Transcript Divorce 101 what to know before you go Thank you for coming to the seminar Unfortunately, we cannot answer questions about your particular situation.

Divorce 101
what to know before
you go
Thank you for coming to the seminar
Unfortunately, we cannot answer questions about
your particular situation. Our goal is to provide you
with a general overview and some useful
information. We will not give you specific legal
advice tonight.
By attending the seminar, we are not establishing
any attorney-client relationship with you as a result
of your attendance
We look forward to your questions but we ask that
they be posed in a hypothetical manner.
The Challenges of Divorce
Few, if any, life events rival the stress and
emotional upheaval of divorce
Normal to feel like everything is falling apart
Combination of legal, financial, and emotional
issues to contend with is challenging
Important to know what you want, but sometimes
what one spouse wants is to stay married; but you
cannot stop a divorce
Overview of Divorce Process
Options
How will you navigate the process?
Consider what is best for you and your kids and
think long-term.
Traditional court-based
divorce
Mediation
Collaborative Process
On Your Own - no help from
professionals
Court-Based Divorce
Also known as a contested
divorce or litigation
Important! Less than 10%
of divorce cases result in a
trial. The vast majority
settle, when the parties
agree, at some point in the
process.
Usually slowest and most
expensive alternative
Court - Based Divorce
May be the best option when...
When your spouse will not consider other options.
History of domestic violence, or other significant abuse
of family members
Spouse unwilling to disclose financial information
Significant psychological or addiction issues
Court or Litigation Based
Process starts with filing of a Complaint for Divorce by
one party against the other. Plaintiff v. Defendant
Court places case on a fourteen (14) month scheduling
track, but case could take longer or shorter
Many cases will have Motions for Temporary Orders
Give up control and decision making to third parties
Adversarial process, makes it hard to “move on” postdivorce and parent with former spouse
Public process-anyone over the age of eighteen (18) is
allowed in the court room
Divorce Mediation
Mediation Facts
Voluntary, confidential process
Mediator serves as a neutral third-party, in an effort to facilitate a lasting
agreement between the parties on all issues
Attorney who is a mediator is not the “attorney” for both parties or either
party
Mediator Hat vs. Attorney (advocate) Hat
No decisions can be imposed upon you, parties maintain more control
Couple can control the pace
Generally faster and less expensive
Mediation...continued
Mediators who are also attorneys can draft your divorce
agreement or any court paperwork at the end of the process
(non-lawyers cannot draft legal documents)
Option of having an attorney on the outside during the
mediation process to advise you and review documents
Mediation is not just for couples that already agree on
everything! We have mediated many complicated
agreements
Some couples who have already started the court based
litigation process can choose mediation to help them
resolve their case
Collaborative Divorce
Like mediation, the collaborative process (CP) is an alternative to
litigation
Team-based, non-adversarial approach
Each client retains a collaboratively-trained lawyer to represent them
A neutral divorce coach (mental health professional) is part of the team
and attends all meetings
Collaborative Law encourages the use of other experts if needed, such
as a financial or tax professional. The cost of experts is normally shared
between the parties.
Resolving Disputes Respectfully through
the Collaborative Process
Series of meetings is held to reach a
mutually acceptable settlement on all
issues
Maintain open communications and
information sharing
No threats of court
If process completely breaks down,
parties must get new attorneys for
court. This aligns everyone’s interests.
The collaborative process
helps parents co-parent
effectively after divorce.
Divorce & Children
Most important predictor of a successful outcome for children
are lower levels of conflict during the divorce and a positive
post-divorce family
Two active, involved parents enable children to thrive - during
and after divorce!
Pitfalls: Disparaging the other parent, projecting your own
feelings onto the kids
Think about how and when to tell your children, what to tell
them, and what questions to expect.
Parenting
Parenting Plan is slowly replacing the
terms custody and visitation.
Two types of custody in MA-Legal
custody and Physical custody.
Don’t assume what you see on TV or
hear from friends is best for your
family
There are no “standards” Many
modern couples are creating parenting
plans that work best for their family
and their children
Parenting Plans
Parenting plan should be flexible, but have enough
detail to be helpful and avoid conflict
Encourage cooperation, information sharing
Focus should be on the best interests of the children
All couples must complete a Mandatory Parenting
Education Class (sheet in folder)
Child Support
Child Support Guidelines (2013)
When does child support end?
What if joint custody?
Modifications of Child Support
Department of Revenue Services
Child Support
Guidelines & Concepts
Minimize the economic impact on children of a
family break up
Provide for the children’s basic needs
Encourage joint parental responsibility for financial
support of child/children
To the extent either parent enjoys a higher standard of
living - to allow child to benefit from that higher
standard-the more money parents make, the more they
spend on their children
Child Support (CS) is tax neutral, meaning it is not considered
income for tax purposes - but may be for other things, like
financial aid. CS is not deductible by the payor.
Guidelines consider income from all sources, cost of health and
dental insurance, childcare, and previous support obligations.
Issues not on the face of the child support guidelines, such as:
Attribution of Income, Deviations based upon specific findings,
identifying ALL income, etc.
More on Child Support
MA Department of Revenue
Many services available from DOR
Collection and Enforcement Options
Modifications - change in employment,
income, parenting schedule, etc.
Contempt Actions-what to do if a parent
doesn’t pay their support?
Main Goals of Alimony Reform:
Predictability and Uniformity
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More Consistent Outcomes
Encourage Marriage, Including 2nd Marriages
Financially Separate Divorced Spouses
Provides Structure to Settlement Negotiations
Encourage Financial Planning
Economic Independence
Alimony Definition
The payment of support from a spouse,
who has the ability to pay, to a spouse in
need of support for a reasonable length
of time, under a court order.
