Thursday, February 8, 2018
Republicans may pride themselves on upholding family values, but their new tax law could soon lead to a surge in married couples calling it quits.
Lawyers are counseling couples considering divorce to do it this year — before a 76-year-old deduction for alimony payments is wiped out in 2019 under the Tax Cuts and Jobs Act.
“Now’s not the time to wait,” said Mary Vidas, a lawyer in Philadelphia and former chair of the American Bar Association’s section on family law. “If you’re going to get a divorce, get it now.”
Read more here.
Thursday, November 30, 2017
From Pennsylvania Family Law:
Any American with a pulse knows that 2017 was to be the first overhaul of U.S. Tax Law since 1986. Until this week, what was circulating through Washington was an 18 page executive summary. That changed yesterday when the House Republican Tax Policy Committee circulated a draft bill that specified exactly what changes were being proposed.
The draft bill summary merits some review because parts of it will affect most of us. But the divorce bar was shocked to see that among those tax “loopholes” on the chopping block is the alimony deduction.
Read more here.
Wednesday, November 8, 2017
Like the break-ups themselves, divorce rates are a complicated subject to study.
Read more here.
Saturday, March 26, 2016
From Boston Herald:
Q: I’m a citizen of England. Before I got married, I acquired a substantial amount of property through hard work and inheritance. I married an American woman. We jointly own a home on Nantucket in which we now live about half the year. We have other assets in the United States. The other half of the year we live in the United Kingdom.
Our 30-year marriage is at an end. The questions are: Should I file for divorce in Massachusetts or in England? Should I stop working and let the executive vice-president take over the company?
A: This column addresses only the alimony issues. Important tax issues will be covered next Sunday.
Both English and Massachusetts law requires the judges to make a complete and full divorce. As discussed in last Sunday’s column, both jurisdictions achieve half that goal by ordering a final division of property. The other half involves awarding alimony. Of course, if there were child-related issues — not mentioned by you — there would be additional factors.
In England, if you have enough assets to make a clean break, the judge will order you to pay a lump sum of “support” to your wife. That lump sum is determined by first deciding the recipient’s “reasonable needs.” About 2,000-some English judges, having found the payor’s earning capacity is also a marital asset, determined a lump sum by using a “Yardstick of Equality.” In 2008, the English appellate court started to push back against that “yardstick.” So that issue is in flux.
Once the annual payment is determined, the English judge will consider “The Duxbury calculations.” Those tables assume a 3.75 percent investment-rate-of-return plus a 3 percent annual increase in the capital. Because those rates are higher than the reality of the current market, not much, if any, weight is currently given to these tables.
Read more here.
Saturday, March 19, 2016
From The News-Press:
Southwest Florida family law attorneys said legislation that rewrites Florida's divorce statutes, which is awaiting the attention of Gov. Rick Scott, could have major impacts positive and negative on alimony, child-support payments and time-sharing of children.
The proposal, the second time lawmakers have sent what is basically an alimony overhaul to Scott, sets out a formula for judges to use when deciding alimony payments and is without a retroactivity provision that the governor blamed in part for his 2013 veto.
The bill replaces permanent alimony with new formulas based on the length of the marriage and the spouses' incomes. Those formulas help set the amount and duration of the payments.
It also advises judges to implement equal time-sharing of children between parents. But backers said it allows judges discretion to deviate from the time-sharing and alimony formulas depending on circumstances.
"Its kind of a good thing. There's been no structure for alimony," said attorney Augustin "Gus" Simmons of the Simmons Law Firm in Fort Myers of the overhaul legislation.
"It gives attorney's some sort of ability to predict ranges to their clients," he said. The current statute defining alimony says nothing about amounts, Simmons said, leading to lawyers hiring out forensic accountants to divine just what people involved in their cases make.
He said that the doing away of permanent alimony isn't surprising as changes in society have taken hold. "Permanent alimony has been on the outs for some time," he said. "Marriages are not lasting as long, people are getting married later in life."
