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

The Thin Man’s Divorce

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“I’ve never been divorced before,”said the thin man sitting across the desk from me. His dark narrow eyes darted back and forth as he nervously sipped the bottled water my receptionist had given him.  He sank into one of the two wing-back chairs in my office. “I don’t know anything about it.  I have a million questions.”

In my line of work as a divorce lawyer I meet all kinds of people. I tried to put the thin man at ease. I put my fingers together in a church steeple, closed my eyes halfway, and leaned back in my burgundy leather office chair in my best Perry Mason imitation. “Well I’ve been divorced twice, so ask me your questions.”  I then proceeded to give him the following answers to his questions one by one.

Question 1.  I had an affair.  Am I going to lose everything in the divorce? 

Adultery gives your spouse grounds for divorce, not the right to 100% of the house, cars, 401(K), and everything else.  Jointly owned properties are divided equally.  The judge can make a marital award to make sure the division is fair.  In determining the marital award, the judge considers several factors.  One of these is who was at fault in the termination of the marriage.  The judge can also make adjustments for any marital funds you have spent on the affair.

Question 2.  Will the court take the children away from me because I cheated?

Adultery may make you a bad spouse but it does not necessarily make you a bad parent.  In Davis v. Davis, 280 Md 119, 372 A.2d 231 (1977), the Maryland Court of Appeals said

Whereas the fact of adultery may be a relevant consideration in child custody awards, no presumption of unfitness on the part of the adulterous parent arises from it; rather it should be weighed, along with all other pertinent factors, only insofar as it affects the children’s welfare.

The court looks at what is in the best interests of the children, not what is in the best interests of the parents.

Question 3.  Can My Spouse Get a Divorced if I Don’t Agree?

While it takes two people to get married, it only takes one to get divorced.   If you don’t want a divorce, you can slow down the process, but a spouse determined to get a divorce can get one.

Question 4. Do I Have to Have a Lawyer to File for Divorce?

It is not a requirement that you hire a lawyer for your divorce.  The Maryland courts have published divorce forms on the Internet and there is a self-help desk at the Montgomery County, Maryland, Courthouse.  We have do-it-yourself divorce help on this website and we have published self-help divorce books.  However, divorce cases can get complicated quickly.  If your case involves child custody, alimony, real estate, retirement funds or other assets, we recommend you hire a lawyer.

Question 5.  Does the Mother Always Win Custody?

In the old days many judges followed the Tender Years Doctrine which presumed that mothers were the better care taker for young children.  Today, however, the standard is best interests of the children.  Many jurisdictions, like The District of Columbia presume that joint custody is in the best interests of the children.

Question 6.  Can a Husband Get Alimony?

Today, there are many cases where the wife makes more money than the husband.  In those cases, husbands are entitled to the same rights as wives including the right seek alimony.

Question 7.  How Much Is All This Going to Cost?

In most cases of a long marriage, the judges in Maryland, Virginia and DC will divide marital assets equally, but they are not required to.  If you make a lot more than your spouse, or your spouse is ill or requires some training to get back in the workforce, you will probably have to pay alimony.  The judge decides the duration and amount.   Once custody and alimony are determined, you can use online calculators to determine child support.  You may have to pay all or a portion of your spouse’s attorney fees as well as your own.

 *  *  * 

The thin man sighed and said, “Thank you.  It’s not what I wanted to hear but I feel better knowing than not knowing.  I want you to be my lawyer.  What’s the first step?”

“Sign my retainer agreement and pay my retainer,” I replied as I pushed the document across the desk and held out my Mont Blanc fountain pen.  “I’ll start working on your case immediately.

 

/by James J. Gross

The Divorce Lawyer Answer Desk: Should I Tell My Wife About My Affair?

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“I had an affair with a woman I work with a few years ago,” said the prospective divorce client in Attorney Hamilton Starke’s office.  “I think I should tell my wife about it.”

