Information provided by K.O. Herston: Knoxville, Tennessee Divorce, Matrimonial and Family Law Attorney.
Facts: Mother and Father lived in California with their children. Father died.
Paternal Grandmother visited the children in California and became concerned with their poor living conditions.
Paternal Grandmother relocated to California, petitioned the California court, and was granted guardianship over the children. The California court allowed Paternal Grandmother the discretion to allow visitation between Mother and the children “given the best interest of the children.”
Later, Paternal Grandmother sought and received permission from the California court to return to Tennessee with the children, and she did.
Mother did not visit her children after they had moved to Tennessee, but she and Paternal Grandmother arranged for weekly telephone calls with the children. The calls usually only lasted about three minutes. Paternal Grandmother eventually instructed Mother to stop calling because she felt the calls were upsetting the children.
Later, Paternal Grandmother petitioned to terminate Mother’s parental rights and adopt the children. Paternal Grandmother alleged grounds of “abandonment” for failure to visit or pay child support.
Mother admitted she had not paid child support in the four months prior to the filing of the petition but stated she was unable to do so because of her financial situation. She also had not seen or spoken to the children during that four-month period but claimed that was because of Paternal Grandmother’s insistence that she have no contact with her children.
The trial court found grounds of abandonment and terminated Mother’s parental rights.
On Appeal: The Court of Appeals reversed the trial court.
A parent has a fundamental right, based in both the federal and state constitutions, to the care, custody, and control of his or her own child. While this right is fundamental, it is not absolute.
To terminate parental rights, two things must be proved by clear and convincing evidence: (1) the existence of at least one of the statutory grounds for termination, and (2) that termination is in the best interest of the child. This heightened burden of proof is one of the safeguards required by the fundamental rights involved, and its purpose is to minimize the possibility of erroneous decisions that result in an unwarranted termination of or interference with these rights.
Under Tennessee Code § 36-1-102(1)(A)(i), abandonment can be established by either showing that Mother willfully failed to support her children or willfully failed to visit them in the four months preceding the filing of the petition. The plain language of the statute makes clear that a parent’s failure to pay support or visit does not lead to termination of parental rights unless the failure is willful.
Failure to visit or support a child is “willful” when a person is aware of his or her duty to visit or support, has the capacity to do so, makes no attempt to do so, and had no justifiable excuse for not doing so. Failure to visit or support is not excused by another person’s conduct unless the conduct actually prevents the person with the obligation from performing his or her duty, or amounts to a significant restraint or interference with the parent’s efforts to support or develop a relationship with the child.
The willfulness of particular conduct depends upon the person’s intent. Intent is seldom capable of direct proof, and triers-of-fact lack the ability to peer into a person’s mind to assess intentions or motivations. Accordingly, triers-of-fact must infer intent from the circumstantial evidence, including a person’s actions or conduct.
If failure to support or visit is due to circumstances outside of a parent’s control, then he or she cannot be said to have willfully abandoned the child.
Regarding the failure to pay support, the financial ability, or capacity, of a parent to pay support must be considered in determining willfulness. If the failure to pay child support is due to financial inability, then a parent has not willfully failed to support the child. In making a willfulness determination, the court must review a parent’s means, which includes both her income and available resources for purposes of support.
After reviewing the record, the Court concluded:
While it is undisputed that Mother failed to provide her children with any support during the relevant time period, there was scant evidence introduced regarding her ability to do so during the applicable four month period.
Regarding the failure to visit, where a parent attempts to visit her child but is obstructed by the acts of another, her failure to visit is not “willful” within the meaning of the statute. A parent’s attempts at visitation are obstructed where another person’s conduct creates a significant restraint of or interference with the parent’s efforts to support or develop a relationship with the child. As such, the failure to visit is only willful if it is a product of free will, rather than coercion.
On this issue, the Court reasoned:
[W]e find sparse evidence relating to Mother’s capacity to visit. In this situation, capacity is affected by the great physical distance between Mother and her children. As noted above, Grandmother presented insufficient evidence concerning Mother’s income during the relevant time period, so we cannot determine whether Mother had the financial ability to visit during the four month period preceding the filing of the petition….
[G]iven the heavy burden necessary to interfere with a fundamental constitutional right, the proof offered here was insufficient to show that Mother’s failure to visit her children was willful. We, therefore, find Grandmother failed to clearly and convincing prove the existence of at least one of the statutory grounds for termination.
Accordingly, the termination of Mother’s parental rights was reversed.
Information provided by K.O. Herston: Knoxville, Tennessee Divorce, Matrimonial and Family Law Attorney.
Information provided by K.O. Herston: Knoxville, Tennessee Divorce, Matrimonial and Family Law Attorney.
Facts: Mother and Father had two children out of wedlock. Mother lives in Tennessee and Father lives in Warsaw, Indiana.
The children, living with Mother, were found to be dependent and neglected in Mother’s care. Custody was granted to the Department of Children’s Services (“DCS”).
