.

Under that contract, the wife had agreed to accept $75,000 as a cash settlement of any alimony claim if the couple split up, and gave up any rights to her husband’s car-wash business. [Read more...]

Couples must obey divorce agreement – even if circumstances change

A typical divorce agreement may include a division of property, alimony, and child custody. In many cases, the alimony and custody rules can be modified at a later date if circumstances change. However, a property division usually can’t be modified – even if unforeseen circumstances mean that one spouse got a much better (or worse) deal than anybody expected.

For instance, when an Alaska couple split up, they had to figure out how to divide some stock that they jointly owned in two companies. They decided that the husband would get the stock, and he’d pay his wife a total of $50,000 for it in a series of installments over time.

Eventually, the husband fell behind on the payments, and the wife sued. [Read more...]

Who’s getting married? Who’s getting divorced? Census numbers tell the tale

The U.S. Census Bureau has gone back through its data from the 1940s to the present, and has compiled a new report analyzing marriage and divorce in America. Who’s getting married? Who’s getting divorced? And how are the answers changing over time?

One of the most interesting findings is that the divorce rate has started to level off and decline. But that’s not necessarily because couples are more likely to stay together for life. Rather, a lot of couples are simply not getting married in the first place, so that when they split up, it doesn’t result in a divorce.

Here’s a closer look at some of the findings:

People are waiting longer to get married. Back in the 1950s, the median age for a first marriage was 23 for men and 20 for women. By 2009, though, the median age had risen to 28 for men and 26 for women. [Read more...]

Smartphone app helps workers prove they weren’t paid properly

The U.S. Department of Labor has launched a smartphone application that makes it easier for employees to track the hours they’ve worked and figure out the wages they’re owed.

The free app, which is available in both English and Spanish at the agency’s website, provides a timesheet for workers to track hours independently of their employer. They can also add comments related to their timesheet; view a summary in daily, weekly and monthly formats; and e-mail the summary as an attachment.

The app is compatible with the iPhone and the iPod Touch. The government plans to make it compatible with other smartphones, such as the Android and the BlackBerry, and to add new features to track tips, commissions, bonuses, deductions, holiday pay, weekend pay and shift differentials.

Federal officials say the app will be highly useful during wage-and-hour investigations where employers haven’t kept accurate records.

Employer sued for retaliating against former employee

Employers can face serious legal consequences if they retaliate against an employee for calling attention to discriminatory practices. But in some cases, the same is true if a company retaliates against a former employee.

Take the case of a magazine editor in Massachusetts who was a part owner of the company that published the magazine. He lost both his job and his shares in the company after an ownership dispute.

As part of his termination agreement, the company agreed to pay him $14,000 each quarter for four years.

Sometime after he left, another former employee sued the company for disability discrimination. The editor filed a court document supporting her claim. [Read more...]

Tip policy gets Applebee’s restaurant chain in trouble

Under federal law, workers can be paid as little as $2.13 an hour as long as they’re earning enough in tips to make up the difference between that amount and the federal minimum wage.

However, if employees spend more than 20 percent of their time performing non-tipped duties, they’re supposed to be paid the full minimum wage for that time.

Recently, the Applebee’s restaurant chain was sued by more than 5,000 current and former servers and bartenders, who claimed they were required to spend more than 20 percent of their time doing cleaning and maintenance, for which they received no tips.   [Read more...]

Feds crack down on companies that call employees ‘contractors’

The federal government is cracking down on businesses that call people “independent contractors” when they’re really entitled to be treated as employees.

In particular, the U.S. Department of Labor and the IRS are stepping up their auditing and enforcement efforts. The IRS has begun a three-year auditing initiative to investigate as many as 6,000 employers, large and small, and nail those who are misclassifying their workers.

Many state governments are also beefing up their enforcement efforts.

If you’re an employer and there’s a possibility that you’ve been misclassifying your workers – or if you’re a worker who’s considered a contractor, but you function more like an employee – you should speak to an attorney. [Read more...]

Can companies use social media to screen job applicants?

Social networking sites such as Facebook and Twitter, and Internet search engines such as Google, can provide a lot of information about someone you don’t know well. For that reason, many employers are using them to screen job applicants, hoping to learn more about a person than what they can see on a resume.

But this can pose legal problems – because these sites can easily give an employer information that is supposed to be off-limits when making hiring decisions.

For example, an employer might discover:

  • A Facebook post where an applicant discusses his religion. [Read more...]

What are the tax implications of a short sale?

Additional Information:

I am considering a short sale on my home in Sherborn.  What are the resulting tax implications of a short sale?

ATTORNEY ANSWER:

Because a short sale involves the forgiveness of debt (in this case the unpaid balance of the mortgage) the seller may get a 1099-C for the amount of the mortgage deficiency.  There are options available which include bankruptcy or relief if you can be considered insolvent.  Also the Mortgage Forgiveness Debt Relief Act of 2007, may provide relief from debt forgiveness taxation for certain owner occupants until December 31, 2012.  These are fact intensive determinations and tax and/or legal counsel should be involved in the transaction.  [Read more...]

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