A new ruling by the Massachusetts Supreme Judicial Court brings many changes for couples heading to probate court for divorce proceedings.
The landmark case, Cavanagh v. Cavanagh, impacts numerous common practices regarding alimony and child support. Within the 59-page opinion, three new laws significantly stand out.
1. Concurrent alimony and child support orders required
A judge faced with any case that involves alimony and child support must calculate both concurrently. New steps require a judge to first calculate alimony based on needed support to maintain a similar lifestyle and then child support. The second step requires calculating child support prior and then alimony. Once completed, the judge compares the two calculations to determine an equitable solution.
2. 401K matches and HSA contributions considered income for child support
Among the many changes defining income includes employer 401K matches and HSA contributions. The court decided to include these as income to avoid shielding financial resources. The ruling remains ambiguous about these as viable income for determining alimony.
3. Limiting income sources voided
Couples with a separation agreement may see it get voided. This ruling voids leaving out any income, even if agreed upon. In the Cavanagh case, the couple initially excluded income from the father’s second job to pay for school. This ruling ensures that judges receive a clear financial picture for calculating the proper amount of child support.
In some instances, this new ruling may have minimal impact. High earners and couples with a moderate earning gap will likely feel its effects the most.