Here is an interesting case we argued in the Maryland Court of Special Appeals about dividing bank accounts in a divorce.

The parties had two savings accounts at the time of their Maryland divorce, worth $86,075.66 and $23,228.33. The accounts were in the husband’s name. Since they were acquired during the marriage, they were marital property.

If you were the judge, you might be tempted to say the savings accounts “shall be equally divided between the parties.”  That is indeed what the trial judge said.

But you would be wrong.

Dividing Bank Accounts in a Maryland Divorce

The starting point to remember in Maryland for dividing property is that the court may not transfer ownership of property (with two exceptions — pensions and “family use” property).

The court did not have authority to divide the savings accounts.  That would require transferring assets from the husband’s name to the wife’s name.  And it breaks the rule that the court may not transfer ownership of property.

Section 8-202(a)(3) of the Family Law Article of the Maryland Code says:  “Except as provided in Section 8-205 of this subtitle, the court may not transfer ownership of personal or real property from one party to the other.”

The Court of Special Appeals reversed the decision.  It sent the case back to the trial judge with instructions.  The trial judge needs to count the savings accounts as belonging entirely to the husband.

Adjustments Are Made in the Marital Award

The court then uses the Marital Award to adjust the equities.  That means to make things more fair but not necessarily equal. A Marital Award is like a judgment in favor of one party against the other.  In our case, for example, the wife can use her marital award to attach the husband’s bank accounts if he doesn’t pay her voluntarily.  The appeals court said the trial court should adjust the marital award by half the total of the two savings accounts, adding approximately $55.000 to the wife’s marital award.

So the process is:

(1)  Don’t transfer ownership of property.

(2)  Indentify who owns what

(3)  Adjust the result through the marital award.

(4)  Don’t short cut these steps or take them out of order.

Zanini v. Abdullahi, Case No. 2390 (2019)

Life insurance to protect the alimony payment in a divorce

Recently I wrote regarding using life insurance to assure payment of child support.  Another scenario is life insurance to protect the alimony payment in a divorce – the spouse being the beneficiary of the policy.

This is a straight forward consideration flowing from payer/insured spouse to payee/beneficiary spouse.  The insured wants less coverage and less premium, the payee/beneficiary spouse wants more coverage.

Alimony Payer Benefit

Premiums on a policy of life insurance on the alimony payer benefit the alimony payee.  Payments to a third party on behalf of or for the benefit of a spouse or former spouse can qualify as alimony.  Paying insurance premiums can qualify if the payer spouse is not obligated to pay under the insurance contract – because in that situation he or she is not simply paying his or her own expense.

Generally, the owner of the policy is the person who is obligated to pay the premiums.  So in order for premiums on the life of the insured/alimony payer’s life paid by the insured/alimony payer to be deductible as alimony, the alimony payee must be the owner of the life insurance policy.

The parties’ Agreement should require the insured/alimony payer to pay the premiums on the payee’s behalf and the parties’ Agreement should state that such payments are alimony.

Survivor Annuity

Another situation where life insurance can be appropriate is to replace a survivor annuity if it is unavailable or available only on undesirable terms.  A traditional defined benefit pension pays a lifetime annuity to the retiree.

Federal law generally requires married persons to elect what is known as a joint and survivor annuity payment option, unless the employee’s spouse agrees otherwise in writing. In divorce, the parties can agree to a joint and survivor annuity or the court can order it.  Under this option, if the non-employee spouse survives the employee spouse, the pension payer continues the annuity payments at a reduced rate to the non-employee spouse for his or her life.

The initial payment (during the joint lives) under a single life annuity payment option is higher than the initial payment under the joint and survivor annuity option. Depending on the amount of that payment reduction, it may make financial sense to elect the single life annuity and buy life insurance on the employee’s life to protect the income stream for the non-employee in the event that he or she is the survivor.

