Showing posts with label alimony. Show all posts
What is the Stevenson-Kelsey Spousal Support Calculator?
UPDATE: There is pending legislation for major changes to the alimony statute in Massachusetts. The Alimony Reform Act of 2011 was filed on January 18, 2011 and you can learn more about the Act at MassAlimonyFormula.com or in our recent blog post highlighting the differences between the bill and the current law.
Attorney Scott R. Stevenson of Hingham, Massachusetts and Attorney Justin L. Kelsey, Esq. (one of the authors of this blog) created the Stevenson-Kelsey Spousal Support Calculator as a tool to enable family law practitioners to better advise their clients regarding the settlement of divorce cases where a primary issue is the proposed alimony payment from one spouse to the other.
There is not currently any “formula” for the calculation of the spousal support obligation (also referred to as “alimony”) that is endorsed by either the Massachusetts Legislature, a consensus of Massachusetts Probate and Family Court Justices, or even a consensus of Massachusetts family law practitioners.
There are many groups who are seeking more definitive changes in the alimony laws in Massachusetts, including groups of lawyers and judges, such as the Joint Alimony Task Force of the MBA and BBA, and also groups of concerned citizens such as Massachusetts Alimony Reform.
Unfortunatley, there are seemingly as many different opinions in the family law field as there are ways to interpret the broad language of MGL, Chapter 208, § 34. Section 34 is the Massachusetts statute relating to the award of spousal support which provides that, in determining the amount of alimony, if any, to be awarded to any one spouse from the other spouse, the Court shall consider: the length of the marriage, the conduct of the parties during the marriage, the age, health, station, occupation, amount and sources of income, vocational skills, employability, estate, liabilities and needs of each of the parties, the opportunity of each for future acquisition of capital assets and income, the nature and value of the property to be so assigned, the present and future needs of any dependent children of the marriage; and the Court may also consider: the contribution of each of the parties in the acquisition, preservation or appreciation in value of their respective estates and the contribution of each of the parties as a homemaker to the family unit.
Not only are these factors numerous, they are in many ways subjective and the Judges are currently left with the difficult task of combining all of these factors to create an alimony order.
The purpose of the Stevenson-Kelsey Spousal Support Calculator is not to suggest that any one of the formulas presented herein is better than any other at approximating the required evaluation under current Mass. Gen. Laws. Ch. 208 § 34. However, the authors do believe that a more consistent approach to the calculation of the alimony obligation – based on quantifiable factors – can benefit the citizens of the Commonwealth of Massachusetts in coming to agreements more quickly and more fairly, thus ending the stresses and expense of divorce litigation sooner rather than later.
Therefore, while we do not endorse any of the specific alimony guideline formulas described herein, we do hope that reference to these formulas will assist family law practitioners in providing both their clients and the Court with increased guidance on appropriate sums for alimony or spousal support in Divorce Agreements.
Each of the formulas was developed by their respective authors after considered and learned debate, and at the very least, we believe that the family law bar and our clients can both learn from the result of that debate in other forums and apply what has been learned to the resolution of disputes in Massachusetts’ divorce litigation. It is in that spirit and with that purpose that we present the Stevenson-Kelsey Spousal Support Calculator.
NOTE:
To view and use the Stevenson-Kelsey Spousal Support Calculator please visit
www.kelseytrask.com/spousalsupport.htm, or you can obtain your own copy of the Stevenson-Kelsey Spousal Support Calculator for use on your own computer by submitting a request here.
Attorney Scott R. Stevenson of Hingham, Massachusetts and Attorney Justin L. Kelsey, Esq. (one of the authors of this blog) created the Stevenson-Kelsey Spousal Support Calculator as a tool to enable family law practitioners to better advise their clients regarding the settlement of divorce cases where a primary issue is the proposed alimony payment from one spouse to the other.
There is not currently any “formula” for the calculation of the spousal support obligation (also referred to as “alimony”) that is endorsed by either the Massachusetts Legislature, a consensus of Massachusetts Probate and Family Court Justices, or even a consensus of Massachusetts family law practitioners.
There are many groups who are seeking more definitive changes in the alimony laws in Massachusetts, including groups of lawyers and judges, such as the Joint Alimony Task Force of the MBA and BBA, and also groups of concerned citizens such as Massachusetts Alimony Reform.
Unfortunatley, there are seemingly as many different opinions in the family law field as there are ways to interpret the broad language of MGL, Chapter 208, § 34. Section 34 is the Massachusetts statute relating to the award of spousal support which provides that, in determining the amount of alimony, if any, to be awarded to any one spouse from the other spouse, the Court shall consider: the length of the marriage, the conduct of the parties during the marriage, the age, health, station, occupation, amount and sources of income, vocational skills, employability, estate, liabilities and needs of each of the parties, the opportunity of each for future acquisition of capital assets and income, the nature and value of the property to be so assigned, the present and future needs of any dependent children of the marriage; and the Court may also consider: the contribution of each of the parties in the acquisition, preservation or appreciation in value of their respective estates and the contribution of each of the parties as a homemaker to the family unit.
Not only are these factors numerous, they are in many ways subjective and the Judges are currently left with the difficult task of combining all of these factors to create an alimony order.
The purpose of the Stevenson-Kelsey Spousal Support Calculator is not to suggest that any one of the formulas presented herein is better than any other at approximating the required evaluation under current Mass. Gen. Laws. Ch. 208 § 34. However, the authors do believe that a more consistent approach to the calculation of the alimony obligation – based on quantifiable factors – can benefit the citizens of the Commonwealth of Massachusetts in coming to agreements more quickly and more fairly, thus ending the stresses and expense of divorce litigation sooner rather than later.
Therefore, while we do not endorse any of the specific alimony guideline formulas described herein, we do hope that reference to these formulas will assist family law practitioners in providing both their clients and the Court with increased guidance on appropriate sums for alimony or spousal support in Divorce Agreements.
Each of the formulas was developed by their respective authors after considered and learned debate, and at the very least, we believe that the family law bar and our clients can both learn from the result of that debate in other forums and apply what has been learned to the resolution of disputes in Massachusetts’ divorce litigation. It is in that spirit and with that purpose that we present the Stevenson-Kelsey Spousal Support Calculator.
NOTE:
To view and use the Stevenson-Kelsey Spousal Support Calculator please visit
www.kelseytrask.com/spousalsupport.htm, or you can obtain your own copy of the Stevenson-Kelsey Spousal Support Calculator for use on your own computer by submitting a request here.
Can I start dating during my divorce?
There are two ways to ask this question: Can I start dating while my divorce case is pending? and Should I start dating while my divorce case is pending?
If you ask five different attorneys whether you should start dating during a divorce, you will probably get five different answers but here is ours:
From a technical legal standpoint, adultery in Massachusetts is still a crime. Although it is almost never prosecuted it is important to note that if you engage in an intimate relationship while still married you are technically violating Massachusetts law and this could be brought up in your divorce case.
From a more practical standpoint, as many of my clients have heard, I have a saying that goes "Don't live your life for your divorce case." By that I mean that you have to still live your life and make choices that are good for you, and not just good for your divorce case. But you also have to recognize that choices have consequences.
In this instance if you have met someone who truly makes your life better, I don't believe it is my place as your attorney to tell you that you shouldn't pursue that relationship. However, you should be aware of the potential consequences so that you can make an informed decision about whether it would be more prudent to wait until the divorce process is over.
You can minimize the potential consequences through the use of common sense. For example, one possible consequence of starting a relationship is the emotional impact on your spouse. As discussed in a previous post, the discovery of an extra-marital relationship can cause some people to become very upset, becoming more difficult to deal with and sometimes even impossible to settle with. You can mitigate this possibility by being discreet, and not rubbing the new relationship in your spouse's face (for instance by bringing the new significant other to court with you).
