During the negotiation of a divorce agreement, you will be discussing issues relating to division of property, payment of alimony or child support, and custody of children and visitation rights, if these issues are involved. We hope you and your spouse can resolve them by agreement, rather than Court order. The following paragraphs are intended to give you a brief outline of Massachusetts divorce law and relevant tax laws and a general idea of what a probate court could or might do if these issues had to be decided by a judge instead of by your agreement. Of course, consultation with your attorney is essential to understand how the law applies to your particular case.
Marital Property: Under Massachusetts law (G.L. c. 208, Section 34), the court “may assign to either the husband or the wife all or any part of the estate of the other.” This law authorizes a judge, based on various factors such as the length of the marriage, the conduct of the parties during the marriage and their ages and general situations, to treat all the property owned by you and your spouse as “marital property” to be divided between the two of you as the judge considers appropriate. While a judge is likely to preserve the ownership of property which was yours or your spouse’s before the marriage, there is ample precedent for a judge awarding the property of one person to the other.
Personal property: includes tangible objects such as furniture and intangible assets such as pensions, the value of a business, stocks and bank accounts.
Clients are encouraged to resolve as much of the division of their tangible property as possible by allocating to each other the items most important to him or her.
In most situations there is not enough property and income to allow parties living apart to living part to live as well as they did under one roof. In approaching this dilemma, most judges will require the financially stronger person to give property and/or money to the other, but within limits, the most important limit being the financial incentive and survival of the main breadwinner.
The Child Support Guidelines in effect in Massachusetts generally define the percentage of gross income which the non-custodial parent would be ordered to pay the other towards the ordinary costs of raising children.
Depending upon the number and ages of the children, the percentages may range. Depending on the income of the custodial parent, the child support obligation may be adjusted. The relationship of periodic payments to extraordinary expenses such as day care, private school, psychotherapy, and college has to be carefully examined in each case, and so do the income tax effects.
Currently, it is more difficult to predict whether alimony will be required in a given situation, and if so, how much and for how long.
Alimony: Money paid periodically by one spouse as alimony for the support of the other spouse, is generally deductible for the paying spouse and taxable income to the receiving spouse.
Child Support: Child support payments to the parent with whom the child is living are not deductible to the paying parent, and not taxable to the receiving parent. The tax exemption for a child is available to the parent with whom the child lives unless that parent signs it away to the other. The divorced parent with whom a child is living can usually claim the advantageous tax status of “head of household.”
Property: Property transferred from one spouse to the other will generally not result in a capital gains tax at the time of the transfer, but may cause the receiving spouse to incur a greater capital gains tax when and if she or he and other complex provisions of the Internal Revenue Code to your divorce may have a significant effect on your finances following the divorce.
Consultation with your tax lawyer may be advisable depending upon your situation.
Your child(ren) may live primarily with you or your ex-spouse, or they may divide their time between your homes. Regardless of where a child is living, you and your ex-spouse may agree that certain decisions about your child should be made by both parents. You may plan for periodic review of your child’s situation in order to provide for change as he or she grows older