The advice of an experienced life insurance professional can be very useful in doing this analysis. For further information see: https://www.consumersadvocate.org/life-insurance.

Life insurance is an important consideration to assure payment of child support.

The decision to pay money to an insurance company now so that the insurance company will pay others after you are dead is usually undertaken with some ambivalence. However, life insurance is an important consideration to assure payment of child support.

If you have minor children, you generally will still need life insurance coverage post-divorce.  But it is a prospect that many divorcing parents find even more distasteful at that time. Add to this, the fact that the divorce court generally cannot order a party to obtain or continue life insurance. (In Virginia, the court can order a party to continue existing life insurance coverage and designate children as beneficiaries if the party has a duty of support to such minor children. Va. Code Sec. 20-108. D)

The party who is proponent of the life insurance coverage, usually the economically dependent spouse, will often have to make a concession on some other issue to get the desired life insurance coverage. In many cases, since that concession would mean less money now to the economically dependent spouse, the concession is not made and the life insurance is not agreed to. As a result, many divorced fathers and mothers have far less life insurance coverage than a married parent with similar income, net worth and family responsibilities would have. One more risk for children of divorce.

When we represent the economically dependent spouse, or in case where there are two significant income earners, we look carefully at apparent life insurance needs and counsel clients to seek an agreement requiring adequate life insurance coverage. When we represent the higher earner, if there are minor children, we counsel our client to carefully examine the life insurance need and think it through before bargaining for lower coverage.

It is always necessary from the insured’s viewpoint for the Agreement to provide for reduced coverage as the future financial obligation decreases over time. This is especially important if the life insurance policy does not lock in level premiums per unit of coverage for the duration of the obligation.

It is best to consult with an experienced life insurance agent with a highly rated insurance company while the marital settlement agreement is being negotiated to determine the availability and cost of coverage.  For further information see: https://www.consumersadvocate.org/life-insurance.

 

A Robot Mediator for Family Law Cases?

“I’ve only got two tools my toolbox,”  divorce attorney Andy Pratt tells his clients.  “Either we negotiate an agreement with your spouse or we go to court and let the judge decide.”

Maybe now he will be able to add a third tool to his toolbox.

A robot mediator using artificial intelligence and an algorithm has settled a court case in Canada.  A client disputed a fee charged by a personal trainer.

The parties had tried mediation with a human but failed to resolve their case.

Then the parties tried Smartsettle ONE, an online program which allows parties to make offers and counter-offers by moving flags along sliders.  Another program, Smartsettle Infinity, allows participants to include conditions in their settlements.

They settled the case in less than two hours.

What’s next – a robot mediator for family law cases?

Wrong Ways to Respond to a Divorce Settlement Offer

Settling your divorce case out of court is almost always better than a divorce trial.  Knowing how to respond to a divorce settlement offer is important.

Many people don’t know how to use principled negotiation techniques to reach a divorce settlement. Here are some examples of the wrong way to respond to an offer:

Give an Ultimatum.

I received a response to a divorce settlement offer last week that was dead on arrival.  It said its terms were “non-negotiable”.  I have never seen that work.  Instead it closes down the settlement discussions.  The same can be said for deadlines pulling the offer, like “You have one week to say yes to this counteroffer or it is revoked forever.”  A lawyer I know expressed a better attitude when he said, “Everything I’ve got is negotiable.”

Respond Indirectly.

If you receive an offer that numbers the issues, like (1) child custody, (2) child support, and so on, don’t start your response by telling me that your spouse won’t agree to a visitation schedule. Respond in the same order, using the same numbers, and propose a visitation schedule that you want.  Save the blame for court.

Throw Out Everything.

I have received more than one letter from opposing counsel that my client‘s offer is ridiculous or unreasonable or unacceptable.   What am I supposed to do with that?  It would be more helpful for them to say which items are unacceptable and propose a counteroffer.

Go Backwards.