Eventually, DCS filed a Petition for Termination of Parental Rights, alleging grounds of abandonment for failure to pay child support and failure to visit. Mother voluntarily surrendered her parental rights. Father went to trial.
Father lives approximately seven hours away from the children. He only visits them when he comes to court because he does not have money to travel. In one and one half years, Father only visited the children two times, both of which coincided with a court date. He did not have a driver’s license and claimed he could not afford the cost of traveling. Despite his failure to visit, he claimed he “visited” his children during supervised phone calls with the children for approximately 20 minutes every other week.
The trial court found Father willfully failed to visit his children. The trial court specifically found the phone calls to the children were token, and Father provided no justifiable excuse for failing to visit the children.
On Appeal: The Court of Appeals reversed the trial court.
The issue on appeal is whether Father’s telephone calls amounted to no more than token visitation.
Abandonment is defined as the willful failure to visit or to make reasonable payments toward the support of the child during the four-month period preceding the filing of the petition to terminate parental rights. To prove the ground of abandonment, a petitioner must establish by clear and convincing evidence that a parent who failed to visit or support had the capacity to do so, made no attempt to do so, and had no justifiable excuse for not doing so.
For purposes of terminating a parent’s rights on the ground of abandonment for failing to visit, “token visitation” means visitation, under the circumstances of the individual case, which constitutes nothing more than perfunctory visitation or visitation of such an infrequent nature or of such short duration as to merely establish minimal or insubstantial contact with the child.
After reviewing the record, the Court of Appeals concluded:
The circumstances of this individual case are that Father resided in northern Indiana, which was a seven-hour one-way trip from Cookeville, Tennessee, and that he had no driver’s license. Moreover, there is no evidence in the record to suggest that Father had a vehicle or that another person was willing to drive him to Cookeville, Tennessee, for visitation, and DCS made no efforts to assist Father with any means of transportation to visit his children in Tennessee….
[T]he evidence in this record has not completely eliminated all “serious or substantial doubt” about the correctness of the conclusion that Father’s failure to visit with the children in person was willful.
It is undisputed that Father visited by phone with his children every other week during the relevant four-month period for approximately twenty minutes. Thus, considering the circumstances of this case, including Father’s modest financial means, lack of a driver’s license, the fact that it would be a seven-hour one-way trip to visit his children, and the lack of evidence that anyone was willing to provide transportation assistance or drive him to Cookeville for visitation, we are unable to conclude that twenty-minute phone calls with his children every other week during the relevant four-month period constitutes token visits…. Thus, even though Father did not visit with the children in person during the relevant four-month period, we find the evidence fails to establish by clear and convincing evidence that his telephone visits constituted mere token visitation. Accordingly, we respectfully disagree with the trial court’s finding that Father abandoned his children by failing to visit.
Accordingly, the trial court was reversed. Unfortunately for Father, however, the trial court also found abandonment by willful failure to pay child support and that finding was affirmed on appeal. Father’s parental rights were terminated on that basis.
K.O.’s Comment: I find it interesting the Court relied upon the fact that “DCS made no efforts to assist Father with any means of transportation to visit his children in Tennessee.” Whether DCS has an obligation to provide reasonable efforts to unify the family before it proves abandonment to the trial court is an open question currently pending before the Tennessee Supreme Court in the In re Kaliyah S. case. This suggests the Court here agrees with the majority opinion in In re Kaliyah S. We’ll soon know whether that’s correct.
Facts: The parties met when Wife was 31 and husband was 47. Wife had a high school education and had worked in several relatively low-skilled jobs. Husband started his own construction company in the early 1980s and accumulated substantial wealth. They got engaged in the spring of 1996 and plan to marry the following spring in 1997.
In late October 1996, Wife discovered she was pregnant. The parties moved their wedding date up, planning to marry in Las Vegas on December 26, 1996.
On December 23, three days before the wedding, Husband presented wife with a wedding ring and, for the first time, a prenuptial agreement. Husband made it clear he would not marry Wife unless she signed the agreement.
Wife’s mother referred her to a local law firm. The next day, on Christmas Eve, Wife went to the law firm’s office without an appointment. She was told she would not be able to find or consult with an attorney before Christmas.
The parties met on Christmas Day at another law office and signed the prenuptial agreement.
The prenuptial agreement contained a list of each party’s separate property: two assets belonging to Wife and 16 assets belonging to Husband. Only one of Husband’s assets was listed with an estimated value.
The parties flew to Las Vegas on Christmas day, and were married there on December 26, 1996.
Husband filed for divorce on June 24, 2011. In her answer, Wife alleged the prenuptial agreement was invalid because she did not enter into it freely and knowledgeably.
The trial court ruled the prenuptial agreement was invalid and unenforceable, stating:
The facts presented in this case do not show that there was full disclosure. There is no proof that she got independent advice. She was not as sophisticated as [Husband] and the agreement appears to be unfair.
