Divorce has a bad stigma. People often think it’s best for children if they work through their relationship issues and stick it out. That is usually false. If you are considering getting a divorce, but you are concerned about the impact on your children, consider the following ways that children could benefit from divorce depending on different situations.
- The child is removed from an environment where they were physically abused.
Every parent has a moral and legal obligation to protect their child from physical abuse. If one parent is physically abusive toward the child or unwilling to protect the child from physical abuse by another person, the other parent has an obligation to remove the child from that environment and protect the child from any physical abuse. Filing for divorce and petitioning for full custody of the child can help protect them.
- The child is protected from psychological abuse.
Psychological abuse can sometimes be more difficult to identify than physical abuse. Emotional manipulation, name calling, harsh punishments, and extreme anger or rage can all constitute psychological abuse. If a child is subjected to psychological abuse in the home, a divorce can facilitate the child’s removal from the abusive parent.
- A parent or another individual in the home is being physically abused.
A child does not need to be physically abused themselves to be harmed by physical abuse in the home. Witnessing the physical abuse of a parent, sibling, or other household member can cause fear, anxiety, and other harmful psychological effects, and can teach the child a lack of respect for other people, which will have lasting effects throughout his or her life.
- A parent or another individual in the home is being psychologically abused.
Watching another person be psychologically abused in the home, whether in the form of emotional manipulation, aggression, or verbal abuse, cannot only be hurtful to a child, but can also teach that child to accept such treatment or treat others the same way. Emotional abuse has lasting effects, whether direct or indirect.
- The child is protected from a neglectful parent.
When one parent is absent and not fulfilling their parental obligations of providing financial support, a divorce between the parents will enable the other parent to petition for child support. Whether child support will be ordered depends on a myriad of factors including each parent’s income, education level, and work history. Many states use a formula to calculate the proper amount of child support owed by the non-custodial parent.
- The child is no longer exposed to substance abuse.
Substance abuse in the home can be very harmful to a child. It is often accompanied by some form of emotional abuse and can lead to physical abuse. Additionally, children living in environments with substance abuse are more likely to gain access to drugs and alcohol.
- The child is able to relax away from an environment with fighting and tension.
Perhaps a child is not living in a home with physical, emotional, or substance abuse, but has two parents who are constantly fighting—that disharmony in the home can cause many negative emotions for children including fear, anxiety, stress, and depression. If parents cannot learn to deal with their marital problems in a healthy manner, divorce may provide children with a healthier, more stable environment away from the toxic tension of their parents’ fighting.
- Divorce will enable the child’s parents to pursue future relationships that model mutual respect and healthy communication.
It is important for children to grow up observing healthy relationships that demonstrate love, care, mutual respect, and healthy communication. If a child’s parents fail to model a good relationship, a divorce can enable the parents to find a better suited spouse.
- Divorce can teach children to set boundaries in their relationships and require respect in relationships.
There is an old adage: “You teach people how to treat you.” Some couples try to stay together for the children, which may cause them to permit unacceptable treatment. This does not benefit children. If the treatment by one spouse to another has become harmful and is unchanging, a divorce can teach children to not accept that type of treatment in their own relationships.
One of the first crucial decisions when starting a new business is choosing the right business structure. Often, new business owners consider forming a limited liability corporation (LLC) or a Corporation.
An LLC is a business entity that is separate from its owners, known as “members”, flexible in structure, and limits the personal liability of its members. The LLC can also choose different tax structures. It can choose to be taxed as a sole proprietorship or partnership, depending on the number of members, or as a Corporation.
A corporation can take two different forms: an S corporation or a C corporation. A C corporation is a standard corporation that is formed by filing articles of incorporation with the secretary of state where the business is to be incorporated. An S corporation is a closely-held corporation that derives its name from an IRS provision providing special tax treatment for an incorporated business that meets certain requirements.
To determine the best fit, an understanding of the tax and functional differences of each form is important:
In an LLC taxed as a sole proprietorship or partnership, there is no need to file a business tax return—each owner of the LLC pays personal income taxes based on their percentage of ownership in the company. As the business entity itself does not pay taxes (the individual owners pay personal income tax), taxes are said to “pass through” the LLC. An LLC, without employees, is not required to pay unemployment taxes or state disability taxes.
Taxes also pass through an s-corporation. In this structure, owners are paid a salary and the remaining profit or loss passes through the s-corporation and is taxed through an owner’s personal income taxes. S-corporations are generally required to pay unemployment taxes, state disability taxes, payroll taxes, and—in some states—state corporate taxes.
