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Counterpoint re: Alimony Reform and Cohabitation

Tuesday, July 10, 2012

By: David H. Lee Maureen McBrien’s opinion piece in Lawyers Weekly of April 30, 2012 was interesting to read as a perspective of an attorney facing a new issue in the area of family law.  It is important that the changes in the Alimony Law, which went into effect March 1, 2012 be highlighted, and that dialogue ensue with respect to the provisions of the newly enacted law.  Her opinion, however, specifically with respect to her subsection on “When is a modification warranted on cohabitation grounds?” seems in large respect to be inconsistent with the wording of H 3617, the Act Reforming Alimony in the Commonwealth, particularly where she suggests that relief under the Act would not be available if cohabitation had begun prior to March 1, 2012.  Her conclusion that the cohabitation relationship has to have begun post-March 1st in order to seek relief of modification based on cohabitation is not accepted.

The measuring focus for any modification of a divorce judgment is the change of circumstance that has occurred following the entry of that judgment.  Ms. McBrien suggests that the change of circumstance based on cohabitation would require that any such cohabitation be after the effective date of the Act; namely, March 1, 2012, to be a basis for relief.  Now, rather than a pure standard of change of circumstance, the facts supporting cohabitation after the judgment, consistent with the provisions of Section 49(d), provides the basis for relief under the Act.

While Section 4(a) of the Act indicates that Section 49 of Chapter 208 of the General Laws shall apply prospectively, alimony judgments entered prior to March 1, 2012 shall terminate on three bases: (1) only under the terms of such judgments; (2) under a subsequent modification; or (3) as otherwise provided for in this Act.  Section 4(b) of the Act indicates that the enactment into law of Sections 48 through 55 of Chapter 208 of the General Laws shall not, in and of itself, be a material change of circumstance warranting modification but for existing alimony judgments that exceed the durational limits under Section 49 of Chapter 208 of the General Laws with respect to which the Act shall be a material change of circumstance which warrants reduction.

Thus, events which have occurred subsequent to a divorce judgment entered prior to March 1, 2012 can serve as a basis for modification.  These events are not limited merely to a reduction in or increase to the income of one of the parties, but also may include events subsequent to the entry of the judgment of divorce with respect to which relief is provided for in the Act.  These specifically include cohabitation and reaching full retirement age.  The reason that the Act itself can serve as a change of circumstance with respect to which a modification shall be based is that the durational limits referred to in Section 49 are measured with reference to the length of the marriage.  The length of the marriage which has been ended cannot be extended so there is no post-divorce judgment event which could serve as a basis for change of circumstance and modification.  A specific indication that the durational limits within the Act shall be deemed a material change of circumstance provides the opportunity for relief based upon the terms of Section 49.

The particular bases for modification of cohabitation or achieving full retirement age, are ongoing circumstances beyond the entry of a judgment of divorce.  One continues to get older after the judgment of divorce. One can commence and continue on a daily basis, a period of cohabitation beyond the entry of a judgment of divorce.  One cannot, however, extend the length of the marriage.  With respect to cohabitation, in particular, each day of cohabitation is effectively a new starting point such that the three month period of time referred to in Section 49(d) runs from each day forward.  Therefore, irrespective of whether the commencement date of the cohabitation was prior to March 1, 2012 and continues beyond March 1, 2012 a Plaintiff seeking relief by reason of cohabitation would not be precluded from bringing that action for relief.  There is nothing in the Act to suggest that a cohabitation which began prior to March 1, 2012 and continue beyond March 1, 2012 is outside a class of cohabitation with respect to which relief can be provided.

Ms. McBrien’s suggestion that the use of the words “upon the cohabitation” suggests problems for alimony payors where the recipient’s cohabitation began prior to the passage of the Act is not consistent with the reading of Section 49(d). Section 49(d) indicates a mandate that alimony shall be suspended, reduced or terminated upon the cohabitation of the recipient spouse when the payor shows that the recipient spouse has maintained a common household…for a continuous period of at least three months. The word “upon” is the basis for the suspension, reduction or termination of alimony. It is not an event of time (read “based upon”). The time event is “when the payor shows”.

As with all standards of modification; namely, seeking relief from the entry of the last judgment, cohabitation now serves as a basis for seeking post March 1, 2012 relief as provided for in the Act.  The prospective nature of the Act precludes going back to an event of cohabitation during a period of time prior to the effective date of the Act and seeking relief through reimbursement of alimony, but does not prohibit relief, based on cohabitation, from an alimony order that otherwise would extend beyond March 1, 2012 merely because that cohabitation first began prior to March 1, 2012..

It should be noted, as well, that there is no restriction in time regarding when it is an action for modification based upon cohabitation can be commenced after March 1, 2012 as there is in Section 5 applicable to durational limits and Section 6 with respect to reaching full retirement age..

Conclusion

One may seek prospective relief with respect to a pre-March 1, 2012 alimony order based upon cohabitation as defined in Section 49 irrespective of whether that cohabitation commenced before March 1, 2012.

David H. Lee was a Co-Chair of the MBA/BBA Alimony Task Force and a member of the Massachusetts Legislative Alimony Reform Task Force.

Fern Frolin (a member of the Massachusetts Legislative Alimony Reform Task Force) and Denise Squillante (Co-Chair of the MBA/BBA Alimony Task Force and a member of the Massachusetts Legislative Alimony Reform Task Force) note their concurrence with this opinion.

This piece was published as a Letter to the Editor of Massachusetts Weekly, July 9, 2012 edition.  Posted with the author's permission.

 

Should People Pay Alimony and Child Support from Unearned (Capital Gains, Interest and Dividend) Income?

Wednesday, May 09, 2012

There is an interesting inconsistency between how income is defined in the Massachusetts Child Support Guidelines (CSG), and how the same kinds of income are treated in our new alimony statute. The question is: in applying support formulations to the income of the paying party, do interest, dividends and capital gains income from investment of property “count”? The Child Support Guidelines (CSG) say “yes” while the new (as of March 1, 2012) alimony statute says “no”.

The CSG definition of income is extremely comprehensive, and it includes interest and dividends, and capital gains received as a “regular source of income”. What makes capital gains a regular source of income? Is the key that there is some income every year? Most years? Does it matter if it varies greatly from year-to-year? Should it matter if the capital gains did not come from the paying party’s “business” trading, as opposed to “personal” investment? However determined, this income it “counts”.

The Massachusetts Appeals Court recently decided a case called Wosson v. Wosson, in which the trial judge included the capital gains income of the father in setting his child support payment, but then reversed herself by excluding it in response to the father’s motion after trial. The Appeals Court did not say that the trial judge could not do this, but it sent the case back to the trial judge because she is required to explain her reasoning under the CSG through “findings”, which she had not done. (A judge may deviate from the CSG, but must explain her action by writing her factual reasons.)

Meanwhile, the new alimony law says that a judge should not take into consideration income that is gained by the investment of property that the paying party receives or keeps in a divorce judgment. We presume that the legislature’s reason for doing this is to avoid what is commonly called “double dipping”, something that happens when a spouse receives an asset in divorce, then has to pay support from the asset or its investment income/gains, after the divorce. (We will talk about “double dipping” more in a later entry.)

Whatever the reasoning of the legislature in making the new alimony laws, it did exclude income generated by divided assets from consideration in the alimony law, while CSG includes it in deriving support for children. Does this matter? It does, if for no other reason, that in some cases, the paying party pays both alimony and child support; and confusion can result in deciding how to define his or her income for calculation purposes.

Should the uses of income be different?

 



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