Boston Divorce Lawyer – Boston Divorce & Family Law Attorney Blog

Any time there is a dispute or issue in a Probate and Family Court, the court requires that a complete and up-to-date financial statement be submitted.  Many people think that this is no big deal and leave it until the day of court to fill it out.  That would be a mistake.  The court relies on the financial statement to calculate child support, alimony and property division.  They can choose to deviate from the child support guidelines or the new alimony guidelines based on what’s contained in the financial statement.  For that reason, it should be completed with extreme care.

If you make $75,000 or less per year in gross income (before taxes), then you fill out the Short Form financial statement.  If you make more, then you fill out the Long Form financial statement.  I will be writing the instructions below as if I am filling out a Short Form financial statement.  For a Long Form, you should really seek the advice of an attorney for your case.

First the basics – the “Division” is the county your cases is located in and the docket number is the numerical number assigned to your case.  These are important so that the court can properly file your financial statement with the correct case file.

The Personal Information section should be filled out completely except for the Social Security number portion.  You can either omit this line or put only the last four digits.  Everything else must be filled out completely.

Part 2 deals with all sources of income.  This can be easily gleamed from a current pay stub.  Take note that the figures being asked are weekly.  If you have a monthly paycheck, then divide it by 4.3 (not 4 as is commonly done) to obtain the weekly amount.  If you get paid bi weekly, then simply divide by 2.  If you are self-employed, then you need to fill out an additional Schedule A.  It is best to have your business accountant fill the Schedule A form for you.  If you own income generating rental property, then you must fill out a separate Schedule B.  Take special note of line item q which deals with contributions from other household members.  If you live with parents or a partner, and they compensate you for household expenses, then you must list this. If however, you split the bills so that someone pays the electric and someone else pays the telephone bill, then simply list it in the expense section below.

Part 3 deals with taxes which can be calculated from your pay stub or tax returns.  Remember to divide by 4.3 to get the weekly amount.

Part 4 should be auto-calculated if you are using the Court forms.  If not, it is the sum of part 2 minus the sum of part 3 or basically your income after taxes.

Part 5 deals with items deducted from your paycheck automatically before it even gets to you and part 6 is simply your income minus taxes and other deductibles.

Part 7 deals with your gross income from the previous year.  The court wants to know this because they want to determine if you have purposefully underemployed yourself for the sake of the court action.

Part 8 is really important because you can use this part to argue to the court why your child support or alimony should be reduced based on your inability to pay.  If you have high expenses, and not simply because you like to spend money, then the court might consider a deviation if justified.  These numbers have to calculated exactly and remember to divide monthly numbers by 4.3 to get the weekly equivalent.

Part 9 is where you put the amount in attorneys fees.

Part 10 and 11 is important when it comes to dividing assets in a divorce.  It is important to list every single piece of real estate, retirement account, bank account or anything of value in this area.  If there isn’t enough space, then separately attach an exhibit.  If you neglect to list something and the other party finds out or the court finds out, it is not only considered perjury but it could cost you in a property division.

As a divorce attorney, I would be lying if I said I didn’t notice the effect the Great Recession has had on my practice.  Like almost every business in any industry, I’ve noticed that fewer new clients are walking through the door.  But I wasn’t aware of the startling effect the Great Recession has had on divorce rates generally.  A recent piece by NPR’s All Things Considered informed me that  studies have shown that for every one percent increase in the unemployment rate, there is a one percent corresponding drop in the divorce rate.

This correlation isn’t due to families “doubling down” and growing closer in the face of adversity, but because couples who would otherwise part ways cannot afford to do so.  They cannot afford Court and attorney’s fees, nor do they have the cash on hand to properly divide their estate.  The end result is that people who have terminated their relationship are forced to remain married to one another, often under the same roof.  For some couples, however, this is an unbearable condition.    Throughout history, divorce rates and rates of domestic violence including homicide have shared a correlation: when divorce rates go up, domestic violence rates go down.  The end result of combining all of this information is a frightening picture: when the stressors that make divorce most likely are affecting millions of people, the same root cause places divorce out of reach.  These same stressors make domestic violence more likely, and the inability to obtain a divorce or remove oneself from the marital home make domestic violence more difficult to escape.

So what information can I provide those in such a situation?

•  You may qualify as an “indigent”, or a person who simply does not have the means to afford the fees associated with divorce.  If you do, filing fees and other court costs may be waived.  You may also be eligible for free legal advice or representation.

• Divorcing may require you to “liquidate” your assets, or to transfer property from one spouse to the other.  You should note that the IRS allows divorcing couples to transfer property between one another without incurring any taxes for such transfers.

