In a divorce, the court has the ability to order the division of retirement accounts, as a one-time non-taxable event, transferring a portion of the account from one spouse to the other. Whether or not all or part of a retirement account is divided depends on the rules of that jurisdiction and the facts of each case.  In this article we're not dealing with that determination but assuming there has been an agreement or order to divide an account.  Now what? How the account is divided, and whether a QDRO or some other specialized order is required, depends on the type of account.  Regardless of the type of account, however, there are five basic pieces of information that a Plan Administrator or QDRO drafter will need in order to properly divide the account.  When drafting a Divorce Agreement or proposed Judgment it is best practice to include these five elements: Identify the Plan Information Clearly  - It may seem obvious, but the Agreement or Judgment m...

In Massachusetts, the asset division statute (M.G.L. c. 208 s 34), grants the court significant discretion and authority to assign assets owned by one spouse to the other in a divorce case in order to reach an "equitable" division.  The trial court has broad discretion as to the treatment of all types of assets owned by either spouse, but before the court can determine an equitable division, the assets themselves must first be defined and valued.  With many assets the value is straightforward, and there are accepted ways of valuing real estate, personal property and business interests.  But some assets, such as stock options, are very difficult to value reliably. What happens when the value of a marital asset is uncertain? The Appeals Court, in Canisius v. Morgenstern , addressed this question in regards to potential royalties and movie rights for the author of The Night Circus .  The trial court Judge had excluded future income from the sale of the wife's book f...

The Massachusetts Appeals Court has decided another case interpreting   the Alimony Reform Act , that I will likely refer to as that "length of the marriage" case rather than trying to pronounce the actual name.  In Valaskatgis v. Valaskatgis , the Appeals Court was faced with the question of whether the Alimony Reform Act's definition for "length of the marriage" also applied to property division questions. Question:  Does Length of the Marriage (for Alimony)   =   Length of the Marriage (for Property Division)? Answer:   No. Why does it matter? The Alimony Reform Act defines length of the marriage as: "the number of months from the date of legal marriage to the date of service of a complaint or petition for divorce or separate support duly filed in a court of the commonwealth or another court with jurisdiction to terminate the marriage; provided, however, that the court may increase the length of the marriage if there is evidence that t...

The Alimony Reform Act of 2011  took effect on March 1, 2012 and significantly changed the law in Massachusetts relating to awards of alimony. Today, the Massachusetts Appeals Court released an opinion that addresses some of the questions still surrounding the Act.  Hassey v. Hassey,  No. 13-P-864 (2014,  available for download here ). In Hassey , the Appeals Court addressed four primary issues in the lower court's decision: Base Alimony of $8,500 per month - VACATED Self-Modifying Alimony of 30% of Husband's gross income in excess of $250,000 - VACATED Termination of Alimony on ""retirement as defined in the Act Reforming Alimony of 2011, as it may be amended." - REMANDED FOR AMBIGUITY Exclusion of Wife's inherited interest in vacation home from marital estate - VACATED We've summarized the take-away points from this decision: 1. The Basic Definition of Alimony and its Purpose HAS NOT CHANGED While there are numerous provisions deali...

Our last post  addressed a recent decision by the Massachusetts Appeals Court to extend attorney's fees liability to opposing counsel on a frivolous appeal.  In this post we discuss why was the appeal was considered so frivolous? In Callahan v. Bedard , Case No. 13-P-914, decided on April 23, 2014 ( available here ), the Appeals Court was asked by a father to overturn a lower court's refusal to set aside a Judgment in a paternity case.  The father had signed an agreement for settlement that was incorporated into a Judgment by the Probate and Family Court judge, and about six months later changed his mind and asked the Probate & Family Court to undo the Judgment pursuant to Mass.R.Dom.Rel.P. 60(b). While not explicitly stated by the Appeals Court, the fact that the father was trying to back out of a deal he had willingly made certainly weighed against him.  In addition to the father's bad faith, though, the Appeals Court directly addressed the issue the fathe...