Another example relates to the finances. Any funds spent with or for a dating relationship during a divorce process could be seen as wasting of marital assets and will likely become an issue in the division of assets. Similarly if support is an issue any funds that can be spent on a dating relationship could arguably be available for support of your former spouse. You can minimize this issue by not spending any money on the new relationship until after the divorce is final.
Finally, if you have children, whether or not you choose to start a new relationship during the divorce process or afterwards you should give special consideration to how this will affect your children. It is universally accepted that introducing anyone new to your children at the early stages of a relationship is not healthy for the children, especially if the likelihood is that many such relationships will not work out. In addition, trying to introduce anyone to the children (even someone you are serious about) during the divorce process can be traumatic because the children are already dealing with a significant transition in their lives. If you are not sure the best way to handle introducing children to a significant other when they become significant, you should consult with a trained professional such as a psychologist or psychiatrist.
If you ask five different attorneys whether you should start dating during a divorce, you will probably get five different answers but here is ours:
From a technical legal standpoint, adultery in Massachusetts is still a crime. Although it is almost never prosecuted it is important to note that if you engage in an intimate relationship while still married you are technically violating Massachusetts law and this could be brought up in your divorce case.
From a more practical standpoint, as many of my clients have heard, I have a saying that goes "Don't live your life for your divorce case." By that I mean that you have to still live your life and make choices that are good for you, and not just good for your divorce case. But you also have to recognize that choices have consequences.
In this instance if you have met someone who truly makes your life better, I don't believe it is my place as your attorney to tell you that you shouldn't pursue that relationship. However, you should be aware of the potential consequences so that you can make an informed decision about whether it would be more prudent to wait until the divorce process is over.
You can minimize the potential consequences through the use of common sense. For example, one possible consequence of starting a relationship is the emotional impact on your spouse. As discussed in a previous post, the discovery of an extra-marital relationship can cause some people to become very upset, becoming more difficult to deal with and sometimes even impossible to settle with. You can mitigate this possibility by being discreet, and not rubbing the new relationship in your spouse's face (for instance by bringing the new significant other to court with you).
Another example relates to the finances. Any funds spent with or for a dating relationship during a divorce process could be seen as wasting of marital assets and will likely become an issue in the division of assets. Similarly if support is an issue any funds that can be spent on a dating relationship could arguably be available for support of your former spouse. You can minimize this issue by not spending any money on the new relationship until after the divorce is final.
Finally, if you have children, whether or not you choose to start a new relationship during the divorce process or afterwards you should give special consideration to how this will affect your children. It is universally accepted that introducing anyone new to your children at the early stages of a relationship is not healthy for the children, especially if the likelihood is that many such relationships will not work out. In addition, trying to introduce anyone to the children (even someone you are serious about) during the divorce process can be traumatic because the children are already dealing with a significant transition in their lives. If you are not sure the best way to handle introducing children to a significant other when they become significant, you should consult with a trained professional such as a psychologist or psychiatrist.
Equitable Division: This isn't Judge Solomon's Court
I was recently directed to two articles involving Husbands, one in Germany, and another in Cambodia, that, as part of their divorce, took their half of their marital homes, literally. Not by selling and getting their share of the equity, and not by buying their Wife out of her share, they literally cut the house in half.
Don't get any ideas if you're getting divorced in Massachusetts, though.
In Massachusetts the Court is directed by M.G.L. c. 208 § 34 to divide the assets of the parties and award support based on numerous factors including the length of the marriage, health of the parties, age of the parties, income of the parties, opportunity for future acquisition of assets and income, and more.
When considering all of these factors, we often discover that an equal division of the assets, i.e. a 50/50 division, is the equitable and fair resolution. However, there are also cases where the totality of the circumstances require an unequal division. You won't find Judge Solomon in a Massachusetts' Court, though you might still find some wisdom.
P.S. Don't think it only happens in other countries. This couple in New York built a wall down the middle of their house.
Thanks to Michael Paonessa for sending us these articles.
Don't get any ideas if you're getting divorced in Massachusetts, though.
In Massachusetts the Court is directed by M.G.L. c. 208 § 34 to divide the assets of the parties and award support based on numerous factors including the length of the marriage, health of the parties, age of the parties, income of the parties, opportunity for future acquisition of assets and income, and more.
When considering all of these factors, we often discover that an equal division of the assets, i.e. a 50/50 division, is the equitable and fair resolution. However, there are also cases where the totality of the circumstances require an unequal division. You won't find Judge Solomon in a Massachusetts' Court, though you might still find some wisdom.
P.S. Don't think it only happens in other countries. This couple in New York built a wall down the middle of their house.
Thanks to Michael Paonessa for sending us these articles.
Alimony Reform Act approved Unanimously by the House
in alimony, Alimony Reform, divorce
According to the Boston Globe, the Massachusetts House has approved the Alimony Reform Act of 2011 unanimously and the bill now waits for a vote by the Senate.
To read more about the act visit MassAlimonyFormula.com
To read more about the act visit MassAlimonyFormula.com
How much will my Divorce cost?
Every divorce case is different and every case will therefore have different costs. For instance, if you are Tiger Woods your costs could include the loss of endorsement deals, in addition to the more typical costs of attorney's fees, alimony, etc. And that's not even taking into account whether or not you think his poor playing of late is also caused by the stress of his divorce.
To generalize for those of you who are not billionaire celebrities, though, I can tell you that there will still be significant costs to getting divorced and they will include:
1. The Emotional Cost: Divorce is often described as the second most stressful event in a person's life (next to the death of a loved one). We can't ignore that stresses in our life have a cost on our daily productivity, our ability to be optimistic, and our availability to deal with other stressful events. This cost is often best addressed through therapy or family support, and just because it can't be fixed through the legal process doesn't mean it should be ignored.
2. The Financial Cost: The financial price of your divorce has two parts: the cost of splitting up joint finances, and the actual price you will pay to become divorced.
2a. Joint Finances -> Individual Finances: It is a simple fact that it costs more to support two households than one. Whether or not your case warrants child support or alimony, there will still be a cost to dividing up the assets and liabilities that you and your spouse shared during the marriage. Many people will need to learn how to manage their finances, because this is something that their spouse used to do. Even if you helped manage the finances, you will need to consider how your budget will have to change now that you only have access to a portion of the assets you once did. This should include changing how you plan for retirement. All of this begins with a true, accurate and complete Financial Statement. A good Financial Statement is not just a tool for the Court, but can also help you and your attorney figure out how you will meet your budget as a single person.
2b. The Pricetag: And finally, the most obvious cost of divorce is the actual out-of-pocket cost to obtain the Judgment of Divorce. In Massachusetts, the Filing fee for divorce is currently $215 ($200 + $15.00 surcharge), and an additional $5 for the Summons if you filed a Complaint for Divorce instead of a Joint Petition.
In addition to the filing fee, if you hire an attorney their rates and fees can vary greatly. I always recommend that my potential clients interview multiple attorneys. Although cost is certainly one factor, it is my opinion that trust is the most important factor when interviewing an attorney. If you can't trust your attorney, then they won't be able to do their job and you will end up spending more money in the long run anyway.
To learn more about what we charge for Divorce, call Attorney Justin L. Kelsey, Esq. at (508) 655-5980 or click here to schedule a free one-hour consultation.
To generalize for those of you who are not billionaire celebrities, though, I can tell you that there will still be significant costs to getting divorced and they will include:
1. The Emotional Cost: Divorce is often described as the second most stressful event in a person's life (next to the death of a loved one). We can't ignore that stresses in our life have a cost on our daily productivity, our ability to be optimistic, and our availability to deal with other stressful events. This cost is often best addressed through therapy or family support, and just because it can't be fixed through the legal process doesn't mean it should be ignored.
2. The Financial Cost: The financial price of your divorce has two parts: the cost of splitting up joint finances, and the actual price you will pay to become divorced.
