Source: https://levinedisputeresolution.com/divorce-mediation-blog
Timestamp: 2019-04-18 23:22:24+00:00

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Litigating colleagues tell me that the casual relationship between “facts” and reality in the Probate and Family Court has become more attenuated, accelerating with the daily lying of the 45th president. Stephen Colbert’s “truthiness” has given way to Trump’s “when in doubt, lie - the more - and the bigger - the better”.
This echoes the political jousting in Washington at large, which reminds me of the arguing of bomb-throwing divorce lawyers in court, but every day, and impacting the world, rather than “merely” the family.
The political and family law circles merged last week during Michael Cohen’s testimony to the House Oversight Committee. Rep. Robin Kelly (D-Ill.) asked Cohen why, for goodness sake, he used a home equity line of credit to source hush money payments to cover up his client’s extramarital romps. It is something about which I have long wondered.
I didn’t see the hearing live. So, it took Michelle Singletary’s “Color of Money” column in the March 3 Boston Sunday Globe to tell me Cohen’s answer: it was the best way to do it without his wife getting wise to the payment.
Perhaps he feared Washington Post. Maybe the Democrats or the FBI. But, of course, Mrs. Cohen. A lawyer, a fixer; but ultimately, a guilty husband!
How’d did a recovering divorce litigator miss that one?
We know that under the federal Tax Cuts and Jobs Act of 2017 (TCJA) alimony instruments executed before December 31, 2018 will carry over deductibility when modified thereafter so long as the parties (or the court?) don’t opt out of that treatment. While we all hope that we can successfully maintain this important tax leverage for the sake of restructured families by incorporating existing temporary (interlocutory) orders into 2019-and-later agreements, a question (among many) that continues to nag is, just how malleable is this rule?
It seems clear that if one modifies former Spouse A’s alimony by reducing the sum or increasing it, deductibility remains intact.
I also assume that if we change former Spouse A’s alimony from an expressed sum to a formula, in whole or in part (i.e., $5000 per month to .325 of gross pay, or $5,000 per month to $4,000 per month plus .325 of future bonuses) deductibility is not jeopardized.
And, if former Spouse A’s alimony durational term is reduced or extended, there seems to be no reason why the opt out rule should not apply.
What if former Spouse A loses her job, former Spouse B’s career has taken off, and the modification shifts the payment obligation from A to B, is deductibility still available for this new obligation?
If this sounds a bit familiar, we wondered in an earlier blog entry if the durational limits of the Massachusetts Alimony Reform Act (eff. 3.1.12) apply to one spouse, or to both when they trade alimony places. As in, if the presumed duration is 7 years, and halfway through, the alimony obligation shifts, does the clock re-set, or does the second payor get credit for the former payor’s time served?
In an era of 2 partner family income predominance, this is not a far-fetched scenario — and now we have to worry about deductibility, too.
In the fourth quarter, it became apparent that Congress had the alimony deduction – a longtime GOP target -- in its crosshairs. As a fiscal matter in context, its cost was marginal, but the decades-old subsidy for divorcing families offended some on moral grounds and compliance was poorly enforced by the IRS, causing greater treasury losses.
By December 2017, EVERYONE knew that Congress had repealed the alimony deduction, but had deferred the effective date of repeal by a full year, being effective January 1, 2019.
As I have asked lawyers in my divorce mediation sessions if they are seeing a common approach in the courts, they look at me like I am still dreaming.
As Christmas approaches, I am drawn to the sad irony that some of the impending happy gifts between spouses may someday turn to bitter lemons, riven by sour grapes in divorce. While none of us can make lemonade out this sad fruit salad, we can help make it all a bit easier for our parties in divorce mediation by giving them ideas of how to take some of the emotion out of this transaction, which is frequently (and intentionally) the last issue tackled, packing one last punch to the gut of the negotiating parties.
Our colleague and friend, David Hoffman of Boston Law Collaborative has synthesized a host of ways to offer people ways out of the worst of this last insult, in his recent piece “Fair and Square…” in Massachusetts Lawyers Weekly. With David’s permission, I am linking it here as a between-the-holidays guest blog. We have all implemented some, but undoubtedly not all of David’s strategies in the past, and it is really great to have it all under one headline, both as a refresher and as and a fantastic handout for mediating spouses.
Sometimes the parties will select one of these processes. They are all interesting, useful and clever.
More often than not, the tired spouses will say, “Really? Do we really have to do this?” Most of the time, they will then figure out how to swallow enough pride and hurt to adopt their own “good enough” solution, which is usually good enough to end this unique form of pain.
The recent decision, Dilanian v. Dilanian, from the Massachusetts Appeals Court describes a litany of unreliable evidence from which a trial judge drew negative inferences about the malfeasance of a divorce-litigant husband, finding that he tried to obscure and shelter both assets and income from his wife and from the court. The Appeals Court agreed with the Probate and Family Court judge, and upheld her decision.