For over a decade, federal courts have ruled that an attorney who files a frivolous appeal on behalf of his or her client can be ordered to pay the opposing party’s legal fees. For example, in the leading case of Cronin v. Amesbury , the First Circuit Court of Appeals ordered the losing party’s attorney to pay the opposing party’s legal fees after he “ crossed the line from zealous advocacy to vexatious advocacy ”. Has this rule been expanded to Massachusetts? In 2010, the question first came to Massachusetts in City of Worcester v. AME Realty Corp ., in which the Appeals Court seemingly expressed support for the federal rule of imposing “joint and several liability” for legal fees on attorneys who file frivolous appeals. In City of Worcester, the Appeals Court referred approvingly to “numerous” federal “decisions applying the sanctions of ‘damages’ and ‘costs’” to attorneys who file frivolous appeals. However, the opinion ultimately declined to say whether the federal rule applied...

In a recent opinion, in which the Massachusetts Appeals Court affirmed the trial court's divorce judgment, a very expensive bachelor party in Las Vegas turned into an even more expensive divorce. In a marriage as short as Frank the Tank's  marriage in Old School (and 21 days shorter than Kim Kardashian's second marriage ), a physician ended up paying one year of alimony for a two month marriage. The story-line of T.E. v. A.O is right out of the movies  involving a husband who went to Las Vegas five days before his wedding in October 2008 and while there charged over $20,000 at a "men's club" and met a woman who he then began an intimate relationship with.  Upon his return from Las Vegas, the parties were married on October 4, 2008 in a wedding that cost approximately $150,000.  In clear violation of the Vegas marketing campaign , soon after the wedding, the wife learned of the extravagant Las Vegas charges and of the husband's ongoing relationship ...

Mad Men Season 3 Episode Photos Mad Men Season 3 Episode Photos Photo Gallery Don Draper (Jon Hamm) in Episode 13 One of television's most popular shows, Mad Men (season five premieres on March 25 on AMC), is set in the early to mid 1960s New York, and features the troubled marriage and eventual divorce of two of its main characters. The show has earned praise for its efforts to remain historically accurate, and as such, gives divorce practitioners a chance to view the dissolution of a marriage as if it were in a time capsule. The show's main character, Don Draper, is a professionally successful advertising executive with a lifestyle which includes a serious drinking problem and many extra-marital affairs. His wife, Betty, had been a model, but stopped working to care for their children after their oldest was born. After discovering one of Don's affairs, and finding out that he was actually living under someone else's name, and that he had previously been ...

While our last post explored what happens when your ex violates the Divorce Judgment, what happens if everyone is following the agreement perfectly, but one of you has clearly got an advantage? A common complaint that potential clients express to us is a dissatisfaction with their prior agreement or judgment because their ex-spouse seems to be doing very well.  They might have a bigger house, or take a lot of vacations, or have a really nice car.  In some cases this is a legitimate indicator that a support order may not be fair, and in those cases a Complaint for Modification may be warranted (our next few posts will address when this is appropriate). However, many times this imbalance reflects something which can’t be fixed by a Complaint for Modification.  In some cases exes have not fully accepted the divorce yet, and comparing your lifestyle to your exes is an indication that you haven’t yet moved on.    Even with a well-crafted agreement your life i...

According to this recent Daily Mail article , Athelstan Whaley, a millionaire hotel tycoon will be left practically penniless by a UK divorce court's order. Whaley claims that the main source of his wealth, a family trust, cannot be accessed to pay for his divorce settlement, despite the fact that the Judge took the trust into account when calculating the divorce payout. In order to pay the settlement, he will have to use all of his liquid assets including selling his house, and claims that this will make him homeless. While it's hard to feel bad for a millionaire, a family trust could put any divorcing spouse in this position. In Massachusetts the division of marital property in a divorce case is controlled by M.G.L. Chapter 208 Section 34 , which states in pertinent part: "In addition to or in lieu of a judgment to pay alimony, the court may assign to either husband or wife all or any part of the estate of the other, including but not limited to, all vested and no...

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 cann...

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 associated...