There are many different types of attorneys just like there are many different types of doctors. You would not go to a dentist for a cardiac issue. By the same token, you should not go to a criminal defense or personal injury attorney for your divorce, even if they are highly recommended by a friend or family member.

Finding a good divorce attorney should not be difficult, but it will require some effort. There are many experienced attorneys who concentrate their practice in domestic relations matters, which includes divorce as well as family law matters, such as child custody and child support. Not all domestic relations attorneys are experienced divorce attorneys. There are many experienced attorneys who excel in custody matters and have spent a lot of time in Family Court, but who are unfamiliar with divorce law and the many issues presented in a divorce as opposed to those related to determining the custody of children.

Divorce law includes many economic components that are not present in Family Court practice. This includes the identification, classification, valuation and distribution of marital property. Divorce practice includes dealing with real estate appraisers, real estate brokers, accountants, and mortgage loan officers.

In New York State there are no “specialists” among attorneys as there are with doctors. Attorneys cannot advertise as being an “expert” or “specialist.” Attorneys may and frequently do advertise themselves as “concentrating” their practice in certain areas or as “limiting” their practice to certain areas.

There also are attorneys who are general practitioners. Many of these attorneys also are solo practitioners. Solo practitioners are common throughout the state, but they make up a greater percentage of the bar upstate and in Western New York. In small towns, where there may not be many attorneys, or clients to be had, some attorneys will have a “general” practice as a matter of economic necessity. This may not be the best type of attorney to handle a contested divorce. This is not to say that all general practitioners are inexperienced in divorce matters. In fact, many have substantial experience handling divorces since divorce is among the more common types of Supreme Court cases in rural areas.

Next, there also are many different types of attorneys just like there are many different types of people. There are people who solve problems. There are people who make problems. There are people who find problems where there are none. It is the same with attorneys. The end of a marriage is the result of many problems and the cause of many others. Therefore, it makes good sense to hire an attorney who will solve problems and not create more.

This is not to say that someone should hire a wimp. Following the advice of Teddy Roosevelt, a good divorce attorney should “speak softly and carry a big stick.” This means being able to negotiate reasonably and effectively while having the ability and litigate effectively, if necessary. Some attorneys just bluster and take unreasonable positions throughout the case and then back down or back-peddle when confronted with a trial. This does no good for anyone. In fact, it is harmful. It prolongs matters, costs more money and creates more stress among the parties.

The very important topic of finding the right divorce attorney is the subject of another post on this blog.

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Several states have adopted practice rules for attorneys regarding the use of artificial intelligence in the preparation of court papers. These rules vary significantly. Recently, on March 25, the Chief Administrative Judge of the New York State Courts, Hon. Joseph A. Zayas, issued a new practice rule regarding the use of artificial intelligence technology by attorneys in any papers that are submitted to the New York courts.

This new rule is set forth in a new Part 161 of the Rules of the Chief Administrator and will be effective June 1, 2026. It includes a statement of policy that states that “the use by attorneys and parties of artificial intelligence tools in preparing papers submitted to a court should not be prohibited, as long as such use is in accordance with the duties and responsibilities that apply to individuals who submit papers to a court.” The policy statement concludes by adding that “since those duties and responsibilities already apply to all submissions, regardless of whether AI tools were used, attorneys and parties should not be required, upon submitting papers, to disclose to the court that they have used AI in the preparation of such papers.”

This policy statement refers to the long-standing Part 130 of the Rules of the Chief Administrator, which requires that every document that is served on another party or submitted to a court must be signed by an attorney. By signing a document an attorney certifies, to the best of their knowledge, or on “information and belief formed after an inquiry reasonable under the circumstances,” that the document and the contentions therein are not frivolous.

Some individual judges have their own rules of practice for the attorneys and parties who appear before them. The new rule addresses this practice by encouraging individual judges who believe that it is appropriate to adopt their own rule regarding the use of artificial intelligence in the preparation of documents submitted to their part of court, adopt the model rule that is included in Part 161. It states that:

“Every attorney or party who uses an artificial intelligence (AI) tool in preparing any paper submitted to this court is expected to understand that tool’s capabilities and limitations. Attorneys and parties need to be aware that AI tools, among other risks and limitations, can generate fabricated information or fictitious citations to authority (commonly known as hallucinations). Under existing authority, by signing a paper and submitting it to this court, an attorney or party certifies that the paper does not contain any false material, factual statement or any frivolous legal argument and an attorney who submits any paper to this court is additionally bound by the Rules of Professional Conduct. Accordingly, any attorney or party who uses an artificial intelligence tool in preparing any paper filed in or submitted to this court or served on another party in a case before this court is required to carefully review the paper and independently ensure that it contains no fabricated or fictitious cases, statutes, or other material. By signing such paper, an attorney or party certifies that such a review has been conducted and that the paper contains no such fabricated or fictitious content. If this court determines that this requirement has not been satisfied, such attorney or party may be subject to sanction or other remedial action.”

