Posts made in May 2018

DIVORCE – REIMBURSEMENT ALIMONY

Reimbursement alimony, as the name implies, is designed to reimburse one spouse for expenses incurred by the other. If, for example, one spouse helped put the other spouse through college or a training program and the couple divorces soon after the training program is complete, the spouse who supported the family during that period might be able to obtain reimbursement alimony as a payback for the resources spent. 

A classic example is the nurse who marries a medical student and supports the family while the medical student finishes medical school (and perhaps a residency program). If the couple divorces soon after the medical student completed training, the nurse probably would be entitled to reimbursement alimony to compensate for the resources used during the training program. In this case, reimbursement alimony is not necessarily being given because the nurse needs funds for day-to-day support (since the nurse would seem to be self- supporting). Instead, the alimony is given as an equitable payback for supporting the spouse through medical school. 

DIVORCE AND PERMANENT ALIMONY

Permanent alimony continues indefinitely. The main bases for teasing payments of permanent alimony are the death of the payor, the death of the recipient, or the remarriage of the recipient. Cohabitation of the recipient with a member of the opposite sex also is a common basis for cessation of permanent alimony. Generally, the cohabitation needs to be of a permanent or near permanent nature, with the parties who are living together sharing living expenses. A few overnight visits usually do not constitute cohabitation for the purpose of stopping alimony payments. 

Unless an agreement between the parties says otherwise, payments of permanent alimony can be adjusted upward or downward based on a change of circumstances. If the recipient gains employment at a well-paying job or receives a significant amount of money from an other source, that might be a basis for reducing alimony payments. If the recipient incurs unexpected medical expenses (that are not covered by insurance), that might be a basis for increasing alimony payments, if the spouse paying alimony has the ability to pay more. 

WHAT IS REHABILITATIVE ALIMONY?

Rehabilitative alimony refers to alimony that is given to a spouse so that the spouse may “rehabilitate” herself or himself in the sense of acquiring greater earning power or training in order to become self- supporting. Rehabilitative alimony also might be given to a parent who is staying home with young children until such time as it is considered appropriate for the parent to work outside the home. 

There is no uniform time at which parents automatically are expected to work outside the home, but when the youngest child is in school full-time is a common time for the parent to resume work. (Of course, in many families, intact and divorced, the parents work outside the home when the children are preschoolers. And in some families, one parent stays home as long as the children live at home.) 

DIVORCE – RESUMPTION OF UNMARRIED NAME

A woman who divorces may resume her unmarried name or keep her married name as she wishes. She can even change her name to something completely new, as long as she is not doing so for fraudulent purposes. Court proceedings generally are not necessary in order to change a name. 

If a woman is changing her name, she should notify government agencies and private companies that have records of her name. Examples of places to notify: the Internal Revenue Service, Social Security Administration, Passport Agency (within U.S. State Department), Post Office, state tax agencies, driver’s license bureau, voter registration bureau, professional licensing agencies, professional societies, unions, mortgage companies, landlord, banks, charge card companies, telephone companies, other utilities, magazines and newspapers to which she subscribes, doctors and dentists, and schools and colleges that she attended or that her children attend. 

DIVORCE – ALIMONY/MAINTENCE

Alimony and maintenance are terms that refer to payments from one spouse to the other spouse for the bene- fit of the spouse who is receiving payment. Some states use the term alimony; other states use the term maintenance; both mean the same thing. Only about 15 percent of divorces or separations involve payments of alimony. (For simplification in the rest of this section, we will use only the term “alimony,” but wherever “alimony” is used, “maintenance” could be substituted.)

DIVORCE AND EFFECT OF BANKRUPTCY

A property settlement might be dischargeable in bankruptcy or it might not be dischargeable, depending on the facts of the case. A discharge in bankruptcy means that all of a debt or a portion of a debt no longer has to be paid, because a federal court has declared the debtor to be bankrupt. 

Prior to 1994, many former spouses of persons who declared bankruptcy after the divorce found themselves out of luck when seeking to collect what was due. A wife, for example, may have agreed to a divorce based on a promise from her husband that three years after the divorce, he would pay her a certain amount of money as part of the property settlement. If after the divorce was finalized, the husband declared bankruptcy, the wife might never collect the amount that was due. 