2a. Joint Finances -> Individual Finances: It is a simple fact that it costs more to support two households than one. Whether or not your case warrants child support or alimony, there will still be a cost to dividing up the assets and liabilities that you and your spouse shared during the marriage. Many people will need to learn how to manage their finances, because this is something that their spouse used to do. Even if you helped manage the finances, you will need to consider how your budget will have to change now that you only have access to a portion of the assets you once did. This should include changing how you plan for retirement. All of this begins with a true, accurate and complete Financial Statement. A good Financial Statement is not just a tool for the Court, but can also help you and your attorney figure out how you will meet your budget as a single person.
2b. The Pricetag: And finally, the most obvious cost of divorce is the actual out-of-pocket cost to obtain the Judgment of Divorce. In Massachusetts, the Filing fee for divorce is currently $215 ($200 + $15.00 surcharge), and an additional $5 for the Summons if you filed a Complaint for Divorce instead of a Joint Petition.
In addition to the filing fee, if you hire an attorney their rates and fees can vary greatly. I always recommend that my potential clients interview multiple attorneys. Although cost is certainly one factor, it is my opinion that trust is the most important factor when interviewing an attorney. If you can't trust your attorney, then they won't be able to do their job and you will end up spending more money in the long run anyway.
To learn more about what we charge for Divorce, call Attorney Justin L. Kelsey, Esq. at (508) 655-5980 or click here to schedule a free one-hour consultation.
Waiting in line for the new iPhone? There's no wait (and no cost) to download our Apps!
Today, June 24, 2010, the day of the iPhone 4.0 release, many, many Apple devotees are waiting in line, no doubt playing games, checking e-mail and surfing the web on their 3GS until they get their hands on the newest iPhone. Well, whether or not you've braved the lines to be the first to have the new device, you can still download the Kelsey & Trask, P.C. Web-Apps and iPhone Apps. (see the end of this post for instructions on how to access these apps on other smartphones as well)
iPhone Apps:
The Child Support Calculator App
Use this worksheet to calculate the presumptive amount of child support to be ordered by the Probate & Family Courts in Massachusetts based on the Massachusetts Child Support Guidelines (including all of the calculations required for filling out the court form). You can then save your calculations, and even e-mail them.
Must have app for Family Law Attys - ★★★★★
Review by Mass Attorney
Must have app. Quickly calculate child support according to the guidelines and try different income scenerios.
The Divorce Spousal Support Calculator App
Some states use formulas to calculate presumptive alimony. And notwithstanding the lack of legislative support, some Judges in Massachusetts have suggested doing the same. A Joint Task Force of the Massachusetts Bar Association and the Boston Bar Association has prepared a draft report which also suggests a formula to calculate the maximum alimony award possible.
All of these formulas are included in this calculator, which we believe can be a valuable resource in helping parties understand a reasonable potential range of spousal support orders.
In addition, you can access the full Article (The Divorce Spousal Support Calculator: An Alimony Formula Resource and Tool for Computing Suggested Alimony Payments in Divorce Cases) directly from the App by clicking on the Settings button in the lower left-hand corner of the App.
Similar to the Child Support Calculator App, you can also save and e-mail your calculations.
The Chapter 7 Means Test Calculator App
The means test is a test required under the new bankruptcy law to determine a debtor's eligibility to file for bankruptcy under Chapter 7 of the Bankruptcy Code. If your income is greater than the median income for your state of residence and family size, in some cases, creditors have the right to file a motion requesting that the Court dismiss your cases under Section 707(b) of the Bankruptcy Code.
Use this App to determine whether you qualify for Chapter 7 bankruptcy under part a of the Chapter 7 Means Test. You can even save or e-mail your calculation to access it later. If your income is greater than the median income for your state of residence and family size, you still might meet part b of the means test after taking into consideration certain expenses and deductions as defined by the Bankruptcy Code. You should consult with an attorney to determine your eligibility.
Web Apps:
These three Apps are also available as Web-Apps and can be accessed directly on our mobile site or through the Apple Web-App Store.
The Child Support Calculator Web-App
- Direct Link: http://mobile.kelseytrask.com/childsupport.htm
The Divorce Spousal Support Calculator Web-App
- Direct Link: http://mobile.kelseytrask.com/spousalsupport.htm
The Chapter 7 Means Test Calculator Web-App
- Direct Link: mobile.kelseytrask.com/meanstest.htm
In addition we have a recently created fourth web-app:
The Chapter 7 Timeline Calculator Web-App
- Direct Link: mobile.kelseytrask.com/7timeline.htm
The bankruptcy court is very strict regarding deadlines. Often, missing a deadline will result in the dismissal of your Bankruptcy Case. Therefore, it is very important that all documents are filed accurately and on time with the Bankruptcy Court.
This App displays approximate dates for deadlines and events in a Chapter 7 Bankruptcy case when you enter a filing date. These dates are subject to change by amendments to the U.S. Code, or may vary due to local rules or practices or even due to the specific facts of your case. If you have any questions you should consult with an attorney when reviewing this timeline.
Don't have an iPhone, that's okay too. Whether you are an Android, Blackberry or other smartphone user, you can still use all of our great calculators in your web-browser on our mobile pages designed just for smartphones. Just visit m.kelseytrask.com or mobile.kelseytrask.com on your mobile phone and you should see a page that looks something like this:
iPhone Apps:
The Child Support Calculator App
Use this worksheet to calculate the presumptive amount of child support to be ordered by the Probate & Family Courts in Massachusetts based on the Massachusetts Child Support Guidelines (including all of the calculations required for filling out the court form). You can then save your calculations, and even e-mail them.Must have app for Family Law Attys - ★★★★★
Review by Mass Attorney
Must have app. Quickly calculate child support according to the guidelines and try different income scenerios.
The Divorce Spousal Support Calculator App
Some states use formulas to calculate presumptive alimony. And notwithstanding the lack of legislative support, some Judges in Massachusetts have suggested doing the same. A Joint Task Force of the Massachusetts Bar Association and the Boston Bar Association has prepared a draft report which also suggests a formula to calculate the maximum alimony award possible. All of these formulas are included in this calculator, which we believe can be a valuable resource in helping parties understand a reasonable potential range of spousal support orders.
In addition, you can access the full Article (The Divorce Spousal Support Calculator: An Alimony Formula Resource and Tool for Computing Suggested Alimony Payments in Divorce Cases) directly from the App by clicking on the Settings button in the lower left-hand corner of the App.
Similar to the Child Support Calculator App, you can also save and e-mail your calculations.
The Chapter 7 Means Test Calculator App
The means test is a test required under the new bankruptcy law to determine a debtor's eligibility to file for bankruptcy under Chapter 7 of the Bankruptcy Code. If your income is greater than the median income for your state of residence and family size, in some cases, creditors have the right to file a motion requesting that the Court dismiss your cases under Section 707(b) of the Bankruptcy Code. Use this App to determine whether you qualify for Chapter 7 bankruptcy under part a of the Chapter 7 Means Test. You can even save or e-mail your calculation to access it later. If your income is greater than the median income for your state of residence and family size, you still might meet part b of the means test after taking into consideration certain expenses and deductions as defined by the Bankruptcy Code. You should consult with an attorney to determine your eligibility.
Web Apps:
These three Apps are also available as Web-Apps and can be accessed directly on our mobile site or through the Apple Web-App Store.
The Child Support Calculator Web-App
- Direct Link: http://mobile.kelseytrask.com/childsupport.htm
The Divorce Spousal Support Calculator Web-App
- Direct Link: http://mobile.kelseytrask.com/spousalsupport.htm
The Chapter 7 Means Test Calculator Web-App
- Direct Link: mobile.kelseytrask.com/meanstest.htm
In addition we have a recently created fourth web-app:
The Chapter 7 Timeline Calculator Web-App
- Direct Link: mobile.kelseytrask.com/7timeline.htm
The bankruptcy court is very strict regarding deadlines. Often, missing a deadline will result in the dismissal of your Bankruptcy Case. Therefore, it is very important that all documents are filed accurately and on time with the Bankruptcy Court.This App displays approximate dates for deadlines and events in a Chapter 7 Bankruptcy case when you enter a filing date. These dates are subject to change by amendments to the U.S. Code, or may vary due to local rules or practices or even due to the specific facts of your case. If you have any questions you should consult with an attorney when reviewing this timeline.