“No, no, no!’ exclaimed Starkes.  “Look, your guilt is making you want to confess.  But the more you explain, the more problems you will create.”

“But I thought Maryland was no-fault divorce?”

Grounds for Divorce

“No-fault applies to grounds for divorce.  Maryland has both fault and no-fault grounds for divorce,” Starkes explained.  “We started with only fault grounds which are desertion, adultery, imprisonment, and insanity. Then we added the no-fault grounds which are currently one-year separation and mutual consent.”

 Alimony

“In a contested divorce, even one brought on no-fault grounds, a judge must consider fault in determining the amount and duration of alimony,” Starkes continued.  “Or, as the law puts it, the circumstances that contributed to the estrangement of the parties.  That includes fault such as an affair.”

Property Distribution

“And that’s not the only trouble a confession will bring to your case,” Starkes said.  “Maryland law requires a three-step procedure for distributing property.  In Step One the judge identifies the marital property of the parties.  In Step Two the judge values the marital property.  In Step Three the judge adjusts the equities if necessary with a Monetary Award.

In determining a Monetary Award,” Starke explained, “the judge must consider several factors including the circumstances that contributed to the estrangement of the parties.  So here we are, back to fault again.”

Confession or Discretion

“So I should lie to her?” asked the prospect.  Is that what you’re saying?”

“No,”  Starkes said, “Always tell the truth.  You just don’t always have to be telling it.”

/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

Leaving Something on the Table

by James J. Gross

When I was a young attorney, I worked in the General Counsel’s office of a big corporation.  I negotiated contracts fiercely trying to get every last cent on my company’s side of the table.  One day, an older guy in the contract administration department pulled me aside.  He told me that a sign of business maturity was leaving something on the table for the other party.  After all, he told me, we want to do more business with these folks in the future.  And if we take too much in one deal, they will find a way to get it back from us in another deal.  It’s a cost of doing business.   You want to leave the other side with good will, not the feeling that they got soaked.

Before everything was online, I used a recruiter to find staff for my law firm.  I hired a bookkeeper  and paid her a finder’s fee.  After three months, the bookkeeper turned around and used the same recruiter to find another job.  I called her and asked for a partial refund of the fee I paid.  She refused.  Needless to say I never used her again.  She made a few dollars but lost lots more in future business.

Even if you are not doing business with the other party again, your karma will catch up to you.  It’s a small world.  After 40 years of practicing law, I can tell you that I run into the same people sitting across the table from me over and over again.  Some are defendants.  Some have become judges.

 

 

/by James J. Gross

Federal Preemption

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by Michael F. Callahan

In 1993, The Maryland Court of Special Appeals (CSA) held that the court could not divide social security benefits because they were not martial property under state law but rather governed by federal law.  Therefore the CSA affirmed the trial court’s decision equally dividing the marital portion of husband’s pension when received but not dividing the wife’s social security benefit.  The court made no other adjustment to the equitable distribution of marital property for social security.  Pleasant v Pleasant, 97 Md. App. 711, 632 A.2d 202 (1993).

 

/by James J. Gross

Post-Separation Strategies in Maryland Divorce Cases

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A 2013 Virginia case, Wright v Wright, 61 Va. App. 432; 737 S.E. 2d 519; 2013 Va. App. LEXIS 53 prompted me to observe that a high earning spouse can increase what he, or she, gets to keep by paying expenses out of marital property and banking the post –separation earnings because in Virginia those earnings are not marital property. Conversely, if you are the lower earning spouse you want prompt filings, quick hearings and, if the stakes justify it, an injunction on expenditure of marital property. See The “Wright” Strategy for Increasing What You Keep in Your Divorce, April 2014.

In Maryland, a spouse’s earnings after separation are marital property in the absence of an agreement to the contrary. So there is no advantage to paying expenses with accumulated marital property and banking post-separation earnings in Maryland. What then is the proper strategy for a high earning spouse in Maryland in a case with a relatively long separation?