There was little opportunity to get independent advice because of the lateness, which I find was on December the 23rd, 1996, and that also the circumstances surrounding the lateness, the time in December when this was disclosed to her, her pregnancy, I find that those did create some duress in dealing with this agreement. The duty was on [Husband] to disclose and not upon her to ask.
Here the property was not accurately listed. The values were not shown. Whether this duress was unlawful as required by the law, I haven’t been provided any current definitions on that, but I find that the antenuptial agreement will be set aside. She had no real opportunity to review it.
On Appeal: The Court of Appeals affirmed the trial court.
Prenuptial agreements, sometimes called antenuptial or premarital agreements, are favored by Tennessee law. As a general rule, Tennessee courts enforce a prenuptial agreement if the party seeking enforcement demonstrates the agreement was entered into freely, and knowledgeably, and in good faith and without the exertion of duress or undue influence.
The requirement that a prenuptial agreement is enforceable only if entered into “knowledgeably” means the spouse seeking to enforce a prenuptial agreement must prove either that a full and fair disclosure of the nature, extent and value of his or her holdings was provided to the spouses seeking to avoid the agreement, or that disclosure was unnecessary because the spouse seeking to avoid the agreement had independent knowledge of the full nature, extent, and value of the proponent spouse’s holdings.
A comprehensive and precise list of assets and liabilities, or detailed disclosures such as financial statements, appraisals, balance sheets, or the like, are not necessarily required to uphold a prenuptial agreement. Further, the inadvertent failure to disclose an asset or the unintentional undervaluation of an asset will not invalidate a prenuptial agreement as long as the disclosure that was made provides an essentially accurate understanding of the party’s financial holdings.
After reviewing the record, the Court of Appeals reasoned:
Wife had essentially no experience, education, or training in financial or business matters. She had lived with her parents up until the point she discovered she was pregnant. She was working a factory job on the night shift at that time. Husband, sixteen years Wife’s elder, conversely had a great deal of business acumen and experience, having started and built a multi-million dollar construction company. He demonstrated himself to be a shrewd and savvy businessman….
[The prenuptial agreement] informed Wife of the estimated value of a single item out of Husband’s list of 16 assets, which item accounted for only approximately 2.5% of Husband’s apparent net worth. The value of the remainder of the 97.5% was not disclosed. The evidence does not preponderate against the trial court’s judgment that Husband failed to meet his burden of proving that he made a full and fair disclosure of the nature, extent, and value of his holdings….
Husband surprised Wife with his presentation of the agreement three days before the scheduled wedding, and, significantly, two days before Christmas…. [W]e agree with the trial court’s determination that the factors regarding the time of the signing of the agreement in relation to the time of the wedding, and the parties’ representation by, or opportunity to consult with, independent counsel, weigh in favor of invalidating the agreement.
Accordingly, the trial court was affirmed and the prenuptial agreement invalidated.
K.O.’s Comment: Prenuptial agreements can be tricky. The drafting lawyer is tasked with creating a prenuptial agreement that will withstand the close scrutiny that is all but certain to come in a divorce. The standard of care for the drafting lawyer arguably requires delivery of a valid and enforceable agreement, something that may not be discovered until decades later when millions of dollars are at stake. Lawyers who don’t focus on practicing family law would be wise to consider referring such matters to those who do.
Facts: Husband and Wife divorced after 43 years of marriage. They adopted their biological grandson, who was 12 years old at the time of divorce.
Husband and Wife agreed on a permanent parenting plan. The trial court set Husband’s child support obligation.
The trial court refused to order an income assignment of Husband’s military retirement pay — which was Husband’s main source of income — to secure the payment of child support.
On Appeal: The Court of Appeals reversed the trial court.
Tennessee Code § 36-5-501(a)(1) provides:
For any order of child support issued, modified, or enforced on or after July 1, 1994, the court shall order an immediate assignment of the obligor’s income, including, but not necessarily limited to: wages, salaries, commissions, bonuses, workers’ compensation, disability, payments pursuant to a pension or retirement program, profit sharing, interest, annuities, and other income due or to become due to the obligor.
Tennessee Code § 36-5-501(a)(2)(A) says:
Income assignment under this subsection (a) shall not be required:
(i) If, in cases involving the modification of support orders, upon proof by one party, there is a written finding of fact in the order of the court that there is good cause not to require immediate income assignment and the proof shows that the obligor has made timely payment of previously ordered support. “Good cause” shall only be established upon proof that the immediate income assignment would not be in the best interests of the child. The court shall, in its order, state specifically why such assignment will not be in the child’s best interests; or
(ii) If there is a written agreement by both parties that provides for alternative arrangements. Such agreement must be reviewed by the court and entered in the record.
