Post Divorce Economic Issues

Question 1

What are the 2 steps toequitable distribution?

Answer 1

STEP 1 Divide assets into 3 categories (on exam make 3 columns): (1) Spouse 1’s; AND (2)Spouse 2’sseparate property (3) Marital property subject to distribution STEP 2 (i) Give S-1 and S-2 their separate property (ii) Exercise equitable discretion to divide up the marital property subject to distribution

Question 2

How is the separate property of each spouse determined?

Answer 2

Separate property = Anything owned PRIOR to marriage, like… Bequests/gifts received by either spouse in their sole name

		Inheritance

		Property they agree will be treated as separate property (in written agmt)

		Personal injury compensation (designed to comensate for pain/suffering)

		Passive appreciation on the above property (change in value due to time or market place fluctuation)									BUT appreciation due to active participation or mgmt by spouse in adding value is a MARITAL asset (Ex – increase in value of a separate property during the marriage due to the contribution of the other spouse as homemaker & parent)

Question 3

How ismarital property determined?

Answer 3

Marital property subject to distribution, includes… All property acquired during marriage REGARDLESSof how asset titled & who works

		Includes professional licenses/degrees earned during marriage (but advanced earnings cannot be double counted for alimony purposes)					All businesses, salaries, stock options, lottery winnings, pension rights, gifts from spouse
					RULE: when in doubt, it’s marital

Question 4

How does a ct determine how to distributemarital assets?

Answer 4

Court may consider any relevant factor, EXCEPT marital fault, UNLESS such fault is egregious (“shocks the conscience”) Courts divide marital property equitably & are guided by statutory factors (age, health insurance coverage, job skills, custodian of children, etc.) but there is no exact percentage & the court has discretion

		Can order in-kind transfer (item by item) ORlump sum (cash award payment) to effectuate distribution 		

Question 5

What are 2 types of maintenance?

Answer 5

Aka “alimony” 1) Temporary maintenance- ordered while case is pending to meet temporary needs of parties (designed to preserve the status quo) On essay, say this if the party is worried abt supporting themselves during a claim

2) Final maintenance – post-divorce, continuous pmt			No automatic entitlement—based on reasonable needs of recipient

Question 6

In assessing maintenance amt, what factors does a ct look to?

Answer 6

Court may consider ANY factor it deems relevant, including… Nature & degree of fault;

		Age and health of parties;

		Skills, earning capacity, time needed to gain job skills;

		Whether spouse cares for the children or another family member;

		Standard of living while married;

		Duration of the marriage;

		The division of property already

NOTE:the economically stronger party generally pays the weaker party's counsel fees in an action for maintenance

Question 7

How are maintenance orders enforced, modified OR terminated?

Answer 7

Enforcement: if spouse violates the order for maintenance, the ct can… Seize & sell property

		Attach spouse's wages

		Seize drivers & professional licenses

		Hold spouse in contempt of ct (jail time)

Modification: any party can move for a modification (up or down)			Modification permissible upon showing of change in circumstances (payer got laid off, injured, recently graduated school & can now get job, etc)

		If p/t separation agmt, extreme hardship must be shown

		Prospective modification only – past due pmts are STILL owed									Encourages people to get to ct. early upon a change in circumstances

Termination:			Normally terminates AUTOMATICALLY on death of either party

		Remarriage (or cohabitation as if marriage) of recipient spouse is grounds for termination AUTOMATICALLY									NOTE: cohabitation w/o marriage not enough to terminate unless cohabatitor represents to the world that he’s married.

		NOTE: YOU CAN K around these automatic terminations in a sep agmt