There are advantages and disadvantages of mediation and you should consider both in deciding whether mediation is right for your case.
For instance, many people choose mediation because they believe it will be cheaper. In all cases that may not be true, but there is a difference between cost and value. Even if the cost of your mediation is higher than you were expecting, you can at least be confident that the time you were charged by your mediator was time spent on moving your case forward. Unfortunately this is not always the case when you go to Court.
Because there are so many other people seeking relief from the Court, I often have to explain to clients what I call "Hurry up and Wait." You have to be at the courthouse at your appointed time for any Motions, Pre-Trials, Contempt hearings, Trials, or other hearings. But there will likely be other cases waiting for hearing at that same time. And even if you are right on time, you will still likely spend hours waiting for your case to be heard. That time is time that your attorney cannot spend working on other cases and is therefore time you will be charged for. Essentially this means that when you go to Court you can end up paying your attorney for multiple hours, for work that could have been completed in a much shorter time working with a mediator.
Of course going to court is sometimes necessary because mediation requires both parties to voluntary participate. But if you are trying to decide whether to use mediation or not, think about whether you want to solve your problems, or wait (and wait, and wait) for someone else to solve them for you.
Tuesday, June 25, 2013
Thursday, June 20, 2013
Divorce Spousal Support Calculator: An Alimony Formula Resource
UPDATE: There is pending legislation for major changes to the alimony statute in Massachusetts. The Alimony Reform Act of 2011 was filed on January 18, 2011 and you can learn more about the Act at MassAlimonyFormula.com or in our recent blog post highlighting the differences between the bill and the current law.
The Stevenson-Kelsey Spousal Support Calculator has been renamed. It will now be known as the Divorce Spousal Support Calculator: An Alimony Formula Resource.
We are hoping that this name change will reflect our intention that the calculator be used by everyone to evaluate the reasonableness of alimony proposals in divorce cases. In keeping with that goal, we have also updated the latest calculator worksheet and article to include statutes from both Texas and Maine relating to alimony.
In addition, the article contains reference to the latest debate in Massachusetts surrounding a House and Senate bill both proposing changes to the current Massachusetts statute relating to alimony. Thank you to everyone who has provided us with support in keeping this calculator updated with the latest developments in alimony.
The Stevenson-Kelsey Spousal Support Calculator has been renamed. It will now be known as the Divorce Spousal Support Calculator: An Alimony Formula Resource.
We are hoping that this name change will reflect our intention that the calculator be used by everyone to evaluate the reasonableness of alimony proposals in divorce cases. In keeping with that goal, we have also updated the latest calculator worksheet and article to include statutes from both Texas and Maine relating to alimony.
In addition, the article contains reference to the latest debate in Massachusetts surrounding a House and Senate bill both proposing changes to the current Massachusetts statute relating to alimony. Thank you to everyone who has provided us with support in keeping this calculator updated with the latest developments in alimony.
Tuesday, June 18, 2013
Divorce and Taxes: Issue #4. Property Transfers
In any divorce where the parties own assets of value, there will likely be some transfer of assets between the parties as part of the divorce settlement. Assets that could be at issue range from tangible personal property (i.e. the pots and pans) to bank, investment and retirement accounts. In addition, the most valuable asset in many marriages is the marital home (and/or other real property). Although generally tax implications in spousal transfers are minimal there are some issues to look out for.
Issue #4. PROPERTY TRANSFERS: Because some assets are post-tax (such as bank accounts) and some assets are pre-tax (such as retirement accounts or capital gains), it is important to understand the tax implications in dividing them. If you trade a pre-tax asset for a post-tax asset of equal value without taking into account the resulting tax liability then you've lost the value of the tax liability. Therefore it is important to understand which assets have tax liability associated with them and whether there are any tax liabilities created through transfer.
PERSONAL PROPERTY WITHOUT CAPITAL GAINS: The transfer of personal property and bank accounts is simple. These items do not typically have any tax basis or capital gains upon transfer or sale because their value is either minor, depreciated, or, in the case of bank accounts, the appreciation is minimal.
PERSONAL PROPERTY WITH CAPITAL GAINS: Similarly, the transfer of property assets with capital gains implications is relatively simple. Pursuant to § 1041(a) of the Internal Revenue Code transfers to a spouse do not result in a gain or loss. This is also true for transfers to a former spouse if the transfer is incident to a divorce. This means that a stock transfered to a spouse or former spouse will maintain the same capital gains characteristics (and tax liabilities) as it would have had in the original spouse's possession. This is also true for an investment account, collectible, or house.
RESIDENTIAL REAL PROPERTY: In the case of residential real property there is a potential benefit to selling the house while still married instead of transferring it between spouses. There is a capital gains exclusion for profits realized on the sale of a residence and it is doubled for spouses. If the parties divorce and one party transfers their interest to the other, and that former spouse then later sells their interest in the residence they will only have the single capital gains exclusion. Of course, this only matters if there is significant equity in the residence.
RETIREMENT ACCOUNTS: Retirement accounts are not typically transferable between anyone, even spouses, without tax consequences. In order to transfer funds held in a retirement account the owner must first remove them from the retirement account, which, if allowed by the rules of the plan, will result in taxable income and, prior to retirement age, tax penalties. However, in the event of a divorce the IRS allows a one-time transfer by Qualified Domestic Relations Order (also known as a "QDRO"). A transfer of retirement account between former spouses pursuant to a QDRO results in a new retirement account held in the name of the other spouse in the amounts and per the terms specified in the QDRO. The retirement income paid from said account will be taxable income upon receipt just as it would have been to the original owner.
