Hearsay in Family Law

 Hearsay is an important legal concept that lawyers learn in law school. Under Federal Rule of Evidence 801, hearsay is an out-of-court statement offered for the truth of the matter asserted.

Even many lawyers are often confused by what this means when reading it. Thus, it is no surprise that the concept can seem murky for individuals going through divorce or family law matters.

In Layperson Terms, What is Hearsay in Divorce and Family Law Matters?

Witnesses often come into court to testify about what another person said in a divorce or family law matter. They could be police officers, school teachers, psychologists, psychiatrists, or other third-party witnesses.

In most instances, when a witness begins testifying about what another person said in court, a lawyer will object based on hearsay. A judge will typically sustain the objection unless there is an applicable exception. Numerous hearsay objections can complicate the situation, including present sense impressions, excited utterances, existing emotional or physical conditions, dying declarations, and others.

Instead of testifying about what somebody else said, better practice is to bring that witness into court to testify as to what they said. When a witness comes into court to testify, they can generally testify about so long as there is a proper foundation, it does not call for an expert’s opinion and it is relevant to the current proceedings. However, any time a witness testifies about what somebody else said, there can be hearsay dilemmas.

What Is The Solution to Hearsay in Family Court?

To avoid hearsay problems in court, the best practice is to bring relevant witnesses to testify at trial. Another option is to depose these witnesses. In many situations, the deposition transcript can be admitted at trial. However, if there were objections at the depositions, those would need to be resolved by a special master or judge.

What Are Business Records Affidavits in Divorce and Family Law Matters?

Another option for business records is to have business records affidavits attached to written documents. The records are then supplied to all counsel of record in advance of the trial by any appropriate deadlines. Examples would be school, medical, business, banking, credit card, mortgage, and other records that constitute business records.

However, many of the statements contained within the business records themselves may be beyond the scope of of the ordinary course of business such that it contains opinion-based content. In such circumstances, a business records affidavit may not be enough for the records to come into evidence. For that to occur, the witnesses may need to come to court.

Finding a Way Out of Financial Abuse

 According to the National Domestic Violence Hotline, 27% of people in physically abusive relationships also reported experiencing financial abuse. Financial abuse takes many forms and does not discriminate based on race, gender, or socio-economic class. Even people who appear to “have it all” find themselves in relationships where financial abuse leaves them feeling trapped. Financial abuse is about power and control. Some of the following behaviors are examples of financial abuse:

Not allowing the victim to see bank statements or to understand what money is available to meet the needs of the family

Not allowing the victim to have checks or a debit card to the joint bank account or refusing to have a joint bank account while depositing all earnings into the abuser’s account

Providing the victim with an “allowance” and dictating where that “allowance” is spent

Verbally or physically assaulting the victim for spending money on something not authorized by the abuser

Refusing to provide transportation, resulting in a victim losing employment

Monitoring credit card and debit card use and challenging the victim about their whereabouts

Demanding the victim leave a job to “benefit” the family

Forcing the victim to work in a family business without pay for the work

Convincing the victim to forgo obtaining credit cards in their own name and to be only an “authorized user” on the abuser’s credit cards, which allows the abuser to cut off access to credit

Using the victim’s social security number to open credit accounts and incurring debt

Demanding that the victim turn over any money the victim earns

Threatening to leave the victim without any financial resources if the victim leaves the marriage or ends the relationship

Making the victim perform sexual acts to receive “payment” to buy groceries or to purchase something a child needs

If you are the victim of financial abuse, here are some steps to start the process of gaining financial freedom:

Change the password on all email accounts

Obtain a copy of your credit report via one of the three credit reporting agencies (Equifax, Experian, or TransUnion) or call for your free annual credit report at 877-322-8228

Open a post office box in order to receive private mail. When applying for a debit or credit card, use the post office box to receive the mail.

Open a checking account in your own name and have the statements sent to a friend’s house or to your post office box. Make small deposits.

