Does the court consider tax consequences in a divorce?

As the income tax filing deadline approaches, we are all wondering how we can reduce our income tax bill and increase our refund. Anyone who is considering divorce, going through a divorce, or has been divorced should consider how their divorce case could affect that tax bill.

We previously posted a series on Divorce & Taxes including the following topics:

Divorce and Taxes: Issue #1. Marital Status

Divorce & Taxes - Issue #2. Child Support v. Alimony

Divorce and Taxes: Issue #3. Child Dependency Exemptions.

Divorce and Taxes: Issue #4. Property Transfers.

Divorce and Taxes: Issue #5. Joint Tax Liability.

Divorce and Taxes: Issue #6. Same Sex Marriages.

Whenever any of these issues arise in a case, it is imperative that divorcing spouses and their counsel consider the tax consequences when negotiating a settlement.

In a recent opinion, the Massachusetts SJC confirmed the importance of considering income tax consequences of divorce orders and specifically ordered that a Judge, even when applying their broad discretion, must consider the potential impact of taxes on the divorce settlement. In L.J.S. v.s. J.E.S. the SJC remanded a Judge's alimony decision finding that the Judge erred by not considering the potential Federal tax consequences.

For practitioners and parties, this decision underlines the importance of getting proper tax advice during your divorce case or negotiation. The Judge must consider the impact of taxation on your settlement, but the Judge won't know unless you present the evidence of what that tax impact will be.

Comments

What is the purpose of the Divorce Nisi waiting period?

In Massachusetts the statutory waiting period after a Judgment of Divorce and before the divorce becomes final (or absolute) is called the Nisi period. After a divorce case settles or goes to trial, a Judgment of Divorce Nisi will issue and it will become Absolute after a further ninety (90) days. This waiting period serves the purpose of allowing parties to change their mind before the divorce becomes final. If the Judgment of Divorce Nisi has issued but not become final yet, and you and your spouse decide you don't want to get divorced, then you can file a Motion to Dismiss and the Judgment will be undone. Although many of my clients who are getting divorced think the idea of getting back together with their ex sounds crazy, I have had cases where this happened. In addition to offering a grace period to change your mind, the Nisi period has three other legal effects: 1. The most obvious effect of the waiting period is that you cannot remarry during the Nisi period, be...

2024 U.S. Presidential Party Platforms - What are the policy positions that could affect families?

While the laws that affect family formation, marriage and divorce are often made at the state level, there are also many policies and laws at the federal level that affect families and children. Just some examples from recent years that have impacted families in my mediation practice include changes to the federal tax laws (such as the elimination of the alimony tax deduction ) and U.S. Supreme Court rulings on same sex marriage and reproductive health rights. In just over a month, the United States presidential election will have a significant impact on these federal policies going forward, and could choose the next appointments to the U.S. Supreme Court as well. In 2016 and 2020 we shared what each presidential platform said about families and policy regarding family formation and dissolution, and below we'll provide you an update on the 2024 presidential platforms. As Maya Angelou said, "When someone shows you who they are, believe them the first time."...

New Massachusetts Child Support Guidelines (2021): Big Changes, Little Changes, Typos & some Unexpected Results

UPDATE: The court has released a web calculating version of the 2021 MA Child Support Guidelines Worksheet . It resolves some of the typos referred to below, but the unexpected calculations still apply. Every four years, per federal mandate, the Massachusetts Probate & Family Court revisits the Child Support Guidelines through the work of a Task Force appointed by the Chief Justice. The 2021 Massachusetts Child Support Guidelines were recently posted. They take effect on October 4, 2021. If you are interested in a training on all of these changes to the new Child Support Guidelines: DMTA Presents the 2021 MA Child Support Guidelines Update – Attend this event to learn the key updates you need to know for your mediation clients. Presented by Justin Kelsey of Divorce Mediation Training Associates and Skylark Law & Mediation, PC . For a full comparison of all the tracked changes between the 2018 and 2021 Massachusetts Ch...

Search This Blog