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Tuesday, September 27, 2011

The New Massachusetts Alimony Law in a Nutshell

As expected, Massachusetts Governor Deval Patrick signed into law the Alimony Reform Act of 2011 yesterday.

The new law, which becomes effective March 1, 2012, makes significant changes to alimony in Massachusetts. Here are just some of the changes:

The new law defines multiple types of alimony:

Types of Alimony Defined:

General Term Alimony: periodic payment of support to a recipient who is economically dependent.

Rehabilitative Alimony: periodic payment of support to a recipient spouse who is expected to become economically self-sufficient by a predicted time, such as, without limitation, reemployment, completion of job training; or receipt of a sum due from the payor spouse pursuant to a judgment.

Reimbursement Alimony: periodic or one-time payment of support to a recipient spouse after a marriage of not more than five years and for the purpose of compensating the recipient for economic or noneconomic contributions to the financial resources of the payor spouse, such as enabling the payor spouse to complete and education or job training.

Transitional Alimony: periodic or one-time payment of support to a recipient spouse after a marriage of not more than five years and for the purpose of transitioning the recipient to an adjusted lifestyle or location as a result of the divorce.

The new law defines the maximum amount of Alimony:

Except for Reimbursement Alimony or circumstances warranting deviation for other forms of alimony, the amount of alimony should generally not exceed the recipient's need or 30% to 35% of the difference between the parties gross incomes.

The new law also limits the duration of General Term Alimony:

General Term Alimony Ends Upon:
  • Remarriage of the recipient;
  • Death of the recipient;
  • Death of the payor (though the court may order life insurance or reasonable security for payment of sums due to the recipient in the event of the payor's death during the alimony term);
  • Except when the court finds that deviation is warranted, upon the expiration of the duration formula calculated above;
  • Upon the cohabitation of the recipient spouse with another person for a continuous period of at least three months (may also result in suspension or reduction instead of termination;
  • Upon the payor attaining the full retirement age when he or she is eligible for the old-age retirement benefit under the United States Old-Age, Disability, and Survivors Insurance Act, 42 U.S.C. 416.

The deviation factors which could result in a different amount or duration are:
  • Advanced age; chronic illness; or unusual health circumstances of either party;
  • Tax considerations applicable to the parties;
  • Whether the payor spouse is providing health insurance and the cost of heath insurance for the recipient spouse;
  • Whether the payor spouse has been ordered to secure life insurance for the benefit of the recipient spouse and the cost of such insurance;
  • Sources and amounts of unearned income, including capital gains, interest and dividends, annuity and investment income from assets that were not allocated in the parties divorce;
  • Significant premarital cohabitation that included economic partnership and/or marital separation of significant duration, each of which the court may consider in determining the length of the marriage;
  • A party's inability to provide for his or her own support by reason of physical or mental abuse by the payor;
  • A party's inability to provide for his or her own support by reason of a party's deficiency's of property, maintenance or employment opportunity; and
  • Upon written findings, any other factor that the court deems relevant and material.

Other Notable Provisions:

Factors to Determine Type, Amount and Duration of Alimony: the length of the marriage; age of the parties; health of the parties; both parties' income, employment and employability, including employability through reasonable diligence and additional training, if necessary; economic and non-economic contribution to the marriage; marital lifestyle; ability of each party to maintain the marital lifestyle; lost economic opportunity as a result of the marriage; and such other factors as the court may deem relevant and material.

Gross Income Shall Not Include: Capital gain income and dividend and interest income which derives from assets equitably divided between the parties under Section 34; and Gross Income already used to calculate Child Support.

Attributing Income: In determining the incomes of parties with respect to the issue of alimony, the Court may attribute income to a party who is unemployed or underemployed.

Remarriage of Payor: income and assets of the payor's spouse shall not be considered in a redetermination of alimony in a modification action.

Overtime or 2nd Job: shall not be considered if first job is full time, and additional income started after initial order.



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