Reason #4 Not to Wait: Remarriage Almost every client who consults with us about divorce indicates they have no intention of getting remarried. And who can blame them for saying that when in the middle of a divorce? But the statistics say otherwise. Most people will get remarried after a divorce, and if you are separated and meet someone you want to marry, you will now have to wait for your divorce process to be complete. You can't simply get remarried like Richard Barton Jr. of Grand Rapids, Michigan, who was charged with Bigamy for getting remarried before being divorced (and who got caught because he was dumb enough to post his new marriage photos on Facebook). Divorces can take years depending on how complicated the issues are and how much either party wants to fight. If you meet someone new will they want to wait that long? Will you? And how will having this third party involved in your life affect your finances (which can be discussed in court)? If you don'
Reason #3 Not to Wait: Becoming a Legal Parent If your spouse is of child-bearing age and a woman, then it is possible (even if unlikely) for them to become impregnated by someone else. This is more likely if you are separated. In Massachusetts if a woman is married within 300 days prior to the birth of a child, then her spouse is legally the father of that child, whether or not he is the biological father. Being a legal parent comes with both obligations (child support, health insurance) and benefits (visitation, relationship). But if it's not your child do you want that responsibility? It is possible to undo this legal presumption but it usually requires knowing who the biological father is and suing them. Now because you waited to get divorced you have two lawsuits instead of one and another party involved in the dispute (the biological father). Read Reason #4: Remarriage.
Reason #2 Not to Wait: The Ticking Time Bomb 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 o
In Massachusetts, the standard for a no-fault divorce is whether or not you subjectively believe that your marriage is irretrievably broken down with no chance of reconciliation. If you are separated but believe that there is a chance of reconciliation, then you should not get divorced (and you do not meet the legal standard to do so anyway). However, if you are separated and you do believe that your marriage is over, then there are some compelling reasons not to wait to get divorced. This four part post will highlight the most compelling of these reasons. Reason #1 Not to Wait: Cutting Financial Ties So long as you are married, you have a financial link to your spouse. In Massachusetts any property that you hold either jointly or individually can be considered marital property subject to division by the family court. This means that if you acquire financial assets after your separation your spouse may have a claim to those, even if they didn't pay a dime to help you ob
It seems like every day I read another article about how Facebook is Becoming a Prime Source for Divorce Case Evidence . Anyone who isn't aware of the risks by now is just not paying attention. But there does still seem to be a great amount of confusion over how private you can really make your Facebook page. While you are free to adjust your privacy settings any way you want, a chain is only as strong as its weakest link. Any one of your "friends" can share any information that they can see. To think of it another way: consider whether the post you are about to make is something you would be okay with every one of your "friends" repeating out loud to one other person they know (as in "look what Justin just posted!"). Chances are somewhere in that chain is your mother, grandmother, ex, or even a potential employer. Of course, doing this every time you post may make you wonder, why am I even on facebook if it's going to be this hard? Well
On March 21, a New York man facing a charge of driving a motor vehicle under the influence of alcohol (DUI in New York, OUI in Massachusetts) showed up intoxicated to a New York court for a hearing carrying an open can of beer , with four more cans in a bag. While this might be snickered at and mentally filed away under the "dumb guys in crime" category, it does highlight the issue of alcoholism and how it can contribute to a myriad of poor life decisions. Alcoholism is a serious issue in many family court cases as well. Alcoholism can be a source of wasting assets, a reason one party has trouble supporting themselves, or worst of all, a parental fitness issue. Alcohol use and abuse is not only difficult to track (it won't show up on drug tests days later), it can also be difficult to prove and control. But there are solutions for dealing with these issues in court, including the use of Breathalyzer technology and support programs. And oftentimes alcohol abuse
A parenting plan which is becoming more popular among divorcing and separating parents is called "nesting." Nesting is when the children stay in the home and the parents move in and out according to a parenting schedule (rather than have the children travel back and forth to separate homes. The main benefits of nesting are as follows: 1. Rather than create greater stress for the children by making them travel and sleep in a new place, while they are still getting used to the idea that their parents are separating, we force this stress on the parents. Although not ideal in either situation, the argument is that if either the children or the parents are going to be inconvenienced it makes more sense for that burden to fall on the parents (at least while it is practical). After all, the parents are the ones who decided to get divorced, not the children. 2. It allows for greater flexibility in designing a settlement of a case. By not forcing one spouse out, we haven’t
