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Alimony

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Alimony

Wait–what do you mean I can’t deduct alimony on my federal taxes?

Alimony is a series of monetary payments to an ex-spouse that may be mandated as part of a divorce decree. Paying alimony can be an expensive and painful process—and it is about to get much more painful, thanks to changes to the federal tax code. At present, those paying alimony may deduct the payments on their federal taxes, while recipients must report them as income. However, the Tax Cuts and Jobs Act (TCJA) reverses this. Beginning in 2019, alimony payments may not be deducted from the paying party’s federal income taxes. However, alimony payment recipients will no longer have to report them as taxable income. If your divorce has been finalized, or will be finalized before December 31, 2018, you need fear not. The TCJA only applies to divorces finalized beginning on January 1, 2019, or to divorce agreements renegotiated on that date or later. If you are currently considering, or undergoing, divorce, think of the change to tax law as fresh impetus to bring the process to completion. You need the counsel of an experienced tax lawyer to make sure that your alimony agreement is reached before the cut-off, and that the payments agree with the complex requirements of current tax law to qualify for deductions.

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Using Marital Assets to Pay for your Divorce

Can I use money from my joint account to pay for my Divorce? Can I get my spouse to pay for my divorce? The financial part of divorce can be overwhelming to many clients. Many clients did not handle the finances in their marriage, did not work during their marriage, or are generally unaware of what they can and can’t do with joint funds during divorce proceedings. In Massachusetts, when a party files for divorce an automatic financial restraining order is used with the summons that is served on the other party. The automatic restraining order restricts either party from selling, transferring, encumbering, assigning, removing or in any way disposing of any property, real or personal, belonging to or acquired by, either party. However, there are few notable exceptions to this rule, one being that either party can use funds for reasonable attorney’s fees and costs in connection with the action. This means that any joint funds could be used within reason to pay for your divorce. That being said, we often suggest that if a client knows they are going to file for divorce, that they set aside some money into a personal account for fees and costs prior to filing for divorce. This method prevents a potentially contentious argument about using money directly for your joint accounts. Additionally, clients often ask if they can have their spouse pay for the divorce. If there is a large income disparity, the moving party can motion the court pursuant to M.G.L.C

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Get an attorney’s help to prove your ex-spouse is cohabitating

In Massachusetts, alimony can be suspended or terminated based on the fact that an ex-spouse has been cohabitating with someone else in a common household for three months or longer. But what if your ex won’t cop to the cohabitation? How do you tell if cohabitation is really happening or the whole thing is just your suspicions playing on coincidences? There are some usual tell-tale signs: — Your ex-spouse’s new partner is spending all of his or her nights with your ex. — He or she is parking down the street, around the corner, or trying to hide the car in the garage. — The kids have been told not to mention their new “Uncle” or “Aunt” to you. Most of the actual evidence that you can take into a courtroom isn’t easily obtained without the help of an attorney and, quite possibly, a private investigator. If you’re only paying a modicum of support, and the payments are due for only another year or so, you’ll have to ask yourself if the cost of investigation and litigation is worth the result. However, if you’re paying substantial alimony and it’s due to continue for a long period of time, then you should absolutely seek the help of an attorney to get the proof that you need to obtain a modification. What sort of evidence can an attorney get that can help your modification request? Cell phone records, for example, can often be obtained with the help of an attorney. Even if

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Supreme Judicial Court of Massachusetts Provides Framework & Guidance for Applying Presumptive Alimony Durational Limits and Deviation Standards.

The Alimony Reform Act of 2011 establishes presumptive time limitation schedules for the payment of alimony based upon the time period in which the parties were married for marriages up to twenty years. The presumptive durational limits in the Alimony Reform Act apply retroactively to alimony awards that pre-date the Act. Divorced spouses who pay alimony may now file a complaint for modification with the appropriate probate and family court, seeking to terminate general term alimony once the durational limits have been met. Given the presumptive time limits on general term alimony, existing alimony orders which exceed the time limitations set forth in the statute must be terminated without a showing of additional material change in circumstances by the moving party, unless the judge finds that a deviation is warranted in the interest of justice. Once the durational limits have been met, the recipient spouse bears the burden of proving by a preponderance of the evidence that a deviation beyond the presumptive termination date set by Alimony Reform Act is required in the interests of justice. In the recent case of George v. George, 476 Mass 65 (2016), the Supreme Judicial Court of Massachusetts took the opportunity to set forth guidelines as to how a probate court judge should apply the interest of justice standard set out in the Alimony Reform Act. The court opined that in order to deviate from the presumptive limits, the judge hearing the case must find that the deviation is necessary by applying the factors

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How long can someone receive alimony under state law?

The days of lifetime alimony are generally a thing of the past. Women – who have commonly been the recipients of spousal support – are now more likely to be just as well- if not better-educated, than their husbands. They’re also likely to have spent a number of years in the workplace, even if they took some time off to have and rear children. Therefore, when an alimony agreement can’t be reached between divorcing spouses and a Massachusetts court has to step in and make the decision, the length of alimony payments generally is based on how long the marriage lasted. State law, however, provides some guidelines: — For marriages of 20 years or more, a judge can order alimony for whatever period he or she believes is fair. — For marriages that lasted up to 20 years, alimony can’t be mandated for more than 80 percent of the total months of the marriage. For example, if a couple was married for 18 years, alimony cannot be ordered for more than about 14 years. — For marriages that lasted up to a decade, the maximum length of alimony payments is 60 percent. — For marriages that lasted no more than five years, the maximum length of alimony payments is half of the duration of the marriage. Judges can increase the duration of alimony beyond these limits under a number of circumstances, such as if a person has a “clear and convincing” reason under the law for an extension. This can

