Divorce is understandably an emotionally triggered word, stirring up a host of powerful sentiments among all parties involved. Though it can be tempting to get lost in the emotional factors of the moment, it’s important that both husband and wife go in to negotiations with their eyes wide open, aware of all their options and potential liabilities.
Last year’s fundamental changes in Massachusetts alimony law make it all the more critical to understand clearly what the legal ramifications of divorce today can look like. So far, judges have been interpreting and applying this law in vastly different ways – perhaps quite unlike the original drafters intended. It will take time (some say even as much as 10 years) to sort out all the variances.
As we’ve covered previously, here are some of the changes that can significantly impact one or more parties:
1) The new law limits the duration of General Term Alimony. Today, the most common type of alimony can end upon the remarriage or death of the payee, the death of the payor (unless the Court has ordered life insurance payments), or the retirement of the payor. It can also be terminated, suspended, or reduced if the recipient spouse cohabits with another person for a continuous period of three months.
2) General Term Alimony can be modified to a different amount or duration based on certain factors: advanced age; chronic illness; tax considerations; payment of health or life insurance; sources of unearned income (capital gains, interest, dividends, annuities, and investments); significant premarital cohabitation (including economic partnership) and/or a lengthy marital separation; physical or mental abuse by the payor; or lack of employment opportunity.
3) Factors used to determine type, amount, and duration of General Term Alimony are: the length of the marriage; age, health, and employment of both parties; economic and non-economic contribution to the marriage; marital lifestyle; and loss of economic opportunity as a result of the marriage.
4) In an effort to protect the payor, the new law makes certain allowances for determining income. Gross income does not include capital gain, dividend, or interest income stemming from property divided between both parties; or income already used to calculate child support. If a payor remarries, his spouse’s income does not count. If a payor takes a second job or works overtime, his additional income does not count.
Though the new law was intended to protect those who may have been unfairly “punished” under the previous law, there are still many areas where one party could end up at a significant disadvantage now. Consider the following scenarios:
1) A wife might be significantly younger than her husband. He may reach retirement age long before she does, at which point there is a rebuttable presumption that the alimony would end. The burden would now shift to her to go back to court to prove that alimony should continue.
2) A couple might have several children and the husband must now pay significant child support. If the couple combined make less than $250,000 and the duration of the child support payments is longer than the period of alimony eligibility, the wife will never receive alimony, since any income used in child support is not to be used for alimony calculations.
3) A divorced wife may move in with her sister or mother for economic reasons. Some courts are actually considering this to be “cohabiting”, resulting in reduced or terminated alimony after three months.
Using mediation or Collaborative Practice prior to going to court can help alleviate difficult situations like these. Consider, for example, the instance of classifying payments as alimony vs. child support. Child support is not deductible for tax purposes or considered income by the payee. Alimony, on the other hand, is deductible by the payor and reportable by the payee. Negotiation efforts can come up with a creative solution that meets the needs of the children while still being prudent for both parents.