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 c
Issues 1 through 4 all focus on the tax liabilities created post-divorce. But what about tax liability incurred during the marriage? Issue #5. JOINT TAX LIABILITY: The Court has the power in a divorce case to assign both assets and liabilities, including tax liability incurred during the marriage. If there are joint tax returns filed during the marriage for which taxes are still owed, that liability is owed by both parties to the taxing authorities. The Court may assign that debt to one party by order or agreement, but that doesn't always satisfy the taxing authorities. Unless you file an innocent spouse application with the IRS (and the IRS makes an innocent spouse determination in your favor), they will still consider a joint debt owed by both parties until satisfied. A probate court order allows you to collect against your former spouse but does not prevent the IRS from collecting against you. Therefore, if there are any assets available for the payment of tax debt a
In any divorce where the parties own assets of value, there will likely be some transfer of assets between the parties as part of the divorce settlement. Assets that could be at issue range from tangible personal property (i.e. the pots and pans) to bank, investment and retirement accounts. In addition, the most valuable asset in many marriages is the marital home (and/or other real property). Although generally tax implications in spousal transfers are minimal there are some issues to look out for. Issue #4. PROPERTY TRANSFERS: Because some assets are post-tax (such as bank accounts) and some assets are pre-tax (such as retirement accounts or capital gains), it is important to understand the tax implications in dividing them. If you trade a pre-tax asset for a post-tax asset of equal value without taking into account the resulting tax liability then you've lost the value of the tax liability. Therefore it is important to understand which assets have tax liability associate
In any divorce case involving children, child support is not the only financial issue to be determined. Children's health insurance, medical expenses and sometimes extracurricular activity expenses will be determined by the Court. In addition, the Court can determine (or the parties can agree) on who may claim the child dependency exemptions on their income tax returns. Issue #3. Child Dependency Exemptions: According to IRS Publication 504 you can claim a qualifying child as your dependent if the following are true: "1. The child must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them. 2. The child must be (a) under age 19 at the end of the year and younger than you (or your spouse, if filing jointly), (b) under age 24 at the end of the year, a full-time student, and younger than you (or your spouse, if filing jointly), or (c) any age if permanently and totally disabled.
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 Reci
A recent article published in Massachusetts Lawyers Weekly discussed a case in Middlesex Probate & Family Court where an attorney in a divorce case asked the judge to order one spouse to pay "pet support" to the other spouse to care for the couples' two dogs. The judge immediately refused the request. The article noted that the judge had just heard a series of cases that involved foreclosed houses and parents losing their jobs. This illustrates an issue that many divorcing couples face when going through the court process. Courts usually only have the time and resources to deal with the "big" issues -- alimony, child custody and support, and property division. That doesn't neatly fit for families that have a variety of other issues, such as pet support or visitation, property sharing, and care taking approaches unique to a child's specific and unique needs. The best way to address these issues is to come to an agreement on the issue and incl
There are two certainties in life: Death and Taxes. We've already written about how divorce and estate planning are interrelated, but what about divorce and taxes? In all cases a divorce will affect some part of your tax return. In most cases there will be numerous changes in your income tax liability after your divorce and you should give consideration to what changes will take place because this could be a factor in determining the best divorce settlement for you. In some cases these changes may be complicated enough that your attorney should involve an accountant or certified financial planner to help analyze the different options. Our next five blog posts will explore the various issues raised by the interrelation of divorce and taxes so that you are at least aware of the issues to be on the lookout for. Issue #1. MARITAL STATUS: The most obvious way that a divorce will affect your taxes is by changing your marital status. This is a change to your federal income ta