Facts: Husband and Wife were married for 17 years. Husband is a physician. Wife has an M.B.A. and was a financial analyst prior to becoming a homemaker and stay-at-home parent to the parties’ children. Throughout the marriage, the parties lived beyond their means. Wife’s mother made significant loans to the parties so they could purchase homes. After a five-day trial, the parties were divorced. The trial court assigned to Wife all of the debt owed to Wife’s mother. The trial court also ordered Husband to pay alimony of $1,750 per month for three years. Wife appealed.
On Appeal: The Court of Appeals affirmed the trial court.
Division of Marital Debt. Wife argued the trial court erred by making her solely responsible for the parties’ debt to her family. The Tennessee Supreme Court has stated that “marital debts are subject to equitable division in the same manner as marital property.” Alford v. Alford, 120 S.W.3d 810, 813 (Tenn. 2003). Marital debts are all debts incurred by either or both spouses during the course of the marriage up to the date of the final divorce hearing. After determining whether a debt is marital debt, the trial court should allocate the marital debt between the spouses by evaluating the following factors: (1) the debt’s purpose; (2) which party incurred the debt; (3) which party benefitted from incurring the debt; and (4) which party is best able to repay the debt.
The Court of Appeals echoed the trial court’s apparent skepticism of the legitimacy of the “debts” owed to Wife’s family.
[Wife’s] family routinely gifted monies to the parties to help support their lifestyle. . . . [T]here were several mortgages that [Wife’s] mother maintained on properties owned by the parties. It appears that [Wife’s mother] would transfer the mortgage from one property to the next with the last mortgage being held on the parties’ [marital] residence. While the “loans” from [Wife’s mother] were created in a very businesslike manner, i.e., promissory notes were executed, in reality it does not appear that these financial obligations were collected in a businesslike manner. Rather, it appears that [Wife’s] family “carried” these loans, and let payments go unpaid when the parties could not make ends meet. . . . [I]n light of the prior business dealings between [Wife] and her family, it appears that there was little expectation that the monies would be repaid.
There is no indication in the record that [Wife’s] family has seriously sought repayment of the large sums of money that have been provided to the parties. In fact, concerning [Wife’s] allegation that she rented a home from her family during the separation, it soon became apparent, during her testimony, that the alleged lease between [Wife] and her mother was a sham, having been drafted ad hoc in preparation for the trial. More importantly, however, the record indicates that, despite listing rent as a monthly expense on her affidavit, [Wife] has, in fact, never paid rent to her mother. While [Wife] protests that the monies “borrowed” from her parents will have to be repaid, given past dealings, this proposition appears unlikely. While we cannot say with certainty that the alleged debt will be forgiven by [Wife’s] family, that appears to be the usual course. Given the totality of the circumstances, and in light of the relative equities between the parties, we conclude that the trial court correctly charged [Wife] with the debt allegedly owed to her family.
Alimony/Spousal Support. The trial court awarded Wife $1,750 per month in transitional alimony for a period of 36 months. Wife argued the trial court should have awarded long-term spousal support, in the form of alimony in futuro, rather than transitional alimony.
When determining whether an award of alimony is appropriate, courts must consider the statutory factors contained in Tennessee Code Annotated Section 36-5-121(i). The two most important factors are the need of the spouse seeking support and the ability of the other spouse to provide such support. Alimony decisions, by their very nature, typically hinge on the unique facts and circumstances of the case.
Once the trial court has determined that alimony is appropriate, it must determine the nature, amount, and duration of the award. Tennessee Code Annotated Section 36-5-121(d)(1) provides that “[t]he court may award rehabilitative alimony, alimony in futuro, also known as periodic alimony, transitional alimony, alimony in solido, also known as lump sum alimony, or a combination of these.”
Tennessee Code Annotated Section 35-5-121(d)(2) reflects a statutory preference favoring rehabilitative spousal support and transitional spousal support over long-term spousal support. Rehabilitative spousal support is intended to enable an economically disadvantaged spouse to acquire additional education or training that will enable the spouse to achieve and maintain a standard of living comparable to the standard of living that existed during the marriage or to the post-divorce standard of living expected to be available to the other spouse.
However, this statutory preference does not entirely displace the other forms of spousal support when the facts of the case warrant long-term or more open-ended support. Although rehabilitative or transitional alimony is the preferred type, “[w]here there is such relative economic disadvantage and rehabilitation is not feasible in consideration of all relevant factors, . . . then the court may grant an order for payment of support and maintenance on a long-term basis . . . .” Thus, long-term alimony is intended to provide long-term support to an economically disadvantaged spouse who is unable to be rehabilitated.
These parties were married for approximately seventeen years, which, as the trial court correctly noted, constitutes neither a short-term, nor a long-term marriage. According to the trial court’s order, at the time of the hearing in this case, [Husband] was 51 years old, and [Wife] was 49 years old. Both parties are in good health; in fact, both train and compete in marathon races. [Husband] is a physician, and [Wife] holds an M.B.A. from Cornell University.
From the totality of the circumstances, it appears that [Wife] is very intelligent, in good health, and quite capable of working. While [Wife] has pursued only part-time employment for most of the marriage, in favor of staying at home and managing the children and household duties, there is no dispute that she has the ability to earn income considerably greater than that which her part-time employment has provided. We agree with the trial court that [Husband] has the ability to earn more money than [Wife]. However, [Wife] also has the ability to procure more gainful employment than she has heretofore sought. Given [Wife’s] work history, her excellent health, and her advanced degree, we cannot conclude that she cannot be rehabilitated in fairly short order. Simply put, the record does not support [Wife’s] contention that she is so far disadvantaged in comparison to [Husband] that she is in need of long-term spousal support.
Because of the divorce, [Wife] will need to make a transition from her previous lifestyle and will need to enter the workforce in earnest. In order to accomplish this goal, [Wife] will need some assistance; however, as discussed above, the record supports a finding that she is quite capable of being rehabilitated so that she can support herself. Considering the fact that [Wife] has need in the immediate future until such time as she can procure employment, and given the fact that, at present, [Husband] has the ability to pay, we conclude that the trial court did not abuse its discretion in awarding [Wife] transitional alimony, rather than alimony in futuro.
Information provided by K.O. Herston, Tennessee Divorce Lawyer.