• Lastly, you should note that if you and/or your children are being subjected to abuse by your spouse, there are both legal protections and other resources available to you.

There are certainly times when divorce is simply out of the question, but if you or someone you know is placing their physical, emotional, or mental health at risk due to the Great Recession, waiting for the economy to turn around should not be an option.

I am surprised at how often I hear both clients and attorneys tell me that in Massachusetts, when couples divorce, everything is split 50/50.  That is simply not true in Massachusetts.  Splitting everything 50/50 is more akin to community property states such as California.  Let’s break down that sentence and examine it:

Everything is split 50/50

The bolded text “everything” is correct and accurate.  In Massachusetts, when a couple divorces, everything is up for grabs.  Everything includes income and assets acquired during the marriage and also before the marriage.  Everything also includes gifts and inheritances during and before the marriage.

Everything is split 50/50

The bolded text “is split” is somewhat correct.  Since everything is up for grabs, everything is then up to be split.  It doesn’t mean that it will be split but simply that there is a possibility of it being split, depending on the circumstances of each couple.

Everything is split 50/50

The bolded text “50/50″ is absolutely false.  Massachusetts is an equitable division state.  It means that at the time of divorce, judges look to see how to split property equitably.  Equitable is a fancy term for “fair and reasonable.”  Fair and reasonable does not mean 50/50 or else our laws would simply say 50/50 or equally.  Equally is not the same as equitably.

Let’s take for example the case where a young couple in their 20′s gets married.  They started the marriage with next to nothing and they’re married for 9 years and had no children.  They then decide to divorce.  In that situation, it would be fair and reasonable to split their assets 50/50.

Now let’s take another example where a young couple in their 20′s gets married.  They started the marriage also with next to nothing and they’re married for 20 years and had 3 kids and the wife was a stay-at-home mom for 15 of those years.  In that situation, it would NOT be fair and reasonable to split their assets 50/50 because the wife sacraficed her professional advancement outside of the home to raise the couple’s kids which in turn enabled the husband to advance his career.  Now if she was to go back to the work force, she would be 15 years behind the curve professionally.  In this situation, a fair and reasonably (or equitable) distribution would be to give the wife more of the assets.

Many of my clients are worried about two issues when it comes to transferring property pursuant to a divorce.  They’re worried either about their house (real property) or their retirement accounts.

Transfer of Real Property

During the marriage, spouses can transfer unlimited money and assets between themselves – tax free.  There is no transfer or capital gains tax on transfers between spouses.  After divorce, spouses (or ex-spouses I suppose) have up to 1-year from the divorce date to transfer property between them, tax free – even if the transfer was not mentioned as part of the divorce.

Transfer of Retirement Assets

If you take out money from any of your retirement accounts (401k, IRA, Roth IRA, 403b, pensions, etc.), you will incur a penalty and be taxed on the amount.  So when couples need to split their retirement accounts during or incident to a divorce, many people worry that they will get penalized and taxed.  However, if done property, that won’t be the case.  Any amount that is taken out or divided incident to a divorce, should be done through a Qualified Domestic Relations Order (QDRO).  It is a special document that is submitted to the retirement account administrators instructing them to divide the account without triggering any penalties or adverse tax consequences.

Before transferring real estate or retirement assets in a divorce, it’s best to consult with a knowledgeable Massachusetts divorce attorney so that you won’t make the mistake of having to pay Uncle Sam when you don’t need to.

In a new book, Survived by Love, Jay Kent-Ferraro, a psychologist by training, talks about his marriage, how he cheated, got divorced and fell back in love with his wife.

I’m very much encouraged by these types of stories.  In my practice, I see couples come to me when their lives are falling apart.  I see my role as helping them rebuild from the rubbles of their failed marriage to build a new life.  Many people demonize divorce attorneys.  They think we create divorce and promote it.  In reality, couples come to us only after they’ve decided to divorce.  We did not cause the divorce itself.  Still, the stereotype persists.  Every once in a while though, I get calls from people who are really ready to divorce.  I’ll speak with them and they’ll reconsider.  Maybe they haven’t tried marriage counseling.  I’ll tell them to go try it.  Maybe they  haven’t taken a real deep look at themselves and their spouse to understand the problems and difficulties and try to fix them.  I ask them to be introspective.

When potential clients don’t call me back after I’ve had the talk with them, I like to think that maybe they decided that their marriage was worth the work.  It was worth a second chance.  I’ve also had clients who remarried their ex-spouse and I’ve had clients who stayed with their ex-spouse, though never got remarried to them.  It’s very encouraging.

Marriage isn’t forever.  Neither, apparently, is divorce.