The purpose of negotiation to is reduce difference between offer and counteroffer until you reach a settlement.  If you are increasing the difference, you are not going anywhere.  Once you have offered alimony of $2,000 a year, it will be impossible to get your spouse to accept $1,000 a month in the next round of negotiations.

The right way to respond to an offer of settlement is through principled negotiations.  That means you respond specifically and directly only to the items in dispute, state your objections clearly, and propose compromises.

Pistol Annies
It takes judge to get married, takes a judge to get divorced
Well the last couple years, spent a lotta time in court
Got my name changed back (yeah yeah)
I got my name changed back (yeah yeah)
Well I wanted somethin’ new, then I wanted what I had
I got my name changed back (yeah yeah)
Well I’ve got me an ex that I adored
But he got along good with a couple road whores
Got my name changed back (yeah yeah)
I got my name changed back (yeah yeah)
I don’t wanna be a Missus on paper no more
I got my name changed back (yeah yeah)
(Here we go)
I don’t let a man get the best of me
Spent an afternoon at the DMV
Got my name changed back (yeah yeah)
I got my name changed back (yeah yeah)
Now who I was ain’t who I be
I got my name changed back (yeah yeah)
(That’s right)

The tall beauty strode into my shabby downtown office like she owned the place.  I wasn’t complaining.  She had booked a half hour consult and my rent was due.

Her voice was sultry with a foreign accent.  “My husband is behaving strangely.  We never talk anymore.  He is always tweeting on his cell phone or watching Fox News.  We lead separate lives.  It’s like we are roommates.  What do you think it could be?”

Divorce lawyers are the repository of cynicism in the world.  I broke it to her gently.  “The French have an idiom.  Cherchez la femme.  It means, ‘Look for the woman’.”

Her eyes started to tear up as I handed her the box of tissues.  A gesture I had repeated hundreds of times in this office.

I read that 42% of Republicans believe President Trump has been faithful to his wife.  I’d bet dollars to doughnuts that none of them were divorce lawyers.

I could see this case calling for stormy weather and a big retainer.

 

 

Gold digger: a woman who becomes or tries to become romantically involved with a rich man in order to get money and gifts from him.  Merriam-Webster Dictionary.

A Belgium tabloid has called Princess Tessy of Luxembourg a gold digger after she filed for divorce from Prince Louis.  What do you think?

The couple met while they were serving in the army in Kosovo. They have been married for 11 years and have two children.  The Princess spent her time raising the children and working for charities in Britain on behalf of young women and teenage girls.

She filed for divorce on the basis of the Prince’s unreasonable behaviour.  Her attorney said she made a fair and sensible proposal for a settlement and it was rejected.  The terms of the proposal are restricted by the court.

The Princess lose the title of princess and royal highness once the divorce becomes final.  She also stands to lose the home in London, where she lived with Prince Louis and raised their children.

 

So goodbye, goodbye
I’m gonna leave you now
And here’s the erason why
I like to sleep with the wiodwopen
And you kee0 the window closed
So goodbye
Goodbye
Gooobye

It turns out that thermostat settings are one of the biggest causes of conflict in marriages.  The wrong setting can cause one spouse to be too cold or too hot, and result in talks of divorce.

It’s not just mental either.  Scientists say that women have a lower body mass to surface area, slower resting metabolism and less muscle mass than men.  Therefore, they may feel more comfortable with warmer temperatures.

Financial considerations might come into play as well.  In the summertime, you can save between one to three percent on your air conditioning bill for each degree you set the thermostat over 72 degrees.

Can’t afford a divorce lawyer?   Need new furniture for your divorce apartment?  Plumfund.com is a website where you can ask people to contribute money for your divorce.

The site describes itself as “Free online crowdfunding for the people we love.”  It has different categories, from baby to funeral, to create a registry for your life events.

You can register your wedding and honeymoon under the Honeyfund category.  I found the divorce requests under “divorce” by using the site search function.