Alimony no longer deductible: what now?

How will alimony be calculated in Massachusetts, now that for orders entered after 12/31/18 it is not deductible to the person paying? There is no definite answer to that question, unfortunately. Massachusetts statutory law provides that in most situations alimony will not exceed the lesser of 30-35% of the difference in the parties’ incomes or the recipient’s need. However, when that law was adopted in 2012, the assumption was that alimony would continue to be taxed to the recipient and deducted by the payor, neither of which is true for new alimony judgments entered after 12/31/18. The state legislature has made no progress in revising the statute, leaving the issue for the Probate and Family Court to resolve.

With this in mind, in cases calling for alimony, the best approach will be to negotiate an amount of alimony that reflects what would have been the tax treatment pre-2019. Those calculations are more complicated that they may appear, because of the variety of tax brackets that may apply to each party. Attorney Sullivan is prepared to represent either party relative to alimony issues, negotiate and calculate the options, and, if needed, obtain the analysis of a tax professional.

In a custody battle, can my child’s therapist testify?

Often, when parents are in the process of divorcing, their children need counseling. Therapy can be a valuable experience for a child, offering a safe environment for the child to voice fears, anxieties and anger, all without concern about the possibility of upsetting their parents. But what if the parents are unable to resolve a custody or other parenting issue? Can the children’s therapist testify in Court? In Massachusetts, there is a statutory patient/psychotherapist privilege that applies to children. That means that a therapist cannot disclose anything said by a child in therapy–with limited exceptions such as abuse and other criminal activity–unless the privilege has been waived. The fact that parents cannot waive that privilege for their children frequently comes as a surprise in divorce proceedings. Instead, the judge will appoint a special Guardian ad Litem purely for the purpose of determining whether to waive the privilege. Typically, but depending upon the child’s age, that person will speak with the parents and the child before making a determination as to whether waiving that privilege could be detrimental to the child.

Do you know how the new tax laws could affect your divorce?

At the end of last year, Congress adopted a number of changes to the tax code that impact people who are divorced. Chief among them are the following:

1. NEW alimony orders entered beginning on January 1, 2019 will be treated differently in that alimony payable under those order will NOT be deductible to the payor and taxable to the payee;
2. Beginning on January 1, 2018, the dependency exemption has been “suspended” long-term, meaning that regardless of the language contained in an agreement, neither parent can claim the child(ren) as a dependent(s);
3. For some parents, child credits remain available and may be negotiated.

However, alimony orders entered prior to January 1, 2019, remain deductible to the payor and taxable to the recipient.

As a result, the negotiation of alimony has become more complicated!

The Massachusetts alimony statute has not been modified to reflect this change in federal law, which means that how Probate and Family Courts will determine alimony in contested situations beginning on January 1 is virtually unknown. Whether you receive or pay alimony, or whether alimony is an issue to be addressed in the future, Attorney Sullivan can advise you about how these changes in federal law may affect you, and whether addressing these issues prior to January 1, at least relating to alimony, might benefit you.

Choosing Divorce Mediation

If you are considering divorce, you may be intrigued with the idea of mediation. For the right couple, mediation can certainly be an effective tool for reducing the acrimony—and cost—of a divorce. Whether that is true for you will depend upon a variety of factors, including the level of trust between you, the complexity of your issues, and the quality of your communication with each other.
Mediation is an unregulated profession, i.e., some mediators are attorneys, and some are well-trained, but some are neither. Choose a mediator with care, with attention not only to qualifications but also to temperament. Mediation, like divorce representation, involves a fair degree of discussion of intimate personal and financial details, and it is important that you are comfortable with the process and the person. If you choose mediation, you should still have individual legal advice, even if just to review the results of the mediation, because the mediator does not represent either person: his or her role is to assist the couple in coming to an agreement, not to assess whether that agreement is in either party’s best interest. Moreover, even an agreement accepted by both parties must be approved by the judge; an incomplete or otherwise inappropriate agreement can be rejected at the time of final hearing, which is a result that neither party desires. Any good mediator will advise participants to retain their own counsel, for that very reason.
Attorney Sullivan is available not only as a trained and experienced mediator, but also to advise you through mediation, to ensure that the mediated agreement is in your best interest, is drafted appropriately, and can be accepted by the Court.