Read more here.
Monday, February 29, 2016
From Fox Boston:
Just four years after the state passed a sweeping alimony reform law, a new alimony bill was filed at the Massachusetts Statehouse to fix some of the confusion and problems that have arisen
In March 2012, following a year long investigation by FOX25 into how alimony was handled in the state, legislators unanimously passed a new law to reform the system.
The purpose of the law was to make alimony need based and end the practice of alimony for life. It was said to be a model for the country.
Chester Chin, from Turner Falls, was one of the first to seek relief from the bill in 2012.
The retired teacher hoped a judge would put an end to his payments based on his financial situation compared to that of his ex-wife’s.
“Over $800 a month is going in that direction,” He said. “When I read the law, I said ‘well, there's a chance to get my life back on track.’”
Chin’s case went all the way to the state’s highest court, and after legal fees topped $12,000 the alimony payments were upheld.
“To have our case dismissed and really rejected it was just mind blowing to this day I can't understand how it happened," Lisa Chin, Chester's current wife, said.
Steve Hitner, President of Massachusetts Alimony Reform, helped draft the 2012 bill and the new version.
Read more here.
Monday, February 8, 2016
Before 2014, a divorced spouse had to show that his ex-spouse shared a common residence with a new partner in order to prove they were living together and be able to stop paying alimony.
But under the Alimony Reform Act of 2014, an ex-spouse no longer has to be living full-time in the same home as another person to be engaged in "cohabitation."
More than a year after the law was passed, advocates of the new law — generally ex-husbands — say there have been improvements, but they have been more modest than they envisioned.
It's less difficult to prove cohabitation, or that an ex-spouse is in a virtual new marriage and effectively living with the new partner, and shouldn't get payments anymore. That issue was raised in a Morris County case this week in which a former husband is seeking to terminate his alimony obligation.
The change in cohabitation was made to remedy a situation where "people are in a marital relationship, for all intents and purposes, but don't get married and keep their separate homes, just so one of them can keep getting an alimony payment. That is a problem," said Jeralyn Lawrence, former chairwoman of the New Jersey Bar Association's family law section, who helped develop the new law.
When New Jersey was debating possible changes in its alimony law back in 2012, advocates of reform were hoping for sweeping changes that would benefit the payers of alimony.
Read more here.
Friday, January 8, 2016
From New York Daily News:
A Brooklyn man who’s serving a 40-year prison sentence for raping his abused wife has lost his galling bid to get alimony payments from her.
The callous creep, who’s being identified in court papers by his initials TT to protect his wife’s identity, claimed he supported his wife, identified as AT, when she went to school with “hustled cigarettes” and by collecting public assistance.
In a decision made public Wednesday, Brooklyn Supreme Court Justice Jeffrey Sunshine found TT hadn’t even done that much — but that he had beat up his wife so many times during their marriage that she wound up losing her job because of her excessive absences.
The judge also found TT’s claims he helped his wife with her schooling to be ridiculous because he was locked up on drug and gun charges at the time.
The couple tied the knot in 2002, and TT “engaged in extreme acts of physical and sexual violence” against his wife throughout the marriage, the judge found. He was arrested twice for attacking her, but AT testified that he’d brutalized her “a lot of times.”
Asked how many times she’d been assaulted in all, she testified she “can’t count, it’s been so many.”
Read more here.
Monday, December 7, 2015
When alimony reform comes to Florida, it may be too late for Tarie MacMillan, a 65-year-old who runs a jewelry business near Tampa.
MacMillan was ordered to pay her ex-husband $7,000 a month 15 years ago. Even so, she has joined the crusade to lobby state legislators to change the legal obligation to provide financial support to a spouse before or after marital separation or divorce.
Some states have already put curbs on judgments, particularly for marriages of less than 20 years, but most, like Florida, are still in progress or are constantly evolving.
“I thought I was my own island of misery that I had to go through this, but once I got involved I was very impressed. There’s a light at the end of the tunnel,” she said.
