Archive for May, 2010

A Hurdle that Must be Crossed

Thursday, May 27th, 2010

Without a doubt, one of the biggest hurdles in a divorce is the negotiation about the terms and conditions of the marital property settlement, spousal and child support and visitation.

There is one no right way to negotiate, nor can a single, model schedule be fashioned. Negotiations, whether face to face or through lawyers or mediators or collaboratively, can be very difficult when one or both of the parties makes unreasonable demands or imagines that he or she can walk away with everything.

Most lawyers agree that negotiations move along when both spouses are at the same place emotionally and mentally, that is, when both the husband and wife each accept that the marriage is over and must end. In a surprising number of cases, one spouse is completely blindsided by the divorce. Rufus’s announcement that he wants a divorce may flatten Rhonda, who has no idea of Roxanne. Thus, the person who wants to leave may be way ahead of the person who does not see the breakup coming — at least emotionally and mentally. The person who is left may try to stall, sometimes in hope of a reunification, but as the divorce progresses, he or she moves toward the point where both spouses understand the marriage is over.

For this reason, many couples wait a period of time between separation and the onset of negotiations.

Some couples arrive at a rough agreement about the divorce and use lawyers to cross the t’s and dot the i’s; others turn the majority of the work over to the attorneys. A husband and wife who can negotiate with each other can save money and perhaps go separate ways, if not as friends, at least not as enemies.

Negotiations frequently bring into play what are termed leverage factors, considerations made by each of the parties pertaining to the issues that are being disputed.

In divorce actions, one leverage factor is, in whose interest is it to remain married longest? Answering this question can be a starting point at the onset of divorce negotiations because it creates leverage over the negotiations. If Rufus has left Rhonda for Roxanne, Rhonda has leverage she can work to her advantage in property settlement negotiations. A person prepared to wait has a bargaining tool that can be brought to bear in property negotiations.

When they end successfully, nothing is in dispute, and divorce can proceed through the courts. The terms and conditions of the divorce — the marital settlement, spousal and child support and visitation — can be memorialize in a settlement agreement, which becomes part of the divorce record.

A Valuable Asset

Monday, May 17th, 2010

The two most valuable assets a divorcing couple divides are the marital home and (often) the husband’s pension.

Divorcing couples often do not realize that the pension benefits of a couple ending a long marriage may be greater than the value of house they live it. A frugal couple who lived in one house for the duration of their marriage may have retirement benefits greater than the sale price of the marital home.

Very often these plans may be divided, so that the worker’s spouse, who very often is a stay-at-home mother without a pension of her own, acquires an interest in her husband’s plan via what is called a Qualified Domestic Relations Order (QDRO). Women need good legal advice about the distribution of a pension. Pension issues probably generate more appeals and reversals on appeal than any other issue in equitable distribution. Women very often are in a position to trade off their share of spousal retirements for other assets, but care should be taken in doing this. More than twice as many men as women have retirement benefits, and the benefits for men are generally much larger than those for women.

In general, pension plans may be what are termed qualified, which means they are regulated by ERISA and guarantied by PBGC, or nonqualified, which means they are not regulated by ERISA and not protected by PBGC. A plan may be defined benefit, where each employee is guaranteed a specific benefit, such as the old-fashioned “company pension” that the Depression-World War II generation expected after years of service to one company, or a defined contribution, where the employer’s contributions are specified, such as the popular 401(k).

Pensions plans can be very difficult for a layperson to understand. Calculating the value of a defined benefit plan for divorce purposes can be particularly challenging and require the services of actuaries.

Divorce Fill in the Blanks

Friday, May 7th, 2010

A number of jurisdictions offer summary or simplified divorces, which are ideal for couples who have been married a short time and are in agreement about everything about the divorce.

These actions streamline a divorce because they an uncontested and in many cases the couple file jointly and don’t even need to appear in court.

Many states offer simplified routines for uncontested divorce and a few offer summary procedures. While the fine print of the summary routines varies from jurisdiction to jurisdiction, basically the requirements are same. For a summary divorce, the couple

– usually cannot be married more than five years (although some jurisdictions allow for longer marriages);

– agree to waive any right to spousal support (any appeal of the dissolution);

– must be childless (although they may have children from previous marriages);

– may not own real property, separately or jointly;

– have neither significant assets (usually less than $25,000), nor significant debts (usually less than $15,000).

In a summary action, the spouses agree how they will divide what they own and what they owe, file the divorce forms in the local court, wait a few months and then request the final divorce decree from the court.

No simpler avenue to a divorce exists than a joint petition for uncontested divorce based on irretrievable breakdown. The divorcing spouses dissolve the marriage in a no-fault action. The joint petition requests court approval of an uncontested separation agreement.

In divorce, it does not get any simpler.

When Spouses Repent in Haste

Tuesday, May 4th, 2010

Sometimes people marry, only to realize almost immediately that they blundered in taking the plunge. May-December marriages, where an aging man tries to find a young woman to take care of him; impulse marriages after a get away in Las Vegas; rebound marriages when one person finds loneliness after divorce too heavy a burden — all may become what are called “short marriages” in the eyes of court, which in short order is called upon to put them asunder.

A short marriage is one where the financial affairs of the parties “do not become so commingled that they cannot easily be restored to premarital situation,” as one court put it. A short marriage, while it cannot be quantified in terms of years, is almost always a childless marriage. For want of rule of thumb, however, a short marriage is generally held to be five or fewer years. In some jurisdictions, if the parties have limited assets and have been married only a few years, a short marriage may easily be ended with a summary action, where both spouses jointly petition the courts to end the marriage.

Summary actions do not allow for alimony or appeal.

The dissolution of short marriages calls forth the image of King Solomon and his sword: a swift cut that attempts “the restoration of spouses to the economic position they occupied before the marriage.” Sometimes this may be as simple as allowing each partner to keep what he or she brought to the marriage and cutting everything marital in two. In fact, in 1988 Alaska case — Rose v. Rose– the court said of short marriage that is it analogous to a contractual “action in rescission.” When the marriage is without substantial marital property, the logic of action of rescission is easy to apply.

To be sure, ending a short marriage is not the same as an annulment, which ends a marriage that was flawed from the onset. Short marriages are lawful in every way. Under the right set of circumstances, however, they may be easier to end than a longer marriage, with property and assets.