Should I mediate my divorce?

Mediation is a popular process for resolving issues that arise in divorce. But is mediation the right choice for you? The reality is that mediation is not for everyone. It requires that both parties trust each other and be committed to fully disclosing all financial realities of their situation, i.e., income, expenses, assets and liabilities. If one party seeks to use the mediation process to dominate the other, or is has a history of either psychological or physical abuse, mediation is less likely to result in a successful resolution.
The job of a mediator is to assist the divorcing couple in coming to an agreement, but the mediator does not represent the interests of either party, which is why each person should have his or her own counsel to consult with during the process, and to review all documents. Lastly, if you and your spouse have few issues, or have essentially resolved your disputes, then you have less of a need for a mediator than for an attorney to draft documents reflecting your agreement, while also ensuring that you have appropriately addressed all relevant issues to your maximum benefit. Remember, though: no attorney can represent both of you.
Attorney Sullivan is a trained, experienced mediator who is also available to consult with you if you if you are working with another mediator. Please feel free to call the office to discuss the benefits and risks of mediation your circumstances.

After the divorce: how to pay for college

This time of year, high school seniors are graduating and planning for next year’s college attendance. High school juniors, too, are planning college visits and applications for the fall. College is expensive, and addressing the issues of how to divide educational expenses after divorce can be a real challenge. If you are in the midst of a divorce, you can be very specific in how you define the term “educational expenses,” and how you and your ex-spouse will determine your respective contributions. Many couples decide to cap their obligations, e.g., to the cost of a state university education. Addressing all of these issues early in the process, and realistically, can be the key to a smooth transition for your college-bound child. If educational expenses become contested, it is wise to leave plenty of time, at least several months and preferably more, for court documents to be filed and hearings to be scheduled.

Paying for college education

Every parent is concerned about how to pay for their children’s college education. This concern may be magnified when the parents are divorced or divorcing. In Massachusetts, the Probate and Family Court does have authority to determine what portion of a child’s education that each parent will pay. The approaches vary by judge, and, of course, by the parties’ circumstances. Some parents choose to limit their potential obligation to a particular dollar amount, or to the total cost of a state college; others, particularly if their children are young, may choose to defer the determination of their respective contributions until the children are older, because circumstances may change during the intervening years. Depending upon the number of children in a family, the children’s ages, and the financial circumstances, it may also be appropriate to adjust child support when a child enters college. Whatever your circumstances, whether you are in the midst of a divorce, or already divorced, Attorney Sullivan is prepared to guide you through the process of resolving college education expense issues in the best way possible for your family.

I live in Massachusetts, and my spouse lives in another state; does it matter where we file for divorce?

Often, both spouses still live in the same state, perhaps even the same home, when they decide to divorce. However, if a couple has separated, one spouse may have moved to another state. In that case, jurisdictional law will determine where a divorce can be granted. Divorce law varies from state to state, though, and each state has different rules that govern whether it has jurisdiction over a divorce. Typically, the rules focus on where each spouse lives, and for how long, but other relevant factors may be where they each lived when the marriage broke down, where the couple lived during their marriage, and how long each spouse has lived at his or her current residence. The rules are not always as obvious as they might seem. Moreover, state law about some aspects of divorce, such as alimony, child support, parenting time and the factors affecting asset division can vary significantly. For example, in Massachusetts, child support can extend until a child is 23 years old, so long as the child is attending school full-time, but in New Hampshire child support ends at age 18 or graduation from high school. Therefore, in circumstances where it might be possible for two different states to exert jurisdiction over a divorce, the decision of where and when to file may be crucial, and is an important matter to discuss with your attorney.

Divorce and the family business

When there is a family business, whether one or both spouses operate the business, it is important to determine its value. Depending upon the size and type of business, it may have a very significant value or a negligent value. A specialized appraiser can speak with the business owner, examine the business financial records, and perform an analysis of the value. Often, the appraiser can provide an indication at the inception of his or her work as to the likelihood that the business has significant value. A divorce attorney works closely with the appraiser to ensure access to a appropriate and complete set of information for the appraisal. Of course, a business also provides a stream of income; if the parties disagree about the extent of that income, the appraiser may also be retained to analyze the owner income.