Take small amounts of cash back at the grocery store and deposit the cash into your separate account

If you have credit cards, contact the financial institutions by telephone to change the PIN number and/or passwords to something your abuser cannot guess. Set up two-factor authentication so that you know if someone tries to change the password.

Contact the National Domestic Violence Hotline at 800-799-SAFE to obtain emergency financial assistance, rental assistance, affordable housing, or public benefits and to learn about resources available to assist you in leaving an abusive relationship

If you have private internet access, you can learn more from the National Domestic Violence Hotline’s website

Contact an experienced family law attorney in your area

Effective Business Valuations

 Many family law matters become contentious and emotional. However, California is a community property state and each marital dissolution case has an end in sight, i.e., the division of assets.[1] In contrast, other types of civil litigation are fraught with unknowns including rulings on liability and whether the court will find economic damage analyses, such as plaintiff’s lost profits and defendant’s disgorged profits, acceptable measures. The narrower focus in marital dissolution litigation can provide an opportunity for efficient and effective solutions. A major key to efficient resolutions in divorce proceedings involving business assets is: (1) a business valuation supported by incisive research and analysis, and (2) forensic accounting of all relevant records and systems to assist in calculating the proper revenues and profits for the valuation.

Business Valuations

To perform a business valuation, the appraiser will conduct due diligence that typically covers the following:

 

1. Company operations: Review of products/services, customers, suppliers, workforce, intellectual property, and litigation/regulatory matters. The goal here is to determine how the business’ processes, infrastructure, and management relate to and result in its financial performance.

• Financial analyses: Review of past several years company financial statements and review of any available projections, budgets, or forecasts. The determination of fair market officers’ compensation. Identifying non-business perquisite expenses and/or non-recurring one-time expenses. Fair market compensation adjustments as well as non-business and non-recurring expense adjustments are usually the two major calculations to arrive at the company’s profit to use in a business valuation. Additional discussion on the non-business/non-recurring expenses appears in the Forensic Accounting section below.

• Economic analyses: The analysis will focus on prevalent conditions in GDP, unemployment, financial market conditions, and inflation. The goal is to determine how economic conditions, both historical and forecast, impact the company’s value.

• Industry analyses: The analysis will center on competition trends, consumer preferences, historical and projected total industry revenues, and potential disruptive technologies. The objective is to determine how industry conditions, both historical and forecast, impact the company’s value.

• Valuation research and analyses: The appraiser will select relevant methods, determine representative revenues and profits, calculate discount and capitalization rates, and select guideline comparable business sales for valuation multiples. The valuation opinion(s) should logically follow the appraiser’s analyses and conclusions associated with 1. through 4. above.

A business valuation encompassing 1. through 5. above meets all the diligence requirements in any matter including marital dissolutions, broader civil litigation, mergers and acquisitions, and estate/probate matters.[2] In many California counties, it is the case that family law judicial officers frown upon the use of projected income statements and guideline comparable business sales valuation methods. However, there are circumstances warranting their consideration, including but not limited to the following:

1. The company’s industry is in an active merger and acquisitions (M&A) market and the business being valued has the infrastructure, organization, and financial performance typical of potential buy-out targets. Buyers of businesses in this industry utilize comparable business sales valuation methods and projections.

• The company has a history of performing annual projections and overall, for the past several years, its actual financial performance has come in close proximity to the projections.

• Industry, economic and/or technology conditions have changed to a degree that make reliance on historical income statements irrelevant to the valuation. The company’s projections incorporate the altered conditions.

The author has been involved as an expert in matters wherein the family law judge has accepted the use of projections and comparable business sales. However, it is always prudent to play it safe and also use traditionally accepted methods, such as the historical income statement capitalization rate method. Furthermore, the appraiser’s report and testimony should be clear that if the trier of fact does not accept projections or comparable business sales then the alternative expert opinion is the amount governed by the traditionally accepted method.

