What Are the Unspoken Terms and Conditions of a Marriage

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What if you were asked to enter into a business deal with another person on the condition that you agree to terms and agreements you have never seen, negotiated nor discussed.

Yet many people marry without a prenuptial agreement. And each assumes the other is a mind reader and assumes they agree to certain unwritten terms and conditions.

First in the absence of a prenup, you are by default agreeing to a complex and intricate set of laws in your State Code. These laws control how your property will be divided in the event of a divorce.

Then there are the unwritten terms and conditions which each of you thinks the other has agreed to although you haven’t mentioned or discussed them.

Divorce attorney, Larry Frolick describes the unspoken terms and conditions that Mary and Joe think they have in their marriage contract. Perhaps not surprisingly, their terms and conditions are different.

Joe’s Unspoken Terms and Conditions:

I chose to marry you, Mary, because you’re calmer and more deliberate than my mother

– so don’t you dare ever do anything that reminds me of her

– especially when I go fishing every spring like my dad

– and don’t freak out like she did, about leaving her alone on weekends.

Mary’s Unspoken Terms and Conditions

I’ll love you (and will sleep with you and nobody else).

I’ll, listen to your problems and try to help (as long as they are not too overwhelming and especially if they don’t remind me of my alcoholic father’s problems).

I’ll keep you company on most weekends

– unless the business I intend to start in 36 months takes off and gets me out of town, and

–unless my sisters call for a family emergency that will take precedence over any situation here, except your heart attack or other life threatening disease

I’ll continue to work at my (boring) job to pay for our (first) house

– but only for two years

– I expect (based on what you bragged about when we were drinking orange juice and champagne with the Fergusons), that you will start earning $100,000 by then

Then we will move to a house

– at least as good as my parents’ and

– in a comparable neighborhood

And have a baby

– who had better not remind me, as she grows up, of your mother

– whom you’d better stop defending pretty quickly

Our baby will be like me

– but will not be forced into things by her family, like having to escape because they are so demanding and unreasonable.

Side Deals.

Not to mention the unspoken side deals with third parties:

This marriage doesn’t mean, Mom, that I won’t come home every Thanksgiving for the rest of my life

– and sleep in my room and

– overlook Dad’s fooling around with Mrs. Carter in our little family game we know so well

I’ll continue to be your little girl/boy.

Conclusion

It isn’t easy, but if you can get your unwritten terms and conditions out of your head and into your mouth and discuss them with your spouse, it may avoid a call to the divorce lawyer.

 

/by James J. Gross

Tips to Settle Your Divorce Case

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My client asks me to explain to the other side how he came up with that offer of alimony, taxes, or property division.

We think that if we talk and talk and talk, the other side will eventually get it.

IF only we can explain it to them, they will slap their palm to their forehead and say “Oh, now I understand.”

But it doesn’t work that way.

The way to a settlement is to find out what the other side wants and needs.

And you do that by asking questions and listening to the answers.

/by James J. Gross

Keeping My Crash Settlement?

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Kathy, a divorce client in Maryland, writes, “I just got a settlement from a car accident I had in 2020. It’s all non-marital isn’t it because it was for my personal injury?”

My Response

Kathy, I’m afraid not.

In Dearing v. Dearing, 292 Md. 115 (1981), the Maryland Court of Appeals (now Supremember Court of Maryland) established the “analytic approach.” Courts must allocate the award component by component rather than all or nothing.

Personal injury awards in divorce must be broken down with each element classified based on what it replaces or compensates. Income that would have been marital property is marital. Pain and suffering compensate the individual spouse personally. Therefore, it is not a substitute for any marital asset.

In Maryland, personal injury awards are part marital and partially non-marital property. It depends on what the damages compensate for.

Not marital property (exempt from equitable distribution):

  • Pain and suffering
  • Disability/disfigurement
  • Loss of consortium (the injured spouse’s personal claim)

Marital property (subject to equitable distribution):

  • Lost wages or earning capacity (income that would have been marital)
  • Medical expenses paid with marital funds
  • Loss of services to the marital unit

Deering remains the controlling Maryland authority on personal Injury awards in divorce. It also reflects Maryland’s broader equitable distribution philosophy. Courts look through the label to the economic substance of an asset.

Litigation note

Unallocated lump-sum settlements create the biggest headaches under Deering. The burden of tracing falls on the spouse claiming non-marital character.