From The Alimony Reform Act of 2011
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Presumption that alimony ends at
retirement is an important component of
the new statute
Retirement age based upon the full
retirement age under 42 U.S.C. 416
(Social Security) - currently 66.
Court may extend alimony payments for
good cause shown. Extension should be
requested at time of original order if
possible
Post-judgment modification on duration if
material change in circumstances possible
Cohabitation
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Issue of cohabitation is a question of fact to be determined
by the court
Factors: Share a common household, present as a couple,
joint memberships, economic interdependence
Minimum amount of time of cohabitation 3 months
Spousal support may be reduced, suspended, or terminated,
but...
Reinstatement is also possible!
The new law recognizes 4 categories
of spousal support in Massachusetts
1. Rehabilitative
2. Reimbursement
3. Transitional
4. General Term
Rehabilitative alimony
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Paid to a spouse who is expected to become selfsufficient at a predicted time with re-employment or
additional training or education
Can be used with any length marriage
5 Year Limit for alimony length, but may be extended
Amount may be modified
reimbursement alimony
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Designed to compensate the recipient spouse for
economic or non-economic contribution to the financial
resources of the payor spouse, such as enabling the
payor spouse to complete and education or job training.
Appropriate for marriages lasting up to 5 years
Periodic payments or lump-sum
Not subject to income guidelines
Not extendable or subject to a modification by the
court.
transitional alimony
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Purpose is to assist the recipient spouse transition to
a new “adjusted” lifestyle or location as a result of
divorce.
Up to a 5 year marriage
Maximum alimony order is 3 years
Not subject to an extension or modification
General Term Alimony...
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Periodic payment of support to a spouse who is
economically dependent.
Related issues that were troublesome in the past are
now addressed...well, mostly.
Amount of GTA should not exceed the recipient’s
need or 30-35% of the difference between the
parties’ gross incomes established at the time of the
order being issued.
GTA Time Limits
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If the marriage length is 5 years or less, GTA shall
continue for not longer than one-half the number of
months of the marriage.
If the marriage lasted 10 years or less, but more
than 5 years, then GTA shall continue for not
longer than 60% of the number of months of the
marriage.
For a marriage lasting 15 years or less, but more
than 10 years, then GTA shall continue for not
longer than 70% of the number of months of the
marriage.
Durational Limits - continued
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If the marriage was 20 years or less, but more than
15 years, then GTA shall continue for not longer
than 80% of the number of months of the marriage.
For marriages lasting longer than 20 years, the
court may order indefinite support, but retirement
presumption is now part of the new law.
The court has discretion to increase the length past
retirement.
Modifications - Time
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Payors married to the recipient 5 years or less may file
for a modification on or after 3/1/13
Married 10 years or less, but more than 5 - file for
modification on or after 3/1/14
Married 15 years or less, but more than 10, file on or
after 3/1/15
Married 20 years, but more than 15, can file on or
after September 1, 2015
Modifications - Retirement
• Any payor who has reached full retirement age;
• Or who will reach full retirement age on or
before March 1, 2015;
• May file a modification or or after March 1, 2013
Property Division
Property Division Includes...
All property is subject to an
Equitable Division including
but not limited to….
Bank Accounts
Cars, Boats, etc.
Personal Property, such as
jewelry, musical instruments,
furniture, lawn equipment,
sports equipment
Real Estate
Credit card points, miles
Time Shares
Retirement Assets
Investment Accounts
...all property is subject to
division, including...
Debt
One thing nobody wants!
Credit Cards
Mortgages - is your house upside down?
Student Loans
Medical Bills...
Other Topics for Consideration
Health Insurance - can get complicated and
impact support
Unreimbursed medical expenses
Kid’s Higher Education
Life Insurance - important to protect
support obligations
Taxes, including dependency exemptions,
filing status, etc.
Common financial
issues in divorce
Not Knowing/ Disclosing ALL The Financial Assets
• For many couples, this is the first time the marital assets
have been tallied.
• Are any assets missing?
o Pension/ defined benefit plans
o Annuities
o Retirement accounts
o Stock options
o Cash value insurance policies
o Etc……!
Tax Implications Of Your Settlement
• Different assets have different
tax structures
– $100k savings account ≠
$100k IRA
• Alimony vs. Child Support
• Is there a combination that works best
to minimize post divorce taxes owed by
each spouse?
• Post divorce house sale could trigger a capital
gain tax
How Will Divorce Impact Your
Financial Status?
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What will your post divorce income be?
What will your post divorce expenses be?
How will health care insurance be handled?
What changes will you need to make to
balance your post divorce budget?
• “Will I be OK?”
The House
• Sell or Keep?
o Decision requires
significant analysis
o Can the spouse who
keeps the house afford it?
o Mortgage refinance?
• If home will be sold in the future, understand
tax basis
• Underwater homes: be careful of tax
implications from short sale transactions
Post Divorce Financial Follow-Up
• Have QDRO’s completed to divide employer
retirement accounts
o Confirm retirement plans will allow QDRO BEFORE
divorce is final
• Health insurance follow up
o If extending coverage through COBRA, alternate payee
must contact employer of the divorce within a certain
time frame.
• Beneficiary changes on
retirement accounts, annuities,
insurance policies, etc.
• Update Estate Plan
• Etc, etc…
Questions?
Need more information?
www.divorcecollaborative.com
Please call (508) 346-3805
for an appointment.