Don't have an iPhone, that's okay too. Whether you are an Android, Blackberry or other smartphone user, you can still use all of our great calculators in your web-browser on our mobile pages designed just for smartphones. Just visit m.kelseytrask.com or mobile.kelseytrask.com on your mobile phone and you should see a page that looks something like this:
What happens to payments owed to an ex-spouse in Bankruptcy?
Obligations that are considered by the Bankruptcy Court to be “domestic relations orders” are non-dischargeable and priority debts. They are defined in U.S. Bankruptcy Code Title 11 Section 101 14(A).
In summary, the term 'domestic support obligation' includes child support, alimony, or other support payment, and can include payments for housing, health insurance or other costs paid on behalf of a spouse or ex-spouse. If payments are owed and in arrears then the 'domestic support obligation may also include interest and the interest is non-dischargeable as well.
It is very important when preparing a Chapter 7 Bankruptcy to be aware that these debts will not be discharged, i.e. will still be owed after the bankruptcy.
It is likewise very important when preparing a Chapter 13 Bankruptcy to be include the 'domestic support obligation' in the Chapter 13 plan as a priority debt and to be clear about how arrears will be paid versus how the ongoing payment reduces the filer's available income. If these issues are not addressed specifically, the Bankruptcy Court may find that the Plan is not binding against your ex-spouse as was the case in In re Owen, 2009 WL 693161 (Bky.E.D.Tenn. March 13, 2009). For an excellent explanation of what happened in that case check out the following article on the Bankrutpcy Law Network: "Stealth" Plan Provisions: Confirmation of Chapter 13 Plan Did not Alter Domestic Support Obligation".
In summary, the term 'domestic support obligation' includes child support, alimony, or other support payment, and can include payments for housing, health insurance or other costs paid on behalf of a spouse or ex-spouse. If payments are owed and in arrears then the 'domestic support obligation may also include interest and the interest is non-dischargeable as well.
It is very important when preparing a Chapter 7 Bankruptcy to be aware that these debts will not be discharged, i.e. will still be owed after the bankruptcy.
It is likewise very important when preparing a Chapter 13 Bankruptcy to be include the 'domestic support obligation' in the Chapter 13 plan as a priority debt and to be clear about how arrears will be paid versus how the ongoing payment reduces the filer's available income. If these issues are not addressed specifically, the Bankruptcy Court may find that the Plan is not binding against your ex-spouse as was the case in In re Owen, 2009 WL 693161 (Bky.E.D.Tenn. March 13, 2009). For an excellent explanation of what happened in that case check out the following article on the Bankrutpcy Law Network: "Stealth" Plan Provisions: Confirmation of Chapter 13 Plan Did not Alter Domestic Support Obligation".
Update on the Alimony Reform Act of 2011: The Winds of Change
In a forum designed to encourage debate and dissenting opinions, there was no notable opposition to the bill, as the Joint Task Force established by the Judiciary Committee seems to have crafted a bill that expected to pass this session. Steve Hitner, the co-founder of the Mass Alimony Reform group, received a standing ovation and a round of applause just prior to testifying. Usually, such welcomes operate against the rules of decorum, but Committee co-chairs Eugene O'Flaherty (D-Chelsea) and Cynthia Stone Creem (D-Newton) allowed it, recognizing the efforts of Hitner and other members of the Task Force in reaching a realistic middle ground.
We at Kelsey & Trask have already voiced our support for the proposed bill, and if it indeeds becomes the law in Massachusetts, we will continue to advocate for our clients under the new law.
If you're interested in seeing a summary of the bill's changes and viewing a calculator for the proposed formulas visit MassAlimonyFormula.com.
You can view the full video of the Joint Committee hearing here.
Latest iPhone App now available in the App Store: Alimony Calculator
UPDATE: There is pending legislation for major changes to the alimony statute in Massachusetts. The Alimony Reform Act of 2011 was filed on January 18, 2011 and you can learn more about the Act at MassAlimonyFormula.com or in our recent blog post highlighting the differences between the bill and the current law.
In addition to the Kelsey & Trask MOBILE web site at http://mobile.kelseytrask.com, our Massachusetts Child Support Calculator App, and our Means Test App, we are now offering the Divorce Spousal Support Calculator as an iPhone App.
You can calculate alimony the same as in the full calculator located on our website, but you can also save your calculations, e-mail them, and view the accompanying Article.
And the App is FREE!
Don't worry Droid and Blackberry users, you can still use the mobile calculator in your web browser here.
In addition to the Kelsey & Trask MOBILE web site at http://mobile.kelseytrask.com, our Massachusetts Child Support Calculator App, and our Means Test App, we are now offering the Divorce Spousal Support Calculator as an iPhone App.
You can calculate alimony the same as in the full calculator located on our website, but you can also save your calculations, e-mail them, and view the accompanying Article.
And the App is FREE!
Don't worry Droid and Blackberry users, you can still use the mobile calculator in your web browser here.
Alimony Reform Update: Committee Hearing on Wednesday 5/18
The Alimony Reform Act of 2011 has had a lot of buzz in the past few months. Since it's filing, over 130 legislators have signed on as Petitioners and many family law practitioners have expressed their support for the bill.
Despite some reservations we at Kelsey & Trask, P.C. have about the bill, we believe that it is a significant improvement over the current alimony law in Massachusetts. In addition, we recognize that some of the provisions that we think could be improved (such as the child support integration) were the result of significant compromise from all of the interested parties (lawyers, judges, citizens and advocates).
Therefore, we at Kelsey & Trask, P.C. support the efforts of Bill Sponsor Gale Candaras and the numerous petitioners to have this bill entered into law as soon as possible.
If you agree, voice your opinion to your state legislators. The Joint Committee on the Judiciary is holding a hearing this Wednesday, May 18, 2011 at 1:00 P.M. in the Gardner Auditorium.
If you're interested in seeing a summary of the bill's changes and viewing a calculator for the proposed formulas visit MassAlimonyFormula.com.
Despite some reservations we at Kelsey & Trask, P.C. have about the bill, we believe that it is a significant improvement over the current alimony law in Massachusetts. In addition, we recognize that some of the provisions that we think could be improved (such as the child support integration) were the result of significant compromise from all of the interested parties (lawyers, judges, citizens and advocates).
Therefore, we at Kelsey & Trask, P.C. support the efforts of Bill Sponsor Gale Candaras and the numerous petitioners to have this bill entered into law as soon as possible.
If you agree, voice your opinion to your state legislators. The Joint Committee on the Judiciary is holding a hearing this Wednesday, May 18, 2011 at 1:00 P.M. in the Gardner Auditorium.
If you're interested in seeing a summary of the bill's changes and viewing a calculator for the proposed formulas visit MassAlimonyFormula.com.
How can I calculate Child Support AND Alimony?
UPDATE: There is pending legislation for major changes to the alimony statute in Massachusetts. The Alimony Reform Act of 2011 was filed on January 18, 2011 and you can learn more about the Act at MassAlimonyFormula.com or in our recent blog post highlighting the differences between the bill and the current law.
Dealing with a case that includes the potential for both child support and alimony can be quite complicated. For purposes of this discussion, I will assume that the person receiving alimony is also the custodial parent (i.e. the person receiving child support).
First let's get some definitions:
Child Support is the amount of money paid by the non-custodial parent to the custodial parent for the support of the children. Child Support is calculated using a formula called the Massachusetts Child Support Guidelines. The formula is presumptive, and Judges can only vary from the formula in specific circumstances. To view the formula and calculate Child Support click here.
