Financial Consequences of Divorce

Question 1

What is non-marital property

Answer 1

(1) assets acquired by either spouse prior to the marriage and retained separately
(2) assets acquired by either spouse by non-interspousal gifts, devise, or descent, and assets acquired in exchange for these assets
(3) income derived from a non-marital asset acquired during the marriage UNLESS the asset was acquired in exchange for a non-marital asset
(4) assets excluded by a valid written agreement of the parties

Question 2

What is marital property?

Answer 2

Property acquired by the parties during the marriage

Question 3

What is included in marital property?

Answer 3

vested/non-vested retirement, stock options, insurance benefits, interest in pending lawsuits, property held by tenancy by the entirety, gifts between spouses, enhancement or appreciation of value of non-marital assets

Question 4

Are professional degrees marital property?

Answer 4

No, but the business associated with that degree may be marital property

Question 5

How can non-marital property become marital property?

Answer 5

(1) When the title holder of the property is changed from one spouse’s name to joint names = implies a gift was made to the marriage
(2) combining marital and non-marital assets so that the value of each is virtually indistinguishable (i.e. bank account where both parties put their salaries)
(3) when a non-marital asset increases in value because of the work/financial contribution of the other spouse, the enhanced value is considered a marital asset

Question 6

What is the default way to divide assets?

Answer 6

equally unless justification for unequal treatment is shown

Question 7

What does the court consider in dividing property? (ACIDMELD)

Answer 7

(1) A = assistance by one spouse to the career of the other
(2) C = contribution to the marriage (e.g. services, care of the children, interrupting career to put spouse through professional school)
(3) I = interruption of career
(4) D = desirability of one spouse retaining a particular asset
(5) M = misconduct that depleted marital assets (e.g. gambling, drugs, or an affair)
(6) E = economic circumstances
(7) L = length of the marriage
(8) D = desirability of the marital home as the residence of the minor children

Question 8

What is the threshold for an award of alimony?

Answer 8

One spouse’s need for alimony AND the other spouse’s ability to pay

Question 9

What are the different types of alimony (after July 1, 2010)?

Answer 9

(1) bridge-the-gap
(2) rehab
(3) durational
(4) permanent

Question 10

What are the different types of alimony (before July 1, 2010)?

Answer 10

(1) temporary
(2) bridge-the-gap
(3) permanent periodic
(4) lump sum
(5) rehabilitative
(6) nominal

Question 11

What is bridge-the-gap alimony?

Answer 11

provided to help a spouse transition from married to single status. Only for short term needs, and may not exceed two years. Not modifiable in amount or duration.

Question 12

What is rehab alimony?

Answer 12

Support issued for a defined period to a spouse can become self-supporting through education or job training. FL requires the needy spouse to show a plan to the court outlining a time frame and steps to be taken to ensure rehabilitation before granting the award

Question 13

What is durational alimony?

Answer 13

(1) purpose is to provide a party with economic assistance for a set period of time following a marriage or short or moderate duration OR following a long duration of marriage if there is no ongoing need for support on a permanent basis
(2) can’t exceed the length of the marriage
(3) can’t be modified unless there’s substantial change in the circumstances
(4) terminates on death or remarriage of the receiving spouse

Question 14

What is permanent alimony?

Answer 14

Awarded to a spouse who lacks the ability to be self-sustaining. Court must find that no other alimony is fair and reasonable under the circumstances. Terminated upon the death or remarriage of the party receiving alimony. Can be modified or terminated based on a substantial change in circumstances or if the receiving spouse has a supportive relationship

Question 15

When is permanent available in terms of each length of marriage?

Answer 15

(1) short-term marriages - if there are written findings of exceptional circumstances
(2) moderate-term marriages - if appropriate upon c+c evidence
(3) long-term marriage - if appropriate

Question 16

What is the length of a short term marriage?

Answer 16

0-7 years

Question 17

What is the length of a moderate-term marriage?

Answer 17

7-17 years

Question 18

What is the length of a long-term marriage?

Answer 18

17+ years

Question 19

What are the factors considered by the court in determining the amount of alimony awarded? (LSAT FACE)

Answer 19

(1) L = length of marriage
(2) S = standard of living
(3) A = age
(4) T = time needed to obtain educational training
(5) F = financial resources available to each party after collecting their share of equitable distribution
(6) A = all sources of income available to each party
(7) C = contribution to the marriage
(8) E = emotional and physical condition of each party
(9) Catch all = any other factor the court finds necessary to be fair to the party

Question 20

How does a spouse get a modification of alimony?

Answer 20

must show a substantial change of circumstances in either a party’s need or ability to pay

Question 21

What factors does the court consider in granting a modification based on a substantial change in the circumstances?

Answer 21

The change must be:

(1) permanent
(2) significant
(3) material
(4) involuntary
(5) something that couldn’t have been contemplated at the time or dissolution

Question 22

When can an alimony payment be reopened?

Answer 22

if either spouse filed a fraudulent financial affidavit so long as reopening is moved for in a reasonable period after fraud is discovered

Question 23

What factors does the court consider in determining whether alimony should be modified/terminated b/c the receiving spouse has entered into a “supportive relationship”?

Answer 23

a supportive relationship exists where:

(1) the parties are holding themselves out as a married couple
(2) the period of time the parties have cohabitated
(3) the extent of the parties’ financial interdependence on one another

Question 24

Is alimony affected by bankruptcy?

Answer 24

Nope

Question 25

How are attorneys fees determined in a dissolution or annulment?

Answer 25

court looks at the parties’ need and ability to pay to determine if one party should be ordered to pay all or part of the other party’s reasonable attorney fees and costs

Question 26

What is the rule for a contingent fee for a lawyer in a domestic relations matter?

Answer 26

A lawyer must not have a contingent fee arrangement in a domestic relations matter where the fee is contingent upon the securing of a divorce or upon the amount of alimony, support, or property settlement