The one question that everyone asks at the end of their initial divorce consultation is "how much is this going to cost?" And with good reason, because cost is a valid concern, especially for many of our clients who have lower or middle class incomes and lifestyles. Unfortunately, the answer is vague and unsatisfying because it depends on so many factors. I try to provide clients at the initial consult with some idea of what I expect the range to be for their case based on what I've learned during that brief time. But some of the factors are truly unpredictable, most significantly how much the other side wants to fight.
There are many ways to reduce the cost of a divorce. In some cases, where both parties are well-informed and willing to cooperate, mediation can be a cheaper option then hiring two lawyers for the whole process. Even if you both have attorneys, following the court Rules and providing documents and other information in a timely fashion can help reduce the costs. For example, just spending the time to draft a complete Financial Statement saves your attorney time having to walk you through each individual question.
Unfortunately, if your spouse does not cooperate with the court Rules and Orders by trying to hide assets, or delaying the disclosure of documents, the costs increase because your attorney has to do more work to chase down the information necessary to advise you. This can be frustrating for clients because it means they do not have control over some of the reasons that attorney's time (and therefore fees) can increase significantly. Because family court is a court of equity it is possible to request that the opposing party pay for fees that are due to their delay or wrongdoing, but often these requests are denied or ordered only partially.
So what do you do if you don't have the funds to pay for divorce counsel, or don't have access to the funds because your spouse controls the finances?
For those with significant marital estates, a recent New York Times article has highlighted the latest in divorce funding options: companies that invest in your divorce. Of course, these companies request a contingency fee in exchange for funding your legal fees (something which attorneys are not allowed to do in divorce cases pursuant to the ethics rules). Because they expect a contingency, these companies only invest in high asset cases, one of the owners describing their ideal case as one with two to five million dollars in marital assets.
For many of our clients and probably many of our readers, these figures are not realistic. However, if you cannot pay for a lawyer there are a number of options for you to still obtain legal advice. There are numerous legal aid services that you may qualify for, and there is a webpage that contains a directory of these services available in Massachusetts.
In addition, it is possible that the Judge will order your spouse to pay your legal fees if he or she has control over assets that would help you pay for counsel. This request will depend on the specific facts of your case and the availability of funds. You may be able to find an attorney who will take your case and file such a Motion based on a small retainer and the likelihood of receiving further funds.
Also, many attorneys offer a free initial consultation. Even if you are unable to eventually hire that attorney, the initial consultation could still provide you with invaluable information regarding your rights and obligations in a divorce case.
Finally, there is also a Lawyer-of-the-Day program in many courts in Massachusetts. As part of that program an attorney volunteers their time for the day to answer legal questions and help potential litigants fill out forms in the courthouse. If you plan to meet with the Lawyer of the Day try to get to the Courthouse early (it opens at 8:30 A.M.) because the line can fill up quickly on a busy day and sometimes they only stay until 3:00 P.M.
Thursday, August 9, 2012
Monday, August 6, 2012
I'm Separated, Why Should I get Divorced? - Reason #1: Cutting Financial Ties
In Massachusetts, the standard for a no-fault divorce is whether or not you subjectively believe that your marriage is irretrievably broken down with no chance of reconciliation.
If you are separated but believe that there is a chance of reconciliation, then you should not get divorced (and you do not meet the legal standard to do so anyway).
However, if you are separated and you do believe that your marriage is over, then there are some compelling reasons not to wait to get divorced. This four part post will highlight the most compelling of these reasons.
Reason #1 Not to Wait: Cutting Financial Ties
So long as you are married, you have a financial link to your spouse. In Massachusetts any property that you hold either jointly or individually can be considered marital property subject to division by the family court. This means that if you acquire financial assets after your separation your spouse may have a claim to those, even if they didn't pay a dime to help you obtain those assets.
Similarly, if your spouse incurs debt after your separation, you may have some obligation to help pay that debt. This is true even if you had nothing to do with the items purchased.
The Court does not ignore the fact of your separation, and it may have a significant impact on how those post-separation assets or debts are divided. But the separation is only one factor among many that the Court must weigh. This means that until the divorce is filed, you are financially linked to your spouse whether or not you are physically separated (and whether or not you separate your finances).
Read Reason #2: The Ticking Time Bomb.
If you are separated but believe that there is a chance of reconciliation, then you should not get divorced (and you do not meet the legal standard to do so anyway).
However, if you are separated and you do believe that your marriage is over, then there are some compelling reasons not to wait to get divorced. This four part post will highlight the most compelling of these reasons.
