ALIMONY REFORM ACT AND COHABITATION

Under the New Alimony Reform Act, one of the provisions provides that an alimony receipient’s cohabitation with another person constitutes grounds for a termination, suspension or reduction in payments. This is a substantial change. Prior to the new act, individuals who received alimony purposefully avoided marriage ( remarriage by the receipient being a provision that would terminate alimony) so that they could continue receiving alimony. In order to avoid this game, the new law included a cohabitation provision.

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DIVORCING COUPLES WITH COMPETING BUSINESSES

The Appeals Court has ruled that when dividing a marital estate that includes a family business, a judge has the authority to prevent the party that no longer has any ownership interest in the business from operating a competing business. This ruling was very limited. The Court had no position on whether the Husband was entitled to a noncompete order, and if so, how broad it should be.

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CRISIS IN THE DELIVERY OF JUSTICE

A recent troubling article written by Judge Elaine M. Moriarty Associate Justice of the Suffolk Probate and Family Court appeared in the Boston Bar Journal citing the current crisis that judges, court staff, attorneys and litigants face today. I have directly quoted her. Over 250,000 people appear in the Probate and Family Court every year. On her motion day, she has upwards of sixty cases scheduled on a given day; a Department of Revenue child support enforcement day has more than one hundred cases assigned. She cites budget cuts over the past several years threaten the courts’ ability to meet the most fundamental obligation, as well as the most fundamental entitlement of citizens of the Commonwealth: timley justice. She has a packed court room, and often times her court officer is covering two other sessions, in addition to hers. And when an altercation takes place out in the hallway, he must respond and is not available to help in any session until the altercation is resolved. She reports that this is troubling to her because if there is a problem in her session, she is able to leave the bench into a secured corridor, but she worries about the safety of the staff, attorneys and litigants (who sometimes bring children) who remain in the courtroom. Of the sixty cases in front of her, more than 70% involve litigants who are self represented and who do not understand the system or what is expected of them. She reports that their pleadings often are not in order, and they frequently seek relief that has not been raised in the pleadings. Often proper notice under the rules has not been given. This requires that the case be continued and rescheduled, which upsets a litigant who anticipated a resolution today. Often times many cases involve one or more parties that do not speak English. They must wait for an interpreter. She reports that often she will hear cases for almost four hours without a break, and when she looks up, the courtroom seems nearly as full as it was when she began in the morning. She has barely made a dent in the number of cases or people who remain. She learns she has several cases that have walked in as emergencies. One involves a custody change and the police. The requesting party has little information about happened. This requires a referral to the Probation Department to try and obtain some immediate information. She further reports that is made more complicated by the fact that there are currently five probation officers to handle the busy case loads for all sessions, down from fifteen officers just a few years ago. It is now 4:00 P.M., many cases still remain. Many people have been waiting all day and haven’t been heard. She reports that she doesn’t want to send them home without a hearing after waiting. Some have taken a day off from work. Thankfully, two of her colleagues offer to help her, so they finish the list at 5:30 P.M. This assistance generally is not available, given the demands on each of the other judges. Sadly, she reports that as she finishes the session, she is drained. But her workday is not done. She must decide and write decisions and orders on the ten cases she took under advisement. This is in addition to deciding several trials under advisement, four of which she heard in the last two weeks alone, where a judgment and findings are due. She can not be as timely as she would like. Some of her cases present novel legal issues that require extensive research for which there is little or time in the ordinary course of the day. She cites that a few years ago the Probate and Family Court had twenty-four law clerks to assist judges in researching decisions. They now have 4 1/2 clerks to support 51 judges. She states that her work is demanding, challenging and rewarding and that she believes that she makes a difference in the lives of those who come before her. But the citizens of the Commonwealth deserve more timley justice. But sadly, this is not possible without the resources necessary to do the work.

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ALIMONY REFORM ACT OF 2011

The Massachusetts Alimony Reform Act of 2011 was signed into law on September 26, 2011. This new statute does not go into effect until March 1, 2011. Although not perfect as it contains language that is ambigious and subject to interpretation, it does provide direction to both lawyers and judges that had been absent under the current laws. Some of the major changes are four different types categories of alimony; Rehabilitative, Reimbursement, Transitional and General Term. One of the major changes in this new law are the term limits for general term alimony. These durational periods will apply to marriages of less than 20 years. Those marriages greater than 20 years, alimony will end at retirement age as defined by the Social Security Act, whether or not a spouse is able to work beyond that age. However, alimony may be extended for good cause shown. If you are presently under an alimony order, please feel free to contact our office to set up a consultation to determine whether or not your present order may qualify for a modification.

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PROBLEM SOLVING VS. CONFLICT CREATION

I just happen to read an article that compared the two types of attorneys, those that solve problems and those who create problems. The problem solver in most cases will settle your case, saving you thousands of dollars in litigation fees and costs. However, be mind full, when settling, you must conduct a cost/benefit analysis.