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Helping minimize the tax consequences of divorce

Too often, divorcing couples don’t consider the tax consequences of their decisions regarding division of property and assets, spousal and child support and other financial matters. That’s why at David M. Gabriel & Associates, we work with a certified public accountant to help our clients avoid unnecessary tax liability and ensure that their marital property is properly valued so that it can be divided fairly. At David M. Gabriel & Associates, we understand the potential tax consequences that may arise as the result of divorce. We assist our clients in protecting the value of their marital property. We help clients properly evaluate assets and debts while formulating a plan to divide their property while taking advantage of tax benefits. Dividing money in retirement accounts can be particularly tricky. If it’s not done correctly, you could find yourself paying substantial and unnecessary tax penalties. A qualified domestic relations order is often used to divide money in pension plans, retirement accounts and annuities. Our attorneys are experienced at drafting QDROs that help our clients protect their hard-earned retirement savings in a divorce. Selling the family home is another aspect of many divorces that can have serious financial consequences. We help clients deal with potential capital gains or losses from the sale so that they aren’t faced with an unexpected tax burden when they pay their taxes the next year. We help them deal with issues that affect their taxes such as claiming dependents, reporting the receipt or payment of alimony, 529 college

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Terminating Alimony Payments

Under Massachusetts law there are a number of remedies available to spouse who pay alimony to modify, reduce or terminate spousal support. If a spouse who is receiving support remarries or either spouse dies, alimony stops. A spouse who is ordered to pay alimony may be required to get a life insurance policy that will provide support after the paying spouse dies. The length of the parties’ marriage plays a significant role in determining when support payments may terminate. Presumptive Durational Limits Marriages of five years or less allow for support payments of no more than half the number of months of the marriage to an economically dependent spouse. If a marriage lasts more than five years but less than 10 years, support may last for 60 percent of the total number of months that the marriage lasted. Support may be provided for 70 percent of the number of total months of the marriage for marriages of more than 10 years but less than 15 years in duration. This number goes up to 80 percent for marriages of more than 15 years but less than 20 years in duration. Payments may also be terminated if it can be proven that the recipient spouse is cohabiting with and has formed a common household with another person for at least three months. Economic interdependence must be proven along with other factors. Alimony may be terminated or modified for a variety of reasons. Spousal support may be ordered as part of a divorce

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Why you should hold off on romance until your divorce is final

Many people going through a divorce can’t even think about the possibility of dating again. However, what if you meet the person you truly believe could be the new love of your life? Even if you’re emotionally ready to become involved in a new relationship, doing so could harm your divorce and custody negotiations. If you begin a new relationship, your estranged spouse could become more difficult to deal with. Even if he or she too is seeing someone else, people’s feelings on these matters aren’t always rational. You’re risking making your negotiations regarding property division and spousal support more difficult. Speaking of spousal support, if you begin living with someone, you won’t be entitled to any. Even if you just have an occasional sleepover, why give your ex reason to argue that you and your new love are cohabitating? It’s important to know that Massachusetts maintains some of its puritanical laws from centuries past. Although it’s rarely prosecuted, adultery is considered a felony here. If you’re seeking a lump-sum settlement rather than payments over time, your spouse may be less willing to go along with that plan if he or she thinks that you’ll soon be cohabitating or remarrying. If you have kids, getting into a new relationship, or even casual dating, soon after a separation can be distressing and confusing for them. They need their parents now more than ever (even if they tell you otherwise). While it’s important to be personally happy and fulfilled, your focus should

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Social media rants may affect alimony and child support

Social media, Facebook in particular, has become an integrated part of the lives of many Massachusetts residents. Some of us have become so accustomed to sharing our lives online that we update and post almost automatically, with very little thought given to what could happen to that information once it is out of our hands. However, when it comes to issues surrounding one’s divorce, posting is not the best policy, and can actually have serious ramifications for issues such as child support and alimony. Even if you think that your former partner does not or cannot see your Facebook activity, this is not the place to air your grievances about the marriage or divorce. If you make comments online that can be proven false, such as claiming that your ex is not meeting his or her child support obligations, the other party can sue you for libel. Also consider the long-term ramifications; if you post negative things about the other spouse and he or she loses a job because of it, their ability to pay child support or alimony could be severely limited, and they could approach the court to ask for a reduced amount. Another thing to remember is that Facebook is forever. What you write, can almost always be recovered and brought to the attention of a court, even if you have erased it from your news feed. That heightens the risk that a child may one day read the negative things you said about the other parent.

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Why don’t men get alimony more often?

Though many people often think of men as the main breadwinners for the family unit in the vast majority of cases, recent studies show that this is largely an outdated mode of thinking. In reality, roughly 40 percent of households have women as the main earners. When it comes to alimony, there are about 400,000 people in the country being paid. Out of that, a tiny 3 percent are men. When considering this with the 40 percent figure above, it stands to reason that a lot of men could be asking for and receiving alimony, but they’re simply not doing it. Why not? There are many reasons. Experts have noted that the following show up often: — Gender roles that just won’t go away: As noted, many people automatically assume that men should be the main providers, despite the real-world statistics, so men may not consider asking for alimony. — Pride: One man said that he would never hit a woman or beg for her help, and he felt like alimony was no better than begging. Despite the fact that his wife made more than $100,000 a year, he didn’t ask for alimony and instead got help from his parents. — Sexist judges: In some cases, a man may fully be qualified for alimony, and a judge may have ruled that it should be paid if the roles were reversed, but the judge allows bias to sway his or her decision, refusing to give alimony to the man. In some

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