Practical note

If the award is a lump sum with no itemization, courts will apportion it. Settlement agreements and jury verdicts that break out damages by category are much easier to handle in divorce proceedings. If you’re dealing with an unallocated settlement, expect a fight over what portion represents wage replacement vs. pain and suffering.

/by James J. Gross

Checklist: What goes into my marital settlement agreement?

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Details, details. Getting the best results from your divorce is often a matter of addressing all the right details. There are many issues to consider as you define the right marital settlement agreement.

Over the years, I have developed some checklists to help clients make sure they answer all the important issues.

This checklist covers some important items that need to go into your settlement agreement.

Children

[x] Where will the children go to school?

[x] Who will decide if they go to public or private school?

[x] What about tutors and extra-curricular activities?

[x] Who will decide about the need for the children’s medical and dental care?

[x] What doctors and dentists will they see?

[x] What medications will they take?

[x] Who will decide if they need braces, cosmetic treatment, or therapy?

[x] What religion will the children be raised in?

[x] What will be their last names?

[x] Who will give consent if they want to get married or join the armed services before age 18?

[x] Who will select a lawyer if the children have a lawsuit?

[x] Where will the children live most of the time?

[x] What will be their routines at each house, for homework or television or going to bed?

[x] What will be the schedule for timesharing or visitation?

[x] What will the schedule be for each week, holidays, vacations, and summer?

[x] What will happen to these arrangements if one parent relocates?

Child Support

[x] How will the financial needs of the children be supported?

[x] Who will pay child support and how much?

[x] Will it be paid directly to the other party by personal check or through a court order?

[x] Will it be paid once a month or twice a month or every two weeks and on which day(s) of the month?

[x] Will it be adjusted each year for inflation or not?

[x] When will child support stop?

[x] Who will pay for health insurance?

[x] What about uncovered medical expenses?

[x] Who will pay for day care and summer camps?

[x] What about extra-curricular activity expenses like piano, soccer, ballet, or karate?

[x] Who will pay for religious celebrations, weddings, or automobiles?

[x] How will college expenses be handled?

Note: The court always has the final say on child custody, visitation, and child support. It cannot delegate this authority to the parties or a third party mediator or arbitrator. The court can consider the opinion of the parties and third parties, and often follows these recommendations. However, the court must make its own decision based on the best interest of the child. And the court can always modify custody, visitation, and child support if circumstances change and that would be in the best interest of the child.

Alimony

[x] Is any type of spousal support needed

[x] How much and for how long?

[x] Should there be a cost of living escalation?

[x] When does spousal support terminate?

[x] Is it modifiable or non-modifiable in the future?

[x] Who will pay the legal fees for the divorce?

[x] Is there life insurance to secure child support and spousal support?

[x] What about health insurance for each spouse?

Property

[x] What will happen to the marital home?

[x] If it is to be sold, when will it be listed for sale, at what price, and when?

[x] How will the sales proceeds be divided?

[x] If one spouse buys the other one out, what is the price and what are the terms for payment?

[x] How will you deal with the mortgage if it is in joint names?

[x] Who will draft the deeds and pay the costs for transfer?

[x] What happens to the automobiles, household furniture, furnishings, jewelry, clothing, and other personal items?

[x] How will bank accounts and stock be divided?

[x] What happens if there is a family business?

[x] How will retirement funds be divided? Will there be a survivor annuity and who will pay for it?

[x] Whose lawyer will draft the court order for dividing retirement funds and who will pay for it?

Taxes

[x] Will you file joint or separate returns?

[x] Who will prepare the returns or pay for their preparation?

[x] Who will get the tax credits and head of household tax status for the children??

[x] Who will pay if there are taxes due?

[x] How will a refund be divided?

[x] What happens if there is an audit for past years?

[x] Who will pay any taxes due on sale of the house, stock, or distribution of pensions?

 

Agreeing on these details now can save you a lot of additional legal proceedings down the road.

/by James J. Gross

Help! Just Found Out Divorce Mediation Is Tuesday!

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“Just found out divorce mediation is Tuesday afternoon!!!

Help! I’m nervous

What do I do?!

What do I say?

How do I dress?

How do I act?

What questions should/shouldn’t I ask?