First, if there is any existing non-marital property, don’t spend that. And remember that from separation to divorce you are earning marital property, increasing the marital proportion of retirement accounts, and adding to the duration of marriage, which is a factor in determining both alimony and marital property distribution. So it pays to settle early because a Separation and Property Settlement Agreement will exclude subsequent earnings from marital property.
Getting to settlement usually requires making a good offer. Getting to settlement early may require making a good offer early. This runs directly contrary to many negotiator’s instinct to make a low ball offer and move up in baby steps to wear down the adversary and get a “good deal”.
For high earners the good deal achieved by extended negotiations may be at the cost of hundreds of thousands of extra dollars added to the marital estate, and then divided. Sometimes it makes sense to make a really good offer early.
What about the Maryland financially dependent spouse? Certainly this spouse wants to settle temporary support and custody, visitation and access early, if possible. But what about the final settlement distributing marital property? It may pay to delay. But the advantage of dividing a bigger pie later must be balanced against the obligation to negotiate in good faith. Also, the additional costs and stress of getting-to-yes later rather than earlier are big negatives. Perhaps a bigger issue is that if the moment for settlement passes, it may not come again.

/by Michael Callahan

The “Wright” Strategy for Increasing What You Keep in Your Divorce

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In a post titled “Determining Marital Property in Maryland, Virginia and the District Of Columbia” (June 17, 2011), I said:

“This article is about when the accumulation of marital property ends. It starts at the time of the marriage. When you return from the honeymoon and go to work the next Monday morning you are earning marital property – the stuff the divorce judge divides. When is the first day you can go to work and earn separate non-marital property? It depends on the jurisdiction.”

And after reviewing the applicable statutes, I said:

“When you and your spouse have separated, intending to remain separated, and do not have a property settlement agreement, in Maryland and the District of Columbia the property you acquire from the date of separation until the date of divorce is marital property. In Virginia such property is not presumptively marital, and in general is determined to be separate property, unless special facts and circumstances are established to overcome the presumption.”

In a recent case, Wright v Wright, 61 Va. App. 432; 737 S.E. 2d 519; 2013 Va. App. LEXIS 53, the Court of Appeals of Virginia considered whether Mr. Wright’s strategy in the two plus years between the date of separation and date of the divorce hearing required a finding to bring post-separation expenditures of marital property back into the marital pot to be divided with Mrs. Wright.

Husband had certain marital accounts totaling about $2,800,000. Husband earned approximately $1,500,000 per year; Wife was a homemaker. During the post-separation period, the marital accounts declined to about $1,415,000 on account of Husband’s payment of joint income taxes, real estate taxes on the marital home, tuition and school expenses for a child of the parties, spousal support to Wife and his own attorney’s fees and expert witness fees. Husband deposited the money he did not spend on these expenses to his separate accounts which, of course, were not marital.

The Court of Appeals said none of those expenditure were improper so they did not amount to “marital waste.” They explained that there are only two categories of expenditures of marital funds “proper” and “waste.” If your spending of marital funds falls into the “proper” categories it’s okay even if that permits a big decline in marital assets to be divided and a big increase in the separate funds of the party following the strategy.

The result in Wright provides a road map for the higher earning spouse to skew the division of marital property in his or her favor in some Virginia cases. If you are the lower earning spouse you want prompt filings, quick hearings and, if the stakes justify it, an injunction on expenditure of marital property.

Also, for multi-state or potentially multi-state cases, Wright is another reason that in a case with a relatively long separation, all other things being equal, the higher earning spouse probably wants the divorce case to be heard in Virginia. As I’ve said here before, a little planning and a little audacity can get you into the Court you want to be in. And a little more planning during separation can increase the property you get to keep.

Some of the facts here are from an article by one of the lawyers involved in the case. What’s wrong with Wright, Ronald R. Tweel (Virginia Family Law Quarterly, Spring 2014)

/by Michael Callahan