DIVORCE AND ALLOCATION OF DEBTS

In addition to dividing property, most couples also have debts to divide. Sometimes the debts will exceed the assets. The court, or the parties by agreement, will divide whatever property the couple has and then allocate the responsibility of each party to pay off particular debts. (The wife pays off MasterCard; husband pays off Visa, and so on.) 

If the debts were jointly incurred, both parties remain ultimately responsible for them. If the spouse who was supposed to pay a particular bill does not, the creditor still can look to the other spouse to collect the amount due. For example, if during the marriage the husband and wife applied together for a MasterCard, both signing the application and both promising to make payments, both are liable to MasterCard, even if only one spouse made the charges. 

If a court or a settlement agreement requires a wife to pay the MasterCard bill, but she does not and MasterCard collects from the husband, the husband can sue the wife for the loss, or he may be able to deduct his loss from future payments he may owe his wife (such as alimony, if there is any). 

Given the potential for continued joint debts, even after a divorce, it is important to limit one’s liability for the other spouse’s debts. Thus, it is best to close joint credit card accounts or other joint accounts as soon as a divorce is pending (unless the party has a great deal of faith in one’s soon-to-be ex-spouse). If it is not possible to close an account because there is an outstanding debt that cannot be paid off immediately, it is prudent for a spouse to notify the creditor that he or she will not be responsible for any additional debts beyond current outstanding balances. 

DIVORCE AND PERSONAL INJURY AWARDS 

Occasionally couples are faced with dividing a personal injury damage award. If, for example, the husband or wife were involved in an auto accident for which someone else was at fault, the party who was injured might receive (or be entitled to receive in the future) a sum of money for the damages. When the couple divorces, who is entitled to the damage award? 

States take different approaches to the issue. Some states view the award as separate or non marital property. Thus, all of the damage award belongs to the injured party. Courts in those states reason that the injury was suffered by only one spouse, and the damage award was designed to make the injured spouse whole. Therefore, all of the damage award belongs to the injured spouse. 

In some personal injury lawsuits, there are two damage awards: one for the spouse who received the physical injury and another damage award for the spouse of the injured party to compensate that spouse for loss of companionship, or consortium, that resulted from the injury. (Loss of consortium refers to loss of sexual relations and, under some definitions, the term also refers to loss of general companionship.) If a state treated damage awards as separate or non-marital property, each spouse would be entitled to his or her own damage award, but they would not be entitled to any portion of their partner’s award. 

How To Reduce Your Child Support When Your Child Reaches 18

When a child reaches the age of majority (usually eighteen)or graduates high school, that normally is a basis for stopping child support for that child, unless the parent is obliged to help pay for that child’s college education. 

Whether payments stop at age eighteen or at graduation from high school depends on the law of the state. Many states say payments stop at the later of those two events (assuming the child will graduate high school in a normal amount of time). 

If only one child is the subject of a support order, the parent who is obliged to pay child support (the obligor) can stop making payments when the child reaches eighteen or graduates high school. The obligor does not have to go to court to seek permission to stop payments. 

If there is more than one child who is subject of a support order, the right of the obligor to reduce payments when the oldest child reaches the age of majority will depend on the wording of the court’s support order. 

If support is set at a certain amount per child (for example, “child support shall be $200 per month for each of the three children”), then the obligor may reduce payments by $200 as each of the three children reach the age of majority. Under this example, child support would be $600 per month when all three children were under eighteen; $400 per month when the oldest child reached eighteen; $200 per month when the middle child reached eighteen; and no support when all three were over eighteen. 

How And When To Modify Your Child Support

The most common standard for modification of child support is a substantial change in circumstances. That usually refers to a change in income of the parent who is supposed to be paying support. If the parent who is obliged to pay support suffers a loss of income, that could be a basis for reducing support; conversely, if the parent’s income increases, that could be a basis for increasing support. 

Changes in circumstances of the child also can be a reason for modifying support. If the child has significant new expenses, such as orthodonture, special classes, or health needs that are not covered by insurance, that too can be a reason for increasing support. 

Significant changes in the income of the parent seeking support also can be a basis for modification. If the custodial parent’s income drops (particularly through no fault of the custodial parent), that might be a basis for increasing support. If the custodial parent’s income increases, that might be a basis for reducing support from the noncustodial parent.