Massachusetts Divorce Law Monitor : Massachusetts Divorce Lawyer & Attorney : Nancy Van Tine : Burns & Levinson Law Firm : MA Divorce & Family Law : Massachusetts Divorce Law Monitor

Topic 1: The Kids: If you have kids who aren't grown up, then this can be the most difficult area to navigate.

Topic 2: Child Support: In any support situation, it seems the support is always too much for the person paying, and never enough for the person receiving it. With child support in Massachusetts, the payments are formulaic.

Topic 3: Child Support, Additional Expenses: Child support monies are intended to cover food, shelter and clothing; but as anyone who has raised a child knows, that is only the beginning.

Topic 4: Alimony: Alimony is determined based on the needs of one party for support and the ability of the other to pay.

Topic 5: Health and Life Insurance: There should be provisions in all agreements, for both health insurance coverage and for how you will handle the uninsured medical expenses for both yourselves and your children.

Topic 6: Taxes: Taxes are among the items you will need to consider when drafting a divorce agreement. You need to think about how to divide any pending refund or liabilities, and how you are going to file for the current or prior year if you are still able to file jointly.

Topic 7: Property Division: The 7th topic to consider is part of the property division. This is controlled by Massachusetts General Laws chapter 208, section 34.

Topic 8: Intangible Personal Property: Intangible Personal Property can be very technical to divide. Pensions, IRAs and other retirement assets, deferred compensation, and stock options all need to be carefully handled.

Topic 9: Debts and Liabilities: In this unhappy recession, many folks who are getting divorced are dealing primarily with how to divide debts, but even if you are solvent you need to consider the various family liabilities out there.

Topic 10: Important for Everyone
 

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Hi there,

In most divorce agreements there are a number of standard provisions (often called "boilerplate").

The most important of these provisions are:

1. The ability of the parties to have separate wills - this covers the right of both parties to exclude the other from their estate plans

2. Waiver of future claims - this generally says that except as written in the agreement neither party has any claim against the other.

3. Personal freedom to live your own life - this is not a restraining order but it is put into all agreements.  I think it may stem back to the days when women were treated like property and needed a recitation of their ability to live on their own.

4. Completeness of this agreement - this basically says the agreement is the agreement and side deals do NOT count; so, if your soon-to-be-ex promises you something, but says he won't put it in the agreement and to just "trust me" - don't.

Then there should be a provision about how to handle future disputes.  Are you going to require trying to mediate first?  Or are you going to simply say that the court is where future problems are worked out.  Maybe you have a parenting coordinator or an arbitrator to divide personal property.

If you wish, this is the point where you can resume your maiden name.

And finally the magic words: "status of the agreement"

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Hi there,

In this unhappy recession, many folks who are getting divorced are dealing primarily with how to divide debts, but even if you are solvent you need to consider the various family liabilities out there.

You should consider who will pay the mortgages: the mortgage on the house, any equity loan or credit line, and any other mortgage on any property.  If you are on a mortgage and you will not be continuing to own the property you should arrange to have your ex take your name off the mortgage.  This will mean that he/she will need to refinance.

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Hi there, 

Intangible Personal Property can be very technical to divide. 

Pensions, IRAs and other retirement assets, deferred compensation, and stock options all need to be carefully handled.

Tax issues are of course apparent - there is only one right way to divide each type of retirement asset and if you do it wrong the tax consequences to the person initially owning the pension can be severe. 

There are many precise aspects to handling stock options and deferred compensation as well. Agreements should be carefully done, as inadvertent results like in the Wooters case, can occur.  In that case the agreement did not specify how future stock options would be treated, because the husband was not in a job that had options at the time of divorce.  The definition of '"earned income" in the agreement, tracked the tax code which treats options as income when they are exercised.  As a result, when he changed employment and received options they were treated as part of his income for support.  

Deferred compensation comes in varied forms.  Your attorney will need to be very familiar with the individual business plans that cover the particular compensation in question.

Business interests and professional practices require valuation and may well require the services of a forensic accountant if there is an issue of hidden income.

You should be mindful of the basis and potential capital gains with securities and mutual funds.

Other intangible property may include royalties, receivables, bank accounts, intellectual property, tax loss carry forwards, frequent flier miles, etc etc.......

And then there are inheritances, future inheritances and trust interests.  The existence of significant assets in any of these categories is important to consider.

You should also ask if there is any "stuff" of significant value, ie. art, jewelry, oriental rugs, antiques, collections, etc that should be appraised.  Are there items in particular that you want?

And finally, don't forget about pets and livestock.

