A husband could satisfy a $120,000 installment payment he owed to his ex-wife under their divorce agreement by transferring some of his retirement benefits to her, a Virginia court recently ruled.

The wealthy couple’s divorce decree required the husband to pay the wife a total of $1.2 million in 10 annual installments.

To make his first installment payment, the husband transferred to the wife $120,000 from his rollover IRA and 401(k) plans.

The wife argued that this violated the divorce decree because, due to taxes and penalties, she would net only $61,000 if she cashed out the retirement benefits right away.

But the court sided with the husband. It said the installment payment was okay because the property he transferred to his wife had a value of $120,000 at the time of the transfer.

A postnuptial agreement is similar to a prenuptial agreement – it sets out what each person is entitled to if the marriage fails. The difference is that a postnuptial agreement is signed after the wedding has taken place.

Postnuptial agreements are increasingly being accepted as legally valid. But they’re not foolproof, and sometimes a spouse can avoid their terms – especially if those terms just don’t seem particularly fair.

For instance, the Connecticut Supreme Court recently refused to enforce a postnuptial agreement that a couple had signed back in 1989.

Under that contract, the wife had agreed to accept $75,000 as a cash settlement of any alimony claim if the couple split up, and gave up any rights to her husband’s car-wash business. [Read more...]

A typical divorce agreement may include a division of property, alimony, and child custody. In many cases, the alimony and custody rules can be modified at a later date if circumstances change. However, a property division usually can’t be modified – even if unforeseen circumstances mean that one spouse got a much better (or worse) deal than anybody expected.

For instance, when an Alaska couple split up, they had to figure out how to divide some stock that they jointly owned in two companies. They decided that the husband would get the stock, and he’d pay his wife a total of $50,000 for it in a series of installments over time.

Eventually, the husband fell behind on the payments, and the wife sued. [Read more...]

The U.S. Census Bureau has gone back through its data from the 1940s to the present, and has compiled a new report analyzing marriage and divorce in America. Who’s getting married? Who’s getting divorced? And how are the answers changing over time?

One of the most interesting findings is that the divorce rate has started to level off and decline. But that’s not necessarily because couples are more likely to stay together for life. Rather, a lot of couples are simply not getting married in the first place, so that when they split up, it doesn’t result in a divorce.

Here’s a closer look at some of the findings:

People are waiting longer to get married. Back in the 1950s, the median age for a first marriage was 23 for men and 20 for women. By 2009, though, the median age had risen to 28 for men and 26 for women. [Read more...]

Facebook is playing a role in as many as a fifth of all divorces in the U.S., according to a study by the American Academy of Matrimonial Lawyers.

Facebook can come up in a divorce case in several ways. One is that marriages sometimes end because people have affairs with people they met – or re-connected with – over the social networking site.

One of the most common uses of Facebook is getting in touch with old friends. But if a marriage is in some trouble already, and a spouse gets back in touch with an old friend (or an old flame) who is emotionally available, a simple “hello” could turn into something much more complicated. [Read more...]

Generally, whatever assets and debts a couple accumulate during a marriage can be split between them at divorce.

But what if a husband racks up an enormous amount of credit card debt without his wife knowing about it? Should she still be responsible for half the bill?

In one recent case, the Kentucky Supreme Court said “no.”

The couple in that case divorced after being married for 42 years. Late in their marriage, the husband ran up $65,000 in credit card debt trying to help their adult son recover from financial setbacks. [Read more...]

A husband’s interest in a business partnership that produced a consistent stream of profits “counted” as marital property, and his wife can receive a share of his interest at divorce, the highest court in Massachusetts recently ruled.

The husband was a partner in an investment advisory firm. Under the terms of the partnership, he received annual cash payments in the form of salary, incentives, return on capital and merit pay.

The wife claimed a share of the value of his partnership interest. The husband objected, arguing that his partnership interest wasn’t “property” since he had no right to the annual payments, which were merely an “expectancy” of future income. (State law says that a divorcing spouse has no right to share in a mere “expectancy” of a benefit.) [Read more...]