Alimony, also called spousal support, is paid by the wage-earning spouse (the spouse who has traditionally earned the majority of the income during the marriage) to the non-wage-earning spouse to allow the non-wage-earning spouse to continue to live in the lifestyle to which he or she has become accustomed during the marriage assuming their is enough income to do so. There is not currently any formula enacted or endorsed by the Massachusetts Legislature or the Courts for the calculation of alimony. The amount of alimony is dependent on the consideration of all of the factors described in M.G.L. c. 208 Section 34.
Some states use formulas to calculate presumptive alimony. And notwithstanding Section 34, some Judges in Massachusetts have suggested doing the same in Massachusetts. A Joint Task Force of the Massachusetts Bar Association and the Boston Bar Association has prepared a draft report which also suggests a formula to calculate the maximum alimony award possible. Although the Court has no obligation to follow these formulas they can be a valuable resource in helping parties understand a reasonable potential range of spousal support orders. The Divorce Spousal Support Calculator which includes all of these formulas and can be accessed by clicking here.
What happens when a case warrants both alimony and child support?
Just as there is no formula for calculating alimony in Massachusetts, there is also no bright-line rule for breaking down how much an order should be alimony and how much should be child support when a case warrants both. The interplay of these two figures can be very complicated because the tax effect to both the payor and the recipient is very different depending on how a support order is broken down.
We have a few observations based on three possible ways of making this calculation.
Option 1: If one were to calculate child support (using The Massachusetts Child Support Guidelines) and alimony (using The Divorce Spousal Support Calculator) and simply add them together, the overall support figure would likely be too high for the payor. For example, suppose a couple where the payor/non-custodial parent, Chris Jones, earns $125,000 per year, and the recipient/custodial parent, Pat Jones, earns $25,000 per year. Assuming no health insurance cost, 1 child (and no other child support orders), and no day care costs, the child support order would be $759 per week. Assuming a 20 year marriage, the average of the first five alimony formulas is $644.60 per week. Simply adding these together results in a total support order of $1403.60 per week ($72,987.20 per year), which is 58% of Chris' gross income (resulting in Pat receiving 65% of the total family income). This would likely leave Chris with not enough funds to support Chris' household.
Option 2: Some Judges have indicated at recent conferences that they are inclined to figure out an appropriate alimony order first, and subtract child support from that figure. In our example above, the child support was greater than the alimony, so there would be no alimony order. Chris would pay only the $759 per week in child support resulting in an annual income to Chris of $85,532 (taxed as $125,000) and an annual income to Pat of $64,468 (taxed as $25,000). After taking into account taxes these incomes are relatively close together, though Chris ends up with more than 50% of the income.
Option 3: Another possibility, suggested by one Judge to the author, is to estimate alimony, and then run the child support guidelines on the post-alimony incomes. In this example, if Chris pays $644.60 per week in alimony, Chris' post-alimony income is $91,480.80 and Pat's post-alimony income is $58,519.20. The Child Support using these figures is $558 per week. The resulting income to Chris would therefore be $62,464.80 (taxed as $91,480.80) and to Pat would be $87,535.20 (taxes as $58,519.20). Although resulting in a lower figure than Option 1, this may still result in too high an order for may Judges (and payors).
These examples demonstrate the difficulty of trying to use these formulas together without reviewing some common-sense evaluation of the budgetary needs of each party. For the example case the likely fair figure is somewhere between Option 2 and Option 3. It makes sense to have some of the order be alimony in order to move some of the taxable income to the lower tax bracket. It may not be practical, though, for the total order to be as high as $1,202.60 per week.
Dealing with a case that includes the potential for both child support and alimony can be quite complicated. For purposes of this discussion, I will assume that the person receiving alimony is also the custodial parent (i.e. the person receiving child support).
First let's get some definitions:
Child Support is the amount of money paid by the non-custodial parent to the custodial parent for the support of the children. Child Support is calculated using a formula called the Massachusetts Child Support Guidelines. The formula is presumptive, and Judges can only vary from the formula in specific circumstances. To view the formula and calculate Child Support click here.
Alimony, also called spousal support, is paid by the wage-earning spouse (the spouse who has traditionally earned the majority of the income during the marriage) to the non-wage-earning spouse to allow the non-wage-earning spouse to continue to live in the lifestyle to which he or she has become accustomed during the marriage assuming their is enough income to do so. There is not currently any formula enacted or endorsed by the Massachusetts Legislature or the Courts for the calculation of alimony. The amount of alimony is dependent on the consideration of all of the factors described in M.G.L. c. 208 Section 34.
Some states use formulas to calculate presumptive alimony. And notwithstanding Section 34, some Judges in Massachusetts have suggested doing the same in Massachusetts. A Joint Task Force of the Massachusetts Bar Association and the Boston Bar Association has prepared a draft report which also suggests a formula to calculate the maximum alimony award possible. Although the Court has no obligation to follow these formulas they can be a valuable resource in helping parties understand a reasonable potential range of spousal support orders. The Divorce Spousal Support Calculator which includes all of these formulas and can be accessed by clicking here.
What happens when a case warrants both alimony and child support?
Just as there is no formula for calculating alimony in Massachusetts, there is also no bright-line rule for breaking down how much an order should be alimony and how much should be child support when a case warrants both. The interplay of these two figures can be very complicated because the tax effect to both the payor and the recipient is very different depending on how a support order is broken down.
We have a few observations based on three possible ways of making this calculation.
Option 1: If one were to calculate child support (using The Massachusetts Child Support Guidelines) and alimony (using The Divorce Spousal Support Calculator) and simply add them together, the overall support figure would likely be too high for the payor. For example, suppose a couple where the payor/non-custodial parent, Chris Jones, earns $125,000 per year, and the recipient/custodial parent, Pat Jones, earns $25,000 per year. Assuming no health insurance cost, 1 child (and no other child support orders), and no day care costs, the child support order would be $759 per week. Assuming a 20 year marriage, the average of the first five alimony formulas is $644.60 per week. Simply adding these together results in a total support order of $1403.60 per week ($72,987.20 per year), which is 58% of Chris' gross income (resulting in Pat receiving 65% of the total family income). This would likely leave Chris with not enough funds to support Chris' household.
Option 2: Some Judges have indicated at recent conferences that they are inclined to figure out an appropriate alimony order first, and subtract child support from that figure. In our example above, the child support was greater than the alimony, so there would be no alimony order. Chris would pay only the $759 per week in child support resulting in an annual income to Chris of $85,532 (taxed as $125,000) and an annual income to Pat of $64,468 (taxed as $25,000). After taking into account taxes these incomes are relatively close together, though Chris ends up with more than 50% of the income.
Option 3: Another possibility, suggested by one Judge to the author, is to estimate alimony, and then run the child support guidelines on the post-alimony incomes. In this example, if Chris pays $644.60 per week in alimony, Chris' post-alimony income is $91,480.80 and Pat's post-alimony income is $58,519.20. The Child Support using these figures is $558 per week. The resulting income to Chris would therefore be $62,464.80 (taxed as $91,480.80) and to Pat would be $87,535.20 (taxes as $58,519.20). Although resulting in a lower figure than Option 1, this may still result in too high an order for may Judges (and payors).
These examples demonstrate the difficulty of trying to use these formulas together without reviewing some common-sense evaluation of the budgetary needs of each party. For the example case the likely fair figure is somewhere between Option 2 and Option 3. It makes sense to have some of the order be alimony in order to move some of the taxable income to the lower tax bracket. It may not be practical, though, for the total order to be as high as $1,202.60 per week.
Q of the Week: What is the Stevenson-Kelsey Spousal Support Calculator?
