Archive for May, 2011

Alimony and the Use of Guidelines and Calculators

Thursday, May 26th, 2011

          Various alimony guidelines have been developed around the country.  The American Academy of Matrimonial Lawyers (AAML) has developed a guideline that uses incomes and length of marriage to calculate the starting point for determining alimony.  The Kaufman guidelines, developed by a Michigan divorce attorney and initially published locally by the Montgomery County Commission for Women, use income, length of marriage, education, income potential and child custody to generate a  recommended amount and duration of alimony.  Last year, the Maryland Court of Appeals approved a trial judge’s reference to the AAML alimony guidelines for informational purposes in Boemio v Boemio, 414 Md. 118, 994 A.2d 911 (2010) . 

          In Virginia, the Fairfax County Circuit Court has by rule adopted guidelines for pendente lite alimony determinations.  It is commonly understood that those guidelines have some influence on final alimony settlements and determinations. 

          There may someday be statutory alimony guidelines in each state the way there are now statutory child support guidelines but it is not likely to be anytime soon.  The driving force behind the universal adoption of statutory child support guidelines was the federal interest in making child support more predictable and more collectible across state lines.   It does not appear there is any similar overriding federal concern with alimony.  So divorcing spouses and divorce lawyers will continue to settle alimony cases based on all the circumstances with non-statutory guidelines playing an increasingly important role in negotiations.  Those cases that do not settle will be tried before judges who may or may not consider the various guidelines in deciding the cases.

Alimony – the Most Unpredictable Issue

Thursday, May 26th, 2011

When alimony is at stake in divorce settlements and trials, it is the most unpredictable issue.  Unlike child support, which is determined under statutory guideline in all three local jurisdictions, and all the other states, alimony depends on “all the circumstances.”

The courts consider a whole range of factors in determining the amount and duration of alimony.   12 factors in Maryland, FL Article, Section 11-106(b); 13 spousal support factors in Virginia, Va. Code Sec 20-107.1.E.; and 9 factors in the District of Columbia, D.C. Code Sec. 16-913(d).  All three jurisdictions include a factor that amounts to anything else the judge decides it is appropriate to consider.

How can you be confident that you have fairly and appropriately settled your alimony case if the outcome is so unpredictable?  It can be difficult but there is some guidance.  First, some factors are more important than others.  Most divorce lawyers would probably agree that the difference in the spouse’s income is the most important factor in determining the amount of alimony.  Likewise most would probably agree that the length of the marriage is the most important factor in determining the duration of alimony.  My next post is about the use of alimony guidelines.

Treatment of Social Security and Retirement Assets in Divorce

Saturday, May 21st, 2011

What if one divorcing spouse works for a private company and has a pension and will be eligible for social security and the other is a government employee? The Court will divide the marital portion of the private pension and the government pension but cannot divide the social security.  Should the Court take account of that difference in expected government benefits in dividing the pension?  Not in Maryland.  See Pleasant v Pleasant, 97 Md. App. 711, 632 A.2d 202 (1993).  In that case the Maryland Court of Special Appeals held federal law precluded treating social security benefits as marital property and affirmed the trial court’s holding that the marital portion of husband’s pension, funded by payroll deduction during the marriage, would be equally divided when received and the wife’s social security benefit, funded by payroll deduction during the marriage, would not be divided.  The court made no other adjustment to the equitable distribution of marital property.  Is that unfair? Of course.  The law of Virginia is the same on this point.  See e.g.    Esposito v. Esposito, 2002 Va. Cir. LEXIS 234 (Fairfax County)

Government pensions

Saturday, May 21st, 2011

Most pensions, 401(k) plans, etc. are in addition to social security.  They are not intended to replace social security and employees covered by these plans are also earning social security credits.  When these plans are equitably distributed between the spouses and the spouses are left with their statutory claim, or no claim, for social security no unfairness results.

 But federal retirement plans and many state government plans are not intended to supplement social security, they are intended to provide a retirement income without social security.  Both the employee deduction and employer contributions are higher, no social security taxes are paid and the federal and state employees are not earning social security credits.

Social Security

Saturday, May 21st, 2011

The division of assets in divorce often includes pensions, 401(K)’s, IRA’s and other retirement assets. The assets to be divided do not include a spouse’s claim to or expectancy of receiving social security benefits. Courts have held that social security is a government benefit not property and therefore it cannot be divided in divorce.

Americans receive social security benefits based on their own quarters of work and earnings or their spouse’s. The system is funded by employee wage deductions and employer contributions. If a couple is divorced after ten years or more of marriage either can claim benefits based on the earnings of the other. These spousal benefits are generally one-half of the employee’s benefits. If your spouse is paid benefits based on your earnings, your benefits are not reduced.

 
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