Navigating the divorce process is often like wading through a minefield: Even when you think you’re on sure footing, your next step may prove treacherous. In the author’s experience, when parents divorce, resolving finances and determining child support dominate throughout the negotiations. A ruling from the Massachusetts Appeals Court recently resolved and expanded the scope of gross income that must be included determine a parent’s potential Child Support obligation.
In Hoegen v. Hoegen, No. 14-P-1491 (Mass.App.Ct. Jan. 22, 2016), Judge Hanlon held that income derived from vested restricted stock units—essentially, stock options—must be considered as gross annual employment income for the purposes of calculating Child Support Orders.
By way of background, Christine Hoegen (the “Mother”) and Patrick Hoegen (the “Father”) were divorced by a Judgment of the Worcester Probate and Family Court. The Court’s Judgment incorporated a Separation Agreement which provided that, among many other things, (1) the Father would pay the Mother Child Support in the amount of $1,020 every other week for the parties 2 children; and (2) the parents would confer every April 1 to reevaluate whether the Child Support should be adjusted given the parents’ respective incomes. The Separation Agreement also provided that that Mother was aware that the Father participated in a stock plan through his employer, and the Mother waived all rights to the Father’s stock plan account.
Around 1-2 years after the parties’ divorced, the Father filed a Complaint for Modification in which he sought to expand his parenting time. In response to the Father’s Complaint, the Mother filed an Answer with the Court in which she sought to recalculate Child Support to include “all” of the Father’s income.
At trial, the only issue left that the parties disputed was whether to include the income the Father received from his stock options, held in the stock plan through his employer, as “gross income” for purposes of calculating the Father’s Child Support obligation. The Mother argued that the Child Support law is expansive and requires the Court to include income from any and all the Father’s sources. The Father argued, however, that the stock plan was properly identified in the underlying divorce case, and the Mother freely negotiated her rights away from claiming against the Father’s account.
Judge Hanlon ruled for the Mother. In his opinion—which is now the law of the Commonwealth of Massachusetts—Judge Hanlon ruled that (1) income derived from stock options is considered gross annual employment income for the purposes of calculating a parent’s Child Support obligation, and (2) a parent cannot waive or bargain away her child(ren)’s right to appropriate Child Support.
A Good Family Law Attorney Can Spot Hidden, but Important, Issues. From the Father’s perspective, this case was about modifying his parenting plan. However, we will forever remember this case for its Child Support ruling. A good lawyer knows the law and knows the right questions to ask to maximize your day in Court.
At SLG, we have exhaustive experience representing parents in Child Custody and Alimony battles, Grandparents seeking visitation, and Husbands and Wives suing for Divorce.
Allow us to share our experience with you.
If you need a professional on your side, call the Shapiro Law Group today. 339-298-2300