UPDATE: There is pending legislation for major changes to the alimony statute in Massachusetts. The Alimony Reform Act of 2011 was filed on January 18, 2011 and you can learn more about the Act at MassAlimonyFormula.com or in our recent blog post highlighting the differences between the bill and the current law.
Alimony, also called spousal support, is paid by the wage-earning spouse (the spouse who has traditionally earned the majority of the income during the marriage) to the non-wage-earning spouse to allow the non-wage-earning spouse to continue to live in the lifestyle to which he or she has become accustomed during the marriage assuming their is enough income to do so.
There is not currently any formula enacted or endorsed by the Massachusetts Legislature or the Courts for the calculation of alimony. The amount of alimony is dependent on the consideration of all of the factors described in M.G.L. c. 208 Section 34. You should consult an attorney to discuss how the facts in your case fit the factors of Section 34.
Some states use formulas to calculate presumptive alimony. And notwithstanding Section 34, some Judges in Massachusetts have suggested doing the same in Massachusetts. A Joint Task Force of the Massachusetts Bar Association and the Boston Bar Association has prepared a draft report which also suggests a formula to calculate the maximum alimony award possible.
Although the Court has no obligation to follow these formulas they can be a valuable resource in helping parties understand a reasonable potential range of spousal support orders. Attorney Justin L. Kelsey of Kelsey & Trask, P.C. in Natick, Massachusetts, in a joint project with Attorney Scott R. Stevenson, Esq. of Hingham, Massachusetts, has created the Stevenson-Kelsey Spousal Support Calculator which includes all of these formulas and can be accessed by clicking here.
The sources for each formula are referenced in the accompanying article which can be accessed by clicking here.
Alimony, also called spousal support, is paid by the wage-earning spouse (the spouse who has traditionally earned the majority of the income during the marriage) to the non-wage-earning spouse to allow the non-wage-earning spouse to continue to live in the lifestyle to which he or she has become accustomed during the marriage assuming their is enough income to do so.
There is not currently any formula enacted or endorsed by the Massachusetts Legislature or the Courts for the calculation of alimony. The amount of alimony is dependent on the consideration of all of the factors described in M.G.L. c. 208 Section 34. You should consult an attorney to discuss how the facts in your case fit the factors of Section 34.
Some states use formulas to calculate presumptive alimony. And notwithstanding Section 34, some Judges in Massachusetts have suggested doing the same in Massachusetts. A Joint Task Force of the Massachusetts Bar Association and the Boston Bar Association has prepared a draft report which also suggests a formula to calculate the maximum alimony award possible.
Although the Court has no obligation to follow these formulas they can be a valuable resource in helping parties understand a reasonable potential range of spousal support orders. Attorney Justin L. Kelsey of Kelsey & Trask, P.C. in Natick, Massachusetts, in a joint project with Attorney Scott R. Stevenson, Esq. of Hingham, Massachusetts, has created the Stevenson-Kelsey Spousal Support Calculator which includes all of these formulas and can be accessed by clicking here.
The sources for each formula are referenced in the accompanying article which can be accessed by clicking here.
Alimony Reform: Stay Tuned!
UPDATE: There is pending legislation for major changes to the alimony statute in Massachusetts. The Alimony Reform Act of 2011 was filed on January 18, 2011 and you can learn more about the Act at MassAlimonyFormula.com or in our recent blog post highlighting the differences between the bill and the current law.
As previously reported on this Blog, there is an ongoing (and at times heated) debate in Massachusetts right now over how to amend the alimony statute. Despite how long this debate has been going on, it appears that we may finally be closer to some changes.
The Legislative Task Force appointed by Newton Senator, Cynthia Creem, is reportedly close to a recommendation which could have the backing of Judges, attorneys and at least some of the reformists. Although the final Bill is not complete yet, it will likely be filed prior to the deadline for this session, January 21, 2011, and include provisions relating to guidelines and duration as recomended by the Joint Task Force Report. It is also likely that the new Bill will address issues raised by the recent Pierce decision as to how alimony should be affected by retirement.
We'll have to wait until the Bill is filed to report on the actual specifics, but stay tuned!
As previously reported on this Blog, there is an ongoing (and at times heated) debate in Massachusetts right now over how to amend the alimony statute. Despite how long this debate has been going on, it appears that we may finally be closer to some changes.
The Legislative Task Force appointed by Newton Senator, Cynthia Creem, is reportedly close to a recommendation which could have the backing of Judges, attorneys and at least some of the reformists. Although the final Bill is not complete yet, it will likely be filed prior to the deadline for this session, January 21, 2011, and include provisions relating to guidelines and duration as recomended by the Joint Task Force Report. It is also likely that the new Bill will address issues raised by the recent Pierce decision as to how alimony should be affected by retirement.
We'll have to wait until the Bill is filed to report on the actual specifics, but stay tuned!
Are Gifts from my Family considered Income by the Family Court?
The following is a joint Blog Post prepared by Justin Kelsey, Esq. of Kelsey & Trask, P.C. (co-author of Scaling the Summit: A Family Law Blog) and Danielle G. Van Ess, Esq. of DGVE law, LLC (author of the Massachusetts, Wills, Trusts, and Estates blog).
The Judges in the Probate & Family Court have a lot of discretion to decide what constitutes income when the Court is considering child support or alimony.
According to M.G.L. c. 208 s. 34, the court can consider "amount and sources of income... and the opportunity of each for future acquisition of capital assets and income" when dividing property or awarding alimony. This language obviously leaves a lot of leeway for the court to consider all "sources of income" including potential "future" income.
Similarly, the Massachusetts Child Support Guidelines indicate that the court can consider "gross income from whatever source regardless of whether that income is recognized by the Internal Revenue Code or reported to the Internal Revenue Service or state Department of Revenue or other taxing authority." The specific list of possible income ends with "any other form of income or compensation not specifically itemized above." Just like with alimony, this broad language provides the Court with discretion to include family gifts as income, especially if the gifts are regular. For example, this could include the right to withdraw funds from an Irrevocable Life Insurance Trust (ILIT) established by parents to reduce estate tax liability and made available to their children as evidenced by regular Crummey notice letters.
The MA Appeals Court recently confirmed this in an unpublished decision holding that a Judge did not abuse his discretion by attributing income to a father based on family gifts, and using that attributed income to calculate child support. DiMambro v. DiMambro (Lawyers Weekly No. 82-281-10) (3 pages) (Appeals Court – Unpublished) (No. 09-P-1387) (Nov. 9, 2010).
“Future income” under the alimony statute, or “attributable income” under the child support guidelines may also include cash gifts such as annual gifts according to the gift tax exclusion amount, which is presently $13,000 per year per individual or $26,000 per year for a married couple to another person.
As the courts may consider all sources of income, particularly where one’s adult child is separated or divorcing it may be best to leave real property (such as a home or vacation home), gifts, and inheritances to one’s adult children in protected trusts rather than outright to attempt to ensure that those gifts will be preserved for one’s child and any grandchildren and not be subject to claims of the child’s ex-spouse. Parents of adult children should also be very cautious about putting their adult child’s name on their real property or bank accounts for purposes of convenience and assistance with management as those assets may become assets of the child as well and subject to claims in bankruptcy or divorce.
Given the Judge's broad discretion in this area, families should discuss gifts and the impact of those gifts with their attorneys to ensure they understand all the relevantthose gifts might have.
The Judges in the Probate & Family Court have a lot of discretion to decide what constitutes income when the Court is considering child support or alimony.
According to M.G.L. c. 208 s. 34, the court can consider "amount and sources of income... and the opportunity of each for future acquisition of capital assets and income" when dividing property or awarding alimony. This language obviously leaves a lot of leeway for the court to consider all "sources of income" including potential "future" income.