When a divorced couple have different religious beliefs, and when children are involved, it can sometimes lead to court.

That’s what happened recently in New Hampshire, where a mother wanted to home-school her daughter according to her religious beliefs, but her ex-husband wanted the child to go to public school.

A judge ruled that it was in the daughter’s best interest to attend public school. The mother appealed to the New Hampshire Supreme Court, arguing that requiring the daughter to go to public school violated her parenting and religious rights under the Constitution. [Read more...]

A father’s child support obligations could be reduced by the amount of his Social Security Disability Insurance payments that went directly to his children, the Vermont Supreme Court recently decided.

The father had been ordered to pay $326 a month in child support when he and his wife divorced. Soon afterward, he went to prison for five years.

When he got out of prison, he applied for SSDI benefits. He received a retroactive payment that included more than $14,000 that went directly to his ex-wife on his children’s behalf.

The father argued that his child support obligations should be reduced by the amount of this payment to his children. [Read more...]

The ex-wife of an Air Force officer might not be able to share in an increase in the officer’s pension benefits that resulted from a promotion he received after the couple divorced, according to a New Jersey appeals court.

The couple divorced when the husband was a captain. The divorce settlement gave the wife 50 percent of his military pension, which was based on his 11 years of service to that point.

By the time the husband retired, he’d reached the rank of major. His promotion entitled him to a larger pension benefit.

But the court said the wife couldn’t automatically share in the increase. Rather, it ordered a hearing to determine how much of the husband’s promotion was due to the couple’s joint efforts while married, and how much was due to the husband’s individual efforts after the divorce.

Divorce is stressful, and if you’re considering a marital split, the last thing you’re probably focusing on is your estate planning documents.  But if you’re thinking of getting divorced, it’s usually wise to revise your estate plans now rather than later.

For example:

• You might have signed a power of attorney document that allows your current spouse to make gifts, sign contracts, and make financial decisions for you.
• You might have a life insurance policy that names your spouse as the beneficiary.
• You might have a lot of your money in joint accounts to which your spouse has unlimited access.
• You might have a health care proxy that allows your spouse to make medical decisions for you if you become incapacitated. [Read more...]

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.” [Read more...]

When someone’s parental rights are terminated, this also terminates the rights of the person’s relatives – including the child’s grandparents, an Illinois appeals court recently ruled. In this case both natural parents’ rights were terminated, and the child’s foster parents petitioned for adoption. The natural father’s parents objected. But the court said they had no legal right to contest the adoption, since once the father’s parental rights were terminated, all of their rights were terminated as well.

After 27 years of marriage, a Colorado couple got divorced. The husband’s main asset was a share of an oil and gas company that was worth $2.5 million. However, for purposes of dividing the couple’s property, the divorce judge reduced the value of the husband’s share by one-third, to about $1.6 million.

The judge explained that this was a “marketability discount.” The idea of a marketability discount is that, while the husband’s interest might have been “worth” $2.5 million if you simply divided the value of the business by his percentage interest, it wouldn’t be “worth” $2.5 million if he tried to sell his interest to a third party. That’s because a third party probably wouldn’t want to pay full value for a minority stake in a business, given that he or she would be a minority owner and would have no control over the operations. [Read more...]

Social Security benefits received by a father count when figuring out his child support obligation, the Mississippi Supreme Court recently ruled. The father’s only source of income was Supplemental Security Income benefits. After a paternity case, he was ordered to pay 14 percent of his income for child support.

The father objected, pointing to a federal law that says Social Security benefits can’t be withheld for child support payments. The court agreed that it couldn’t order the Social Security Administration to withhold his payments. But it could still order him to turn part of the money over to the mother after he received it, the court decided.

A mother can relocate with her children from New York to Florida if she pays for visitation via the “Skype” service that will provide a real-time broadcast between her children and their father over the Internet, a New York court recently decided.

The mother wanted to move from Long Island to Florida with the couple’s two children, ages nine and six. She planned to move in with her parents because the New York home was in the late stages of foreclosure and she was unemployed. The father was a recovering alcoholic who lived in employer-provided housing and couldn’t afford trips to Florida.

