The Divorce Decree (50%) Flashcards
Equitable distribution involves a three-step process of determining:
- Determine the classification of all property (marital, divisible, separate)
- Value property subject to equitable distribution
- Determine what is an equitable distribution of the property
Equitable distribution treats property coming into the household during the marriage as belonging
to both spouses, divided at divorce
Separate property means:
Real or personal property acquired by the spouse before the marriage started or after the date of separation
- Bequest
- Inheritance
- Gift
The separate property of each spouse is not subject to division or distribution to the other spouse.
Property acquired by gift from the other spouse during the marriage is considered separate property only if
such intention is stated in the conveyance.
When is the net value of property determined?
At date of separation
What property is subject to equitable distribution?
2
Marital property
Divisible property
≠separate property
If separate property is exchanged for other property during the marriage, then
The court treats the exchange as separate property
Income from separate property that occurs during marriage is
separate property
Damages for things particular to that spouse will be treated as
separate property
Marital property includes:
all real and personal property acquired by either spouse or both spouses during the course of the marriage and before the date of the separation of the parties,
+
vested or non-vested pensions, retirement and deferred compensation
Marital property presumption?
If property comes into the household between the date of marriage and date of separation, then it is marital property
The Source of Funds Doctrine applies in North Carolina, meaning that
Dual characteristics of property (marital + separate)
-if it is mixed, separate out what is what.
Certain types of property is ongoing and the property is acquired as it is paid for.
“Divisible property” is defined as:
-Includes?
Property that was earned during the marriage and not received until after the marriage ends
-natural increase or decrease in value
≠increase in value due to work by spouse
Income earned from jobs during the marriage is treated as
Marital property
Value of property is to be determined:
By date of separation
-court must take into account good will when assessing value of property
What offsets marital property distributions?
Marital debt must be equally distributed
An equal distribution of marital and divisible property is presumed to be
equitable
A distribution is equitable when?
The distribution is fair
The court will accept a valuation in a separation agreement if
it is seemingly accurate in its division of assets.
Statutory factors Court will consider in equitable division of property
(12)
- income, separate property and liabilities of each party
- obligation of support for a prior marriage (previous alimony or child support)
- circumstances of the marriage (how long married, age and health of parties)
- Primary custody + need to raise in marital home
- What the parties have contributed to the marriage beyond income (child-care taking contributions)
- Sacrifices one spouse made for the career of the other
- Increase in value of separate property during the marriage
- Liquid or non-liquid property
- Difficulty of evaluating an asset
- Tax consequences for moving property
- Acts of parties to preserve or develop or waste marital or divisible property
- Court can consider any other factors
In-Kind Distributions are?
-presumption
each spouse gets a portion of each category of property
(1/2 of stocks, 1/2 of bank accounts)
-it is equitable
When in-kind distributions are not available
Court will have to give assets that are similar in value to one spouse in order to offset the value of the large asset given to the other.
Presumption that in-kind distributions are equitable can be rebutted by showing
(2)
-what happens if rebutted?
- one of a kind property not subject to division
- closely held business that splitting the control will incapacitate the business
A distributive reward is given
What is a distributive reward
Cash payments in a lump sum or installments that would compensate as if they got a share of the property
≠alimony if part of the property distribution
What can the court not consider in equitable distribution?
2
- cannot look at marital fault of the parties (unless there is waste after separation)
- whether a spouse will get alimony or child support
For future interests to be subject to equitable distribution
To be subject to distribution, the interest must be presently owned at the date of separation; therefore, non-vested interests are subject to distribution
Pension and Retirement Benefits subject to distribution
(1) If the benefits arise from work that happened before the marriage
(2) If based on work done during the marriage:
(1) Treated as separate property
(2) treated as marital property subject to distribution (regardless of if it is vested or not)
- -The court will have to figure out what portion of the benefits are attributable to work done during the marriage, before the marriage and after the marriage.
Equitable distribution of Personal Injury Awards
2
Pain and suffering awards are separate property
Compensation for economic loss are divisible if during the marriage
The court must award alimony, either for a specified or indefinite term, to the requesting party upon a finding that
(2)
- party seeking alimony is a dependent spouse (needs resources for day-to-day living)
- Other spouse is a supporting spouse (has resources to pay) and has been supporting dependent all along
An award of alimony is equitable after considering all relevant factors, including the following:
- Marital misconduct of both of the spouses
- Earning and earning capacity of spouses
- Ages and health of spouses
- Sources of income for each spouse
- Extent to which the financial situation of one spouse will be effected of being a custodian of a minor child
- Standard of living of the spouses during the marriage
- Assets and liabilities of the two spouses
- Separate property ownership
- Contribution made as homemaker
- Relative needs of the spouses (what parties need to live going forward)
- Tax ramifications
- Anything just and proper to consider
- Look back at the property distribution + child custody
Alimony is absolutely barred by
Exceptions
2
Any illicit sexual behavior, including adultery, by the dependent spouse during the marriage absolutely bars alimony, regardless of need,
- -unless the supporting spouse also committed illicit sexual behavior (could cancel each other out)
- -unless either party has been condoned by the other party must not be considered
Goal of alimony payments
Make sure that the parties go forward with the same standard of living as before
How is alimony taxable?