Similarly, the Massachusetts Child Support Guidelines indicate that the court can consider "gross income from whatever source regardless of whether that income is recognized by the Internal Revenue Code or reported to the Internal Revenue Service or state Department of Revenue or other taxing authority." The specific list of possible income ends with "any other form of income or compensation not specifically itemized above." Just like with alimony, this broad language provides the Court with discretion to include family gifts as income, especially if the gifts are regular. For example, this could include the right to withdraw funds from an Irrevocable Life Insurance Trust (ILIT) established by parents to reduce estate tax liability and made available to their children as evidenced by regular Crummey notice letters.
The MA Appeals Court recently confirmed this in an unpublished decision holding that a Judge did not abuse his discretion by attributing income to a father based on family gifts, and using that attributed income to calculate child support. DiMambro v. DiMambro (Lawyers Weekly No. 82-281-10) (3 pages) (Appeals Court – Unpublished) (No. 09-P-1387) (Nov. 9, 2010).
“Future income” under the alimony statute, or “attributable income” under the child support guidelines may also include cash gifts such as annual gifts according to the gift tax exclusion amount, which is presently $13,000 per year per individual or $26,000 per year for a married couple to another person.
As the courts may consider all sources of income, particularly where one’s adult child is separated or divorcing it may be best to leave real property (such as a home or vacation home), gifts, and inheritances to one’s adult children in protected trusts rather than outright to attempt to ensure that those gifts will be preserved for one’s child and any grandchildren and not be subject to claims of the child’s ex-spouse. Parents of adult children should also be very cautious about putting their adult child’s name on their real property or bank accounts for purposes of convenience and assistance with management as those assets may become assets of the child as well and subject to claims in bankruptcy or divorce.
Given the Judge's broad discretion in this area, families should discuss gifts and the impact of those gifts with their attorneys to ensure they understand all the relevantthose gifts might have.
I'm Separated, Why Should I get Divorced? - Reason #2: The Ticking Time Bomb
in alimony, disability, divorce, separation
Today your spouse may be a healthy self-sufficient person. They may work and support themselves today. But what happens if they become disabled. Whether or not you are separated you have a legal obligation to help support your spouse and they can enforce that obligation through a Complaint for Separate Support or a Complaint for Divorce.
And if your spouse becomes disabled during your marriage (whether or not you are separated) you will likely be obligated to support them financially. Under Massachusetts law, spousal support, especially in the case of a disabled recipient can be for life.
Even if your spouse does not become disabled, if they are a candidate for spousal support (also known as alimony) the longer you are married, the longer alimony may last. Although duration of alimony is a hotly contested issue under the current law, there is a proposed alimony bill which would link duration directly (by formula) to the length of the marriage. It would be up to a Judge whether to consider your separation part of the marriage or not.
Read Reason #3: Becoming a Legal Parent
Eat, Drink and Remarry
in alimony, divorce, remarriage
I often ask my Divorce clients to tell me how they visualize their life five years from now. This often helps focus clients on their goals, which helps us determine the best decisions to make in their divorce case. For instance, if a client doesn't see themselves living in this area five years from now, then I wouldn't recommend that they buy their spouse out of a marital home.
One question that comes up in many cases is the likelihood that a client might get remarried, which can have an obvious impact on divorce issues (such as alimony which typically ends upon remarriage).
Almost every Divorce client that enters my office is adamant that they will not get remarried. But the statistics disagree. In fact, 50 percent of divorced individuals remarry within five years. According to a study by the Department of Health and Human Services, the percentage was even higher in the 50s, 60s and 70s.
Many clients don't want to hear about these statistics, but I think that one of my jobs as a Divorce attorney is to focus clients on the future. It is important for people going through a divorce to realize that there is light at the end of the tunnel and they should be thinking about life after divorce, not just life during a divorce.
Although, a Divorce client might not think a 50% chance that they'll remarry in five years is good news today, I think believing that love is still possible ultimately gives people hope and optimism about their future.
One question that comes up in many cases is the likelihood that a client might get remarried, which can have an obvious impact on divorce issues (such as alimony which typically ends upon remarriage).
Almost every Divorce client that enters my office is adamant that they will not get remarried. But the statistics disagree. In fact, 50 percent of divorced individuals remarry within five years. According to a study by the Department of Health and Human Services, the percentage was even higher in the 50s, 60s and 70s.
Many clients don't want to hear about these statistics, but I think that one of my jobs as a Divorce attorney is to focus clients on the future. It is important for people going through a divorce to realize that there is light at the end of the tunnel and they should be thinking about life after divorce, not just life during a divorce.
Although, a Divorce client might not think a 50% chance that they'll remarry in five years is good news today, I think believing that love is still possible ultimately gives people hope and optimism about their future.
Alimony Reform Recommendations
UPDATE: There is pending legislation for major changes to the alimony statute in Massachusetts. The Alimony Reform Act of 2011 was filed on January 18, 2011 and you can learn more about the Act at MassAlimonyFormula.com or in our recent blog post highlighting the differences between the bill and the current law.
The Boston Bar Association has unanimously voted to endorse the Report of the Joint MBA/BBA Alimony Task Force: Alimony or Spousal Support Guidelines where there are no Dependent Children.
The Report recommends an alimony cap based on a formula. It also recommends durational limits on alimony and lists specific instances where the recommendations would not apply, such as cases where the recipient is so disabled as to become a ward of the state.
The Report also allows for deviation based on certain factors, which include cohabitation.
As indicated in a previous Alimony debate post, this is the type of reform that we believe would be an improvement over the current state of alimony in Massachusetts (especially as compared to the currently proposed reforms in the Senate and House bills).
If you have an opinion on which solution is best, vote here.
The Boston Bar Association has unanimously voted to endorse the Report of the Joint MBA/BBA Alimony Task Force: Alimony or Spousal Support Guidelines where there are no Dependent Children.
The Report recommends an alimony cap based on a formula. It also recommends durational limits on alimony and lists specific instances where the recommendations would not apply, such as cases where the recipient is so disabled as to become a ward of the state.
The Report also allows for deviation based on certain factors, which include cohabitation.
As indicated in a previous Alimony debate post, this is the type of reform that we believe would be an improvement over the current state of alimony in Massachusetts (especially as compared to the currently proposed reforms in the Senate and House bills).
If you have an opinion on which solution is best, vote here.
Can Assets I Owned Prior to the Marriage be Divided in a Divorce?
The short answer is YES! Whether or not they are divided will depend on a number of factors.
For divorce purposes, Massachusetts gives very broad definition to "marital assets". Absent a pre-nuptial agreement every asset and liability owed by either party is considered by the Court in a division. The Court can consider the source of the asset but that is just one of the factors in whether or not to divide it. Under M.G.L. ch. 208 § 34, the Court can assign alimony or division of property based on the following section:
Generally, any asset earned during the marriage will be divided 50/50. A stay at home parent's contribution as homemaker and in child-rearing is considered equal in value to the earning capacity of a working parent. A good example of this is the equal division of retirement accounts earned during the marriage.
Regarding assets earned prior to the marriage, those are more difficult to predict. The other factors, such as the length of the marriage, health of the parties, etc. can have a significant impact on whether or not these assets are divided. Generally we tell clients that in short term marriages (less than 5 years) the Court tries to put people back in the position they were in prior to the marriage (returning previously owned assets).
As marriages get longer, though, it is very typical for assets to "merge" into the fabric of the marriage. A major factor in this consideration is whether or not the asset was shared during the marriage. For instance the marital home (if purchased by one party prior to the marriage) is pretty likely to "merge" as more time goes by because both parties contribute to its "preservation and appreciation"(even if the title is not changed).
If you are concerned about keeping pre-marital assets separate you should consult with an attorney regarding the preparation of a pre-nuptial agreement prior to the marriage. If you are already married and considering a divorce, you should consult with an attorney to explain your specific circumstances before assuming property will be kept separate or merged by the Court.
