Archive for the ‘divorce and money’ Category

Stay Pending Appeal

Wednesday, September 3rd, 2014

An appellant who wants the trial court’s judgment suspended while the case is being appealed, must request a stay and post a bond to ensure that, if the trial court’s judgment is affirmed, there are funds to pay whatever is required.

For example, in the District of Columbia, Rule 8 of the Rules of the DC Court of Appeals governs.  To obtain a stay pending appeal the appellant must first file a motion in the Superior Court (the trial court) within thirty days of entry of judgment.  That court decides whether to grant a stay and on what terms.  The Superior Court’s decision on the stay is also appealable.

Prior to 2002, the law in DC had been that an appeal automatically stayed the final judgment of divorce.  Many interesting and potentially disastrous consequences flow from a stay of the judgment of divorce.  Except where noted below, these consequences are essentially the same in all three jurisdictions.  If the divorce judgment is stayed:

  1. You’re still married so you cannot remarry.
  2. If you die, your spouse is your widow or widower and has important rights with respect to your pension, 401(k) account, intestate estate (if you have no Will) and the right to elect against your Will if you have disinherited him or her.  In Virginia your spouse is entitled to a share of your augmented estate which includes non-probate assets and certain property transferred during your lifetime.
  3. If you and your spouse own the former marital residence (or other real property) as tenants by the entirety and the divorce judgment is stayed then you still own it in that peculiar old common law tenancy.  If you die, he or she takes the whole property, you cannot leave your interest in the home to the kids, you cannot borrow against or assign your interest, etc.
  4. In Maryland and DC you’re still earning marital property and increasing the marital portion of your pension and retirement accounts every day when you go to work.  If the case is remanded for a new hearing your further accumulation of money, property, pension credits, etc. may be on the table for equitable distribution at that future trial.

It’s definitely a case of “be careful what you wish for” when you seek to stay of a judgment of divorce.


Wednesday, September 3rd, 2014

Sometimes a party to a lawsuit is not satisfied with the trial judge’s decision. When that happens that person might want to file an appeal. Generally, and in all divorce cases in all three local jurisdictions, you can appeal “as of right.” You may not win but you can appeal.

The party who appeals is called the appellant. The other party is called the appellee. Often the appellee will appeal the portions of the trial judge’s decision that he or she is not satisfied with and become the appellee/cross-appellant.
In due course, if the appellant and, if applicable, the cross-appellant, do all the required filing correctly and on time, the appellate court judges will review the contested portions of the trial judge’s decision. The appellate judges give deference to the trial judge’s findings of fact because he or she saw and heard the witnesses and the appellate judges did not. Findings of fact are not disturbed unless they are “clearly erroneous.”

The appellate court judges do not give deference to the trial judge’s rulings regarding the law. If they conclude the trial judge was wrong, they reverse. Usually though, that means they remand the case back to the trial judge to conduct a further hearing, if necessary, and generally preside over the remainder of case consistently with appellate court’s ruling.

A Comparison of Child Support under the Maryland, Virginia and D.C. Guidelines

Saturday, August 9th, 2014

Here is a comparison applying the child support guidelines of each local jurisdiction to a typical case: two children, sole custody, $0 health insurance and $0 child care costs and combined monthly income of $10,000, non-custodial parent’s income is $7,500 and custodial parent’s income is $2,500:
total support $25,174/12 = $2,098
custodial % of income .75
recommended support order $1,573

total support $1,811
custodial % of income .75
recommended support order $1,358

total support – $1,567
custodial % of income .75
recommended support order $1,175

Again, applying the child support guidelines to a case with the same facts except combined monthly income of $15,000, non-custodial parent’s income is $11,250 and custodial parent’s income is $3,750:
District of Columbia recommended support order – $2,197

Maryland recommended support order – $2,135

Virginia recommended support order – $1,541

And the same facts except combined monthly income of $20,000, non-custodial parent’s income is $15,000 and custodial parent’s income is $5,000
District of Columbia: recommended support order – $2,714

Maryland recommended support order (extrapolated)- $2,847

Virginia recommended support order – $1,765

And now with combined monthly income of $30,000, non-custodial parent’s income is $22,500 and custodial parent’s income is $7,500
District of Columbia: recommended support order – $2,714

Maryland recommended support order (extrapolated)- $4,271

Virginia recommended support order – $2,144

As you can see, at higher incomes, child support is much lower in Virginia than in Maryland or the District, just as it was in 2011. At incomes over $20,000, recommended support in Maryland using extrapolation is much higher than in DC or Virginia.