Best,

Nancy

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Hi there,

The 7th topic to consider is part of the property division.  This is controlled by Massachusetts General Laws chapter 208, section 34.

Volumes have been written about this and frankly it is an area where cases that may go to trial as valuation issues, particularly with businesses, can be intractable.

Below is an general outline of some issues to think about when dividing real estate, though every month someone comes up with something new, so this is NOT all inclusive.

Your home:

• If you rent this is simpler; however, there may be lease issues, such as who is on the lease, or will one of you need to indemnify the other?
   
• If you own, consider who will have use and possession during the divorce and what will happen with eventual ownership.  If there is a sale or transfer within the couple or not, you need to think about the tax issues, including capital gains (don't forget the exclusion on sale for your primary residence), as well as who deducts the interest and real estate taxes.  You will have to decide how the bills are paid pre-divorce.  Will the mortgage need to be re-written to remove one party post divorce?  If there is to be a sale or transfer there may be timing issues to consider as well, such as when the children finish a school year or a certain grade.
   
• Then there is your other real estate (vacation house, rental or business property, time shares,  etc).  Many of the same considerations may apply as with your home, but the capital gains tax will be different.

All of these additional properties will need to be valued as well.

Best,

Nancy

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Hi there,

April 15th is coming up fast.  If you are divorcing, or if you are divorced, your taxes will be different and you will have a number of new items to consider.  I just came across a good article by Carley Mealey at the Brisbane Consulting Group. 

Taxgirl, my favorite tax site, has had a number of good posts on spousal support and taxes and on alimony in general.

Taxes are among the items you will need to consider when drafting a divorce agreement.  You need to think about how to divide any pending refund or liabilities, and how you are going to file for the current or prior year if you are still able to file jointly.

Another consideration should be how to handle any refunds (not so likely) or taxes and penalties that may occur for prior tax years when you filed jointly. Remember the divorce agreement can make one of you responsible but the IRS generally simply goes after the easier target.

And finally, someone sent me this article and I found it so fascinating I had to pass it on.

Best,

Nancy

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Hi there

In today's political climate the next item, health insurance, is somewhat challenging to consider.

There should be provisions in all agreements, for both health insurance coverage and for how you will handle the uninsured medical expenses for both yourselves and your children.

Generally this is first an economic and a health consideration; Who has the best insurance at the best price? If there are children then the cost of insurance is covered in the child support guidelines.  The guidelines provide that the custodial parent pays for the first $250 of uninsured expenses for the children, then the parents share the remainder annually.  Generally it is best to spell out what is intended to be covered; medical expenses, dental expenses and counseling expenses, then list what future expenses need to be discussed before they are incurred; there can be a different split of the cost of large ticket items, such as orthodontia as well.

Massachusetts has a provision in its laws that requires health insurance companies with some exceptions to provide post divorce insurance for the spouse of the insured.   This is great unless the insured spouse is employed by a company that is a self insurer (Microsoft) or works for the government, in which case the spouse will have to obtain their own insurance. The issue of who pays for this and how the payment is to be characterized, as alimony or not is the subject generally of negotiation, often intense.

Life insurance should be part of any agreement where one there are children or where one side has a support obligation to the other side.  The purpose of life insurance in a divorcing family is exactly the same as it would be in an intact one. It is to replace the stream of income that would be lost should one party die, or to fund the obligations to pay in the future that one party has for the benefit of the other or for the benefit of the children. I am not a proponent of whole life insurance and particularly not in a divorce situation where the obligation is limited. If you shop around there is some very reasonable term life insurance available.

You will need to consider: duration, amount , beneficiaries, proof of insurance, how does one party determine that the insurance is in effect, as well as a logical relationship of the insurance to your obligations.

Best,

Nancy

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Hi there,

Fourth in our topics to discuss is alimony.  In addition to everything else you need to think of, another important consideration when getting divorced is alimony.

You first need to decide if your case is an alimony case.  You can do that by answering these questions:

• Does one of you earn substantially more than the other? 
• Are there economic needs of one party that are not being met by her income?

Alimony is determined based on the needs of one party for support and the ability of the other to pay.

The reverse of child support; alimony reduces the payor's taxable income and is taxable to the recipient.

If you have children, the child support guidelines will apply to the first $250,000 of income, however, you can agree to allocate the support payment between alimony and child support to get the maximum tax benefit for the family unit.

Alimony currently is a very contentious area of divorce law.  There is a task force on revisions to the alimony law pending and there has been a great deal of public discussion surrounding that.

