How will Massachusetts Alimony Reform Affect You?
In January 2011, Senator Gale Candaras, Esq. and Representative John Fernandes announced new legislation to reform the current Massachusetts alimony system. The proposal, called the Alimony Reform Act of 2011, is a sweeping transformation of the current alimony system in Massachusetts. Right now, this is just a proposal and not law, but in the last couple of months since the Act was proposed, many family law attorneys have come to believe that this Act, or at least some similar version of this Act, will become law in Massachusetts. While some of the current propositions in the Act may change it is still worth analyzing the Act in anticipation of the potential issues and implications of its enactment.
The New Alimony Scheme
There are many changes under this proposed Act, but perhaps the most significant change is the implementation of a durational alimony scheme. Currently, when the court orders a spouse to pay alimony pursuant to a divorce judgment, the payment period is indefinite (lovingly or heatedly referred to as “Alimony for Life”). The Act however will put an end to Massachusetts’s “life alimony.” Under the Act, the court will follow a tiered formula to determine the maximum length that alimony can be assigned.
Proposed Durational Scheme for “General Term Alimony”
- Marriages 5 years or less: Alimony cannot be greater than 50% of the months of marriage;
- Marriages 10 years or less: Alimony cannot be greater than 60% of the months of marriage;
- Marriages 15 years or less: Alimony cannot be greater than 70% of the months of marriage;
- Marriages 20 years or less: Alimony cannot be greater than 80% of the months of marriage;
- Marriages greater than 20 years: The court has discretion to order indefinite period.
The Act has also established definitions for multiple types of alimony, which the court can utilize when creating a divorce order. Aside from “General Term Alimony,” which will follow the schedule above, the Act will also include: “Rehabilitative Alimony,” “Reimbursement Alimony,” and “Transitional Alimony.” These types of alimony can be ordered in place of the General Term Alimony and are all for a duration of less than five years. It is not yet clear how the court will determine when it is appropriate to use one of these alternative types of alimony instead of the General Term Alimony. What is clear, is that that a judge will have discretion to order these shorter types of alimony, even when the General Term Alimony would call for a longer period of alimony under the Act.
Grounds for Termination of Alimony
Under the Act, General Term Alimony can terminate upon the remarriage or cohabitation of the recipient. Currently, cohabitation is not sufficient reason to constitute the termination of alimony and there are even some cases where alimony may not terminate when the recipient remarries. This is an important change that ex-spouses should be aware of because there are certain to be many alimony recipients who are cohabitating with a boyfriend or girlfriend and have intentionally avoided marriage so that they can continue to receive alimony payments from their ex-spouse.
The Act also states that General Term Alimony shall terminate upon the payor reaching the full retirement age or when that person becomes eligible for the old-age retirement benefit under the United States Old-Age, Disability, and Survivors Insurance Act. Currently, retire is not in and of itself a sufficient change in circumstance to warrant termination of an alimony obligation absence some other countervailing circumstance. This change will be particularly relevant to people who divorce later in life and are approaching the age of retirement.
Determining the Amount of Alimony the Obligor shall pay
Under the new Act, the court shall exclude several sources of income from its determination of an alimony award, including the gross income used to determine a spouse’s child support obligation.
In addition, the Act also excludes any income the payor spouse receives from a second job or overtime from a determination of alimony. It is unclear at this point how this may affect a spouse who is not paid hourly, but rather paid a weekly salary regardless of how many hours per week the spouse works.
Also, under the Act, where a payor spouse remarries, the new spouse’s income will not be considered for the purpose of increasing the payor spouse’s alimony obligation. This may have significant impact in the case where a payor spouse remarries someone who has a particularly good financial situation and the recipient ex-spouse has an unfortunate financial situation.
Modification Generally and Modifications of Pre-Act Alimony Orders
The Act states that the enactment of this bill is a material change in circumstance sufficient to change the duration of a previously ordered alimony award, however it is not sufficient to change the amount of alimony that was awarded. Additionally, parties who have made a divorce agreement which states that their alimony order shall not be modifiable, will not be entitled to have their alimony order changed because of this Act.
Basically what this means, is that spouses who were ordered to pay alimony prior to the enactment of this bill, could seek and obtain a modification of their alimony obligation, but they can only seek modification for the duration of their obligation and could not obtain a modification for the actual amount of alimony that they were originally ordered to pay. One thing that is not clear yet is whether the court will prorate the durational requirement of a newly modified order based on the length of time that a spouse has already paid alimony. If this becomes the case, some orders will be terminated all together where the spouse has already paid alimony for a period longer than the new duration standard would have otherwise required.
These modification changes may be appealing to a person paying alimony however such people should carefully consider the ramifications of a modification. Counter claims for an increase to the amount of alimony are certainly foreseeable as a response by the alimony recipient.
Life Insurance
Under the new Act, a payor spouse is required to maintain life insurance for the recipient spouse, however, they are required to do so only for the duration of the alimony period. This brings up two important issues. First, in some cases, the insurance coverage may only be for a short period of time therefore coverage will not last long. Secondly, in a situation where the parties are near retirement when they get divorced, it may be very difficult and expensive to obtain a life insurance policy depending on the health of the parties.
Thinking and Planning
As you can see, there are a lot of changes and many unanswered questions about this proposal. One thing is for sure though, if this Act becomes law, it is definitely important to consult with an experienced family law attorney to help you evaluate your situation and determine your best options. At this point, this Act is not law, and no one knows for sure if and when this Act could become law.
Keep checking in with us over the next several months as we will be carefully watching and commenting on any changes and developments to the Alimony Reform Act. As always please do not hesitate to contact our office if you have questions or need help working through your family law issues.
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