Alimony, otherwise known as spousal support or maintenance, is an ongoing payment by the higher-earning spouse to the lower-earning one. It has changed and shifted over the 40 years since the Supreme Court ruled that it had to be applied equally to both genders.
Yet it is still heavily weighted toward men paying women. Only 3% of around 400,000 alimony recipients are male, according to the 2010 census, up 0.5% since 2000. Recipients claimed $9.2 million in payments in 2013 on their tax returns.
Unlike child support, which is common when divorcing couple has kids, alimony awards have always been very rare, going from about 25% of cases in the 1960s to about 10% today, said Judith McMullen, a professor of law at Marquette University. In one study of Wisconsin cases, she found it was only 8.6%.
Now that women are paying alimony more often, they are getting involved in advocating for change.
Read more here.
Wednesday, July 29, 2015
From The National Law Review:
At the conclusion of many divorce proceedings, alimony is calculated by the court to be paid from the supporting spouse to the dependent spouse. The amount of alimony to be paid is calculated based on a variety of factors, including, among others, the length of the marriage and the martial lifestyle of the couples while married. Once calculated, alimony can typically only be modified by showing a “change in circumstances” that would warrant either the increase or decrease in alimony payments to be made. An occurrence that can be considered a “change in circumstance” is when the alimony recipient then cohabitates with another following the divorce while still receiving alimony payments.
Cohabitation situations can be frustrating to the alimony obligor (the spouse making the payments) because the alimony recipient cohabitating with another can mean two things: (1) the recipient may be using the payments to support their new partner, or (2) the recipient may be receiving financial support from their new partner in addition to the alimony received from their former spouse, essentially receiving monies from two different sources and concealing changes in their finances.
Read more here.
Tuesday, July 28, 2015
From The National Law Review:
During the course of divorce proceedings, alimony from the supporting spouse to the dependent spouse is typically calculated based on a variety of factors. The income of the two spouses is a critical factor in determining the amount of alimony to be paid. However, some incomes are not guaranteed and can change over time. One of the most common scenarios in which the income of a spouse can change is due to retirement. Following one’s retirement, a spouse can petition the court to modify the alimony payments they either receive or pay. However, there are an additional set of factors the court must consider in permitting alimony payments to be modified if the parties were divorced prior to September of 2014.
The leading case in New Jersey addressing the modification of alimony is Lepis v. Lepis (1980), which states that “the party seeking modification [of alimony] must demonstrate that changed circumstances have substantially impaired the ability to support himself or herself.” Furthermore, the court will look at the party’s circumstances at the time of the divorce (when the alimony was determined) and at the time of application for the modification of alimony to see any differences in the circumstances between these two dates.
Read more here.
Tuesday, June 30, 2015
From The Wall Street Journal:
The New York state Senate passed sweeping revisions Wednesday to alimony laws that change how some payments are set and eliminate a long-debated requirement that judges calculate the lifetime value of a license or professional degree earned during the marriage, even if the spouse changed careers later.
The Assembly approved the bill last week.
The Senate’s action came five years after the state adopted legislation on alimony that eventually drew criticism from a wide range of bar associations and matrimonial lawyers.
That law introduced a formula to determine temporary alimony, known as maintenance, that is paid out between the filing of a divorce and its completion. It was intended to protect low-income New Yorkers, who may not able to afford lawyers, by providing predictability and consistency in awards.
It worked well for that group, many agreed. But it drew increasing opposition because it applied to people making more than $500,000 a year. Critics said it failed to account for the often more complicated financial situations of higher-income people, such as annual bonuses or mortgage payments. As a result, there were extreme cases of spouses being asked to pay more in child support, alimony and other expenses than their monthly incomes.
Read more here.