Reason #1 Not to Wait: Cutting Financial Ties
So long as you are married, you have a financial link to your spouse. In Massachusetts any property that you hold either jointly or individually can be considered marital property subject to division by the family court. This means that if you acquire financial assets after your separation your spouse may have a claim to those, even if they didn't pay a dime to help you obtain those assets.
Similarly, if your spouse incurs debt after your separation, you may have some obligation to help pay that debt. This is true even if you had nothing to do with the items purchased.
The Court does not ignore the fact of your separation, and it may have a significant impact on how those post-separation assets or debts are divided. But the separation is only one factor among many that the Court must weigh. This means that until the divorce is filed, you are financially linked to your spouse whether or not you are physically separated (and whether or not you separate your finances).
Read Reason #2: The Ticking Time Bomb.
Friday, August 3, 2012
How can I calculate Child Support AND Alimony?
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.
Dealing with a case that includes the potential for both child support and alimony can be quite complicated. For purposes of this discussion, I will assume that the person receiving alimony is also the custodial parent (i.e. the person receiving child support).
First let's get some definitions:
Child Support is the amount of money paid by the non-custodial parent to the custodial parent for the support of the children. Child Support is calculated using a formula called the Massachusetts Child Support Guidelines. The formula is presumptive, and Judges can only vary from the formula in specific circumstances. To view the formula and calculate Child Support click here.
Alimony, also called spousal support, is paid by the wage-earning spouse (the spouse who has traditionally earned the majority of the income during the marriage) to the non-wage-earning spouse to allow the non-wage-earning spouse to continue to live in the lifestyle to which he or she has become accustomed during the marriage assuming their is enough income to do so. There is not currently any formula enacted or endorsed by the Massachusetts Legislature or the Courts for the calculation of alimony. The amount of alimony is dependent on the consideration of all of the factors described in M.G.L. c. 208 Section 34.
Some states use formulas to calculate presumptive alimony. And notwithstanding Section 34, some Judges in Massachusetts have suggested doing the same in Massachusetts. A Joint Task Force of the Massachusetts Bar Association and the Boston Bar Association has prepared a draft report which also suggests a formula to calculate the maximum alimony award possible. Although the Court has no obligation to follow these formulas they can be a valuable resource in helping parties understand a reasonable potential range of spousal support orders. The Divorce Spousal Support Calculator which includes all of these formulas and can be accessed by clicking here.
What happens when a case warrants both alimony and child support?
Just as there is no formula for calculating alimony in Massachusetts, there is also no bright-line rule for breaking down how much an order should be alimony and how much should be child support when a case warrants both. The interplay of these two figures can be very complicated because the tax effect to both the payor and the recipient is very different depending on how a support order is broken down.
We have a few observations based on three possible ways of making this calculation.
Option 1: If one were to calculate child support (using The Massachusetts Child Support Guidelines) and alimony (using The Divorce Spousal Support Calculator) and simply add them together, the overall support figure would likely be too high for the payor. For example, suppose a couple where the payor/non-custodial parent, Chris Jones, earns $125,000 per year, and the recipient/custodial parent, Pat Jones, earns $25,000 per year. Assuming no health insurance cost, 1 child (and no other child support orders), and no day care costs, the child support order would be $759 per week. Assuming a 20 year marriage, the average of the first five alimony formulas is $644.60 per week. Simply adding these together results in a total support order of $1403.60 per week ($72,987.20 per year), which is 58% of Chris' gross income (resulting in Pat receiving 65% of the total family income). This would likely leave Chris with not enough funds to support Chris' household.
Option 2: Some Judges have indicated at recent conferences that they are inclined to figure out an appropriate alimony order first, and subtract child support from that figure. In our example above, the child support was greater than the alimony, so there would be no alimony order. Chris would pay only the $759 per week in child support resulting in an annual income to Chris of $85,532 (taxed as $125,000) and an annual income to Pat of $64,468 (taxed as $25,000). After taking into account taxes these incomes are relatively close together, though Chris ends up with more than 50% of the income.
Option 3: Another possibility, suggested by one Judge to the author, is to estimate alimony, and then run the child support guidelines on the post-alimony incomes. In this example, if Chris pays $644.60 per week in alimony, Chris' post-alimony income is $91,480.80 and Pat's post-alimony income is $58,519.20. The Child Support using these figures is $558 per week. The resulting income to Chris would therefore be $62,464.80 (taxed as $91,480.80) and to Pat would be $87,535.20 (taxes as $58,519.20). Although resulting in a lower figure than Option 1, this may still result in too high an order for may Judges (and payors).