Husband argued the trial court had good cause for declining to order income assignment. Specifically, he argued in income assignment might prevent him from timely paying the parties’ mortgage, which would negatively impact both parties’ financial futures. Further, Husband noted there were no allegations he had ever failed to pay any ordered or requested child support on time.
The Court of Appeals rejected Husband’s argument, holding:
Section 36-5-501(a)(2)(A)(i) only appears to apply when a party is seeking a modification of a previously ordered child support award. From our review of the record, the child support award contained in the final decree of divorce was the first child support award ordered by the trial court. Accordingly, this proceeding did not involve a modification of a support order. Under these circumstances, Tennessee Code § 36-5-501(a)(1) clearly requires the trial court to order income assignment. The trial court’s failure to do so, therefore, is error.
Accordingly, the trial court was reversed.
K.O.’s Comment: Compare this case with State ex rel. Rickard v. Holt, where the Court of Appeals affirmed the trial court’s finding that good cause existed for not issuing a wage assignment to secure the payment of child support.
This article by Laura Ayo in the December issue of the Greater Knoxville Business Journal may be of interest.
Collaborative Divorce an Emerging Local Practice
Couples ending their marriages don’t have to fight in court over assets, finances or child custody thanks to the recent growth of collaborative divorce professionals in Knoxville.
“I think the idea of collaborative divorce in Knoxville is in its infancy,” says K.O. Herston, a family law mediator and attorney. “The main challenge I see is people aren’t aware of it as an option, and because of that, they don’t know to seek it out. It’s up to lawyers to educate their clients that it is an option.”
Herston is one of a handful of attorneys, mediators, financial advisers and other professionals in Knoxville who have become trained to guide separating couples through the collaborative divorce process.
“I got trained to be a collaborative divorce attorney in 2007 in North Carolina,” says attorney Jackie Kittrell, executive director of the nonprofit Community Mediation Center. “There was no training in Tennessee. It wasn’t until 2009 that there was training for Tennessee lawyers.”
Dr. Beth Cooper, a family mediator in private practice in Knoxville, organized an International Academy of Collaborative Practitioners standards training session in Knoxville in 2013 that about 14 attorneys attended.
“When you come into contact with people who are going through divorce and see how awful it is and the effect on the kids, you know something better can happen,” Cooper says. “Collaborative divorce is another alternative.”
In a collaborative divorce, the husband and wife each hires an attorney — trained in the method — and sign a four-way agreement promising to negotiate the terms of their divorce in an honest, open, non-adversarial manner outside a courtroom.
“It differs from the traditional divorce process, which starts off with both sides getting separate lawyers and engaging in an adversarial process,” Herston says. “The goal (of collaborative divorce) at the outset is to try to reach an agreement. When you hire a divorce attorney, the objective is not to always obtain an agreement. This begins the process with a different goal.”
It also differs from a traditional divorce in that other professionals, such as financial advisers, real estate appraisers and mental health specialists, are hired jointly as needed to offer neutral expertise.
“That way you don’t have dueling experts trying to prove a point,” says Bill Morris, a financial advisor with Morris Financial Group who became a Certified Divorce Financial Analyst (CDFA) through the Institute for Divorce Financial Analysts last year. “It brings all the elements to the table and everyone is on the same level playing field.”
Professionals like Morris, called financial neutrals, evaluate the situation of the divorcing couple and present options, but the couple decides which option works best for their circumstances, he says.
“We are prohibited from making recommendations,” he adds.
Collaborative divorce isn’t for everyone, but hopes are more couples will seek it as an option because it allows families to have more control over the process since a third-party judge isn’t making the decisions that affect the division of assets or child custody.
“Every single person I’ve talked to who has been through the divorce process feels out of control,” Kittrell says. “They’re hiring people at great expense to go fight for them, but they don’t always know what’s happening or how to stop it or adjust it.”
Likewise, experts say relationships fare better and children are better served when couples take an agreeable parental approach to what is considered one of the most stressful situations a family can endure.
“It really does set a good model for those children and lets those children see their parents do something difficult with a lot of grace,” Kittrell says.
Collaborative divorce also has the benefit of being more cost effective, timely and private since the matter stays out of a courtroom and the parties set their own timetable, experts say.
If, at any time during the process, either side decides they want to go to court, both sides withdraw from the process and seek new attorneys to bring their case before a judge.
“The collaborative approach doesn’t preclude litigation,” Herston says. “It is always there as a backstop option.”
While the Tennessee Bar Association and local bar associations across the state have been working to further educate their members about collaborative law, Cooper recently launched a website, www.knoxvillecollaborativedivorce.com, to provide more information about it.
She is also organizing a training session for early March for financial advisers, therapists and other professionals interested in learning more about collaborative divorce.
“Here, locally, we are in the very early stages,” Herston says. “But the more lawyers we get involved and the more financial neutrals and other professionals who get involved, the more it’s going to take place.”