In a C corporation, the business is a separate entity that is required to file its own corporate tax return. The taxes do not “pass through” to shareholders.
An S corporation has several organizational requirements:
- No more than 100 shareholders;
- Only one class of stocks;
- Shareholders must be citizens or residents of the United States; and
- Shareholders must be individuals.
If these requirements are met, the business entity will not be required to file its own tax return and the taxes will pass through to the owners.
In an LLC, taxes also pass through the entity, but there is no limit on the number of members, which need not be United States citizens or residents. C corporations also have no restrictions on ownership and can issue stock in multiple classes.
The choice between forming an LLC or a corporation should be based on the particular needs and goals of your business. For guidance in selecting the best business structure and forming your business, contact our experienced business law attorneys in Myrtle Beach SC.
You may have heard that you can avoid Probate by putting your home in your adult child’s name; or perhaps your son or daughter is helping to pay your bills and you think it would be easier to manage finances if your property was in their name. If you are considering adding your adult child’s name to the deed of your home or transferring ownership of your home to your child, consider the following reasons why you should not do so:
- You will no longer have sole legal control of the property.
When you put your home in your adult child’s name, you can no longer sell the property without his/her consent. Furthermore, in the unfortunate event that your child were to pass, the property—or at least their interest in the property—could be inherited according to their Will, or lack thereof, depending on how the property is titled.
- Your property may be exposed to your adult child’s current or future debt liabilities.
Your home may be exposed to your adult child’s creditors, if he/she has unpaid debt, or is subject to a tax lien in the event that your child is overdue on state or federal taxes. Even if your adult child does not already have debt, he/she may be able to use the property as collateral to secure future loans. You will have no protection from their creditors.
- The transfer may be considered a gift that renders you temporarily ineligible for Medicaid benefits.
According to Medicaid regulations, if your transfer is viewed as an attempt to move assets and become eligible for Medicaid funds to pay for long-term care, your “gift” may trigger a period of ineligibility for Medicaid benefits. When you apply for Medicaid, you will have to disclose all financial transactions during a certain period of time. If you have to move into a nursing home and you recently made a transfer, the period of ineligibility will be calculated using a formula that divides the value of the transfer by the average cost of a nursing home in your state.
- You might have to pay taxes on your gift.
The transfer to your adult child will legally be considered a gift and subject to federal gift tax regulations. Under the new tax plan that came into effect in 2018, this will likely only impact families with very large estates, but it is something to consider in your estate planning strategy.
- Your child may have increased capital gains taxes.
For federal income tax purposes, if you simply add your child’s name to the title, he/she receives the gift at your cost basis. For example, if you paid $100,000 for the property and it is now worth $500,000, and you give your daughter half of the house, her cost basis would be $50,000. When she goes to sell the property, she would be entitled to the $250,000 and, if he/she isn’t living in the property when it is sold, he/she might have significant capital gains taxes to pay.
Overall, the decision to transfer the deed of your home to your adult child can create several problematic circumstances and, in most cases, should not be done for reasons of convenience or as a tool to avoid probate. Speak with an attorney and allow them to guide you.
Louis Pasteur, a 19th century French scientist, famously stated, “Chance favors the prepared mind.” It’s not generally pleasant to think about the end of your life and most people are too busy living their lives to make plans for what will happen after they pass. But the truth is—that day will come for us all and creating an estate plan now will allow you to control and design the details of your legacy. Here’s why:
- Without a Will, your estate is subject to state intestate laws.
If you become deceased without a proper Will in place, your estate will be divided according to intestate laws. That means the law of your state will decide, by statute, which of your relatives inherits from you and how much. This might result in family members you really wanted to provide for, not receiving any inheritance at all, while other relatives, who perhaps you had no intention of leaving money or assets to, may inherit a significant portion.
In South Carolina, if you pass away without a Will, have a spouse and children, the State has determined that your assets will be divided 50% to your spouse and 50% to your children. Very few of my clients are happy with this arrangement. Creating an estate plan that accurately reflects your wishes eliminates these unfortunate circumstances and allows you to control the legacy of your estate.
- You can name a guardian for your children.
It is not uncommon for individuals to draft their first Will once they become parents. Similar to the concerns mentioned above, if you do not designate a guardian for your children in the event of your death, the state government will make that decision after you pass.
Even if your minor children are older, it is not too late and still important to make your intentions known in a properly executed Will.