When deciding, you should also consider:

• Timing of payments
• When and why there can be increases
• If there is bonus income involved how alimony can or should be paid from the bonus, it is usual and I think, sensible, to set a percentage for alimony to be paid from the bonus on an 'if and when received' basis.
• Reductions and termination.

One of the real problems with alimony is that the Courts still lack the power to set an end date although there is legislation pending to give them that authority.

Best,

Nancy

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Hi there,

Third in our outline of topics to consider when getting divorced are additional, child related expenses. The child support monies are intended to cover food, shelter and clothing; but as anyone who has raised a child knows, that is only the beginning. Some of these expenses should be shared with the other parent.

Uninsured medical expenses:
According to the child support guidelines, the primary caretaker of the kids pays the first $250 per year for all the kids in combined routine uninsured medical and dental expenses. After that, the parents divide the costs equally. This sounds simple, but it can result in accounting and repayment problems. Be sure to keep all records of bills paid and be sure to submit the bills for timely payment both to the other parent and the insurance company if you need to. Since insurance companies differ wildly in their requirements, as do medical and dental providers, it is best to consider your situation from both aspects and have some language in your agreement that takes care of all forseen possibilities.

Extracurricular activities, and other costs:
These are no longer considered to be part of child support, so it is necessary to have an agreement on what extracurricular activities the kids will have. Other costs can include sports gear, art supplies, etc. that are necessary for the planned activities; it can also cover such things as summers abroad and church trips, the list goes on and on. A good rule of thumb is to try and keep the kids lives as stable as possible, so if you can, at least keep them in their current activities. You should have both a mechanism for agreement on the activities, and also a mechanism for division of payment.

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Hi there;

In any support situation, it seems the support is always too much for the person paying, and never enough for the person receiving it.  With child support in Massachusetts, the payments are formulaic.  The Child Support Guidelines were revised a year ago, and here is an update on the revisions.

In most cases if there are children who fall under the guidelines (generally under 18 if not in school and up to age 23 if in college), the parent with whom the kids are living should be receiving at least some support from the other parent even before the parties hit the court system.  The guidelines make it easy to determine the amount, but even with a formula there can be disagreements and the recipient may need to ask the court to intervene.

Commonly, child support is paid on the same calendar as the one used to calculate and receive your pay check.  The calculation is weekly, so if you are going to be paying monthly remember there are 4.3 weeks in a month; consequently, a $100 per week order results in a $430 per month payment.

If possible, it is best to have the support paid either via payroll deduction, or direct deposit.  That way no one needs to remember to do it, or to nag when it doesn't get done.  NEVER, EVER have the payments delivered via the kids (and do NOT, as one person in my experience did, write "Blood money for the Bitch" on the memo line on the check)!

The person who pays child support also pays the taxes on it.  This usually means that in the final agreement, there can be some consideration of this in the allocation of the dependency exemptions.

Best,

Nancy

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Hi there,

Here is the first topic in the series: Top 10 Topics to Consider When Getting Divorced.

If you have kids who aren't grown up, then this can be the most difficult area to navigate.  You will want to consider all of the topics in A and B below, and you may need to consider the topics in C, D and E as well.

A.  Legal custody, joint vs. sole, what legal custody means; who makes major decisions such as health, religion, education, moral development; and/or emergency decisions?

Most folks end up with joint legal custody, which actually is presumed to be the default format in Massachusetts.  Joint legal custody means that the parents need to communicate, and hopefully agree on the major decisions listed above.  This can be very hard in a high conflict situation, and impossible in a situation involving violence, mental health or substance abuse issues.  In fact, the state is asking people who are getting divorced because they can't communicate, to continue to communicate about their children.

I have the utmost respect for those who manage sometimes after the divorce is done, to step back, take themselves out of the equation and do what is best for the kids.  I have some prior posts about holiday scheduling that may be useful.  Sometimes, parents can't do it themselves and a Parent Coordinator is necessary.

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Hi there,

I hope you all had wonderful holidays!

A few weeks ago, a client who was going through a mediated divorce asked about a list of topics to consider in crafting his agreement with his wife and their mediator.  This seemed like a useful tool for anyone considering divorce, and as I thought more about it, the list grew and grew.  Over the next few weeks I will be posting thoughts and considerations about the top 10 topics to think about when getting divorced.

I will cover (and I bet the list will grow):

1.  The kids

2.  Child support and the child support guidelines

3.  Education and activities

4.  Alimony

5.  Life insurance and medical insurance

6.  Tax considerations

7.  Division of real estate

8.  Division of other property

9.  Debts and credit cards

10.  Everything else that should normally be covered in a divorce agreement

I also will be changing the Monday Miscellany format to only a couple of times a month. 

Best,

Nancy

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