The self-employed husband depressed his apparent income after the divorce filing, by decreasing his profit distributions and increasing his retained, undistributed earnings, without legitimate explanation. You can’t do that!
On a defined contribution plan, the sole- business-owner husband presented documents with the number of retirement plan participants yo-yoing periodically, attempting to reduce his share of the pension pool, for equitable division with his wife. Can’t do that either.
By post-trial motion, the executor-trustee-beneficiary husband tried to take back his inaccurate trial testimony in which he overstated his rights in his father’s estate, which the court had accepted, and later sourced to the husband’s own inexcusable neglect. That doesn’t work.
But the howler in the bunch, of which the Appeals Court made but passing note, the pension plan-administrator husband tried to dilute his share of a defined benefit pension plan by including his late father as a member of the plan, thus trying to divert a chunk of the pension from the court’s equitable division powers.
Only problem was that the plan documents that the husband himself offered in evidence showed that his father was no longer alive when the plan was created.
None of this is particularly surprising in the Probate & Family Court, where Stephen Colbert’s notion of “truthiness” has a long history. But, the audacity to lie in plain sight of a dated document that he himself put into evidence is, simply put, Trumpian.
To borrow a cliché from left wing TV, the “institutions held”: the trial judge sniffed out the ruse, and the appellate court backed her up.
Translation can be a tricky thing.
Just ask this restaurant owner in China, above. (https://lingualinx.com/blog/the-funniest-examples-of-translation-gone-wrong/).
Or, yourself, as you try to assemble your kid’s imported toy next month using instructions that seem reverse engineered from Chinese to Japanese to English; and while reading your next off-shore spam email.
While lawyers, judges, mediators and arbitrators struggle to glean government’s intentions through statutes and regulations, the public relies on IRS instructional publications for their primary understanding of tax law.
Line 11 Alimony Received Enter amounts received as alimony or separate maintenance. You must let the person who made the payments know your social security number. If you don’t, you may have to pay a penalty. For more details, see Pub. 504.
That’s my underlining. It is self-referential and circular, but hey, it’s only a draft.
TAX TIP: Alimony received will no longer be included in your income if you entered into a divorce or separation agreement on or before December 31, 2018, and the agreement is changed after December 31, 2018, to expressly provide that alimony received is not included in your income.
That is their italics, presumably to draw us to its importance. The color-coding is mine, to help illustrate the following. What does this communicate to the reader?
From which taxpayer might rightfully conclude that her lawyer was crazy in trying to craft an alimony deal in 2018 since taxable alimony has been retroactively repealed. What was the rush about, anyway?
She might also conclude, let’s wait to talk turkey until after new year, since this clause also implies that 2019 agreements will produce deductible alimony. Huh?
The more patient taxpayer will also read “…and the agreement is changed after December 31, 2018, to expressly provide that alimony received is not included in your income.” After suffering through two dependent clauses that rely on the passive tense and a sort of double negative (“no longer” and “not”), one may well wonder “what’s the big deal?” After all, if my 2018 alimony deal does not produce reportable income to me, then who cares if a change to my agreement simply confirms that result?
Is draft publication 504 a symptom of poor drafting or something more insidious, like deliberate obfuscation of taxpayer’s rights and obligations?
On a more nuanced level, does the fact that draft publication 504 makes reference to “divorce and separation agreements” only, and not to court orders or judgments, imply that 2018 alimony agreements will be deemed qualified deductible support in 2019 without the need for a judge’s endorsement, as much precedent suggests?
I hope so. The absence of reference to court orders is soothing, and perhaps indicates that my previously expressed worries are misplaced.
But then, what happens if the parties take a merging agreement for alimony, signed in 2018, to a court in 2019, and the judge does not approve the deal for incorporation into an order or judgment?
Of course, this is only a draft, and as a public “instruction” only, it is not law. See, https://www.forbes.com/sites/robertwood/2015/11/11/amazingly-irs-says-you-cant-rely-on-irs-instructions/#21b2923d341a.
So, I think I’ll still wait for the temporary regulations before I let down my guard entirely.
Thanks to David H. Goodman, CPA, of Gosule, Butkus & Jesson, LLP for the draft language. Stay tuned for David’s piece about alimony trusts in the next LDRC newsletter.
I’ve drafted a lot of separation agreements over the years. I have also been accused, on occasion, of trying to anticipate some pretty unlikely events. But I never considered the possibility that a child support payor might try to stop paying because his kid earned a college scholarship, let alone one that committed him to military service after graduation!
Instead of saying “congratulations, and thank you, son”, the father demanded retroactive termination of child support to the start of his son’s ROTC training, junior year, citing the “military enlistment” emancipation provision of the parties’ divorce agreement. And to think, Claire Booth Luce had never heard of the Bobblis case when she coined “No good deed goes unpunished”.