Child Support in Maryland, Virginia and the District of Columbia

Wednesday, August 6th, 2014

The amount of child support payable is determined under statutory guidelines in all three local jurisdictions.  The law in each jurisdiction provides that the amount of support is determined by applying the guidelines to the facts of the case.  That amount is presumed to be the correct amount of support.

Virginia revised its child support guidelines effective July 1, 2014. All three jurisdictions use a shared income model as the basis for the child support guidelines.   Shared income models are based on the notion that the amount of money needed to support the child(ren) should be based on the combined incomes of the parties.   The Court then allocates that amount between the parties in proportion to their respective incomes.  The shared income model also takes account of the number of children and whether custody is sole or shared.  All three jurisdictions add reasonable day care costs to the basic child support obligation.  Those costs are divided between the parties.  All three jurisdictions adjust for health insurance costs attributable to the children.  See DC Code Sec. 16.916.01, MD. Code F.L. Article Sec. 12-204, Va. Code Sec. 20-108.2.

One big difference among the jurisdictions is that in the District child support is payable for a child until age 21.  In Maryland and Virginia child support ends at age 18, except that support continues for a full time high school student until the earlier of high school graduation or the child’s nineteenth birthday.  Also, D.C. judges, unlike their Virginia and Maryland counterparts, will award support arrearages for a period of time up to 24 months prior to the filing of the complaint seeking support. See 16-916.01(v).
The Maryland guidelines do not explicitly apply to cases where combined monthly income exceeds $15,000, but Maryland case law suggests that it can be appropriate to determine child support in above guidelines cases by extrapolating at the marginal rate applicable at the highest guidelines bracket.  The most popular Maryland child support calculator, SASI-CALC, extrapolates in that way so that is frequently is used, at least as a starting point, in settlement negotiations.  Child support extrapolated from the top of the guidelines is also often ordered in Maryland cases even though it is not strictly the presumptively correct amount under the statute.  The child support calculator in the also popular “Kaufmann guidelines” does not extrapolate.

The District of Columbia child support guidelines apply up to combined monthly income of $20,000.  The District’s guidelines do not apply presumptively to cases where the parent’s combined income exceeds $20,000 per month, but support cannot be less than it would be at $20,000 combined income.  Extrapolation form the top of the guidelines is not approved.  DC law requires case by case justification of  support in excess of the top of the guidelines.   D.C Code Section 16-916.01(h).

Virginia recently revised its statute effective July 2014 to increase the income limit of the child support guideline to combined monthly income of $35,000, and adjust support payable at all income levels.  Although the Virginia statutory child support charts end at combined monthly income of $35,000, the statute explicitly provides for the rate of child support on monthly incomes exceeding $35,000.  For example, total support for two children increases $3.40 for each $100 dollars of combined income over $35,000 per month.  So no case is “above the guidelines” in Virginia. Va. Code Sec. 20-108.2.B

Post-Separation Strategies in Maryland Divorce Cases

Friday, May 9th, 2014

A 2013 Virginia case, Wright v Wright, 61 Va. App. 432; 737 S.E. 2d 519; 2013 Va. App. LEXIS 53 prompted me to observe that a high earning spouse can increase what he, or she, gets to keep by paying expenses out of marital property and banking the post –separation earnings because in Virginia those earnings are not marital property. Conversely, if you are the lower earning spouse you want prompt filings, quick hearings and, if the stakes justify it, an injunction on expenditure of marital property. See The “Wright” Strategy for Increasing What You Keep in Your Divorce, April 2014.