Give me all tips/advice you all have please! ”

— Nicole’s post on Facebook

Advice for Handling Divorce Mediation

Nicole:

Everybody is nervous in a divorce. In fact I’d be nervous if you weren’t nervous. But here’s a tip that will help you calm down and give you more confidence during the mediation.

Write the main categories to be decided down the left side of a piece of paper. These will be your rows. The main categories are child custody, child visitation, child support, alimony, property division, and legal fees. You can expand on this by adding subcategories.

For example, under visitation, you might have subcategories of weekly schedule, holidays and summer vacations. Under property division, you would have the big ones, like house and pensions, as well as bank accounts, automobiles, and furniture.

Next, make three columns labeled best, middle, and showstopper. Fill out your objective in each row and column. This will make you think about what you really want, what you can live with or without, and what will make you walk out of the room if you don’t get. It also help you know what to say.

It doesn’t matter so much how you dress but I would suggest business or business casual will make you feel comfortable. Act firmly but politely. Remember you are there to problem solve, not to blame or assess fault. You can ask any question you want. Let the mediator take the lead.

You don’t have to reach an agreement if you don’t think it is fair. But as the mediator will probably tell you, you will save a lot of time and money if you do.

 

/by James J. Gross

Litigating Military Pensions in a Divorce

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Divorces are full of tripfalls and traps and pensions are the quicksand of divorces.  Dividing military pensions adds another level of difficulty altogether.

Howell v. Howell

When John and Sandra Howell got divorced  in Arizona the state court awarded Sandra 50% of John’s military retirement pay.  She began receiving payments a year later when John retired.  About 13 years later, the Department of Veterans Affairs found John to be partially disabled due to a service connected injury.

The Uniformed Services Former Spouses’ Protection Act authorizes states to treat veterans’ “disposable retired pay” as community property.  10 U.S.C. 1408.  However, if a veteran receives disability pay, her or she is required by law to waive the same amount from pension benefits and the definition of “disposable retired pay” specifically excludes amounts waived for disability payments.  10 U.S.C.  5305.  In the Howell case this reduced Sandra’s payments, and increased John’s payments, by about $250 a month.

Sandra petitioned the state court to enforce the divorce order and restore the original payments.  The court agreed and so did the Arizona Supreme Court when John appealed.  But that’s not the end of the case and John was determined to take it all the way to the U.S. Supreme Court.  That court, in 2017, held that the federal law pre-empted states from dividing waived military retirement pay as community property   State courts could not require the veteran to reimburse or indemnify a spouse for a loss of benefit due to the disability  waiver.

The Loopholes

  1. The U.S. Supreme Court said a state court could adjust alimony to take into account the possibility of a future reduction in disposable retired pay, or
  2. A state court could value the pension less because of the contingency that it might be reduced and divide or set off other community property to take that reduction in value into account.  (Equitable distribution states like MD, VA and DC could adjust the marital award to account for this contingency.

Weiser v. Weiser

What if the parties have an agreement on how they will divide military pension?  The parties can do lots of things that judges cannot do.  The courts will enforce agreements by the parties even if they provide for something the court does not have the power to order.    Andrew and Michelle Weiser married in 1992 and divorced in 2011.  Their marriage settlement agreement said:

“In the event the husband’s military retirement benefit shall be reduced or offset by disability pay, such a reduction shall not reduce the amount the wife is entitled to receive each month under the terms of this order.”

Andrew retired in 2010 after 20 years in the US Army.  In 2012, Andrew received a 30% disability rating and started receiving disability pay which reduced his retirement pay. He began paying Michelle one half of the remaining military retirement pay, rather than one half of the original military retirement pay.

Michelle sued to enforce the agreement and collect the reduction in payments.  Her lawyers argued that since there was no agreement in Howell it did not apply to the Weiser case. They also argued res judicata which means the dispute has already been decided in the case.

Even if it was decided wrongly, the court will not reopen the case to let the parties relitigate it.  The Washington Court of Appeals agreed with Michelle and awarded her attorney fees.

The Law Governing Military Pensions in a Divorce

Is this the last word on the subject? Another judge on another day could find the contractual provision void as against public policy and decline to enforce it.

It doesn’t seem right to let a veteran wiggle out of his agreement not to reduce pension payments to a former spouse just because the payments change from retirement pay to disability pay. But Congress passed the law to protect veteran’s disability pay from all creditors including former spouses.