The policy adopted in Rule 161 and the model rule should be applauded. Rather than micro-managing attorneys, they recognize the underlying principles of integrity and honesty that are bedrocks of the legal profession. The policy and the rule allow attorneys to adopt modern technology to provide better and more efficient legal services to their clients while relying on age-old values.

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Finding the right divorce attorney requires the prospective client to do some thinking and then do their homework. The prospective client needs to determine what criteria they will use to select their divorce attorney and then they should prioritize and weigh these criteria. Choosing a particular divorce attorney simply because their office is near your home, or because your friend speaks highly of them, or their name came up first in an online search is a mistake. These are ways to find potential candidates. However, these are not meaningful criteria upon which to base such an important decision.

In selecting a divorce attorney, the factors that should be considered include, but are not limited to:

(1) The attorney’s level of experience and competence in handling divorce cases.
(2) The attorney’s level of experience dealing with the particular issues presented in the prospective client’s matter. These can include domestic violence or the custody of children. These also can include economic issues such as self-employed individuals, family-owned businesses, rental and income properties as well as family trusts.
(3) The attorney’s level of experience practicing in the courts of the county in which the prospective client resides.
(4) The attorney’s online reviews. This is not just how many stars out of five they have on Google. This means reading the reviews. A one-star or five-star review with no commentary really says nothing more than someone loved or hated the attorney. A prospective client should look for things in prior clients’ comments that make the attorney sound like someone who will do the best job for them. This can include statements about how well the attorney explains things, their level of preparedness, their level of legal knowledge, how well they return phone calls, their availability and willingness to meet with clients, their level of empathy, their willingness to negotiate, their ability to litigate, as well as many other details that might seem relevant to the prospective client’s unique circumstances.

These factors often cannot be reliably ascertained from reviewing an attorney’s website or an online profile. However, looking online to get an initial picture about an attorney can help narrow the list of candidates and help the prospective client determine who might be their best choice. Ultimately, the most reliable way to choose an attorney is to have an initial consultation. This essentially is an opportunity for the prospective client to interview the attorney as the attorney interviews the prospective client.

A quick free phone call is not a real initial consultation. A real initial consultation is an in-person meeting between the prospective client and the attorney for which the client will be expected to pay a consultation fee.

In an initial consultation an attorney will ask the prospective client a lot of questions about their particular facts and circumstances in order to identify legal and factual issues and offer the appropriate legal advice. Likewise, in a consultation the prospective client should ask the attorney questions to see if the attorney best fits their legal needs. Meeting in-person allows the attorney and the prospective client to see each other’s demeanor and body language, the informational value of which should not be underestimated.

A prospective client should ask the consulting attorney about his or her philosophy and methodology with handling matrimonial matters. They also should ask the attorney about their experience with similar cases or cases with similar issues. For example, some divorce attorneys have lots of experience in dealing with custody issues, but they may have little to no experience dealing with economic issues such as real estate matters, business valuations, or qualified domestic relations orders. Other attorneys are great with economic issues, but are not very adept with custodial issues. Hence, the prospective client should make sure that the attorney has sufficient experience with the issues that he or she expects to be in controversy in their case.

If the other party has an attorney, the prospective client should ask the consulting attorney if they have experience dealing with the other attorney. Attorneys are people too and some attorneys seriously dislike each other to the point where they cannot effectively negotiate. If it appears that there is bad blood between the consulting attorney and the other party’s attorney, that may be a reason to go elsewhere.

A prospective client should feel comfortable speaking with the attorney. They should feel like they are being heard and that their questions are being answered sufficiently. They should feel a level of confidence in the attorney’s ability to best represent them.

Consulting with an attorney does not obligate the prospective client to retain the attorney. Attorneys understand that a prospective client may consult with more than one attorney. They also understand that people often need time to process what they were told in a consultation. It is perfectly appropriate for a prospective client to take some time after a consultation to make a decision about hiring the attorney. Sometimes a second consultation with the attorney may be appropriate if additional information is needed. Attorneys will not be offended by a prospective client who does not ask to retain them after the initial consultation. If they are offended, they probably are not the right attorney to retain.

There are plenty of experienced divorce attorneys. Not everyone is right for every divorce client. A prospective client should not be afraid to interview more than one attorney and no one should ever feel like they must engage an attorney who they do not like or with whom they feel uncomfortable.

