In Cavanagh v. Cavanagh (490 Mass. 398 — 2022), the Massachusetts Supreme Judicial Court (SJC) handed down a decision that was a departure from previous interpretations of the Massachusetts Alimony Reform Act of 2021. The ruling defines a new way to calculate how much support should be paid, changes and increases the income used in support calculations, and decreases the range of admissible testimony in divorce cases.
During the past nine months, attorneys and judges alike have continued to question the purpose and lasting impact of the ruling and the pending decisions from the SJC. Here are the three main areas of impact this ruling could have.
1. Child Support and Alimony Considered Concurrently
Before the Cavanagh decision, it was widely held in Massachusetts that child support was calculated before alimony. If the payor had eligible income left over after paying child support, a judge could consider granting alimony based on that excess income.
In what is perhaps the most significant change brought about by the court’s decision, the judge is now to consider child support and alimony concurrently. The change means that the alimony calculation could be based on the total eligible income, not income less child support, potentially increasing the amount of support paid by the higher-earning spouse.
2. Reversal of Child Support and Alimony Calculations
An involved three-step process was outlined to support this new concurrent analysis. Child support is first calculated based on eligible income and then on alimony. Next, the calculation is reversed – alimony is calculated first and then child support. The judge then uses their discretion to compare the resulting amounts, including any tax implications and chooses the one that provides the fairest and most equitable arrangement for the family involved. Due to the complicated nature of these calculations, and the enduring impact of the judge’s ruling, individuals are retaining divorce and tax attorneys and accountants to determine the best possible outcome.
Further changes to the child support and alimony calculations include factoring in additional income types. Many divorcing couples can expect to see an increase in the amount of income considered eligible in the calculation for support being paid out from one spouse to the other.
Employer 401(k) matches and pre-tax contributions to healthcare accounts are categorized as eligible income for the first time. The court expanded the definition to a greater extent by including income generated from interest, dividends, and capital gains (unless resulting from real estate and personal property transactions) in child support assessments. It is still being determined if this ruling applies to alimony, however.
3. Scope Confined to the Pretrial Order
The SJC ruling states limitations in the probate court’s trial scope to the contested issues outlined in the pretrial order. The ruling potentially limits the previous broad scope of discretion that probate judges often have, which could lead to more efficient and predictable trials down the road. However, time will tell how this decision will play out in family law courts.
If ratified into law, the Cavanagh ruling could topple many previously held practices in Probate and Family Courts and ultimately change the landscape of support for both sides in a divorce or separation process. Understanding the implications and still unfolding aspects of this ruling is crucial for anyone with similar legal matters pending or planned.
The skilled Family Law attorneys at Sassoon Cymrot Law have supported many families through the divorce process and can work with you to navigate changing interpretations of laws and guidelines. Call on us to discuss how to achieve best outcomes, as well as any other legal matters that should arise as a result of your divorce.