Facts: Husband and Wife were divorced by agreement. They entered into a marital dissolution agreement that contained an alimony provision under which Husband agreed to pay Wife “transitional alimony” for 60 months. Notably, this alimony provisions stated “[t]he alimony shall not be modifiable by either party.”
The alimony provision in the marital dissolution agreement read as follows:
11. ALIMONY. Husband shall pay to the Wife transitional alimony for a period of sixty (60) months following the granting of the Final Decree of Divorce, to be determined as follows: child support shall be set in compliance with the Tennessee Child Support Guidelines as set forth in the Permanent Parenting Plan. It is agreed that Husband shall pay to the Wife the sum of $3,000 per month. Any amount paid by Husband above court ordered child support shall be considered alimony and shall be includible as income to the Wife. The alimony shall not be modifiable by either party. The parties agree that Husband shall be allowed to pay the alimony directly to the mortgage company if Wife becomes more than 30 days late on any payment. The parties agree to divide equally any income tax refund received for calendar year 2011.
After the divorce from Husband, Wife remarried.
Citing Wife’s remarriage as an event that would permit modification of transitional alimony under Tennessee Code § 36-5-121(g)(2)(C), Husband filed a petition to terminate his alimony obligation.
The trial court ruled it was unable to modify the final decree and terminate Husband’s alimony obligation because of the non-modification clause that accompanied the alimony provision in the marital dissolution agreement.
On Appeal: The Court of Appeals affirmed the trial court.
Wife argued the non-modification language is controlling as a matter of contract law.
Husband argued the non-modification language merely restates the pronouncement in Tennessee Code § 36-5-121 that transitional alimony is generally nonmodifiable.
A marital dissolution agreement is essentially a contract between a husband and wife in contemplation of divorce proceedings. The cardinal rule for contract interpretation is to ascertain the intention of the parties from the contract as a whole and to give effect to that intention consistent with legal principles. Words expressing the parties’ intentions should be given their usual, natural, and ordinary meaning, and absent a showing of fraud or mistake, a court must enforce a contract as written, even though it contains terms which may seem harsh or unjust.
Here, the marital dissolution agreement denominated the alimony to be paid to Wife as “transitional alimony,” and it is generally true that such alimony is, by statute, potentially modifiable if one of the three contingencies outlined in Tennessee Code § 36-5-121(g)(2) is implicated. Under the statute, transitional alimony is nonmodifiable unless one of the following qualifying events applies:
(A) The parties otherwise agree in an agreement incorporated into the initial decree of divorce or legal separation, or order of protection;
(B) The court otherwise orders in the initial decree of divorce, legal separation or order of protection; or
(C) The alimony recipient lives with a third person, in which case a rebuttable presumption is raised that:
(i) The third person is contributing to the support of the alimony recipient and the alimony recipient does not need the amount of support previously awarded, and the court should suspend all or part of the alimony obligation of the former spouse; or
(ii) The third person is receiving support from the alimony recipient and the alimony recipient does not need the amount of alimony previously awarded and the court should suspend all or part of the alimony obligation of the former spouse.
After finding the parties’ marital dissolution agreement to be clear and unambiguous, the Court reasoned:
Although [Tennessee Code § 36-5-121(g)(2)] certainly represents a basis on which courts may exercise jurisdiction to modify transitional alimony awards, and courts within this state have frequently commented that marital dissolution agreements lose their contractual nature as to matters of alimony and child support when merged into final decrees, Husband’s petition to terminate his alimony obligation cannot be maintained under the facts of this case. To adopt Husband’s argument and disregard the non-modification language in the parties’ MDA would rid that language of any meaning or effect, contravening elementary contract interpretation principles. Although Husband may argue that the language is superfluous and has no specific relevance other than to restate a general default rule pronounced by statute elsewhere, such a meaning is not gleaned from the four corners of the MDA. If the language of a written instrument is unambiguous, the Court must interpret it as written rather than according to the unexpressed intention of one of the parties. The non-modification language is unambiguous in this case, and we will enforce it as such….
Undoubtedly, transitional alimony is generally subject to modification post-divorce if one of the contingencies in Tennessee Code Annotated § 36-5-121(g)(2) is established. Trial courts do possess such authority, as Husband has argued, as a matter of statute. Delete When, however, parties expressly agree in a marital dissolution agreement that a transitional alimony obligation shall not be modifiable, such an agreement should be deemed to have force. The alimony statutes are not applicable where the parties agree in a marital dissolution agreement to terms different from those set out in the statutes. Thus, notwithstanding whatever potential relief might otherwise be available generally as a matter of statute, the parties’ agreement should take precedence.
Accordingly, the trial court was affirmed.
K.O.’s Comment: Compare this case with Miller v. McFarland, where the Court held the “obligor spouse’s right to seek modification based on the alimony recipient’s cohabitation with a third party is guaranteed by statute.” In that case, the Court determined the alimony awarded in a marital dissolution agreement was transitional alimony and thus subject to modification under Tennessee Code § 36-5-121(g)(2). Unlike the marital dissolution agreement in this case, however, the parties’ marital dissolution agreement in Miller v. McFarland contained no specific terms as to whether the obligor spouse’s alimony obligation was, or was not, modifiable.