The Probate and Family Court dispatched the father’s demand with careful legal analysis. The Massachusetts Appeals Court did the same, crediting Judge Lisa Roberts’ good work, and distinguishing military enlistment (and full time attendance at West Point or other military academy), from attending college on a military-provided scholarship. The appellate panel upheld the trial judge’s ruling that the child remained unemancipated, and child support unchanged.
The father represented himself at the trial level, but he had counsel on the appeal. Presumably, his lawyer advanced irony-free arguments that she believed would survive the giggle test. The Appeals Court accorded the appellant and his counsel the dignity of a reasoned, published decision rather than the “you’ve got to be kidding me” reply a/k/a summary disposition.
They even declined to award appellate fees for advancing a frivolous argument.
And, if the grub is purchased during entertainment it must be invoiced or specified separately from the entertainment.
They’re all fun, but Item 5 on the menu caught my eye particularly. Gosule points out a $5 hot dog at a Red Sox game will be half deductible, while the $1,500 game tickets (hell, it’s playoff time) are not; while $200 worth of food and drink in a Celtics luxury box will not be deductible at all because it is not paid or billed separately from the ticket.
That’s as logical as calling another 9th inning pitching change in a 16-1 rout or 4th quarter NBA garbage time “entertainment”.
It also reminds me of the dilemma of creating and parsing Probate and Family Court Rule 401 financial statements, where “food”, “meals out” and “entertainment”, both personal and business, mix and mingle with regularity, with double counting galore!
In the unusual context of a U.S. Bankruptcy Court case, Judge Melvin S. Hoffman examined an evidentiary statute that is daily fodder in family law litigation, M.L.G., ch. 233, §20, known as the “spousal disqualification”. In short, §20 prohibits married or divorced person from testifying to private conversations between them that occurred during marriage.
It is not a waivable privilege, like the right to withhold testimony in a criminal proceeding against one’s spouse. It is a rule that neither party may relax, certainly not unilaterally; and, arguably, a judge should not rely on disqualified testimony, even if neither party is vigilant enough to object to its admission.
There are exceptions to the rule: domestic and child abuse cases, and at issue in M.T.J.C. LLC, et als. v. Steven Simon, cases where the spouses have entered into a contract with each other. Appellate cases have previously addressed construction questions such as: “can a ‘conversation’ be in writing?” (no); and “what is private”? (where a reasonable expectation of privacy exists, which may be negated by the presence of other persons who have the capacity to overhear and understand); and most recently, does the Alimony Reform Act (eff. 3.1.12) definition of marriage length (M.G.L., ch. 208, §48) terminate the period of disqualification? (no, private conversations remain disqualified until absolute divorce, under Balistreri v. Balistreri, Appeals Court 2018).
But, this bankruptcy judge faced a question that neither §20 nor appellate case law have yet addressed, namely, does the contract exemption to spousal disqualification apply in a lawsuit in which a third party is litigating against one of the spouses?
Because of the paucity of authority, Judge Hoffman tasked himself with “… predict[ing] how the Massachusetts Supreme Judicial Court would rule on this issue”. In doing so, he carefully reviewed the statute and interpretive case law, and concluded, soundly, that the contract exemption only applies when the spouses are themselves lawsuit opponents.
In other words, the court could not order Ms. Simon to testify about her private conversations with Mr. Simon about a contract between them, at the demand of someone else suing her husband.
Judge Hoffman’s scholarship is an interesting read, especially for those who encounter the disqualification on a daily basis, and rarely question its premises. He recites history and policy that underlay the statute: that spouses were considered “as one” in common law, that their interests were uniformly aligned, that the “bias of affection” would undermine reliable testimony, that marital peace would be disturbed, and that cross examination of the declarant might cause prejudice to the other spouse.
He concludes that even if many of these reservations “seem quaintly outdated”, they nevertheless ground a statute, which the trial courts are not free to alter.
As a family law arbitrator, special master and litigating-lawyer-in-recovery, I can’t miss the unavoidable irony in the “bias of affection” justification for spousal disqualification. The divorce court’s problem is in fact, the polar opposite: think, “the bias of disaffection”.
The fact of the matter is that, quaint or not, spousal disqualification is a good rule. What harmonious couples talk about privately is no one else’s business; and how conflicting spouses remember it, or choose to recount it, clouded by conflation, confusion or convenience, gives rise to inherently unreliable testimony.
Factfinders struggle enough with the quantum of evidence in a field where parties and counsel fear leaving even the smallest pebble unturned. Opening divorce trials to endless “he/she/they said” testimony would be a race to the evidentiary bottom, producing even more heat and precious little light.
As a young litigator I felt the opposite. Age has its privileges, I guess.

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