While many California counties only require bare bones business valuation reports, e.g., schedules without footnotes, it is very advantageous to consider more extensive narratives for any critical issues impacting the valuation conclusion. Also, as discussed in detail in the Forensic Accounting section below, presenting an executive summary that concisely and convincingly presents findings and opinions may be highly influential to the opposing spouse and the trier of fact, thereby providing an opportunity for a faster resolution of the case.

Forensic Accounting

At the outset of the family law matter, the forensic accountant should obtain company bank statements, financial statements (income statement, balance sheet, and statement of cash flows), and underlying accounting records (general ledgers, trial balances, and accounting software). Generally, these documents will cover the period of the most recent three to five historical past years.

There are several tests to make on the above documents. The overall initial analyses will be to determine if the various documents support or bring into question the accuracy of the financial statements. An example of a red flag would be if bank statement deposits or withdrawals differ substantially from income statement revenues and expenses and such difference is not the result of anything else that could cause this to be the case, e.g., a major loan paydown. Another would be constant reclassifications of assets, liabilities, revenues, and/or expenses in the general ledgers.

Testing the support for accounting records is fundamental to this process. The forensic accountant should, on a statistical examination basis, review underlying customer and vendor invoices, relevant contracts, and bank reconciliations. He should interview the bookkeeper, controller, chief financial officer, and the business’ outside accounting or audit firm, typically, but not always, Certified Public Accountants (CPAs). The more red flags identified, the more testing will increase.

Additionally, the forensic accountant’s work is critical in determining non-business perquisite expenses and/or one-time non-recurring expenses. Such items are crucial to the business valuation’s accuracy. From a business appraisal perspective, non-business and non-recurring expenses artificially deflate a company’s profits. Non-business expenses are personal owner costs such as automobiles not used for business purposes, excessive meals and entertainment charges not for reasonable business development purposes, and having non-working relatives on the payroll. A buyer of a business can operate without such expenses and would adjust out such costs to calculate higher profits on which to value the company in making an offer price.

The same would be done with one-time non-recurring expenses. These can include temporarily outsourcing, at above market compensation rates, the retiring chief financial officer; a litigation-clean business settling a customer dispute; and environmental remediation costs permanently settling the issue at hand. Again, from a valuation perspective, the business’ profits cannot be unfairly penalized for such expenses. Once more, the business’ buyer would adjust out such costs to calculate higher profits on which to value the company in making an offer price.

All too often, the forensic professional’s report and court presentations will fall into the trap of using the language of “accountese.” Such presentations force readers to plow through numerous documents, with myriad cross references across hundreds or thousands of pages. Of course, the forensic accountants should be supported by all these documents, but there must also be an executive summary that concisely and convincingly presents the findings.

The executive summary format cannot be a one-size-fits-all format. Rather, it should be flexibly tailored to meet the findings of each particular marital dissolution case. For instance, if the financial statements and accounting records are in excellent shape, the summary can succinctly state the records examined, the state of their accuracy and the conclusions. Much less is better in this case. On the other hand, if all the accounting is in major disarray, then the summary might incorporate flow charts, graphics, and related succinct outline narratives.

The executive summary also serves a dual process of making the forensic accountant think about the reasonableness of the opinions to outside parties such as opposing counsel, mediators, arbitrators, and judicial officers. This is very helpful in preparing for deposition, mediation, arbitration, and trial testimony.

Process

Often the duration of family law cases can span several months to a few years. It is best to keep the communication process frequent and consistent among the business appraiser/forensic accountant, client, and client’s legal counsel. Recurrent status meetings should be held for the appraiser/forensic to report the status of information requested versus received and offer preliminary, or at end final, opinions. These meetings also provide meaningful dialogues for the appraiser/forensic and attorney to address issues and problems that arise through the course of the matter.

 

Choosing the Right Attorney

Legendary investor Warren Buffet once famously said, “The most important decision you will ever make has nothing to do with your money or your career- it is who you marry.”

