In our last entry, we recalled the days when cost of living adjustments (COLA) provisions were a common feature of Massachusetts alimony and child support settlements; and then their virtual disappearance. Our recent experience in divorce mediation suggested to us that perhaps it is time to revisit this powerful but potentially risky economic device in settlements, known in Massachusetts as separation agreements.
Here we will focus on 7 reasons why COLA’s may be beneficial to divorcing parties:
COLA’s cannot prevent all modification cases. But, they can neutralize one powerful and incessant change in our economy, impacting the cost-benefit analysis that either side must make before beginning any action to modify.
In our next entry, we will explore the risks of COLA’s.
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