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New York was the last state to adopt “no-fault” divorce. In 2010, the Domestic Relations Law was amended with the addition of a new paragraph that states that a court may grant a divorce where it is shown that “the relationship between husband and wife has broken down irretrievably for a period of at least six months.” The proof required to show this is that “one party has so stated under oath.” This can be done by a simple affidavit. There no longer is a requirement that the parties live separate and apart for a year or have a separation agreement for more than a year. In fact, today some couples get divorced while they still are living together.

The irretrievable breakdown of a marriage provides a legal basis for a divorce, but a court cannot issue a judgment of divorce unless and until the issues of equitable distribution of marital property, spousal maintenance, child custody, child support as well as counsel and experts’ fees are resolved by the parties, or determined by the court.

Although the Domestic Relations Law was amended with the no-fault grounds for divorce, the other legal grounds were not abolished. Hence, the law still includes cruel and inhuman treatment, abandonment, imprisonment, adultery and living apart pursuant to separation agreement as valid grounds for divorce. Sometimes a plaintiff will allege one of these other grounds, such as adultery or cruel and inhuman treatment. This typically is done as a commentary on the defendant. If the matter should reach trial a judge will not consider these sour grapes grounds if the no-fault grounds are alleged. These sour grapes issues like adultery as marital fault have no place in the analysis of the economic issues presented in a divorce.

Nevertheless, economic fault is an issue that can be considered at trial in the analysis of the economic issues presented. These include the wasteful dissipation of marital assets and incurring debts that did not benefit the marriage. So, it may not matter that the husband had an affair with the wife’s best friend and slept with her in the marital bed. But, if he met his mistress at expensive hotels for their trysts and lavished her with gifts, this “economic fault” will be relevant.

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The name “automatic orders” is a bit misleading. There actually is no court order. The automatic orders actually are a detailed statutory prohibition set forth in the Domestic Relations Law regarding transfers of assets that could impair the court’s ability to divide up the marital property in the matrimonial action. This eliminates the need for one party or the other to have to go through the expensive and time-consuming process of requesting that a court impose an order prohibiting the transfer of marital property.

The automatic orders are serious business. A party who violates the automatic orders may be held in contempt of court.

The specific restraints included in the automatic orders are as follows.

(1) Neither party shall sell, transfer, encumber, conceal, assign, remove or in any way dispose of, without the consent of the other party in writing, or by order of the court, any property (including, but not limited to, real estate, personal property, cash accounts, stocks, mutual funds, bank accounts, cars and boats) individually or jointly held by the parties, except in the usual course of business, for customary and usual household expenses or for reasonable attorney’s fees in connection with matrimonial action;

(2) Neither party shall transfer, encumber, assign, remove, withdraw or in any way dispose of any tax deferred funds, stocks or other assets held in any individual retirement accounts, 401K accounts, profit sharing plans, Keough accounts, or any other pension or retirement account, and the parties shall further refrain from applying for or requesting the payment of retirement benefits or annuity payments of any kind, without the consent of the other party in writing, or upon further order of the court;

(3) Neither party shall incur unreasonable debts hereafter, including, but not limited to, further borrowing against any credit line secured by the family residence, further encumbrancing any assets, or unreasonably using credit cards or cash advances against credit cards, except in the usual course of business or for customary or usual household expenses, or for reasonable attorney’s fees in connection with this action;

(4) Neither party shall cause the other party or the children of the marriage to be removed from any existing medical, hospital and dental insurance coverage, and each party shall maintain the existing medical, hospital and dental insurance coverage in full force and effect; and

(5) Neither party shall change the beneficiaries of any existing life insurance policies, and each party shall maintain the existing life insurance, automobile insurance, homeowners and renters insurance policies in full force and effect.

At any time during the course of a divorce action, the parties may agree to modify the automatic orders to allow one or both of them to make otherwise prohibited transfers. Any such agreement to modify the automatic orders must be in writing, signed by the parties and duly acknowledged.

It is important to remember that these restraints are not absolute. Each party remains free to transfer or dispose of assets (1) in the usual course of business, (2) for customary and usual household expenses, or (3) for reasonable attorney’s fees in connection with the divorce. These exceptions sometimes are the source of serious controversy when one side tries to use these to gain an advantage against the other, such as objecting to the use of a joint bank account to pay counsel fees. If this situation arises, prudent practice is to try to resolve the issue without judicial intervention. If that is not possible, the party looking to access or use funds should at least request a conference with the judge to address the concerns proactively rather than wait for the other party to file a motion. If all else fails, either may ask the court to make a specific modification of the automatic orders. This typically will require a written motion that will take some time and cost both parties a fair amount of money.

