Rules regarding health insurance

Colorado state law provides a few helpful rules on health insurance after a divorce. The law has a prohibition on an insured spouse who is going through a divorce from changing or canceling a family insurance policy without advance notice and consent of the other party.

If you carry the insurance for your family, be aware that you can’t drop your former spouse without his or her consent. You should also be aware that changes you make to your insurance plan could affect your coverage or any coverage you have for your children.

Absent a separate agreement, health insurance that you have through your ex-spouse will generally be cancelled at the end of month following a divorce. If your spouse provided the insurance, it may be possible to get temporary coverage through your former spouse’s employer using COBRA. If you do need to use COBRA coverage, you will likely be responsible for the payments, but your insurance plan will remain intact.

If you have questions about what may or may not happen to your health insurance coverage, contact your attorney.

Reporting Maintenance On Your Taxes: Avoid an IRS Headache

Tax season may have come and gone for this year, but don’t put your taxes too far down on your list of priorities just yet. The IRS recently revealed that it is going to start looking more closely at tax returns for divorced couples where maintenance, or alimony, is involved.

The news comes on the heels of a new study that revealed a gross discrepancy between what ex-spouses should be reporting on their tax returns and what they’re actually claiming.

Under the tax code, a spouse who is paying maintenance can deduct those payments each year, while the spouse who is receiving payments must claim that money as income. While payments for child support aren’t considered income and can’t be deducted, alimony payments must be.

A recent report by an IRS watchdog revealed that nearly half of the tax returns from ex-spouses contained discrepancies regarding alimony paid and income reported. The report estimated that over a five-year period, those errors could amount to $1.7 billion dollars. In light of that news, the IRS plans to change its audit filters to catch some of these suspicious returns.

To avoid a potential audit, it’s important to ensure you know what’s required. Here’s a helpful blog regarding how to file a return after a divorce. And it may be helpful to seek out an accountant or someone with specialized experience with these types of returns. 

Read the full IRS story from the Wall Street Journal here.

Taking Litigation out of Divorce

Many families facing divorce don’t realize just how long the process might take, but with overburdened courts, mandatory waiting periods and conflicting family schedules, the process can drag on for the better part of a year or longer. For those families who want to minimize the stress that a yearlong divorce process might create, there are a number of alternatives for you to explore.

Mediation and collaborative divorce are among the more popular alternatives to a traditional divorce, and both are gaining traction as cost-effective, efficient means of achieving your desired result. At the outset, these approaches require that you and your family agree on using an alternative to the traditional model. You don’t have to agree on everything, but it’s necessary that both parties understand and buy into a different process. Both of these methods have a track record of helping families find long term, mutually satisfying agreements where stress is minimized and kids come first.

If you have questions about whether your family might be able to use an alternative to litigation, ask your attorney to explain the differences between the various methods, and talk to your family about the process.

You can learn more about collaborative divorce here, and more about mediation here.

And here’s a story about how collaborative family law is helping families in other areas of the country.