Post_divorce economic issues Flashcards
What are the 2 steps toequitable distribution?
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
How is the separate property of each spouse determined?
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)
How ismarital property determined?
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
How does a ct determine how to distributemarital assets?
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
What are 2 types of maintenance?
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
In assessing maintenance amt, what factors does a ct look to?
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
How are maintenance orders enforced, modified OR terminated?
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
