What ‘counts’ in divorce? See if you can guess

It’s often unclear whether certain of a couple’s assets or certain types of income “count” in divorce proceedings. Take a look at the following questions, and see if you can guess what the courts decided. (Remember that the actual outcome could vary from state to state and in slightly different situations.)

  • A woman won $2.7 million in a medical malpractice lawsuit. Ten years later she got divorced. Can her husband share in the money?

No, said an Iowa court. The couple had placed the money in an investment account and had lived off the proceeds for a time. The court said that since the husband had lived off the proceeds for a while, it was only fair to allow the wife to keep whatever amount was left, “so that she is adequately compensated for her physical injuries, pain and suffering, and future medical expenses.”

  • In deciding how much child support a mother needs, does her “income” include the amount that is deducted on her paycheck for Social Security and Medicare taxes, heath insurance premiums, and 401(k) contributions?

No, said a North Carolina court. These amounts shouldn’t be included because they are related to a future benefit. They aren’t available to the mother for her immediate support, and she can’t access them to help raise the children.

  • Two years after divorce, a father inherited $400,000 from his aunt’s estate. Should his child support payments increase as a result?

Yes, said the Texas Court of Appeals. All assets and income that are not specifically excluded under state law must be included when determining child support, the court said –  including an inheritance from a third party.

  • A husband filed for divorce after he retired. His employer was paying $846/month for his retiree health benefits. Can his wife share in this?

No, said the Indiana Supreme Court. The wife had calculated that the future benefits had a present value of $102,000, and she argued that they were a marital asset subject to division. But the court ruled that “employer-provided health insurance benefits do not constitute an asset once they have vested in a party to the marriage.”