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Global satellite mapping, augmented by aerial photography and street view photography has created a virtual copy of most of our urban and suburban communities.  This has created a wealth of information and imagery that allows people to do much more than just use their smart phones to navigate or for people to look and see what their back yard looks like on Google Earth or to see the street view image of their office.

This imagery is used extensively in business and commerce.  It also finds its way into the courtroom where satellite maps and images as well as street view images have proven to be a valuable tool for attorneys.

Among the few useful and positive things accomplished by the New York legislature in 2018 was the adoption of a new law that makes it much easier for attorneys and judges to employ these resources.  Although New York does not have a formal comprehensive code of courtroom evidence, various rules of evidence can be found in a number of different parts of the state’s voluminous code.  The new law related to web mapping services and global satellite imaging has been tucked into the Civil Practice Law and Rules as CPLR section 4511(c).

This new law went into effect on January 1, 2019.  It provides that every court shall take judicial notice of an image, map, location, distance, calculation, or other information taken from a web mapping service, a global satellite imaging site, or an internet mapping tool, when requested by a party to the action.  This is subject to a rebuttable presumption that such image, map, location, distance, calculation, or other information fairly and accurately depicts the evidence presented.

Judicial notice is a rule of evidence that allows a fact to be introduced into evidence if the truth of that fact is so well-known, or so authoritatively attested, that it cannot reasonably be doubted.  This means that if a party wishes to introduce a satellite image of an intersection from Google Earth or a Streetside view of residence from Bing Maps, that the court will admit the image into evidence without having the party having to present the evidentiary foundation that might otherwise be required.

The new law says that judicial notice shall be taken based on a rebuttable presumption.  This means that the imagery is presumptively admissible but the other party can rebut this presumption if they present sufficient proof.  To do this the other party would need to present by “credible and reliable evidence” that the image, map, location, distance, calculation, or other information taken from a web mapping service, a global satellite imaging site, or an internet mapping tool “does not fairly and accurately portray that which it is being offered to prove.”  This could be done through witness testimony or other photographic evidence.  This could be as simple showing that the satellite image in question is outdated and there is a newer one available or having a witness with personal knowledge testify that the image is no longer accurate.

The new law provides some procedural requirements.  The party who intends to offer such an image or information at a trial or hearing must give the other party 30 days-notice of their intent to use such information and provide them with a copy of the information or image or give a specific internet address at which such image or information may be found.  The other party then has until ten days before the trial or hearing to object to the request for judicial notice of such and must provide a specific basis for their objection.  This new law should benefit litigants.  It is just one example of how technology continues to change the practice of law.

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Matrimonial law in New York State typically is legislated in Albany.  However, this year the biggest change in matrimonial law comes from Washington, D.C.  The 2017 “Tax Cuts and Jobs Act” includes among its 186 pages a section entitled “Repeal of Deduction for Alimony Payments.”  Beginning in 2019, this section eliminates the IRS Code provisions that allow the payor of spousal maintenance to deduct from his or her taxable income any maintenance he or she has paid to his or her spouse or former spouse.  This is a radical change from what has been the law since 1942.

There was much written about the change in the tax deductibility of maintenance and a prediction of a year-end rush for people to complete their divorces.  However, very little has been written about the new tax law in relation to New York’s Maintenance Guidelines and possible strategies to try to deal with this impact.

COLLECTING MORE INCOME TAX

While the stated purpose for the “Tax Cuts and Jobs Act” is to cut income taxes, streamline the tax code and help promote domestic economic growth, the repeal of the tax deduction for maintenance payments serves no such purpose.  It simply helps the government maximize the amount of income taxes it will collect under the revised tax code.  It will do this by taxing the entirety of the maintenance payor’s income, including the maintenance he or she will pay, at a tax rate that will be higher than if the maintenance was taxed at the rate of the payor’s spouse or former spouse.  This is because of our system of progressive tax rates.  This means more money for the government and less money for the divorced or divorcing taxpayers.

A quick and very simplified hypothetical illustration should put the gravity of the situation into perspective.  Let us assume a childless marriage with a husband, who has a taxable income of $150,000 per year, and a wife, who has a taxable income of $25,000.  Under New York’s Maintenance Guidelines the husband’s presumptive maintenance obligation would be $40,000 per year.  Under the “old” tax law, the husband would deduct the $40,000 and pay income taxes on his net taxable income of $110,000 while the wife would include the $40,000 pay income taxes on her gross taxable income of $65,000.

With this amount of maintenance, the wife would remain in the 12 percent tax bracket, which covers the income range of $19,051 to $77,400.  On her $65,000 of taxable income she would pay about $7800 of Federal income tax.  Of this, $4800 is a result of the maintenance she would receive.