Those of us practicing family law will quickly tell you that the second most important decision you will ever make is who you hire as your divorce attorney.

With half of first-time marriages ending in divorce (second and third marriages fail at a much higher rate), most Americans face the reality of having to choose an attorney who will help guide them through this difficult time.

Unfortunately, sometimes our profession does more harm than good.

At a deposition in early April 2024, attorney Joseph Houston, representing the husband in a contentious divorce case, stood up and shot his client’s wife, Ashley Prince, and her new husband, Dennis Prince, before turning the gun on himself. The incident sent shock waves throughout the Las Vegas community, where the shooting occurred. However, for divorce attorneys throughout the nation, it was anything short of shocking. Why, might you ask? Divorce attorneys have now become more mired in their client’s battles than ever before. Family Court has turned into a tool for abusers where parties are encouraged, often by their lawyers, to terrorize one another, and Judges do not have the fortitude to tell them no. Contentious cases can drag on for years, spurred by attorney-driven litigation, and can cost parties upwards of hundreds of thousands of dollars.

Often fueled by the pressure of their clients’ “win at all costs” approach, attorneys feel they must play the role of the attack dog. This often means engaging in scorched earth tactics that cause divorce cases to spiral out of control, at the expense of the parties and often, their children. During court hearings, attorneys typically raise their voices and speak over one another- and often the Judge. Sometimes it feels as though he who screams the loudest, gets the most. However, the principal effect of rude remarks, coarse language, bravado, and inflexibility is to appear unprofessional.

This is not what our profession was meant to accomplish. Not every divorce case needs to be a highly contentious battle that spans years and costs the parties hundreds of thousands of dollars. Lawyers are meant to expedite proceedings and ensure the process is smooth. These days, however, it seems that lawyers increasingly engage in mean, unnecessary, and calculated behavior to inflame.

While medicine has the Hippocratic Oath, nothing similar exists in the practice of family law. As a client, you have many choices when it comes to choosing a reputable divorce attorney. Who you choose can play a pivotal part in how smoothly- and expeditiously- your divorce case is resolved. While most clients seek to hire the most aggressive attorney they can find, they often fail to recognize that “aggressive” does not necessarily mean “smart”. Although you want to hire an attorney who can assist you in gaining a strategic advantage in your case while protecting your interests, you do not want to hire someone who will unnecessarily inflame an already tense situation, making resolution impossible.

So, what can you do to ensure that you find the right attorney to represent you in your divorce case? And what can you do to ensure that your attorney does not engage in behavior that results in unnecessary drama, and costs?

Well for one, seek an attorney who engages in collaborative law, or collaborative divorce as we call it in family law. Collaborative law is when lawyers work together to resolve. The goal is to help the parties reach a fair settlement in the least contentious, often least expensive, way possible.

While mediation is always an option, many clients fail to realize that a mediator does not serve as an advocate for either side. Mediators are neutral third parties who are there to help the parties come to a resolution; they are not there to assist you in protecting your rights or providing you with legal advice. Additionally, mediation is not a “one size fits all” solution. As a certified mediator, with a degree in alternative dispute resolution, I can tell you that mediation works for a select few. If your relationship with your soon-to-be ex is contentious, and you want to ensure that you- and your assets- are protected, I recommend seeking an attorney who engages in collaborative law rather than turning to mediation. Collaborative law allows you to have a lawyer who can guide and protect you, but who will also work with the other side to ensure that the matter is resolved quickly and fairly. Counsel that cannot be courteous and work together respectfully are less likely to have productive conversations, or even speak at all. As an attorney who frequently engages in collaborative law, I appreciate and respect counsel who are willing to work together to reach a compromise. Conversely, I disengage with adversaries who are rude, preventing them from whatever goal they were hoping to accomplish. If your lawyer is unwilling to engage in productive conversations with the other side, a settlement is unlikely, and expensive litigation is likely to ensue.

