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The MA Appeals Court recently confirmed this in an unpublished decision holding that a Judge did not abuse his discretion by attributing income to a father based on family gifts, and using that attributed income to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 DiMambro v. DiMambro (Lawyers Weekly No. 82-281-10) (3 pages) (Appeals Court – Unpublished) (No. 09-P-1387) (Nov. 9, 2010).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.

Every state (and every country) has standards for jurisdiction that decide whether or not you can bring a divorce case to their courts.

Where you can file for divorce is an important question because the laws of the state or county where you will file will control how your divorce case is resolved, and those laws can differ significantly. A British woman was recently denied access to file divorce in the United Kingdom courts because her and her Husband last lived together in France. According to The Daily Telegraph, this decision will result in her losing any rights she might have had to her Husband's £1.2m pension.

The laws can also differ greatly by state. In Massachusetts, for instance, the court can consider potential inheritance as an opportunity "for future acquisition of capital assets and income" and award alimony or assign property to one spouse or the other based on that consideration. In many other states inheritance or potential inheritance cannot be considered by the divorce court.

In order to know where you can file for Divorce consult with a local attorney in the jurisdiction in which you live.

In Massachusetts M.G.L. ch 208 §4 requires that to file a divorce case in the Commonwealth the parties must have lived together in the Commonwealth as a married couple, and at least one of them lived in the Commonwealth at the time the cause of the divorce happened. As an exception to this requirement, M.G.L. ch 208 §5 allows you to file for divorce in the Commonwealth if you have been a resident for one year, or if the cause of the divorce occurred in Massachusetts and you are currently a resident. Since the standard for a no-fault divorce is a subjective standard relating only to whether or not you believe your marriage is irretrievably broken down, the Supreme Judicial Court on an interlocutory appeal has ruled that if you lived in Massachusetts when you came to the realization that your marriage is over, that is sufficient for establishing jurisdiction to file for divorce in Massachusetts. Caffyn v. Caffyn SJC-09141 (2004).

If you have questions about divorce in Massachusetts schedule a 1-hour Free Consultation.