With this amount of maintenance, the husband would remain in the 24 percent tax bracket, which covers the income range of $82,501 to $157,500.  Therefore, deducting the $40,000 of maintenance would reduce his income tax liability by $9600.  That $40,000 really only cost him $30,400 after taxes.

This shifting of taxable also costs the Federal Government about $4800 of income tax.  Instead of collecting $9600 of tax on this $40,000, the Federal Government would only collect $4800.  The new tax law will recapture this money for the Federal Government.

Using these same numbers for 2019, the results are radically different.  The presumptive maintenance obligation remains $40,000 per year but the husband would pay income taxes on his gross taxable income of $150,000 while the wife would pay income taxes only on her taxable income of $25,000.

The wife would be in the 12 percent tax bracket, which covers the income range of $9526 to $38,700.  She would pay about $2810 of federal income tax.  That is about $5000 less in tax than she would have paid for 2018.

Applying the new tax code to these figures, the husband would be in the 24 percent tax bracket, which covers the income range of $82,501 to $157,500.  He would pay about $35,700 of Federal income tax.  That’s about $10,000 more than he would have paid for 2018.  And the third party in this equation, the Federal government, gets about $4800 more in taxes collected.

APPLICATION OF THE NEW TAX LAW

The new tax law applies only to new matrimonial agreements, orders and judgments made after December 31, 2018.  Agreements, judgments and orders made before the end of 2018 will be treated under the old tax code.  Those people who are already divorced or have a signed matrimonial agreement need not worry about the new law.  Any future modifications of maintenance paid under a pre-2019 divorce agreement, order or judgment will remain tax deductible to the payor unless the modification expressly states that the new tax code will apply.

All agreements, orders and judgments made after December 31, 2018, will be treated under the new tax code.  This will turn New York’s maintenance law on its ear.  Practically speaking this could have much more of an impact on matrimonial practice than the implementation of the Maintenance Guidelines in 2016.  Where the guidelines created a certain uniformity and consistency in matrimonial practice, the new tax law only creates uncertainty.

THE PROS AND CONS

The new tax law simplifies certain things for divorcing people.  Under the new tax law neither maintenance nor child support payments will have any tax consequences to either party.  No longer will a maintenance payee be surprised by a tax bill inflated because of maintenance received when he or she did not properly anticipate the income taxes.  This probably is a good thing since no one likes surprises with their divorce or their tax bill.  However, from the perspective of the maintenance payor, this new law could be expensive.

The problem is not the new tax law nor is it New York’s Maintenance Guidelines.  It is the nexus between guidelines and federal tax law that creates the problem.  They were not designed to work together.

This is something that attorneys cannot ignore, wish away or try to have the parties waive.  The Federal government will not honor a new agreement that makes maintenance taxable to the payee and tax deductible to the payor.  A payor who tries to deduct maintenance under an agreement or order made after 2018 will have the deduction disallowed by the IRS and will be stuck with a tax bill with penalties and interest.

The repeal is permanent.  However, as with anything to do with the tax code, it may not last.  In any event, the tax shifting strategies that divorce attorneys have used for decades no longer will work.  The practical application of the law of maintenance must change.

WHAT ABOUT THE KIDS?

The tax treatment of child support payments will not change under the revised tax code.  However, the new tax law will have some impact on divorcing couples with minor children since it eliminates both personal and dependent income tax exemptions.  These were $4,050 per exemption in 2017.  This means that there no longer will be the annoying argument over who gets to claim the kids on their income tax returns.

The elimination of the dependent tax exemptions is supposed to be offset by the increase in the standard deduction.  The new tax law increases the standard deduction for single filers from $6,350 to $12,000.  The head of household standard deduction increases from $9,350 to $18,000.  For people with one or two kids, this could work out.

STATE LEGISLATION

The present problem is created by the nexus between state matrimonial laws and the federal tax law.  This creates a very specific problem in every state where there are spousal maintenance guidelines or a statutory maintenance formula if the state law is not revised to address the impact of the new federal tax law.  In states where there is no statutory maintenance formula, the issue still presents itself.  However, in these states the judges typically have significantly more discretion in setting the amount and duration of maintenance, or alimony as many of them call it.

New York’s legislature has not acted to address the new tax code.  Based upon how long it took to adopt the Maintenance Guidelines initially, it is fair to expect that changing the guidelines will not be accomplished anytime soon.