For divorce purposes, Massachusetts gives very broad definition to "marital assets". Absent a pre-nuptial agreement every asset and liability owed by either party is considered by the Court in a division. The Court can consider the source of the asset but that is just one of the factors in whether or not to divide it. Under M.G.L. ch. 208 § 34, the Court can assign alimony or division of property based on the following section:"In determining the amount of alimony, if any, to be paid, or in fixing the nature and value of the property, if any, to be so assigned, the court, after hearing the witnesses, if any, of each party, shall consider the length of the marriage, the conduct of the parties during the marriage, the age, health, station, occupation, amount and sources of income, vocational skills, employability, estate, liabilities and needs of each of the parties and the opportunity of each for future acquisition of capital assets and income. In fixing the nature and value of the property to be so assigned, the court shall also consider the present and future needs of the dependent children of the marriage. The court may also consider the contribution of each of the parties in the acquisition, preservation or appreciation in value of their respective estates and the contribution of each of the parties as a homemaker to the family unit." (emphasis added)
Generally, any asset earned during the marriage will be divided 50/50. A stay at home parent's contribution as homemaker and in child-rearing is considered equal in value to the earning capacity of a working parent. A good example of this is the equal division of retirement accounts earned during the marriage.
Regarding assets earned prior to the marriage, those are more difficult to predict. The other factors, such as the length of the marriage, health of the parties, etc. can have a significant impact on whether or not these assets are divided. Generally we tell clients that in short term marriages (less than 5 years) the Court tries to put people back in the position they were in prior to the marriage (returning previously owned assets).
As marriages get longer, though, it is very typical for assets to "merge" into the fabric of the marriage. A major factor in this consideration is whether or not the asset was shared during the marriage. For instance the marital home (if purchased by one party prior to the marriage) is pretty likely to "merge" as more time goes by because both parties contribute to its "preservation and appreciation"(even if the title is not changed).
If you are concerned about keeping pre-marital assets separate you should consult with an attorney regarding the preparation of a pre-nuptial agreement prior to the marriage. If you are already married and considering a divorce, you should consult with an attorney to explain your specific circumstances before assuming property will be kept separate or merged by the Court.
Divorce and Taxes: Issue #6. Same Sex Marriages
Unfortunately, the current state of the law creates two classes of married citizens. Traditional opposite sex marriages are one class and same sex marriages are treated as second class by the limitations created by DOMA (the poorly named "Defense of Marriage Act"). DOMA prohibits the federal government from recognizing same-sex marriages. Although the current federal administration has indicated they will not defend DOMA in Court, it is still currently the law of the land. That means that many of the tax issues described in our last few blog posts do not apply in the same way to same-sex marriages.
Issue #6. SAME SEX MARRIAGES: Below we have described the numerous ways that DOMA changes how same-sex marriages are treated when it comes to taxes:
MARTIAL STATUS: For Federal tax returns, same sex married couples cannot file under married status. Therefore, their tax status upon divorce does not change on their federal returns.
ALIMONY: Because same-sex former spouses cannot be considered spouses for federal tax returns, they cannot take a tax benefit associated with a former spouse. Therefore, alimony payments made to a same-sex former spouse do not qualify as tax deductible income to the payor and cannot be categorized as alimony payments for federal tax purposes.
PROPERTY TRANSFERS: Because same-sex spouses and former spouses cannot be considered spouses for federal tax purposes, the exemption on capital gain realizations for transfers between spouses does not apply. Similarly, the transfers of retirement accounts allowed by QDRO between former spouses is not permitted between same-sex spouses. The inability to transfer retirement assets without tax implications can severely inhibit the ability to divide marital assets sensibly.
These limitations imposed by DOMA create extra considerations that must be made in dealing with same-sex divorce cases.
Click here to read Divorce and Taxes: Issue #1. Marital Status.
Issue #6. SAME SEX MARRIAGES: Below we have described the numerous ways that DOMA changes how same-sex marriages are treated when it comes to taxes:
MARTIAL STATUS: For Federal tax returns, same sex married couples cannot file under married status. Therefore, their tax status upon divorce does not change on their federal returns.
ALIMONY: Because same-sex former spouses cannot be considered spouses for federal tax returns, they cannot take a tax benefit associated with a former spouse. Therefore, alimony payments made to a same-sex former spouse do not qualify as tax deductible income to the payor and cannot be categorized as alimony payments for federal tax purposes.
PROPERTY TRANSFERS: Because same-sex spouses and former spouses cannot be considered spouses for federal tax purposes, the exemption on capital gain realizations for transfers between spouses does not apply. Similarly, the transfers of retirement accounts allowed by QDRO between former spouses is not permitted between same-sex spouses. The inability to transfer retirement assets without tax implications can severely inhibit the ability to divide marital assets sensibly.
These limitations imposed by DOMA create extra considerations that must be made in dealing with same-sex divorce cases.
Click here to read Divorce and Taxes: Issue #1. Marital Status.
Divorce & Taxes - Issue #2. Child Support v. Alimony
in alimony, child support, divorce, taxes
Obviously not every case has alimony and child support issues, but those divorce clients that do should be aware of some basic income tax issues related to support.
Issue #2. CHILD SUPPORT V. ALIMONY:
Child Support is the amount of money paid by the non-custodial parent to the custodial parent for the support of the children. In Massachusetts, Child Support is calculated using a formula called the Massachusetts Child Support Guidelines. Child Support is NOT taxable income to the recipient, and is NOT tax deductible to the payor.
Alimony, also called spousal support, is paid by the wage-earning spouse (the spouse who has traditionally earned the majority of the income during the marriage) to the non-wage-earning spouse to allow the non-wage-earning spouse to continue to live in the lifestyle to which he or she has become accustomed during the marriage assuming their is enough income to do so. Alimony is income to the recipient and should be included as taxable income on the Recipients state and federal income tax returns. Alimony is tax deductible to the Payor, and sometimes even payments made on behalf of an ex-spouse, such as health insurance payments may also be tax deductible. You should consult with an attorney to discuss the specific facts of your case if you think you might be making other payments which could be tax deductible as well.
What happens when a case warrants both alimony and child support?
Just as there is no formula for calculating alimony in Massachusetts, there is also no bright-line rule for breaking down how much of an order should be alimony and how much should be child support when a case warrants both. The interplay of these two figures can be very complicated because the tax effect to both the payor and the recipient is very different depending on how a support order is broken down. For more information about the possible ways of dividing support orders review our blog post: How can I calculate Child Support AND Alimony?
Click here to read Divorce and Taxes: Issue #3. Child Dependency Exemptions.
Issue #2. CHILD SUPPORT V. ALIMONY:
Child Support is the amount of money paid by the non-custodial parent to the custodial parent for the support of the children. In Massachusetts, Child Support is calculated using a formula called the Massachusetts Child Support Guidelines. Child Support is NOT taxable income to the recipient, and is NOT tax deductible to the payor.
Alimony, also called spousal support, is paid by the wage-earning spouse (the spouse who has traditionally earned the majority of the income during the marriage) to the non-wage-earning spouse to allow the non-wage-earning spouse to continue to live in the lifestyle to which he or she has become accustomed during the marriage assuming their is enough income to do so. Alimony is income to the recipient and should be included as taxable income on the Recipients state and federal income tax returns. Alimony is tax deductible to the Payor, and sometimes even payments made on behalf of an ex-spouse, such as health insurance payments may also be tax deductible. You should consult with an attorney to discuss the specific facts of your case if you think you might be making other payments which could be tax deductible as well.
What happens when a case warrants both alimony and child support?
Just as there is no formula for calculating alimony in Massachusetts, there is also no bright-line rule for breaking down how much of an order should be alimony and how much should be child support when a case warrants both. The interplay of these two figures can be very complicated because the tax effect to both the payor and the recipient is very different depending on how a support order is broken down. For more information about the possible ways of dividing support orders review our blog post: How can I calculate Child Support AND Alimony?
Click here to read Divorce and Taxes: Issue #3. Child Dependency Exemptions.
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