In Maryland, a spouse’s earnings after separation are marital property in the absence of an agreement to the contrary. So there is no advantage to paying expenses with accumulated marital property and banking post-separation earnings in Maryland. What then is the proper strategy for a high earning spouse in Maryland in a case with a relatively long separation?

First, if there is any existing non-marital property, don’t spend that. And remember that from separation to divorce you are earning marital property, increasing the marital proportion of retirement accounts, and adding to the duration of marriage, which is a factor in determining both alimony and marital property distribution. So it pays to settle early because a Separation and Property Settlement Agreement will exclude subsequent earnings from marital property.
Getting to settlement usually requires making a good offer. Getting to settlement early may require making a good offer early. This runs directly contrary to many negotiator’s instinct to make a low ball offer and move up in baby steps to wear down the adversary and get a “good deal”.
For high earners the good deal achieved by extended negotiations may be at the cost of hundreds of thousands of extra dollars added to the marital estate, and then divided. Sometimes it makes sense to make a really good offer early.
What about the Maryland financially dependent spouse? Certainly this spouse wants to settle temporary support and custody, visitation and access early, if possible. But what about the final settlement distributing marital property? It may pay to delay. But the advantage of dividing a bigger pie later must be balanced against the obligation to negotiate in good faith. Also, the additional costs and stress of getting-to-yes later rather than earlier are big negatives. Perhaps a bigger issue is that if the moment for settlement passes, it may not come again.

The “Wright” Strategy for Increasing What You Keep in Your Divorce

Tuesday, April 22nd, 2014

In a post titled “Determining Marital Property in Maryland, Virginia and the District Of Columbia” (June 17, 2011), I said:

“This article is about when the accumulation of marital property ends. It starts at the time of the marriage. When you return from the honeymoon and go to work the next Monday morning you are earning marital property – the stuff the divorce judge divides. When is the first day you can go to work and earn separate non-marital property? It depends on the jurisdiction.”

And after reviewing the applicable statutes, I said:

“When you and your spouse have separated, intending to remain separated, and do not have a property settlement agreement, in Maryland and the District of Columbia the property you acquire from the date of separation until the date of divorce is marital property. In Virginia such property is not presumptively marital, and in general is determined to be separate property, unless special facts and circumstances are established to overcome the presumption.”

In a recent case, Wright v Wright, 61 Va. App. 432; 737 S.E. 2d 519; 2013 Va. App. LEXIS 53, the Court of Appeals of Virginia considered whether Mr. Wright’s strategy in the two plus years between the date of separation and date of the divorce hearing required a finding to bring post-separation expenditures of marital property back into the marital pot to be divided with Mrs. Wright.

Husband had certain marital accounts totaling about $2,800,000. Husband earned approximately $1,500,000 per year; Wife was a homemaker. During the post-separation period, the marital accounts declined to about $1,415,000 on account of Husband’s payment of joint income taxes, real estate taxes on the marital home, tuition and school expenses for a child of the parties, spousal support to Wife and his own attorney’s fees and expert witness fees. Husband deposited the money he did not spend on these expenses to his separate accounts which, of course, were not marital.

The Court of Appeals said none of those expenditure were improper so they did not amount to “marital waste.” They explained that there are only two categories of expenditures of marital funds “proper” and “waste.” If your spending of marital funds falls into the “proper” categories it’s okay even if that permits a big decline in marital assets to be divided and a big increase in the separate funds of the party following the strategy.

The result in Wright provides a road map for the higher earning spouse to skew the division of marital property in his or her favor in some Virginia cases. If you are the lower earning spouse you want prompt filings, quick hearings and, if the stakes justify it, an injunction on expenditure of marital property.

Also, for multi-state or potentially multi-state cases, Wright is another reason that in a case with a relatively long separation, all other things being equal, the higher earning spouse probably wants the divorce case to be heard in Virginia. As I’ve said here before, a little planning and a little audacity can get you into the Court you want to be in. And a little more planning during separation can increase the property you get to keep.