Tuesday, October 26, 2010
An article in the September issue of the Illinois Bar Journal discusses whether a court may order a maintenance-paying spouse to obtain life insurance as security for the obligation:
Illinois law once gave trial judges the discretion to order a party to obtain reasonable security for a maintenance obligation. (1) The current Illinois Marriage and Dissolution of Marriage Act ("dissolution act") no longer specifically provides for such discretion. Recently, a conflict between the appellate districts arose over whether trial courts have the discretion to order a maintenance-paying spouse to obtain life insurance as security for the maintenance obligation.
Read more here.
Monday, October 18, 2010
This summer, the Court of Appeal in London ruled that, in divorce proceedings, it was an invasion of privacy for documents or emails obtained by stealth to be admitted as evidence because it was an invasion of privacy. The judgment has been called a “cheats’ charter” by divorce lawyers. Read the court’s opinion here and news coverage here and here.
Wednesday, July 21, 2010
The battle rages on in Massachusetts to reform what many critics characterize as an antiquated and often inequitable set of principles governing alimony:
Steve Niro got married in 1981 at age 23 and divorced less than five years later. At the time of the divorce, he and his wife were in their late 20s, and both were working. Niro remarried nearly 15 years ago, but he’s still paying his alimony.
Two years ago, Niro’s youngest son graduated from college, ending child support payments and leaving his former wife with alimony of $65 a week. “The next thing I know, I get summonsed to court for alimony adjustment,’’ he says. A probate court judge increased the alimony to $700 a week even though the couple had divorced nearly a quarter of a century ago — five times longer than they were married.
“I paid child support. I paid college. I was never late. I fulfilled my obligations,’’ says Niro, 52, a Milford native who works for an environmental engineering firm in Portland, Maine. “I just have to hope that legislators in Massachusetts have enough sense to pass a law that puts guidelines on alimony because the courts don’t exercise any common sense or logic.’’
Niro and other men — and women — like him say the state’s alimony law is archaic, reflecting an era when women kept house and men provided. Today, with women making up nearly half the workforce, they say alimony should be a temporary boost, not a lifetime subsidy.
Critics charge that the Legislature has avoided the issue for years in part because drawn-out divorce litigation is lucrative for lawmakers, many of whom are lawyers. Now these critics are working to change the law, a vague statute that gives judges wide discretion over alimony awards. Two bills have been introduced, and a legislative task force is working on a third version.
The current law sets no formulas or guidelines, saying only that the length of the marriage, assets, occupation, and employment aspects will be considered in setting alimony. Massachusetts probate judges have relied largely on case law and generally consider any marriage of more than 20 years a long-term marriage that merits lifetime alimony, or payments until the recipient remarries. But often marriages of much shorter duration — such as Niro’s — also result in lifetime payments.Last fall, a crowd of frustrated alimony payers testified at a State House hearing on a bill that would amend the law.
Introduced by Steven Walsh, Democrat of Lynn, the bill attracted 72 cosponsors. It would limit alimony payments to half the length of the marriage, with a cap of 12 years and automatic termination when the payer turns 65. It would protect second spouses’ income from contributing to the alimony award for first spouses. The court would have to consider “the marketable skills’’ and “willingness and diligence’’ of the recipient to seek work. In addition, if the recipient is cohabiting with a partner, alimony would be decreased substantially.
But that bill has been shelved, and critics of the existing law say the large number of lawyer legislators, many of whom practice family law, is the reason. They argue that the current law encourages endless expensive litigation.
Read the full story here.
Friday, April 9, 2010
City financiers who have seen bonuses slashed or lost jobs are flocking to the courts to seek a reduction in the amount of maintenance they pay to ex-wives.
Family lawyers said they had seen a "huge rise" in applications of so-called varying orders which ask the court to alter the levels of annual maintenance that must be paid to former spouses.
The trend is particularly pronounced where bankers getting divorced did not have the ready cash to hand over a huge sum for a "clean break" and instead agreed to pay maintenance to their former spouses - which often took into account future bonuses.
"Over the last 18 months there has been a huge rise in people seeking to vary maintenance orders," said Julian Lipson, partner and head of the family law team at Withers.