Second, educate yourself on the divorce process so that you may make informed decisions when it comes to engaging in certain litigation tactics. As an example, you need to understand the need- and the expense- associated with conducting discovery so that you can avoid expensive and unnecessary costs. For instance, sometimes parties- at the urging of their counsel- are encouraged to subpoena records from every bank account ever owned or operated by their spouse, or they are encouraged to conduct lengthy and expensive depositions of third-party witnesses. Not to say that discovery is not an important, and often critical, part of any divorce case, however, make a habit of asking your attorney the relevance and necessity of the discovery they are engaging in. Do not engage in a fishing expedition for the sole purpose of harassing the other party. Don’t get me wrong, discovery is important, but it is also strategic. Discovery is conducted to obtain information that is crucial to your case. However, dragging every neighbor and family member into a deposition, or subpoenaing hundreds of thousands of pages of bank account statements, can sometimes be nothing more than an exercise in futility. This type of behavior will not only raise tensions, but it will also raise your legal fees.

Third, make sure your attorney does not engage in hurtful stonewalling tactics. By stonewalling and refusing to provide necessary information when requested, you are simply delaying the inevitable and raising your legal fees. There are lawyers out there who will advise you to delay or be difficult, even when it comes to providing basic financial information to the court or your opponent. While your lawyer undoubtedly must be strategic in deciding when and how to provide this information, unnecessarily making the other side “jump through hoops” is not recommended. In fact, in California, you are required to exchange certain financial information with your spouse via financial disclosures. Engaging in stonewalling tactics will, at a minimum, result in nothing more than prolonging the inevitable. It may also result in you paying monetary sanctions for your failure to comply. If your lawyer is recommending that you engage in this behavior, ask them the relevance and necessity of this conduct and where it will leave you in the end.

Fourth, be cognizant if your attorney encourages you to file frivolous ex-parte motions with the Court. In the world of law, an “ex-parte” motion refers to an emergency motion brought before the Court where one party seeks immediate court intervention. Unfortunately, what was designed to be restricted to “true emergencies” has now resulted in parties filing ex-parte motion after ex-parte motion for trivial matters that can be resolved without judicial intervention. Encourage your attorney to make efforts to resolve your issues with your opponent before running into court on an ex-parte basis. Your attorney should be explaining to you what constitutes an “emergency” in family law…and what does not. Often what you feel is an emergency is not considered to be one by the Court. By filing frivolous ex-parte motions, you not only risk angering your judge (which is never a good thing) but also spending a ludicrous amount of money paying your attorney- and paying your spouse’s attorney if your ex-parte motion is ultimately denied.

Likewise, your attorney should be honest with you regarding the failure- or success- of any proposed motions you bring before the court. You do not have to fight every battle. And you do not need to roll the dice regarding every motion. Being strategic is not the same as being unnecessarily aggressive. There is an old saying that if the law is on your side, you argue the law; if the facts are on your side, you argue the facts; but if neither is on your side, you pound the table. Pounding the table is a sign that the lawyer has neither the facts nor the law on her side. If this is your lawyer, then you need a new one.

Five, and probably the most critical, choose a family law attorney who is cognizant of the effect your divorce has on your children and who will do their best to ensure the process is the least damaging to your kids. For children, divorce should be an adjustment, not a crisis. There is no shortage of studies that warn us that children of divorce suffer from an increase in health problems, poor performance in academics, a loss of interest in social activity, increased anger, irritability, and feelings of guilt, as well as destructive behavior. What we fail to recognize is that it is not necessarily the divorce itself that leads to this causal effect- But how the parties behave towards one another during the divorce process and thereafter. Divorce is already hard on your kids, don’t make it harder for them by embroiling them in your daily fighting.