These examples demonstrate the difficulty of trying to use these formulas together without reviewing some common-sense evaluation of the budgetary needs of each party. For the example case the likely fair figure is somewhere between Option 2 and Option 3. It makes sense to have some of the order be alimony in order to move some of the taxable income to the lower tax bracket. It may not be practical, though, for the total order to be as high as $1,202.60 per week.
Dealing with a case that includes the potential for both child support and alimony can be quite complicated. For purposes of this discussion, I will assume that the person receiving alimony is also the custodial parent (i.e. the person receiving child support).
First let's get some definitions:
Child Support is the amount of money paid by the non-custodial parent to the custodial parent for the support of the children. Child Support is calculated using a formula called the Massachusetts Child Support Guidelines. The formula is presumptive, and Judges can only vary from the formula in specific circumstances. To view the formula and calculate Child Support click here.
Alimony, also called spousal support, is paid by the wage-earning spouse (the spouse who has traditionally earned the majority of the income during the marriage) to the non-wage-earning spouse to allow the non-wage-earning spouse to continue to live in the lifestyle to which he or she has become accustomed during the marriage assuming their is enough income to do so. There is not currently any formula enacted or endorsed by the Massachusetts Legislature or the Courts for the calculation of alimony. The amount of alimony is dependent on the consideration of all of the factors described in M.G.L. c. 208 Section 34.
Some states use formulas to calculate presumptive alimony. And notwithstanding Section 34, some Judges in Massachusetts have suggested doing the same in Massachusetts. A Joint Task Force of the Massachusetts Bar Association and the Boston Bar Association has prepared a draft report which also suggests a formula to calculate the maximum alimony award possible. Although the Court has no obligation to follow these formulas they can be a valuable resource in helping parties understand a reasonable potential range of spousal support orders. The Divorce Spousal Support Calculator which includes all of these formulas and can be accessed by clicking here.
What happens when a case warrants both alimony and child support?
Just as there is no formula for calculating alimony in Massachusetts, there is also no bright-line rule for breaking down how much an order should be alimony and how much should be child support when a case warrants both. The interplay of these two figures can be very complicated because the tax effect to both the payor and the recipient is very different depending on how a support order is broken down.
We have a few observations based on three possible ways of making this calculation.
Option 1: If one were to calculate child support (using The Massachusetts Child Support Guidelines) and alimony (using The Divorce Spousal Support Calculator) and simply add them together, the overall support figure would likely be too high for the payor. For example, suppose a couple where the payor/non-custodial parent, Chris Jones, earns $125,000 per year, and the recipient/custodial parent, Pat Jones, earns $25,000 per year. Assuming no health insurance cost, 1 child (and no other child support orders), and no day care costs, the child support order would be $759 per week. Assuming a 20 year marriage, the average of the first five alimony formulas is $644.60 per week. Simply adding these together results in a total support order of $1403.60 per week ($72,987.20 per year), which is 58% of Chris' gross income (resulting in Pat receiving 65% of the total family income). This would likely leave Chris with not enough funds to support Chris' household.
Option 2: Some Judges have indicated at recent conferences that they are inclined to figure out an appropriate alimony order first, and subtract child support from that figure. In our example above, the child support was greater than the alimony, so there would be no alimony order. Chris would pay only the $759 per week in child support resulting in an annual income to Chris of $85,532 (taxed as $125,000) and an annual income to Pat of $64,468 (taxed as $25,000). After taking into account taxes these incomes are relatively close together, though Chris ends up with more than 50% of the income.
Option 3: Another possibility, suggested by one Judge to the author, is to estimate alimony, and then run the child support guidelines on the post-alimony incomes. In this example, if Chris pays $644.60 per week in alimony, Chris' post-alimony income is $91,480.80 and Pat's post-alimony income is $58,519.20. The Child Support using these figures is $558 per week. The resulting income to Chris would therefore be $62,464.80 (taxed as $91,480.80) and to Pat would be $87,535.20 (taxes as $58,519.20). Although resulting in a lower figure than Option 1, this may still result in too high an order for may Judges (and payors).
These examples demonstrate the difficulty of trying to use these formulas together without reviewing some common-sense evaluation of the budgetary needs of each party. For the example case the likely fair figure is somewhere between Option 2 and Option 3. It makes sense to have some of the order be alimony in order to move some of the taxable income to the lower tax bracket. It may not be practical, though, for the total order to be as high as $1,202.60 per week.
Wednesday, August 1, 2012
Meet the Staff of Kelsey & Trask, P.C.
The staff of Kelsey & Trask, P.C. assist our attorneys in bringing quality service and attention to our clients. To learn more about Melissa M. Day, our Administrative Assistant, and Jonathan Eaton, our part-time law clerk, visit our new Staff page.
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