This is not to say that this is something that cannot be done.  Illinois state law makers appreciated the potential adverse impacts of the new tax law.  They changed that state’s formula for spousal maintenance.  Starting in 2019 payor spouses will be obliged to pay less to payee spouses with decrease in presumptive spousal maintenance payments to balance out the impact of the change in the tax code.

Currently, the Illinois spousal maintenance formula requires taking 30 percent of the payor’s gross income and subtracting from this 20 percent of the payee’s gross income to determine the amount of maintenance.  Under the new Illinois formula, courts will take 33.3 percent of the payor’s net income and subtract 25 percent of the payee’s net income to determine the amount of maintenance.  If our Mr. and Mrs. Hypothetical lived in Illinois, and had the same incomes of $150,000 and $25,000 respectively, under the old Illinois law, his maintenance obligation would have been $40,000, just like in New York.  Under the new Illinois law, his maintenance obligation would be about $32,200.  There is no reason why New York cannot fashion a similar revision to the Maintenance Guidelines.

NEW YORK PRACTICE OPTIONS

What are New York’s divorce attorneys to do in light of the new tax law and New York’s Maintenance Guidelines?  One good answer appears to be right in the Maintenance Guidelines.  Domestic Relations Law section 236(B)(6)(e)(1) states that the “court shall order the post-divorce maintenance guideline obligation…unless the court finds that the post-divorce maintenance guideline obligation is unjust or inappropriate.”  This determination shall be based upon consideration of the 13 statutory factors detailed in the Domestic Relations Law.  Based upon such consideration, a court then may adjust the post-divorce maintenance guidelines obligation accordingly.

Among these factors to be considered is “(j) the tax consequences to each party.”  This factor has not been a major consideration up to now since the tax consequences were as expected; the payor gets the deduction and the payee claims the income in a lower tax bracket.  But now, this factor will be thrust to the forefront.

The Maintenance Guidelines were adopted with the old tax code in mind.  Their strict application, with the dramatically different treatment of maintenance under the new tax code and its radically different tax impact to the parties, appears to be, as a matter of law, unjust or inappropriate.

GET AN ACCOUNTANT

A deviation from the presumptive post-divorce maintenance guideline obligation probably would entail a reduction in the amount of the maintenance obligation.  However, to do this math intelligently, it appears to be prudent practice to enlist the services of a certified public accountant to calculate the tax impact of the new tax law on the parties.

Calculating income taxes is far beyond the skill set of a matrimonial attorney.  What needs to be done in this situation would require calculating the tax impact under the old law and the new law if the Maintenance Guidelines were followed.  Trying to do this math under two versions of the tax code to determine the tax impact of the new law clearly is something that requires the expertise of a certified public accountant.  Keep in mind that there are other changes in the tax law that may impact the tax calculations for the parties.  Given the amount of money in controversy, the fees spent on an accountant makes sense.

This could get more expensive if the accountant has to testify at trial.  Even then this seems like a prudent and cost-effective investment for a maintenance payor.  This expert testimony would be necessary to competently prove the tax impact at trial and give the judge the information they need to determine what is a fair and just deviation from the guidelines.

HOW MUCH TO DEVIATE

With the tax impact of the new law determined for a particular case, then there is the question of how much of a deviation from the guidelines is appropriate.  It appears that this question will be the one that will create the most controversy and be subject to the most litigation.

The first thing that may come to mind is that the fairest way to address this is to calculate the tax impact of maintenance to the payor and reduce the maintenance award in that amount.  Going back to our hypothetical husband and wife we can illustrate this method.  Under the old law the husband by deducting the $40,000 of maintenance would have reduced his income tax liability by $9600.  Under the new law, maybe his maintenance should only be $30,400.

However, this method of deviation creates a problem for the hypothetical wife.  Before she had to pay taxes on the $40,000 of maintenance at 12 percent, her tax rate.  Using this method, she essentially would be taxed at the husband’s rate of 24 percent.  Under old law she would have had netted $35,200.  Now she would have only $30,400 of maintenance.

Another option to determine a fair and just about the maintenance would be to adjust the presumptive maintenance award by the average of the parties’ respective tax brackets.  For example, where the wife is in the 12 percent tax bracket and the husband is in the 24 percent tax bracket, the court could reduce a maintenance award by 18 percent to split the tax impact between the parties.

This could be illustrated as follows with Mr. and Mrs. Hypothetical.  If the husband’s guidelines maintenance obligation of $40,000 was adjusted by 18 percent it would be reduced by $7200 to $32,800.  This would save him $7200 and cost the wife only $2400.

In this vein, the maintenance guidelines are wealth redistribution that allocate the total marital income 60/40 between the payor spouse and payee spouse.  With this in mind, instead of averaging the tax rates, a court could weigh the two rates along the 60/40 ratio of the maintenance guidelines.  This would shift 40 percent of the tax burden to the payee by a corresponding reduction of the maintenance award.