Your attorney should be honest with you when it comes to helping you devise a custody and visitation order that is in the best interests of your children, not necessarily yourself. In my family law practice, I do my best to ensure that my client’s children are handled with care, and you should hire an attorney who does the same. Firstly, your attorney should encourage you to have open communication with the other party when it comes to caring for your children. I encourage my clients to partake in co-parenting classes. Learning how to co-parent will save you a ton of time, a ton of fees, and a ton of heartbreak. Secondly, your attorney should neither encourage nor tolerate alienation tactics. Parental alienation is a form of child abuse. Keeping your children from seeing their mother or father out of spite only hurts them and hinders their progress. Your attorney should not only discourage this type of behavior but should take affirmative steps to ensure it never happens in the first place.

In conclusion, you have options when it comes to choosing the right divorce attorney for you. Your decision should be made weighing several factors. The idea that the best lawyer is forceful, combative, and obstinate is outdated and incorrect. Lawyers who adopt a belligerent persona do not do the best job for their clients, particularly in divorce cases when children are at issue. Clients should seek out an attorney who zealously guards their interests and advocates for them. But this does not mean being vengeful or taking extreme positions. Keep in mind that putting on an obnoxious show can entertain clients, but it rarely advances the client’s case, so choose wisely.

Tenny focuses her practice exclusively on Family Law and Family Law Mediation. Well-known for her effective and assertive representation, Tenny has extensive experience in handling all aspects of family law cases ranging from mediation to trials involving child custody and child support, spousal support, and division of property. Committed to the intelligent and effective representation of her clients, Tenny focuses her practice on intricate custody disputes as well as cases involving the characterization and division of high asset and complex marital estates. Tenny also currently practices as a certified Mediator in Family Law. She is the creator and host of the Family Law Podcast, “For Better or Worse: Family Law Happy Hour”, currently featured on Apple, Google, and Spotify.

Alcohol and Substance Abuse During a Divorce

Alcohol and substance use disorders (including alcohol and controlled substances like cocaine, heroin, and opioids) are increasing in many parts of the United States, with significant impacts on those affected and their families. For couples who are divorcing, alcohol or substance use disorders can have a substantial effect on parenting time, custody, and, under certain limited circumstances, division of marital assets. Impacts on the relationship between the spouses and the children can also be significant. Many families and individuals benefit from individual and/or family, along with other mental health interventions such as rehabilitation programs, group therapy, and medications. Along with therapeutic supports of various kinds, any spouse who is in the middle of a divorce involving alcohol or substance use disorder (including both the spouse who suffers from alcohol or substance use disorder and the spouse who does not) would benefit from counsel with significant experience in these types of divorce matters, which require both sensitivity and zealous advocacy.

Legal Custody

Under Massachusetts law, absent an emergency, abuse or neglect, once either parent has filed for divorce, the parents have temporary shared legal custody of their minor children. However, a judge can order temporary sole legal custody to one parent, provided the judge makes written findings that shared legal custody would not be in the best interests of the children. This can occur when a parent’s ability to make decisions in the best interests of their children is impaired by substance use, when they are unavailable due to an inpatient recovery or rehabilitation program, or when they are otherwise unable or unavailable to make decisions for their children given the impact of their use of alcohol or controlled substances.

Parenting Time

There is no presumption as to what parenting plan should apply in a divorce. Rather, the Court will order the parenting plan that it considers to be in the best interests of the children.

Similar to legal custody, substance or alcohol use disorder can impact the parenting plan because one parent is not able to care for the children due to impairment, or because one parent is attending an inpatient recovery or rehabilitation program. Some parents’ path to recovery involves significant time spent at Alcoholics Anonymous (AA) or Narcotics Anonymous (NA) meetings or group therapy sessions, sometimes on a daily or almost daily basis. If that parent also has a full-time or even part-time job, they may simply not be available to care for the children on a regular basis due to those commitments. This may be temporary, and that parent may be able to seek and obtain parenting time, or additional parenting time, as they continue in treatment for alcohol or substance use disorder.