This article by Quentin Fottrell in MarketWatch might be of interest to readers of this blog.
The Best (and Worst) Time to Get a Divorce
Hedge-fund billionaire Ken Griffin, the founder and CEO of Chicago-based investment firm Citadel LLC, has filed for divorce from his wife of 10 years, Anne Dias Griffin. Griffin, 45, has a net worth of around $5.5 billion, according to Forbes magazine. But consider this harsh reality: Half of all marriages end in divorce, and when it comes to splitting up — even for those outside the 1% — experts say timing is everything.
The divorce rate is on the rise, particularly among older Americans, a new report from the University of Minnesota finds. The report, which used new data from the U.S. Census’ “American Community Survey” and controlled for changes in the age composition of the married population, concluded that there has been a “substantial increase” in divorce rates between 1990 and 2008. Roughly half of marriages end in divorce, says Steven Ruggles, director of the Minnesota Population Center at the University of Minnesota and co-author of the report, “but the rate of divorces in America is at an all-time high.” And bad news for those who hope for success in subsequent marriages: The divorce rate increases with second and third marriages.
Check the forecast for windfalls. If one party’s company is about to go public or he or she is about to come into a bonus or big inheritance, then wait to get divorced, says Shelly Church, a financial advisor at Raymond James in Naples, Fla.
Last month, David Tepper, 56, reportedly split from his wife of 28 years. Most people don’t have the kind of wealth to consider in a divorce as Tepper, who has an estimated worth of $10 billion. Experts say the Tepper divorce would likely have been a lot less expensive had it happened before the financial crisis. When many traders panicked in 2009, Tepper bought shares of troubled banks and earned around $7.5 billion in profit and nearly $4 billion for himself. It’s also important to be mindful of what you say in the media (for public figures) and social media (for the rest of us), says Randy Kessler, an Atlanta-based lawyer who wrote the book, “Divorce: Protect Yourself, Your Kids, and Your Future.” (A spokesman for Tepper declined to comment.)
All such proceeds will be counted as marital property. Last year, Griffin bought four properties in Palm Beach for $130 million, The Wall Street Journal reported. Less wealthy couples, for example those with an underwater home — where the mortgage is worth more than the property — may want to hold off. “During the housing market meltdown, there were often no liquid assets to distribute, Church says. The share of underwater mortgages fell to below 20% in the first quarter of 2014 for the first time in four years and it’s expected to fall to 17.2% by the end of this year, according to real-estate website Zillow. That gradual rise in house prices will help unhappy couples to live happily ever after financially, she says.
Baby boomers like Tepper also appear to be getting divorced at a faster clip. The rate doubled among adults of a certain age between 1990 and 2010, according to “The Gray Divorce Revolution,” a study carried out by Susan Brown and I-Fen Lin at Bowling Green State University. Around 1-in-4 people aged 50 and older got divorced versus 1-in-8 two decades earlier, they found. One reason: Many middle-class people wait until they’re more financially secure before saying “I don’t.” Many couples find that it’s less expensive, less inconvenient and less disruptive to part ways after the children graduate and leave home, says Abby Rodman, a psychotherapist in Boston. (Another theory: “The only way you can get out of a marriage is you can die or you can divorce,” Ruggles says. “People live long enough to divorce.”)
“Health insurance is a fairly frequent reason to hold off and delay,” says Maria Cognetti, president of the American Academy of Matrimonial Lawyers, and a family lawyer in Camp Hill, Penn. In such cases, one party either isn’t insurable or is not insured, she says. “For a healthy middle-aged person, health insurance could easily cost $1,000 a month. Add health issues and it could be a really ugly number.” Health insurance premiums have risen 11% in the small group market and 12% in the individual market, according to Morgan Stanley’s April health-care analysts report. “Every so often you have a decent spouse who says, ‘I don’t dislike you enough to put you out on the street,’” Cognetti says. And, so, they cut ties, live in separate homes, and remain married for the love of their joint health insurance.
When you’re partners in business, it’s best to make sure a divorce doesn’t happen just before — or during — the sale of a company.
L.A. Clippers owner Donald Sterling told Anderson Cooper in a recent CNN interview that he and his wife Shelly are divorcing, but no papers have been filed. The couple has a 50/50 stake in the L.A. Clippers basketball team and his wife Shelly agreed to sell it to former Microsoft CEO Steve Ballmer for $2 billion after Sterling was recorded making racist comments. If the sale was going ahead during divorce proceedings, the court could get involved, says Kessler. ” In the worst-case scenario the court could appoint a receiver, he adds, “but that’s probably not going to happen.”
