Facts: After 24 years of marriage, the parties were divorced. Both parties were 46 years old. Wife was primarily a stay-at-home parent after the parties’ first child was born. After a two-day trial, the trial court found
[Wife] had a need of $2,300 per month. [Husband] had the ability to pay only $1,500.00 per month. There were no assets from which an award of alimony in solido could be immediately paid.
The trial court awarded virtually the entire marital estate to Wife, consisting of equity in the marital home ($242,227) and the 401(k) ($40,872). This resulted in an award of 99% of the marital estate to Wife according to Husband’s calculations, or 96.5% using Wife’s numbers. The trial court also awarded Wife alimony in futuro in the amount of $1,500 per month and stated it was awarding her “a larger share of the property because the Husband cannot afford to pay her need.”
Husband appealed, challenging both the division of property and the alimony award.
On Appeal: The Court of Appeals reversed and modified the trial court’s judgment.
Property Division. After classifying the property of a divorcing couple, a trial court is charged with equitably dividing the marital property. An equitable division of property is not necessarily an equal one. The division of marital property is not a mechanical process, but rather is guided by the factors in Tennessee Code Annotated § 36-4-121(c).
Tennessee Code Annotated § 36-4-121(c) requires a trial court to consider the following factors in making its division of marital property:
(1) The duration of the marriage;
(2) The age, physical and mental health, vocational skills, employability, earning capacity, estate, financial liabilities and financial needs of each of the parties;
(3) The tangible or intangible contribution by one (1) party to the education, training or increased earning power of the other party;
(4) The relative ability of each party for future acquisitions of capital assets and income;
(5)(A) The contribution of each party to the acquisition, preservation, appreciation, depreciation or dissipation of the marital or separate property, including the contribution of a party to the marriage as homemaker, wage earner or parent, with the contribution of a party as homemaker or wage earner to be given the same weight if each party has fulfilled its role;
(B) For purposes of this subdivision (c)(5), dissipation of assets means wasteful expenditures which reduce the marital property available for equitable distributions and which are made for a purpose contrary to the marriage either before or after a complaint for divorce or legal separation has been filed.
(6) The value of the separate property of each party;
(7) The estate of each party at the time of the marriage;
(8) The economic circumstances of each party at the time the division of property is to become effective;
(9) The tax consequences to each party, costs associated with the reasonably foreseeable sale of the asset, and other reasonably foreseeable expenses associated with the asset;
(10) The amount of social security benefits available to each spouse; and
(11) Such other factors as are necessary to consider the equities between the parties.
After reviewing the record, the Court concluded:
Our Supreme Court has approved the concept of using the division of marital property to help meet a disadvantaged spouse’s financial needs. While the trial court in the present case expressly stated that it was not awarding alimony in solido, the court made clear that it was awarding “Wife a larger share of the property because the Husband cannot afford to pay her need.” The trial court found that Wife needed $2,300 per month and that Husband could afford to pay only $1,500 per month. Under these circumstances, we agree with the strategy adopted by the trial court of awarding Wife a greater share of the marital property. We disagree, however, with the extreme disproportion in the percentages awarded to the two spouses. We hereby modify the trial court’s property division to award the remaining value of the 401(k) to Husband. Wife shall retain all of the equity in the marital home.
Alimony. Husband argued Wife had no need for alimony and, alternatively, that the trial court erred in awarding alimony in futuro instead of transitional alimony.
The Court first modified the amount of alimony, writing:
Husband listed a net monthly income of $4,982. Husband’s child support obligation was set at $1,357 per month. Because Husband did not have the ability to pay the full amount of Wife’s need, the trial court set alimony at $1,500 per month. Subtracting the child support and alimony payments (totaling $2,857) from Husband’s net income yields a figure of approximately $2,125 to cover his monthly living expenses. Under the circumstances, the evidence preponderates against the trial court’s finding that Husband had the ability to pay $1,500 per month. We, therefore, modify the monthly amount to $1,200.
The Court then modified the type of alimony from alimony in futuro to transitional alimony.
Although the trial court concluded that Wife could not do better than earning about $5,000 per year, we find no evidence to support this finding. Wife completed three years of college and has had a real estate license; while she will need some time to transition into the work force, we do not find any support for the trial court’s determination that Wife will be unable to secure more than minimal earnings. Wife herself testified that she was hopeful about her prospects in developing a cosmetics business. Under the circumstances, we conclude that the trial court erred in awarding alimony in futuro and that an award of transitional alimony is more appropriate.
The Court modified the alimony award to provide for transitional alimony in the amount of $1,200.00 a month for a period of five years.
Information provided by K.O. Herston: Knoxville, Tennessee Divorce, Matrimonial and Family Law Attorney.