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LANDLORD REPORTING REQUIREMENTS REPEALED IN APRIL 2011

As of April 14, 2011, Obama has signed into law the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011. This new law retroactively repeals the expanded information recording requirements set down in the Small Business Jobs Act of 2010 (“SBJA”).

Under the SBJA, when payments to service providers relating to the rental property totaled $600 or more per year after December 31, 2010, landlords (a.k.a. rental property owners) would be required to report that information to the IRS and the service provider via a Form 1099.

With the signing of the new law, however, it will be as though those paper-heavy provisions of the SBJA never existed.

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RENTAL PROPERTY OWNERS ARE SUBJECT TO A NEW LAW

Effective for payments made after December 31, 2010, recipients of rental income from real estate generally are subject to the same information reporting requirements as tax payers engaged in a trade or business. In particular, rental income recipients making payments of $600.00 or more to a service provider ( such as a plumber, painter, lawyer, accountant,) in the course of earning rental income are required to provide an information return, (typically Form 1099-MISC) to the IRS and to the service provider.

In order to comply with the law:
1. You will need to get a federal ID number for your rental property, Form SS4;

2. A Form W-9 request for tax number and identification must be filled out by your vendors. Failure for them to provide you their ID number later will not avoid penalties being obtained.

The penalties for failure to file 1099 forms  have been doubled under the new law. They are up to $100.00 per incident. Failure to file withe the IRS is one incident and failure to provide one to the service vendor is another; therefore the penalty would be $200.00 for each 1099 not filed. In addition, you may have to pay the service provider’s tax if he cannot be located and/or cannot pay the tax.

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MASSACHUSETTS WAGE ACT

With our economy still lingering in a recession, companies continue to lay off employees in order to remain viable. And with layoffs, often attached is severance pay. A recent ruling by a Superior Court judge has determined that an employee’s severance pay is included in the Wage Act.

 This law presents challenges for employers and opportunities for individual or class actions by employees. In 2010, employers who broke the Massachusetts Wage Act paid more than $8 million in fines and restitution to workers within the Commonwealth as reported by Massachusetts Lawyers Weekly, February 7, 2001 Ed. Plaintiffs who prevail in actions against employers for violating this act are automatically awarded treble damages, in addition to the previous available costs of litigation and attorneys fees. This act was designated “primarily to prevent unreasonable detention of wages”. Electronic Data Systems Corp. v. Attorney General, 454 Mass. 63, 70(2009), citing Boston Police Patrolmen’s’ Ass’n v. Boston, 435 Mass. 718, 720 (2002).

 Under Massachusetts Law, to state a claim under the Wage Act, a plaintiff must prove:

(1) he was an employee under the statue; (2) his deferred compensation constitutes a “wage” under the statue, [and] (3) the defendants violated the Act by not paying his wages in a timely manner. “Stanton v. Lighthouse Financial Services, Inc. 621 F. Supp. 2d 5, 10 (D.Mass. 2009) citing Allen v. Imtralearn Software Corp., 2006 WL 127813, *1 5, 10 (D.Mass. App. Ct. Apr. 24, 2006)).

 Given the increased exposure to employers under the Act, employers must pay close attention to the many and varied technical aspects of the Act to make certain they are in compliance.

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NEW CHILD SUPPORT GUIDELINES

I would like my readers to be aware, if not already, that the Massachusetts Child Support Guidelines were revised for the first time since they were implemented back in 1987 on January 1, 2009. If you have a present order, you may be effected.

Some of the revisions include the following:

• They consider the combined income of both parents, elimination of the $20,000.00 custodial parent disregard, (under the old guidelines, this amount wasn’t included in the formula);

• The guidelines apply up to $250,000.00 of combined income for both parties, (up from $135,000.00 under the old guidelines);

• The manner in which to calculate child support in those instances where there is shared custody, (under the old guidelines they did not apply); and

• The ability to attribute income to any parent if the court finds that one party is capable of working and is either unemployed or under employed.

Under the new guidelines, an existing order may be modified if any of the following circumstances exist:
(1) the existing order is at least three years old; or
(2) health insurance previously available at a reasonable cost is no longer available (or if available but not at a reasonable cost); or
(3) health insurance not previously available to a party at a reasonable cost has become available; or
(4) any other material change in circumstances has occurred.

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NEW BILL THAT PROMISES AN ALIMONY OVERHAUL

There has been a “new bill” awaiting assignment for hearings called the Alimony Reform Act of 2011”.  If passed it will provide direction for judges, family law practitioners, and litigants.  The end result will be consistency and predictability which is presently lacking.

There are a number of revisions that include time limits, along with new alimony definitions; rehabilitative, reimbursement, and transitional alimony. There would also be a formula for limiting alimony awards based on the duration of the parties’ marriage. Should a marriage last for less than 5 years, an alimony award would be no more than 50% of the length of the marriage, for 5-10 year marriages an award would be no more than 60%, 10-15 years 70%, 15-20 years 80%, and for marriages over 20 years, the alimony would remain indefinite.

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