There are also ethical and moral issues to consider. “There is no perfect time to get divorced,” says Rodman, who also wrote the midlife-divorce book “Until Midlife Do We Part.” But, she says, people should try to mitigate any emotional fallout. “It’s not a good time to get divorced a week before your daughter’s wedding or a month before your son’s graduation,” she says. The holidays are also a bad time to serve divorce papers. “That’s why January is one of the biggest months for divorce filings,” she says. Most unhappy spouses wait until after the turkey has been carved and gifts have been unwrapped. Divorces tend to surge in January, according to an analysis of divorce filings by FindLaw.com, a legal-information website, and continue to rise the following month before peaking in March.
Not only can divorces cost money, but they also exact a heavy toll on a couple’s privacy, Kessler says. For example, the 2003 divorce between former General Electric head Jack Welch and his second wife Jane Welch: When the couple filed for divorce in Connecticut, his GE retirement agreement became part of the public record and was splashed across national newspapers. As a result, the Securities and Exchange Commission launched a formal inquiry. Welch subsequently decided to give up his GE retirement package, which was worth around $2.5 million a year. “In this environment, I don’t want a great company with the highest integrity dragged into a public fight because of my divorce proceedings,” he wrote in a column for The Wall Street Journal at the time.
Facts: Grandparents petitioned to terminate the parental rights of Mother and Father so they could adopt Child.
Mother voluntarily relinquished her parental rights. Father went to trial.
The trial court found Father abandoned Child by the willful failure to visit and the willful failure to support. The trial court also found termination to be in Child’s best interest.
Father’s parental rights were terminated.
On Appeal: The Court of Appeals affirmed in part and reversed in part.
The trial court’s findings as to grounds of abandonment by the willful failure to visit and termination being in Child’s best interest were affirmed.
The issue of interest to me is grounds of abandonment by the willful failure to support. The trial court’s reliance on that ground for termination was reversed.
Father admitted he had not paid child support for many years, but insisted it was not willful because he could not maintain a steady job because of his diabetes and other health conditions.
When the lawsuit was filed, Father testified he was living with his father in a trailer that had a hanging sheet for a door. By the time of trial, Father was living in a house with his father, although he slept in his aunt’s house at night because he suffers from diabetic seizures. He testified that his father pays for his $45 a month cell phone bill, and although he barely has enough money to pay his medical bills when he works, he admitted he has several recent tattoos that were paid for by family members. He also testified he was in the process of applying for disability benefits.
The trial court found Father was “able-bodied and capable of working and supporting” Child, and added this comment: “Instead of paying support, he paid to tattoo his body rather than provide food” for Child.
In order to prove that failure to pay child support was willful, petitioners must prove the parent is aware of his or her duty to provide support, has the capacity to provide support, makes no attempt to provide support, and has no justifiable excuse for not providing the support. A parent who fails to support a child because he or she is financially unable to do so is not willfully failing to support the child.
After reviewing the record, the Court reasoned:
Father admits not paying child support during the relevant time period; however, he insists his failure to provide support was not willful because he was unable to pay child support due to his health. He testified that he suffers from juvenile diabetes, seizures, neuropathy in his legs, and lack of sensitivity to hot or cold, which went uncontested. He also stated that these conditions prevented him from maintaining a job, and, when he did work, he barely made enough to pay his medical bills.
Grandparents . . . challenge his claim that he could not pay support by noting he had enough money to have a cell phone, internet service, and numerous tattoos. Father, however, rebutted this testimony by stating that his father pays for his cell phone bill and that friends and other family members paid for his tattoos….
Based upon our review of the record, we find the evidence does not clearly and convincingly establish that Father’s failure to support the child was willful.
Accordingly, the trial’s reliance on abandonment by the willful failure to support as grounds for the termination of Father’s parental rights was reversed.
Facts: Mother and Father are the parents of Child.
Father’s child support obligation was set at $55 per week. The order instructed Father to submit all child support payments to the clerk of the juvenile court. The order further stated any payments made directly to Mother in lieu of the clerk “will be considered a gift.”
For a period of time, Father paid his child support directly to the juvenile court clerk as directed in the order. Later, at Mother’s request, all child support payments were mailed directly to Mother, although the payments were sporadic and not always in the amounts specified in the child support order.
Years later, Mother sought a judgment against Father for the child support arrearage.
The trial court credited Father for all payments made directly to the juvenile court clerk and the payments made directly to Mother. A judgment was entered against Father for the $17,337 child support arrearage. Mother’s request for prejudgment interest on the arrearage was denied.
Both parties appealed.
On Appeal: The Court of Appeals affirmed in part and reversed in part.
Two issues are of interest to me in this appeal: (1) crediting Father for payments made directly to Mother in contravention of the order requiring payments to be made directly to the court clerk, and (2) the denial of prejudgment interest on the child support arrearage.
Crediting Father’s payments to Mother. Mother argued the trial court erred in awarding Father credit for the child support payments made in contravention of the child support order because Father did not show the payments were used for “necessaries.”