Alcohol and Controlled Substance Testing

Where one parent suffers from substance use disorder, the Court may order them to undergo alcohol or controlled substance testing. This could involve one-time testing, such as a hair follicle drug test or other drug or alcohol test administered at the Court. More typically, testing is ongoing, and may be ordered to occur before and during that parent’s parenting time, or daily if the parent has frequent parenting time. Testing can involve an alcohol testing device that the parent blows into to register their blood alcohol level, which is then typically, but not always, sent contemporaneously to the other parent via text message or email. Other testing may include a breathalyzer attached to the ignition of a parent’s car, or weekly, monthly, or random alcohol or drug testing at a laboratory.

A well-drafted order, judgment or agreement will include consequences for a failed, missed, or late drug or alcohol test, which may include suspension of a parent’s parenting time, a requirement that a parent’s parenting time be supervised by a family member or professional parenting time supervisor, or review by the Court. An order or agreement requiring testing may include changes to the frequency of testing after all tests have been negative for a certain period, possibly resulting in testing being eliminated entirely after tests have been consistently negative for a significant period of time.

Abuse

Some individuals who suffer from alcohol or substance use disorder may physically, mentally, or psychologically abuse their spouse (although, of course, not all who suffer from alcohol or substance use disorder are abusive, and not all abusers suffer from a mental or physical illness). Under Massachusetts law, if the Court finds that a pattern or serious incident of abuse has occurred and issues a temporary or permanent custody order, the Court is required to enter written findings of fact as to the effects of the abuse on the children. Those findings must demonstrate that the order is in the children’s best interests and provides for the safety and well-being of the children.

If the Court grants an abusive parent parenting time with the children, the Court is required to provide for the safety and well-being of the children and the safety of the abused parent. The Court can:

 

• order an exchange of the children to occur in a protected setting or in the presence of an appropriate third party;
• order parenting time to be supervised by an appropriate third party, visitation center or agency;
• order the abusive parent to attend and complete a certified batterer’s treatment program as a condition of parenting time;
• order the abusive parent to abstain from possession or consumption of alcohol or controlled substances during parenting time and for twenty-four hours preceding it;
• order the abusive parent to pay the costs of supervised visitation;
• prohibit overnight parenting;
• require a bond from the abusive parent for the return and safety of the children;
• order an investigation or appointment of a guardian ad litem or attorney for the children; and
• impose any other condition that is deemed necessary to provide for the safety and well-being of the children and the safety of the abused parent.

Asset Division

Alcohol and substance use disorder can have some impact on asset division in limited circumstances. The Court will not “punish” one spouse financially for suffering from alcohol or substance use disorder but may grant the other spouse additional marital assets if it is shown that the spouse dissipated marital assets on controlled substances and/or alcohol. The Court treats alcohol and substance use disorder as a medical condition, and offsets for dissipation on alcohol or controlled substances only occur in unusual circumstances, such as where the dissipation is significant, particularly in proportion to the spouses’ overall assets.

Divorce can be one of the most difficult things a person has to endure, and can involve incredible grief, loss, and rupture to relationships of all types, including family and friends. If alcohol or controlled substance use disorder is also involved, this can create a volatile situation for both spouses and children of the marriage. If your divorce intersects with alcohol or substance use disorder in any way, it is essential to consult with an experienced attorney who can help you navigate the complex problems that may arise, as well as the significant impacts that alcohol and substance use can have on myriad issues in divorce.

Accurately Completing a Financial Statement During Divorce

 Everyone who obtains a divorce in Massachusetts will have to file a crucial document at least once in their case: a financial statement. The importance of an accurate financial statement cannot be overstated, particularly in highly-contested divorce cases. Under Rule 401 of the Supplemental Probate and Family Court Rule, parties are required to file financial statements with the Court within 45 days of service of the summons (which is the notice issued by the Court after the Complaint for Divorce is filed and which the Plaintiff must serve on the Defendant). The parties are also required to update and file new financial statements in advance of each court appearance at which financial relief is sought by either party, as well as at a pre-trial and trial. A party who earns less than $75,000 per year will complete the short-form financial statement, while a party who earns $75,000 per year or more will complete the long-form financial statement.

