Tag Archive for: Alimony

Too Rich for Alimony in a Divorce?

Can you be too rich for alimony in a divorce?

Can you be too rich to get alimony in a divorce? This is a great problem to have.

Alimony in Divorce – A South Carolina Case

In a 2017 case out of South Carolina, the court awarded $5,000 a month in permanent alimony to the wife in a 28-year marriage. The husband made over $400,000 a year and she made far less.

On appeal, the husband pointed out that the wife received $1.28 million in the divorce and could support herself without alimony.

The appeals court found “It would be inequitable to require the Wife to invade her only assets to support herself while Husband may save and continue to draw a substantial salary and dividends from his company.” The case is now on appeal to the South Carolina Supreme Court.

— Sweeney v. Sweeney, 420 S.C. 69, 75, 800 S.E.2d 148, 151 (Ct. App. 2017)

Alimony in Divorce – A Maryland Case

Divorce law is different in each state. The outcome might not have been the same in Maryland. In 1990, the Maryland Court of Special Appeals reviewed a case where the parties each had over $1 million in assets.

The trial judge denied alimony in the divorce. The judge found the parties to be self-supporting and therefore not entitled to alimony.

The appeals court affirmed, noting that alimony is not intended to be a pension for life. The court stated the objective of alimony is to help a dependent spouse time to become self-supporting.

— Hull v. Hull, 83 Md. App. 218, 574 A.2d 20 (1990)

Temporary Alimony in a Divorce

In a 1994 case in Maryland, the Court of Special Appeals reviewed a case involving temporary alimony in a divorce. The test for temporary alimony is need and ability to pay. The husband appealed the trial court’s award of temporary alimony to his wife arguing that she didn’t need alimony because she had $160,000 in assets she could use.

The appeals court noted that the Hull case required an award of alimony to be based on a conclusion that a recipient spouse is not self-sufficient. However, the trial judge had considerable equitable discretion in reaching that conclusion.

The law does not require a spouse to liquidate assets in order to receive alimony. The trial court did not err in finding the wife was not self-sufficient despite her investment assets.

— Reuter v. Reuter, 102 Md.App. 2112 (1994)

/by James J. Gross

Going Broke on a Million a Year

It is a lament divorce judges frequently hear.  Since alimony and child support are based on income, you can’t blame the judges for being somewhat cynical.  It is a law of the Universe.  Income decreases in the year of divorce.

But what if you make a million dollars a year?  Carol Rose, estranged spouse of former baseball star, Pete Rose, says that Pete makes at least $100,000 a month signing autographs and making personal appearances. However, according to Carol, he has spent most of it on high stakes gambling and still owes significant amounts to the casinos and the IRS.

Carol is asking the court to compel Pete to reveal the full details of his finances in their divorce.

/by James J. Gross

Wealthy Woman Not Entitled to Alimony

Word of a case has reached us from India.  A woman there asked the Bombay High Court to increase her alimony award granted in a divorce.

The court rejected her request because it found that she was already wealthy and therefore not entitled to alimony.

The court said that a woman who is able to maintain her lifestyle despite the estrangement doesn’t need alimony.

We have a similar concept in Maryland, although stated in different words.  Alimony is not intended to be a pension for life.

The objective of alimony is to help a dependent spouse time to become self-supporting even if that results in a lower standard of living.  Holston v. Holston, 58 Md. App. 308, 473 A.2d 459 (1984).

Parties who each had over a million dollars in assets were already self-supporting and therefore not entitled to alimony.  Hull v. Hull, 83 Md. App. 218, 574 A.2d 20 (1990).

/by James J. Gross

Husband Who Would Rather Be Idle than Industrious Has to Pay Alimony

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She was an army nurse and he was in the army. Mr. and Mrs. Donigan married in 1943. A daughter was born two years later. They lived in Baltimore until 1948 when the husband rejoined the army and was assigned to Japan.

The wife and child joined him six months later but discovered the husband had become infatuated with a girl serving with the Red Cross. Eventually they returned to the US and the husband filed for divorce. The trial judge denied alimony to the wife because he found that she as employed and self-supporting.

The appeals court viewed it differently, however, and said “The husband is about forty years of age but  prefers to travel about the country rather than work, or as his wife puts it, he enjoys play more than he does work….if the wife’s income is insufficient for her needs, the husband’s obligation is not less because he would rather be idle than industrious and peripatetic than productive, although he has the mental and physical ability to earn a living.”

Donigan v. Donigan, 208 Md. 511, 119 A.2d 430 (1956)

/by James J. Gross

Can Alimony Be Longer Than The Marriage?

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Dr. Murray Malin, an anesthesiologist, was 38 when he met Marcie Minenberg, 27. She went to law school but did not pass the bar exam and was working in a jewelry store. They wed, had one child, and divorced in Maryland after three years of marriage. At the time of trial, Murray had stopped practicing as a doctor due to a drug addiction.

The trial court awarded Marcie alimony of $3,500 a month, non-taxable to her, for five years. Murray appealed arguing that (1) the court could not award alimony that was non-taxable and (2) the court could not award alimony for longer than the marriage.

The Maryland Court of Special Appeals agreed with Murray that the only alimony a court can award is taxable alimony. Parties can make alimony non-taxable, but only by agreement.