Some of the facts here are from an article by one of the lawyers involved in the case. What’s wrong with Wright, Ronald R. Tweel (Virginia Family Law Quarterly, Spring 2014)

JDR, Fault Divorce or Wait

Thursday, April 10th, 2014

My last post said that when a spouse needs child support or custody relief in the first post-separation year in Virginia, the choices are filing a petition requesting custody and/or support relief in Juvenile & Domestic Relations Court (hereinafter “JDR”), asserting fault grounds in a complaint for divorce from bed and board and for the custody and/or support relief in Circuit Court, or waiting one year from separation to file a complaint in Circuit Court for final divorce (called divorce a vincula matrimonii) on separation grounds and for the custody and/or support relief.
JDR is structured to be friendly to the self-represented. There are forms for most pleadings, the clerk’s office schedules the hearings and hearings are relatively informal. However, dockets are crowded and relief is not as speedy as in Circuit Court where you can be before a judge for temporary relief in 21 days. Also, either party can appeal to the Circuit Court and have the entire case reheard. The Circuit Court does not just review the record of what happened in JDR (there is no actual record), the Circuit Court rehears the entire case. In general, the unsatisfied party simply has to file a notice and pay an appeal fee. So when you prevail in JDR it often only means you won round one. And if you had an opportunity to start in Circuit Court instead, it was an unnecessary and inconclusive round one – a waste of time and money.
When you have evidence of clear fault grounds – adultery, physical cruelty, actual abandonment – the choice of where to file is a no-brainer. You file for divorce in Circuit Court and seek the additional custody and/or support relief. But this discussion is about choices so it concerns those cases where the evidence or the fault is less than clear. The advantages of a Circuit Court suit must be weighed against the downside risks. These include, for example, possible harm to the parenting relationship, the general ratcheting up of conflict, costs and attorney’s fees that often result from an accusation of fault, and the loss of credibility with the court if there is a failure of proof. In this weighing, one must also consider how important it is to be in the Circuit Court and how important it is to get into court now rather than wait out the year.
That is the third choice a party can make in this situation – wait one year, then file for divorce on one year separation grounds. This is what is often done. Because, of course, the choice is not between going to court now or doing nothing for one year. In the meantime there are negotiations with your spouse, getting the time-sharing schedule set by action and discussions, dividing accounts by self-help – just take your half, and dealing with many other issues. Often the important work of separating your affairs, dividing property and debt, and settling how to raise the children post-divorce is worked out during that first post-separation year, resulting in a Marital Settlement Agreement that resolves all issues. And if you agree on less than all, you can bring a complaint for divorce on one year separation grounds in Circuit Court and ask the judge to grant your divorce and decide the remaining support, custody or property issues.

Where to File for Custody and Support in Virginia

Thursday, April 3rd, 2014

When separated spouses in Maryland and the District of Columbia require the aid of the court to resolve issues of support or custody they know where to file their case – in the local Circuit Court in Maryland and in Superior Court in the District of Columbia. And if they have been separated for less than the period required for an absolute divorce, they can include a request for limited divorce (legal separation in DC) in the support and/or custody suit.

Not so in Virginia. The circuit courts are the trial courts of general jurisdiction, and are the trial courts preferred by lawyers, including family lawyers. But the court with jurisdiction of minors, including custody and support of minors, and support of spouses, is the Juvenile & Domestic Relations District Court (“JDR”).  Although a complaint for spousal support can be filed in Circuit Court without also seeking divorce, the Circuit Court only has concurrent jurisdiction over child support and custody matters if there is a divorce case pending.   And, unlike in Maryland and DC, when the spouses have been separated for less than the required period (one year in general, six months with a written separation agreement and no minor children), a complaint for limited divorce is often not an option because in Virginia there aren’t any no fault grounds for limited divorce (called divorce from bed & board or, in Latin, a mensa et thoro ).
In this situation, the spouse needing custody or child support relief faces a choice. He or she can:

1. File a petition requesting custody and/or support relief in JDR;

2. Assert fault grounds and file a complaint for divorce from bed and board and for the custody and/or support relief in Circuit Court; or

3. Wait the one year period and then file a complaint in Circuit Court for final divorce (called divorce a vincula matrimonii) on separation grounds and for the custody and/or support relief.
Each of these choices has advantages and disadvantages which I will address in my next post.