We’ll have to wait and see if Congress or the U.S. Supreme Court clarifies the law. In the meantime, watch out for the  quicksand!

/by James J. Gross

Liquidated Damages – Tips for Settling Your Divorce Case

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“Simplify.  Simplify.”  — Henry David Thoreau

Divorce negotiations can feel like Whack-A-Mole. There are so many issues. And they are interconnected so if you change one the others change. For example, if alimony goes up, child support goes down. One tool I have in my divorce toolbox is liquidated damages. That means reducing disputes to a dollar amount.

A Typical Scenario

Let’s say I represent a husband in a divorce. He moves out of the marital home into an apartment and the wife still lives there. She wants to know who is going to pay the bills until they reach an overall agreement or the divorce judge decides at trial. She worries he will cancel her health and auto insurance.

The husband has his own expenses to pay now and wants the wife to pay her own living expenses.

Each spouse is angry and feels the other is to blame for the separation.

Liquidated Damages Offer and Demand

After some back and forth with opposing counsel, I suggest we convert the various disputed issues into a single dollar amount.

I ask opposing counsel how much money the wife is requesting each month. This is the “demand” because it is the amount the wife is demanding the husband pay.

Then I ask my client how much he is willing and can afford to contribute to the wife’s expenses until we settle or go to trial. This amount is the “offer” or the amount he is offering to pay the wife to settle.

Ceiling and Floor

Now we have established a ceiling and a floor for settlement negotiations.

Next we try to negotiate a liquidated damages number somewhere between the offer and demand.

This simplifies the dispute and takes some of the emotion and blame out of negotiations. The parties are also able to bring more certainty and stability to the future and plan their budgets accordingly.

/by James J. Gross

Dividing Bank Accounts in a Divorce

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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)

/by James J. Gross

Winning the Lottery

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Are lottery winnings marital property?

Today’s scenario: A man who is legally separated from his wife wins the lottery. Does he have to share the winnings with his wife? The marital property law of your state holds the answer.

I’ve done the calculation and your chances of winning the lottery are identical whether you play or not.” — Fran Lebowitz

If you buy a ticket on Friday, you have a better chance of dying by Monday than winning the lottery.” –Anonymous

Do ya feel lucky, punk? Well do ya?” — Clint Eastwood in Dirty Harry.

All life is 6 to 5 against.” – Damon Runyon.

Jackpot or “Share”Pot?

Rich Zelasko of Detroit, Michigan, had been separated from his wife, Mary Beth Zelasko, for two years when he bought a ticket in the Mega Millions Lottery in 2013.

He won more than $30 million. Does he have to share it with his ex-wife? The divorce was final in 2018.

The Michigan appeals court says marriage isn’t over until it’s over. So Mary Beth Zelasko gets $15 million of the jackpot awarded by an arbitrator.

The husband’s attorney argued, “Rich was lucky, but it was his luck, not Mary’s, that produced the lottery proceeds.” But the arbitrator ruled that the ticket was marital property and the court upheld that decision.

A Different Result in California

Denise Rossi won $1.3 million in the California Lottery.  She field for divorce 11 days later.  However, she did not disclose her winnings.  When it was discovered, the judge gave the entire amount to the husband.

Virginia Marital Property Law

In Virginia, marital property is determined at the date of separation. So Rich would not have had to share his winnings if he lived in Virginia.

Maryland and DC Marital Property Law

In Maryland and DC, marital property is determined on the date of trial and it includes property acquired during the marriage.  Under marital property law there, the judge can still adjust the division of property through a marital award after considering various factors set forth in the statutes.

That’s just what happened when Mr. Alton bought a DC lotto ticket and won over a million dollars while separated but not divorced.  The trial court gave the wife half, but the Maryland Court of Appeals reversed, saying:

Mr. Alston, using his own funds, purchased the ticket and won the Lotto. This event was not dependent in any way on the parties’ joint efforts or shared life, past or present. At the time, the marriage was, for all practical purposes, over.

Alston v. Alston, 331 Md. 496 (1993)

Alimony and Child Support

Lottery winnings are also considered to be income in all three jurisdictions and that can affect alimony and child support.

/by James J. Gross

A Robot Mediator for Family Law Cases?

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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?

/by James J. Gross