While only the long form financial statement requires the notarization of the party’s signature, both the short form and the long form are signed under the penalties of perjury. A party signing a financial statement must certify that the information contained therein is true, accurate, and complete. A willful misrepresentation on a financial statement can subject the party to sanctions, including criminal penalties. Although we have never seen anyone criminally punished for the information contained in or missing from a financial statement, we have seen litigants suffer significant consequences from their failure to take the necessary time to accurately complete the financial statement – namely, losing credibility in front of the trial judge. If a trial judge determines a party is not credible on financial matters, this can have considerable ramifications for how the judge will rule on issues of alimony, child support, and division of assets. It can be an even bigger issue if financial statements that were filed and relied upon multiple times during the case and in issuing temporary orders turn out not to have been accurate or not to have included a full disclosure of assets, liabilities, income and expenses. It is absolutely critical to take the time to accurately fill out the financial statement and to do so with the assistance of counsel.

When completing a financial statement, it is helpful to refer to the following documents:

• Paystubs
• Tax returns
• Income Reporting Forms W2, K-1 and 1099
• Bank, investment account, and retirement account statements and screenshots showing current balances
• Loan statements
• Appraisals of real estate, jewelry, and other assets
• Credit card statements

The financial statement form contains lines for suggested sources of income, including wages, overtime, commissions, bonus, and dividends, and interest, among many others. All types of income must be listed, even if there is no line on the form for your particular type of income. In light of recent case law, you also need to list employer contributions to a 401(k) or health savings account. If you are self-employed, you must complete Schedule A. If you have rental income, you must complete Schedule B for each rental property.

The financial statement also requires the disclosure of weekly expenses. When listing weekly expenses, the amount listed should not be a guess, but should be based upon real spending habits. The Court will look to expenses to determine lifestyle and need for alimony. Review six months to a year’s worth of bank and credit card records to calculate your true living expenses. Keep in mind that your electric bill may be significantly higher in the summer, while your home heating oil or gas may be significantly higher in the winter, and generally, the number reported should be based on the total amount spent annually. Remember that you may regularly spend money on something that is not listed on the financial statement – be sure to add it. This may include amounts set aside for savings, which can also be a component of marital lifestyle.

The same holds true for assets. You should list all assets in which you have an interest, even if the form does not contain a category for such an asset – such as an interest in trust, ownership of a rare coin collection, ownership of a business, or even frequent flyer miles, Venmo, PayPal, Cash App, cryptocurrency, health savings or dependent care accounts, and anything else of value. All assets must be listed. If you do not have a value for a particular asset or the item is being appraised, the asset should still be disclosed with an indication that the value is presently unknown or subject to appraisal.

The accuracy and thoroughness on every single financial statement filled out over the course of your divorce are incredibly important. While it is a lot of work, taking the time to carefully and accurately fill out the form with the assistance of counsel can save you from the pain of a difficult cross-examination at trial – or worse, including an unfavorable result.

Rob McAngus | Understanding Spousal Maintenance

Did you know that spousal maintenance in Texas has a maximum duration and specific termination conditions? Dive into this episode to uncover the intricacies of spousal support laws, how they affect divorce proceedings and essential advice for family lawyers.

In this episode, Rob McAngus, Partner at Verner Brumley Mueller Parker, P.C. and board-certified in family law, reveals the nuanced world of spousal maintenance in Texas and offers invaluable wisdom for family law attorneys.

You’ll discover…

• The difference between spousal maintenance and alimony, and why Texas has unique rules.
• Key factors courts consider when determining the minimum reasonable needs test.
• Real-life examples of disability cases and their implications on spousal maintenance rulings.
• How family violence convictions impact spousal maintenance eligibility.
• Essential advice from Rob McAngus on building a legal document repository.