Read the rest here.
Monday, November 30, 2009
Back in May, we speculated that Italian Prime Minister Silvio Berlusconi's wandering eye might cost him millions but the news of just how much money his estranged wife, Veronica Lario, wants is still shocking. The former actress is seeking 43 million euros (around $65 million) each year in alimony.
Lario, who is 20 years his junior, put up with Berlusconi's indiscretion for many years but earlier this year Berlusconi's attendance at an 18-year-old girl's birthday party seems to have been the final straw.
Wednesday, November 4, 2009
The Wall Street Journal reports on political pressure building in some states to limit alimony in various ways, all getting at the core debate over the purpose of long-term alimony these days. The report mentions legislation being introduced in Massachusetts, Ohio, Florida and Pennsylvania. Read the full article here.
For a taste of the proposed changes, check out HB 1785, currently pending in the Massachusetts legislature.
The goal [of the bill is that] "any party needing alimony shall be self-supporting within a reasonable period of time."
It defines that period by capping alimony awards at half the duration of a marriage, with a maximum of 12 years unless the supported spouse still has custody of a child or children under 16 years old.
The House bill also would require alimony payments after five years to drop 10 percent annually, with the same caveat on custody of minors or if a recipient is unable to be gainfully employed.
Paying alimony would end upon retirement age. Increases in payments would be tied to the Consumer Price Index. The ability to pay would be determined by recent income, not including the resources of new significant others.
Finally, the bill says many alimony orders that do not comply with the new rules should be amended in court.
Read news coverage of the MA bill here.
AC and TO
Saturday, August 18, 2007
After an 18 year marriage dissolved, Husband was ordered to pay alimony to Wife. Twenty-six years later, Husband (now 67 years old and in poor health) retires and sells his entire interest in his business, leaving him with social security benefits as his sole income. In response to Husband's motion to modify alimony, the trial court ordered that his alimony be reduced from $ 78,000 to $ 1 per year.
The Supreme Court of Connecticut, noting that it is a rare case in which it will reverse a trial court's decision to modify alimony, found that the trial court's focus on Husband's poor health and reduced income was too narrow.
We conclude that, in reducing the defendant's alimony obligation from $ 78,000 to $ 1 per year, the trial court improperly focused on the fact that the defendant's monthly income had been reduced from $ 14,880.14 to $ 1640, and failed to give proper consideration to the defendant's other financial resources. In addition, although the trial court properly considered the fact that the defendant had retired and was in poor health, it failed to give due weight to the plaintiff's health and financial situation. Accordingly, we conclude that, although the trial court properly determined that there had been a substantial change in circumstances justifying a modification of the defendant's alimony obligation, the trial court abused its discretion in determining the amount of that modification. We recognize that a finding of abuse of discretion in making financial awards in marital dissolution cases is very rare..... Nevertheless, in light of the extreme nature of the modification order and the trial court's misconception and misapplication of the statutory criteria, we are compelled to conclude that this is one of those rare cases.
Simms v. Simms, 2007 Conn. LEXIS 321 (August 14, 2007)
Opinion online (Last visited August 18, 2007 bgf)
Thursday, June 14, 2007
The tax court, in a recent summary opinion, provides a good example for our students of the importance of careful drafting in light of the interrelationship between the tax code and state law when determining the tax consequences of divorce. In this case, the divorce decree provided that Husband would pay Wife $1200 a month in “rehabilitative alimony” and an additional $72,000 in “lump-sum alimony”, payable in installments of $600 a month. The decree did not indicate whether this lump sum
award would terminate upon Wife’s death.
Under section 71(b) of the tax code, alimony is not deductible if it does not terminate upon the payee spouse’s death. Because the Florida courts have held that an award of lump-sum alimony survives the death of both the obligor and the obligee, the alimony was not properly deductible.
Hinson v. Commissioner, US Tax Court Summary Opinion 2007-92 (June 7, 2007)
Read opinion (last visited June 14, 2007 bgf)