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

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 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

Overview of Divorce Process Options

How will you navigate the process?

Consider what is best for you and your kids and think long-term.

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 DivorceCourt-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 DivorceMay be the best option when...

Court - Based DivorceMay 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 BasedCourt or Litigation BasedProcess 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” post-divorce and parent with former spouse

Public process-anyone over the age of eighteen (18) is allowed in the court room

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” post-divorce and parent with former spouse

Public process-anyone over the age of eighteen (18) is allowed in the court room

Divorce MediationDivorce Mediation

Mediation FactsMediation 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...continuedMediation...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 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

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 & ChildrenDivorce & 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.

ParentingParentingParenting 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 PlansParenting 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 SupportChild 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

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 SupportMore 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?

• More Consistent Outcomes

•Encourage Marriage, Including 2nd Marriages

•Financially Separate Divorced Spouses

•Provides Structure to Settlement Negotiations

•Encourage Financial Planning

•Economic Independence

Main Goals of Alimony Reform:Predictability and Uniformity

Alimony DefinitionAlimony 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

• 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

CohabitationCohabitation

• 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!

• 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 MassachusettsThe new law recognizes 4 categories of spousal support in Massachusetts

1. Rehabilitative

2. Reimbursement

3. Transitional

4. General Term

Rehabilitative alimony

Rehabilitative alimony

• Paid to a spouse who is expected to become self-sufficient 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

reimbursement alimony

• 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 alimonytransitional alimony

• 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...

General Term Alimony...

• 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 LimitsGTA Time Limits

• 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

Durational Limits - continued

• 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 - TimeModifications - Time

• 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

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

• 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

Property Division Includes...

Property Division Includes...

DebtDebt

One thing nobody wants!

Credit Cards

Mortgages - is your house upside down?

Student Loans

Medical Bills...

Other Topics for ConsiderationOther 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

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 planso Annuitieso Retirement accountso Stock optionso Cash value insurance policieso 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?

• 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 analysiso 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 accountso Confirm retirement plans will allow QDRO BEFORE

divorce is final• Health insurance follow upo 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?Questions?

Need more information?www.divorcecollaborative.com

Please call (508) 346-3805for an appointment.