As for the length of alimony, the appeals court said there was no law against alimony that lasts longer than the marriage.

Malin v. Mininberg, 153 Md. App. 358, 837 A.2d 178 (2003)

/by James J. Gross

The Alimony Factors

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Section 11-106 of the Family Law Article of the Maryland Code requires the court to consider certain factors in determining the amount and duration of alimony.  This next series will take a look at the factors one by one.

Alimony Factor #1.  The ability of the party seeking alimony to be partly or wholly self-supporting.

Alimony Before 1980.

Alimony originally was awarded on a permanent basis to a financially dependent spouse who was not at fault for the destruction of the marriage.  The thought was that the financially dependent spouse ought to be able to continue with the same standard of living to which that spouse had become accustomed during the marriage, provided the other party could afford it.  Alimony could be modified in the event of a change in circumstances but basically lasted until one of the parties died or the party receiving alimony remarried.

Alimony Today.

The Governor’s Commission on Domestic Relations Report dated January 18, 1980, changed the concept of alimony in Maryland.  New alimony laws were adopted at sections 11-106 and 11-107 of the Family Law Article.

The court in Holstein v. Holstein described it like this:

Under the present statute, the principal function of alimony is rehabilitation. Thus, when awarding alimony, the chancellor is required to consider not only those factors relating to the financial situation, age and health of each party, their standards of living, the duration of marriage and the contribution of each party to its well being but also the ability of the party seeking alimony to be wholly or partially self-supporting and the time deemed necessary for the party seeking alimony to gain sufficient education or training to enable that party to find suitable employment. It is apparent, therefore, that the concept of  alimony as a lifetime pension enabling the financially dependent spouse to maintain an accustomed standard of living has largely been superseded by the concept that the economically dependent spouse should be required to become self-supporting, even though that might result in a reduced standard of living.

There are two exceptions when indefinite alimony should be awarded.  These will be discussed in my next post.

/by James J. Gross

Tax Planning for Divorce (Part 5-Payments to Your Ex)

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Guest Post by John Ellsworth, Esq.

If you’re paying alimony, you can take a tax deduction for the payments, even if you don’t itemize deductions.

Keep in mind, though, that the IRS won’t consider the payments to be true alimony unless they are spelled out in the divorce agreement. This is another rule for you to memorize: unless the divorce decree spells it out, it’s probably not going to be accepted by the IRS as alimony.

Your ex, meanwhile, must pay income tax on those amounts. Be sure you know your ex-spouse’s Social Security number. You have to report it on your tax return to claim the alimony deduction.

The opposite is true for child support: You don’t get a deduction for paying child support and the recipient doesn’t pay income tax.

/by James J. Gross

The Difference Between Statutory and Pendente Lite Alimony

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Time

  • Statutory alimony may be indefinite or rehabilitative or both.  Indefinite alimony means until either spouse dies or the payee remarries.  Rehabilitative alimony means for a fixed period of time.
  • Pendente lite alimony is paid during the legal proceedings until the divorce trial.  Pendente lite alimony is also called temporary alimony.

Purpose

  • The purpose of statutory alimony is to enable a person to become financially able to support theirself.
  • The purpose of pendente lite alimony is to maintain the status quo until trial.

Elements

  • To determine statutory alimony, the court must consider various factors, including fault.
  • To determine pendente lite alimony, the court considers the payee’s needs and the payor’s ability to pay.

When Decided

  • Statutory alimony is decided at the divorce trial.
  • Pendente lite alimony is decided at the Pendente Lite Hearing.
/by James J. Gross

Debtor’s Prison

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“If your guy doesn’t pay his alimony, we’ll file a motion for contempt and you can tell him we’ll be asking for jail time,” said Sobel, who was representing the ex-wife.  He didn’t like the ex-husband’s attorney, Caster, ever since he had yelled at Sobel and hung up on him in another case years ago.  Sobel had a long memory.

“Come on, Sobel,” Castor said.  “The judge is not going to put my guy in jail.  It’s contractual alimony, not court ordered alimony.”

“Whadya mean, Castor?  The Agreement is incorporated into the Divorce Decree.  That makes it a court order.  And your client has failed to comply with it.”

“Well there is no imprisonment for debt in Maryland.  Check the state constitution, Sobel.”

“You check it, Castor.  I’ve got it right here.  Section 398 of Article III says ‘No person shall be imprisoned for debt, but a valid decree of a court of competent jurisdiction or agreement approved by decree of said court for the support of a wife or dependent children or for alimony shall not constitute a debt within the meaning of this section.’

“Sobel, me and my client will, as they say, see you in court.”

“Tell your client to bring his checkbook or a toothbrush, Castor, for when he goes to the slammer.”

/by James J. Gross

75% Divorce Rate in MapleStory

Real world relationships are tough enough but MapleStory, a free online role playing game, has a divorce rate of 75%.

Andy Chalk writes at EscapistMagazine.com that it costs $25 real dollars to get married in MapleStory.

“I was young, naive, and thought I had met ‘the one.’ says 20 year old Tyler, and 19 year old Seth says “She was only out there to get free things off of me.”

On the bright side,MapleStory divorcees don’t pay alimony or child support and they don’t have to go to court.  I wonder if this will be good practice for  these people when they get married in real life.

/by James J. Gross