Click here to read Divorce and Taxes: Issue #5. Joint Tax Liability.
Issue #4. PROPERTY TRANSFERS: Because some assets are post-tax (such as bank accounts) and some assets are pre-tax (such as retirement accounts or capital gains), it is important to understand the tax implications in dividing them. If you trade a pre-tax asset for a post-tax asset of equal value without taking into account the resulting tax liability then you've lost the value of the tax liability. Therefore it is important to understand which assets have tax liability associated with them and whether there are any tax liabilities created through transfer.
PERSONAL PROPERTY WITHOUT CAPITAL GAINS: The transfer of personal property and bank accounts is simple. These items do not typically have any tax basis or capital gains upon transfer or sale because their value is either minor, depreciated, or, in the case of bank accounts, the appreciation is minimal.
PERSONAL PROPERTY WITH CAPITAL GAINS: Similarly, the transfer of property assets with capital gains implications is relatively simple. Pursuant to § 1041(a) of the Internal Revenue Code transfers to a spouse do not result in a gain or loss. This is also true for transfers to a former spouse if the transfer is incident to a divorce. This means that a stock transfered to a spouse or former spouse will maintain the same capital gains characteristics (and tax liabilities) as it would have had in the original spouse's possession. This is also true for an investment account, collectible, or house.
RESIDENTIAL REAL PROPERTY: In the case of residential real property there is a potential benefit to selling the house while still married instead of transferring it between spouses. There is a capital gains exclusion for profits realized on the sale of a residence and it is doubled for spouses. If the parties divorce and one party transfers their interest to the other, and that former spouse then later sells their interest in the residence they will only have the single capital gains exclusion. Of course, this only matters if there is significant equity in the residence.
RETIREMENT ACCOUNTS: Retirement accounts are not typically transferable between anyone, even spouses, without tax consequences. In order to transfer funds held in a retirement account the owner must first remove them from the retirement account, which, if allowed by the rules of the plan, will result in taxable income and, prior to retirement age, tax penalties. However, in the event of a divorce the IRS allows a one-time transfer by Qualified Domestic Relations Order (also known as a "QDRO"). A transfer of retirement account between former spouses pursuant to a QDRO results in a new retirement account held in the name of the other spouse in the amounts and per the terms specified in the QDRO. The retirement income paid from said account will be taxable income upon receipt just as it would have been to the original owner.
Click here to read Divorce and Taxes: Issue #5. Joint Tax Liability.
Saturday, June 1, 2013
Does a Criminal Record affect Child Custody?
If one of the parents in a custody case has a criminal record, the types of crimes on their record could have an effect on their chances of obtaining custody. In custody cases the issue is always going to come down to whether or not the best interests of the child might be affected.
In the most extreme case, in which one parent has been convicted of first degree murder of the other parent, the law specifically prohibits visitation with the children until they are of a suitable age to assent.
Similarly, but to a less serious degree, in making custody and visitation determinations the court will consider crimes that would cause one to question the fitness of a parent. These types of crimes would obviously include any violent crime convictions which could call into question whether the children would be in danger around a parent who has shown themselves to resort to violence when faced with conflict. In addition, drug and alcohol abuse offenses would call into question a parent's ability to care for their child without supervision.
Other crimes that might seem unrelated, such as theft or prostitution, may not cause a Judge to question the parent's ability to care for the child, but rather their suitability as a role model. These types of convictions might be a reason to limit time with the child, but may not require supervision (assuming that this criminal behavior is in the parent's past).
Judges have access to the criminal record of parents, and when issues are raised like those discussed above, the court will often request the records of both parents before making a determination. This is also true in any 209A Restraining Order cases.
It is also important to note that the Criminal Offender Record Information (CORI) system is changing in 2012. All of the changes are listed here. Some of the changes that could affect your case, include a new procedure for having an inaccurate record amended, and new permissions for access to sealed CORI by court order in domestic abuse/child custody actions and where a person’s safety is at stake.
In the most extreme case, in which one parent has been convicted of first degree murder of the other parent, the law specifically prohibits visitation with the children until they are of a suitable age to assent.
Similarly, but to a less serious degree, in making custody and visitation determinations the court will consider crimes that would cause one to question the fitness of a parent. These types of crimes would obviously include any violent crime convictions which could call into question whether the children would be in danger around a parent who has shown themselves to resort to violence when faced with conflict. In addition, drug and alcohol abuse offenses would call into question a parent's ability to care for their child without supervision.
Other crimes that might seem unrelated, such as theft or prostitution, may not cause a Judge to question the parent's ability to care for the child, but rather their suitability as a role model. These types of convictions might be a reason to limit time with the child, but may not require supervision (assuming that this criminal behavior is in the parent's past).
Judges have access to the criminal record of parents, and when issues are raised like those discussed above, the court will often request the records of both parents before making a determination. This is also true in any 209A Restraining Order cases.
It is also important to note that the Criminal Offender Record Information (CORI) system is changing in 2012. All of the changes are listed here. Some of the changes that could affect your case, include a new procedure for having an inaccurate record amended, and new permissions for access to sealed CORI by court order in domestic abuse/child custody actions and where a person’s safety is at stake.
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