This could be illustrated as follows with Mr. and Mrs. Hypothetical.  If the husband’s $40,000 guidelines maintenance obligation was being taxed to him at 24 percent for a total of $9600 of tax.  Dividing this tax 60/40 would yield $5760 to him and $3840 to the wife.  Maintenance would be reduced from $40,000 to $36,160.

This too could provide a reasonable compromise.  It distributes the tax burden between the parties in an equitable manner that approximates the ratio of wealth distribution in the maintenance guidelines.

The new Illinois maintenance formula also provides a third way to allocate the tax impact in an equitable manner between the parties.  It roughly allocates the tax liability 2/3 to the payor and 1/3 to the payee.  There also are options that could be explored with regard to equitable distribution and even child support to address the tax impact of the new tax law.  These could get complicated and are beyond the scope of this discussion.

CONCLUSION

The new tax law will make divorce practice more difficult because it maximizes the amount of income tax that a divorcing couple will have to pay.  It thereby will drain the finite financial resources of the parties, which rarely are sufficient to allow one household to split into two without some significant financial strain.  Practically speaking, the relative certainty or consistency that the maintenance guidelines brought to matrimonial practice probably will be undone by the new tax law.

There is no clear answer as to what is the right or wrong way to address the impact of the elimination of the spousal maintenance tax deduction.  Clearly something must be done and it appears that a variety of tactics and strategies offer some viable solutions.

The post Impact of the New Federal Tax Law on Maintenance appeared first on Anthony Buono, Attorney at Law.

This section eliminates the IRS Code provisions that allowed the payor of spousal maintenance to deduct from his or her taxable income any maintenance he or she has paid to his or her spouse or former spouse.  This is a radical change from what has been the law since 1942.

There has been some information in the press about the change in the tax deductibility of maintenance and a prediction of a year-end rush for people to complete their divorces.  However, very little has been written on what will happen under the new tax law in relation to New York’s Maintenance Guidelines and possible strategies to try to deal with this impact.

This series of posts will (1) discuss the extent of the changes to the Federal tax code and its treatment of spousal maintenance, (2) explore the significant impacts of the new Federal tax code on spousal maintenance and (3) suggest a number of possible strategies to try to deal with this impact.

While the stated purpose for the “Tax Cuts and Jobs Act” is to cut income taxes, streamline the tax code and help promote domestic economic growth, the repeal of the deduction of maintenance payments serves no such purpose.  It simply helps the government maximize the amount of income taxes it will collect under the revised tax code.

The new tax code will accomplish this by taxing the entirety of the maintenance payor’s income, including the maintenance he of she will pay, at a tax rate that will be higher than if the maintenance was taxed at the rate of his or her spouse or former spouse.  This means more money for the government and less money for the divorced taxpayers.

A quick hypothetical illustration of how this will work should put the gravity of the situation into perspective.  Let us assume a husband, who has a taxable income of $150,000 per year, and a wife, who has a taxable income of $25,000, in a childless marriage.  Under New York’s Maintenance Guidelines the husband’s presumptive maintenance obligation would be $40,000 per year.  Under the current tax law the husband would pay income taxes on his net taxable income of $110,000 while the wife would pay income taxes on her gross taxable income of $65,000.

With this amount of maintenance, the wife would remain in the 12 percent tax bracket, which covers the income range of $19,051 to $77,400.  On her $65,000 of taxable income she would pay about $7800 of Federal income tax.  Of this, $4800 is a result of the maintenance she receives.

With this amount of maintenance, the husband would remain in the 24 percent tax bracket, which covers the income range of $82,501 to $157,500.  Therefore, deducting the $40,000 of maintenance would reduce his income tax liability by $9600.  That $40,000 really only cost him $30,400 after taxes.  This shifting of taxable income also costs the Federal Government $4800 of income tax.

Using the same numbers for 2019, we get a radically different result.  The presumptive maintenance obligation remains $40,000 per year but the husband would pay income taxes on his gross taxable income of $150,000 while the wife would pay income taxes only on her taxable income of $25,000.

Applying the new tax code to these figures, the wife would be in the 12 percent tax bracket.  She would pay about $2810 of federal income tax.  That is about $5000 less than she would have paid for 2018.

Applying the new tax code to these figures, the husband would be in the 24 percent tax bracket.  He would pay about $35,700 of Federal income tax.  That’s about $10,000 more than he would have paid for 2018.  And the third party in this equation, the Federal government, gets about $5000 more in taxes collected.  This, after all, is the point of this point of the new tax law.