How to Disinherit Your Spouse

Thursday, February 6th, 2014

Most married people want their surviving spouses taken care of when they die. The statutes of Maryland Virginia and DC reflect this. See a prior article here – Wills and Decedent Estates of Divorced and Divorcing Spouses.

Of course when the marriage breaks down, most people no longer want to provide for their estranged spouse. But divorce takes time. And the state statutes and federal statutes protect spouses. Is there a way to successfully disinherit your spouse before the divorce is final?

State law generally grants the surviving spouse all or part of the probate estate of the decedent by intestate succession when the decedent did not make a Will and by right of election against the Will when the decedent made a Will. Virginia, but not Maryland, expands the spousal protections to the “augmented” estate. The augmented estate includes certain non-probate assets and prior gifts.

Maryland case law suggests that Maryland’s statutory surviving spouse protections can be avoided by the common device of using a revocable trust instead of a Will as the primary estate planning document. Generally this requires executing a revocable trust which includes a clause stating who is to receive the grantor’s property at his or her death and transferring all or some of the grantor’s property to the trust. This keeps the property out of the probate estate and out of reach of the surviving spouse’s election against the Will.

The surviving spouse’s recourse is to seek to invalidate the trust. Karsenty v Shoukroun, 406 Md. 469 (2008) was a case where the decedent transferred property to a revocable trust with a disposition at death other than to his wife. The Court of Appeals of Maryland spent 40 pages discussing fraud on marital rights, unlawful frustration of marital rights and also legitimate estate planning. But the court stopped short of saying you cannot do by a revocable trust what you cannot do by Will. They sent the case back to the trial judge to consider the facts in light of the Court of Appeals 40 page discussion. So if you want to disinherit your spouse so that he or she doesn’t inherit in case you die before the divorce is final, a revocable trust is certainly worth a try in Maryland.

Not so in Virginia. The property transferred to the revocable trust is part of the “augmented estate” and the surviving spouse gets a share of that.
This sort of unilateral action to disinherit the spouse is appropriate only for protracted, contested divorces. In most divorce cases, estate planning is done by each spouse pursuant to an agreement with mutual waivers of estate rights. After all, your spouse doesn’t want you to inherit from him or her either.

Pendente Lite Relief in Virginia

Tuesday, January 28th, 2014

There are many divorce cases where only one spouse is employed and there are no significant liquid assets or those assets are all under the control of the employed spouse.

In such cases, the financially dependent spouse can seek an award of pendente lite support.  “Pendente lite” is Latin for “pending the litigation”.  It means temporary support until the divorce trial.

Pendente lite support hearings are short and the only issues considered are need for support and ability to pay.  Some jurisdictions have established guidelines for  pendente lite spousal support.

For example the Fairfax County formula is:

When child support is also payable – monthly spousal support equals 28% of the payor’s monthly gross income minus 58% of the payee’s monthly gross income.

When child support is not payable – monthly spousal support equals  30% of the payor’s monthly gross income minus 50% of the payee’s monthly gross income

Child support is generally determined under the child support guidelines. Those guidelines are also used to determine child support pendente lite.

Virginia Courts can also enter pendente lite orders on maintaining health insurance coverage for a spouse or children, responsibility for debt payments during the case, exclusive use and possession of the family residence during the case, payment of attorney’s fees and other costs of the suit, and custody of the children pendente lite . However, most courts are reluctant to rule on custody pendente lite.  This is because custody matters have scheduling priority and will soon be heard as a final matter so pendente lite relief is not necessary unless there is an emergency.  And the judges do not like emergencies, so if you claim you have an emergency it better be a real emergency.

The Court’s ruling on any issue at a hearing on pendente lite relief can be reviewed and modified at the final hearing.

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