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.

Child Support Revisited

Massachusetts has just completed a periodic revision of the Child Support Guidelines, which occurs every four (4) years, and the changes will become effective on September 15, 2017. While some of the changes are minor, the most significant changes include the following:

1. Increasing the minimum support order to $25 per week. The minimum child support order typically applies in families with extremely low income, and previously was $80/month.

2. Removing the parenting time/child support calculation that was inserted into the 2013 guidelines. The 2013 guidelines had implemented three basic parenting arrangements for purposes of calculating child support: one parent having primary custody with about 2/3 of the children’s time, joint custody with each parent having about 50% of the children’s time, and one parent having primary custody with more than 2/3 of the children’s time. The latter category was eliminated, as the Court–and many attorneys–found that that provision was escalating litigation and causing some parents to vie for more of the parenting time in order to enhance his/her support obligations.

4. Including a capped adjustment in the child support calculation for child care and health care costs. This revisions appears intended to more equitably spread the cost of day care and health care costs between the parents.

5. Addressing child support for children between the ages of 18 and 23, resulting in a 25% reductio in child support for children in this age group.

6. Including provisions related to parental contribution to post-secondary educational expenses, essentially capping parents’ obligations at the cost of U.Mass. Amherst except where the Court enters a specific finding that private college is affordable or that the family has saved for that purpose.

Attorney Sullivan is available to meet with you to evaluate whether and to what extent these revisions could might impact on your circumstances.

Brady decision

This is not a family law decision but it is news — and very interesting reading(at least to a lawyer!) — and it does provide some insight into the arbitration process, an increasingly popular alternative to trial: