child support

Legal separation may avoid tax consequences, but brings high risk

Many Massachusetts couples find it challenging to know the best approach to ending a marriage. Some couples opt to enter into a legal separation while they determine whether or not to work on saving their marriage. Others move directly to a divorce filing. Each option has its pros and cons, but savvy couples will carefully weigh the financial implications of both choices before moving forward. While a legal separation may help a couple avoid some of the tax consequences of divorce, it can also leave both parties open to a high level of financial risk. A legal separation is a court-approved separation of two spouses, with the responsibilities of each spouse clearly laid out as a part of the agreement. The parties remain legally married, and one advantage of such an arrangement is that the spouses can continue to share benefits such as health insurance. They can also continue to enjoy tax benefits, inheritance rights and access to jointly owned properties. However, there is a degree of risk associated with legal separation, because spouses can also continue to spend jointly owned savings and enter into contracts, leaving open the possibility for a significantly reduced net worth before divorce papers are filed. Many experts advise against legal separation, pointing out that the opportunity to enjoy certain benefits is far outweighed by the risks inherent in remaining legally tethered while the marriage is in a state of flux. For example, if the legal separation outlines a spousal support or child support payment,

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High net-worth divorce may spell image trouble for Tom Cruise

Massachusetts readers may be aware that yet another movie star marriage has hit the rocks, though this one appears to have hit with a thud. While Cruise marked his 50th birthday on July 3, Holmes has apparently been occupied with putting the finishing touches on her divorce paperwork, which was filed on June 28. The meticulously chronicled union between Tom Cruise and Katie Holmes, cynically dubbed TomKat, has apparently come to an end. It was recently announced that Holmes has filed for divorce from Cruise, citing irreconcilable differences. In what surely will be a high net-worth divorce, the couple appears set to focus primarily on their 6-year-old daughter, Suri. The paperwork for the divorce was filed in New York. Some observers have speculated that her choice of jurisdiction may indicate that she intends to seek sole custody of their daughter. It is predicted by many that New York will lend Holmes a greater child custody advantage than by filing in California — another location where the couple owns residential property. In a high net-worth divorce between any high-powered couple, whether in Massachusetts or elsewhere, one important element for each party is their public image. Each will likely want to protect their personal brand at the same time that they are negotiating over issues important to them both, most probably child custody issues. Some believe that Cruise’s brand could take a hit because media reports about his personal life and religious views may run counter to the nice-guy/hero image typically portrayed

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Property division now; division of college tuition bills later

Children from divorced parents face a number of challenges when their parents split. In fact, in addition to property division, most divorcing couples in Massachusetts spend time working out issues concerning their children. How custody will be divided, what child support is appropriate, even where the kids will spend holidays. However, many divorcing parents neglect to plan for their kids’ college educations, which can lead to frustration, argument and disappointment down the road. The US News and World Report cites the cost of a college education as $35,000 and above at a private school, and $20,000 or above at a public school. And those are current numbers; kids who are young will likely face higher costs when they are ready to start college. The cost of a college education is difficult for most families to manage, and when the parents are divorced, some students find themselves unable to attend at all. In one unusual case, a college student sued her father when he failed to pay her tuition. Suspecting her dad might not follow through on his promise to pay for college, she had him sign a contract specifying that he agree to pay for her education until she was 25, as long as she made a serious effort to apply for scholarships and financial aid. When he stopped paying during her senior year, she took him to court. The judge ruled in her favor, awarding her a $47,000 judgment plus attorney fees. The case made national headlines, but the

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Boston father’s obligation to pay upheld by courts

If a woman gives birth to child after she and her husband separate, the husband can still be held financially responsible for the baby. This was the case of a Massachusetts man whose estranged wife gave birth to twins after an in-vitro fertilization involving donor eggs and donor sperm. According to court reports, in 2001, the wife threatened to “withdraw her support for his citizenship application” unless he consented to the procedure. The husband agreed to the IVF procedure provided that she signed an agreement that he would not be have to pay child support for any children she gave birth to. The couple separated shortly thereafter. The court ruled that the father was still financially responsible for the children, twin girls born in 2003. While the in-vitro procedure took place the couple after was separated, the decision to have the children occurred while they were still together. The Massachusetts Appeals Court said, “Simple consent to the procedure is enough to confer parental status.” It is wise for fathers to understand their rights when it comes to having children. This includes whether they will be required by law to provide financial support them even when they are no longer in a relationship with the children’s mother. Some divorce attorneys specialize in different types of family law, including paternity and child support. In this case, the man would have benefited from legal advice before continuing to give his consent to his wife’s in-vitro fertilization treatment. This case began in 2006 when

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