First, credits against a child support arrearage do not violate the prohibition on retroactive modification of child support orders as long as the amount of child support is not altered.
Second, an obligor parent is generally not given credit for child support payments made in a manner other than that specified in the operative child support order. There are, however, two recognized exceptions that permit crediting the obligor parent for non-conforming payments: (1) the “necessaries rule,” and (2) the “equitable considerations rule.” Under either exception, the court may credit the direct payments toward support arrearages as long as there is proper evidentiary support.
The necessaries rule allows a credit for voluntary payments only when made for the child’s necessaries that are not being supplied by the custodial parent.
The necessaries rule has been applied to a variety of fact patterns, including when the obligor, non-custodial parent seeks credit for (1) voluntary expenditures on the child’s behalf, (2) child support payments made payable to the child, (3) expenditures when the child shares a primary residence with or is cared for by that parent, and (4) direct payments to the obligee, custodial parent.
The types of “necessaries” that are usually considered include food, shelter, tuition, medical care, legal services, and funeral expenses.
In this case, however, the Court found the equitable considerations exception to be applicable, not the necessaries rule.
The equitable considerations rules applies in specific circumstances when, for example, (1) the obligee parent received the payments, directly or indirectly, and exercised control over the funds, or the obligee parent requested the support payments be paid to a third party and acquiesced in such payment, and (2) the specific circumstances demand a credit to avoid an injustice.
After reviewing the record, the Court commented:
[I]t is undisputed that Mother specifically asked Father to remit all support payments directly to her and that Father agreed to this non-conforming procedure.This procedure was followed for several years…. The documentary evidence established that the “memo” line on the checks confirmed that all such payments were for child support. Moreover, the check amounts were for increments of $55, which was Father’s weekly support obligation. Mother also testified she knew the checks were for support, she endorsed the checks upon receipt, deposited them into a separate bank account she had designated for child support, and that she used the funds for the child’s benefit.
The relevant factors weigh in favor of crediting Father for all child support payments remitted directly to Mother…for, to hold otherwise, would ‘unjustly enrich Mother and lead to an inequitable result.’ Therefore, we have concluded the specific circumstances in this case warrant crediting Father with all nonconforming child support payments Mother received.
Thus, the trial court was affirmed on this issue.
Prejudgment interest on the child support arrearage. Tennessee Code § 36-5-101(f)(1) states, in relevant part:
If the full amount of child support is not paid by the date when the ordered support is due, the unpaid amount is in arrears, shall become a judgment for the unpaid amounts, and shall accrue interest from the date of the arrearage, at the rate of twelve percent (12%) per year. All interest that accumulates on arrearages shall be considered child support. Computation of interest shall not be the responsibility of the clerk.
The Court has previously held that prejudgment interest for child support arrearages is mandatory, non-discretionary, and accrues from the date when the support was due, not from the date a judgment for the unpaid amounts is entered.
Accordingly, the trial court’s refusal to assess prejudgment interest on Father’s child support arrearage was reversed. The case was remanded to the trial court to award Mother prejudgment interest consistent with Tennessee Code § 36-5-101(f)(1).
K.O.’s Comment: A good case to review on the “necessaries rule” is State ex rel. DeBusk v. DeBusk.
Regarding when interest starts accruing on a child support arrearage, a divided Western Section reached the opposite conclusion in Jackson v. Jackson, holding that interest doesn’t start accruing until a judgment for the child support arrearage is entered. Knowledgable family law litigators have legal support for both arguments.
Today we concluded an exhausting but rewarding week by presenting our annual seminar in Knoxville.
Some attendees had this to say about today’s presentation:
This seminar is, by far, the most helpful family law CLE each year. It is a “can’t miss” for me. — Melody Luhn, Esq., Knoxville
If you practice family law and don’t attend this CLE, you are doing yourself and your clients a disservice. — Christopher Seaton, Esq., Knoxville
This is a wonderful seminar balancing substance with humor. I always find it informative and entertaining. — Suzanne Masters, Esq., Knoxville
It is refreshing to attend a CLE that gets right to the point. I learned more applicable law in three hours than many seminars teach me in six. — Joshua Reed, Esq., Knoxville
Excellent! This information is very valuable to those practicing in the area of family law. — Rebecca Bell Jenkins, Esq., Knoxville
After returning to the office, we took the time to enjoy a cold beer before putting away our CLE materials until next year. Now we are ready to enjoy a relaxing weekend before getting back to the business of practicing law first thing Monday morning.
- Alimony/Spousal Support
- Attorney's Fees
- Child Custody
- Child Support
- Divorce Tips
- Domestic Violence
- Grandparent Visitation
- Grounds for Divorce
- Juvenile Law
- Marital Dissolution Agreement
- Order of Protection
- Parental Rights
- Post-Divorce Issues
- Prenuptial Agreements
- Property Classification
- Property Division
- Property Valuation