In the second part of this series we will discuss the “Repeal of Deduction for Alimony Payments” in that “Tax Cuts and Jobs Act” and how this will be applied and how it will help the Federal Government collect more income tax.

The post The Impact of The New Tax Law on Divorces Part 1: Collecting More Income Tax appeared first on Anthony Buono, Attorney at Law.

A child’s preference regarding which parent he or she would like to live with is a factor to be considered in determining custody.  But although the wishes of a child are a factor “to be explored,” they should not be considered “determinative.”  A court must consider the child’s maturity and the reasons for their preferences in determining what weight to give to the child’s preferences.

Needless to say, case law on this point is not entirely consistent.  However, the underlying logic and reasoning of the case law generally is consistent.  Courts will consider if a child is sufficiently mature to weigh intelligently the factors essential to making a wise choice regarding their custody.  This has to be considered on a case-by-case basis.

Courts must not lose sight of the child’s age and vulnerability to be influenced by a parent.  There are lots of subtle and not so subtle things a parent can do to influence a child’s preferences.  For this reason, most courts consider a child’s wishes to be “informative” rather than “dispositive.”  Courts also should give great weight any evidence that a parent may have coached their child with respect to their preferences.

Even in a case where a child has not been coached, a court still should consider a child’s vulnerability to be influenced by a parent.  For example, in one case, the court found that the preferences of the children may have been influenced by the fact that during all of their time at their father’s residence they were engaged exclusively in enjoyable activities, such as ice skating and shopping.  They did not bring homework to do at their father’s house and they had no responsibilities or chores to do at his house.  Hence, “the father’s home was decidedly and artificially free of the stress and conflict that is inherent in day-to-day life.”  The court concluded that this may have influenced the children’s preference to live with their father.

This brings us back to the two examples I gave earlier.  Clearly, the preferences of a child who wants to go to one parent to have fun would be given less weight than a child who wants to go to another parent to feel safe.

Ideally, a custody case never comes down to the preferences of the children.  Although the fight is over them, they should never be in the fight.  Parents should avoid putting their children in the middle of a custody dispute, should never coach them, and most certainly should not expect them to take sides.

The post Modification of a Custody Order: Part 14 – The Wishes of the Child continued appeared first on Anthony Buono, Attorney at Law.

We do not let children dictate whether or not they are going to school.  We do not let children run the household.  Many laws involve age based restrictions.  All this is for good reason, yet, somehow many parents believe that the wishes of their child are the paramount consideration in a custody matter.  That is if they believe, rightly or wrongly, that their child wants to live with them.

It also is very important to remember that a custody matter is about the child and that the legal standard is what is in the best interests of the child.  It probably is in a child’s best interests to not have to choose between their parents or be put in the middle of their parents’ disputes.

The truth of the matter is that generally the wishes of the child will be considered if that child is able to articulate such.  Then the second, and probably more important question, is how much weight will a court give to the wishes of a child.

When explaining this to clients over the years I typically give the following examples of “the wishes of the child.”  The first is a case I had early on in my career.  My client wanted custody of his seven-year-old daughter, who was at the time living with her mother and her mother’s boyfriend.  When interviewed by her attorney this young lady articulated that she wanted to live with her daddy.  Her reason for wanting to live with her father was mommy’s boyfriend had burned her with a cigarette when she misbehaved and her mommy did nothing about it.  Clearly despite this child being young, her wish to live with her father was based upon an objectively valid reason.

On the other end of the spectrum, I had a case about five years ago in which my client’s 17-year-old son wanted to go live with his father.  His reasons for this were simple.  His father told him that he did not have to do his homework and that he could concentrate on playing team sports so he could go to college on an athletic scholarship.  His father also did not enforce a curfew and apparently let him watch pornography as well as have his girlfriend stay overnight with him when he was at his father’s house.

So now we have a young adult who can drive himself wherever he wants saying he wants to stay with his father.  However, his reasoning was immature and shortsighted.  This is the type of case where a court would not give much weight to the wishes of the child.  The problem of course is you cannot tie down this boy to keep him at his mother’s house.  The result in that case was that legally my client continued to have residential custody of her son but because he was not actually living with her, the father no longer had to pay child support, which I suspect was his motivation the whole time in seeking custody of his son.

Now these two examples are cases where the weight to be given to a child’s wishes is obvious.  Unfortunately, the vast majority of cases are not so clear-cut.  This is because we are dealing with children of many ages and the varying levels maturity.

In my next post, I will explore these less clear cases.

The post Modification of a Custody Order: Part 13 – The Wishes of the Child appeared first on Anthony Buono, Attorney at Law.