Taxable to the recipient
Tax deductible to provider
Rights of parent to child
3
- custody
- decision making
- support to child
Obligation to support a child exists until?
Age 18 or marriage, entry to military, emancipation
If the child has not graduated from high school by the time they turn 18: can continue support until age 20
A child support order is generally entered only against
the noncustodial parent
-assumes one parent has primary physical custody of the child
Parents obligation to pay college expenses
there is none
-can only have a contractual duty to pay in a settlement agreement
If there is joint custody, the court will order child support from the
more financially well-off parent
The guidelines the court considers when ordering child support consider
(2)
If the court chooses to deviate from the guidelines:
Schedule Guidelines: presumption of proper child support
- Parents income
- Number of children involved
-Court can deviate if it makes specific findings about need to do so (e.g. health needs of a child)
When are child support guidelines not available?
When the parent’s combined adjusted gross income is more than 20k per month
In such cases, the court should, on a case by case basis, consider the reasonable needs of the child(ren) and the relative ability of each parent to provide support.
When the court is looking at child support, it is looking at
What the needs of the child are
- Private school tuition
- Health Insurance
Child support may be paid as the court may order, including by:
(4)
(1) periodic payments (monthly);
(2) lump sum payment
(3) transfer of title or possession of personal property of any interest therein;
(4) lien on property
A child support order can be enforced by
5
Enforceable like any civil judgment is
(a) contempt proceedings
(b) criminal proceedings
(c) an order to make payments to a state official that collects and disburses support payments.
(d) income withholding
(e) revocation of licenses privileges (e.g. drivers, professional, hunters, passports)
Is the obligation to pay child support tied to visitation?
no, Interference with visitation rights by the custodial parent thus does not suspend or discharge the noncustodial parent’s obligation to provide support.
Child Custody Means
Right to control the child + make decisions for the child
Legal Custody Means
decision making authority for the child
- where to go to school
- who the doctor will be
Physical Custody Means
Day-to-day responsibility for the child
The court is directed to award the custody of minor children to the person, agency, organization or institution as will
Best promote the interest and welfare of the child
Guiding principle for custody?
Best interest of the child
An order for custody must include
The reasons for its decisions
What is the presumption of who will best serve interests of the child?
there is none, either parent could be best custodian of the child.
Factors to consider in best interest of child determination?
- who has taken care of the child in the past
- who knows most about the child’s needs
- preferences of the child
A child’s preferences for which parent will get custody will
North Carolina doesn’t require the court to take this into account, but they may consider the preference of a child who can reasonably express a preference.
(age 10 to 12)
If the court decides to interview the child to decide preference, what are the rights of parents
Get to be at the interview
Custody of a child may go to
- one parent
- both parents
- split legal custody and physical custody of the child
Joint custody must be considered by the court if
requested by either parent, but the ultimate decision will be made in the best interest of the child.
As between either of the parents and a third party, there is a presumption in favor of
the parent; unless, there is a clear showing that the parents cannot be fit parents
-there is a constitutional right to control the child, make decisions for the child
Can the court order that a child may be moved out the state?
Yes
Can the court order that one parent determines the religious training of the child?
Yes
An order for custody of a minor child may provide visitation rights for
for any grandparent of the child as the court, in its discretion, deems appropriate.
Can electronic communication replace or substitute for custody or visiting?
no, but can supplement
Can a court modify a property distribution after divorce?
No, closed upon date of divorce, the only way a court may be able to reopen the judgement is if there is a showing of fraud
Alimony, child support and child custody orders may all be modified if
There is a changed circumstances
Changed circumstances sufficient to modify Alimony
- terminates (3)
- may change (2)
Several events are considered a change in circumstances that will terminate the order for alimony:
- death of either party
- recipient spouse remarries
- recipient spouse cohabitants with another
There are other circumstances that may warrant a change in the order:
- Supporting spouse sees an unanticipated drop in income
- Something happens to the recipient spouse that changes their needs
≠The recipient spouse does not have to maintain the standard of living of the paying spouse.
When an order for alimony has been entered by a court of another jurisdiction, a court of this State may modify the alimony order if
upon a showing of changed circumstances enter a new order for alimony which modifies or supersedes such order for alimony to the extent that it could have been modified in the jurisdiction where granted.
Change circumstances sufficient to modify Child Support
3
- The child is entitled to enjoy the paying parent’s standard of living if it changes after divorce. (if it goes up, reflect increase)
- if child’s needs go up
- Child support calculations need to be revisited every few years to make sure that child support orders keep up with standard of living
Modification of a child custody order requires a two-step showing by the proponent:
(2)
- changed circumstances exist
+ - given those changed circumstances, it is in the best interest of the child to change the custodial order
Situations requiring child custody modification may include:
3
- changes in child’s preference
- changes in needs that one parent can better serve
- when custodial parent is relocated (≠ when parents are in the military)
A non-parent seeking custody over a parent must show?
That the biological parent is unfit
-must show abuse or neglect
> best interest of the child
A child is considered abandoned by its parents if?
The child is relinquished for six consecutive months