- You can pass down items to designated people.
Perhaps you have a very sentimental or valuable item that you want to entrust to a particular person after you pass away. In a Will, you can make that wish known. If you pass away “intestate” (without a Will) in South Carolina, your valuable items will be divided according to the wishes of the Personal Representative (Executor) of your estate, or could even be sold. Said Personal Representative will be chosen according to state law.
- A Will makes things easier for your family and friends.
Unfortunately, there can be a lot of drama surrounding inheritance. If you do not have a Will, family and friends might be in disagreement about how you wanted your estate to be divided. Or, perhaps your Will is very old and the circumstances of your life have changed drastically—if your Will has not been updated to reflect the changed circumstances of your life, this can also create conflict for those you leave behind.
Additionally, having a Will can make the probate process smooth and less expensive. Without a Will, your Personal Representative would have to petition the Court to be allowed to sell your Real Property. Of course this slows down an already lengthy process and will increase attorneys fees.
Do yourself a favor and your loved ones a favor by making your wishes clear in a properly executed Will.
- You can make gifts to charity.
If there is a charitable organization close to your heart, you can designate money or assets to be donated to that charity in your Will.
Be sure to note that simply writing your wishes down on a piece of paper in your house will not necessarily result in those wishes being carried out after you pass. A Will must be properly executed and an estate planning attorney can help you develop an estate plan, and draft and execute a Will.
If you do not have a proper Will or want to make changes to your existing Will, the estate planning attorneys at our firm will be able to guide you through the process, so you can focus on living your life, while knowing you have a responsible estate plan in place that accurately reflects your wishes.
Going through a divorce is an emotional and often tumultuous time in a person’s life. If efforts to reconcile with your spouse are no longer viable, and you find yourself at the beginning of a divorce in South Carolina, it is time to start an action plan. Although it is difficult to do so, approaching the situation calmly and treating the end of your marriage like the dissolution of a business is important.
To protect your legal and financial interests in a divorce:
Close all joint accounts and separate non-marital assets.
In South Carolina, marital property is divided “equitably” during a divorce. Ending a marriage is like ending a joint venture business, and if you and your spouse are separating, it is time to separate your finances. It is common for individuals going through a divorce to wonder how much money they should take out of their joint account for their own use before closing the account. This depends on the circumstances of each person and each marriage. If you are unsure of what to do, this is something you can discuss with your attorney.
Make copies of important legal and financial documents.
Information on documents like bank statements, credit card statements, and tax returns include important details that may be relevant in determining child support, spousal support (alimony), and even the proper grounds for divorce. In South Carolina, there are five grounds for divorce: one-year separation, adultery, habitual drunkenness or narcotics abuse, physical cruelty, and desertion. Details in your bank or credit card statements may provide evidence in support of one of these grounds.
Hire an experienced divorce attorney.
During a divorce, you need an advocate more than ever. An experienced divorce attorney in South Carolina can help negotiate the division of your assets, child custody agreements, and spousal support to serve your best interests. Whether or not your spouse is represented by counsel, an attorney who understands the nuances of divorce laws in South Carolina can help you obtain the best result possible.
Apply for an Order of Separation and Maintenance.
Once you decide to end your marriage, you may need to file for Separate Support and Maintenance prior to filing for Divorce. While South Carolina does not technically provide for “legal separations”, an Order of Separation and Maintenance can accomplish many of the same goals including establishing a date by which to measure the accrual of debts by either spouse.
Put a child custody and visitation plan in writing.
In a relatively amicable divorce, spouses may feel that they are capable of reaching a child custody and visitation plan on their own and do not require a court order or formal agreement; however, it is much better for everyone involved, especially the children, to have a formal written agreement detailing your plan. Otherwise, if one parent violates your informal, verbal agreement, you will not be able to enforce that agreement.
Conserve your money and keep track of your expenses.
Whether you or your spouse were the primary breadwinner in the marriage, it is wise to save as much money as you can—as divorces are expensive—and keep detailed records of your expenses, which will come in handy in spousal support and asset division negotiations.
Update your will and other beneficiary information.
You may also want to consider updating your estate plan, including your will and any other beneficiary information, while you are going through a divorce. If you become deceased before your divorce is final, your soon-to-be-ex spouse could possibly inherit your assets.
Divorce is always challenging and emotional. Consider hiring an experienced divorce attorney in Myrtle Beach, South Carolina to help you navigate through the legalities and negotiations of this difficult process. Contact us today.