He objected to the move, especially because he had recently completed rehab and was trying to become a permanent presence in the children’s lives. [Read more...]

A divorced husband could stop paying for his ex-wife’s health insurance when she got engaged and moved in with her fiancé, the Iowa Supreme Court recently ruled. The couple’s divorce decree required the husband to pay up to $300 per month for the wife’s health insurance. He obliged, but wanted to stop paying when the wife no longer needed the coverage.

The question was whether the insurance coverage was part of the wife’s support – which could be modified by a court if her needs changed – or part of the couple’s property settlement, which couldn’t be changed. The court said that in this particular case, the insurance payments were part of the wife’s support, and so they could be cancelled later by a judge.

Prenuptial agreements used to be only for celebrities, but in the last few years they have become dramatically more common in the U.S., and now it’s quite ordinary for middle-class couples to ask for them.

There’s no one single reason for the change. Rather, a number of factors are working together to make prenups more acceptable – including:

• The recession. Many people have seen the value of their homes, pensions and investments shrink dramatically, and they are concerned about protecting what they have left. In addition, a lot of people want to shield themselves from debts brought to a marriage by the other spouse. [Read more...]

Being dumped by the person you were planning to marry is an emotionally wrenching, if not humiliating, experience. But can you sue over it? It’s highly unusual, but a few states allow this type of lawsuit. It helps if you can show that you actually lost money as a result of the runaway bride or groom, as opposed to simply being embarrassed.

In a North Carolina case, Crystal Dellinger began dating her boyfriend, Cliff Barnes, while she was still in high school. After graduation, she helped Barnes run a convenience store he had purchased. Later, she agreed to help Barnes open a second store instead of looking for a job. Ultimately she helped him establish four stores, working without pay for a year so he could put the profits back into the business. When Barnes asked her to marry him, he promised he’d sell all the stores once day and she’d never have to worry about money. She accepted. [Read more...]

When a couple agrees to a divorce settlement, it’s generally final. But in some instances, a judge might allow a couple to reopen it and change the terms if they later realize they made an honest mistake – such as that their property wasn’t worth as much as they thought. For example, when a wealthy New York lawyer and his wife divorced, they agreed to split their property, which included a $5.4 million investment account, right down the middle. Unfortunately, the account was invested with the notorious Wall Street fraudster Bernard Madoff.

Madoff’s ponzi scheme wasn’t revealed until after the husband had already paid the wife $6.6 million, including her share of the investment account, which was actually worthless. The wife argued that she was still entitled to the full amount of the settlement. But a New York appeals court agreed with the husband that the settlement should be set aside due to a “mutual mistake.”

The issue of whether same-sex partners are entitled to custody rights continues to produce different court decisions around the country. In one recent case, a North Carolina woman conceived a child through artificial insemination, and her partner sought to adopt the child. A judge allowed the adoption. When the couple later split up, the partner sought parental rights.

The state supreme court first decided that the adoption was invalid (despite what the judge had ruled), because North Carolina law doesn’t allow for adoption in this situation.

However, the court went on to say that joint custody was nevertheless appropriate in this case, because it was in the best interests of the child. [Read more...]

A woman who worked full-time while her husband was in dental school is entitled to “compensatory” support for her role in launching his $350,000-a-year dental career, the Oregon Supreme Court recently ruled. Once her husband had established his practice, the wife focused on homemaking and childcare responsibilities, though she also worked part-time in the dental office for several years.

The court said the wife’s contribution to her husband’s education, training and vocational skills was a significant factor behind his earning capacity. Accordingly, she was awarded $2,000 a month for 10 years, in addition to $3,000 a month in “transitional” spousal support and $4,000 a month in maintenance. [Read more...]

A lot of difficult questions can come up in a divorce case. Check out the following situations and see if you can figure out what the court decided. You be the judge! But remember – the actual outcome can vary from state to state, and depends on the exact facts of each case.

• A wife’s 401(k) plan was worth $164,000 when she filed for divorce. By the time of the divorce trial, however, it was worth $235,000. The husband was awarded half the value of the plan. Should he get half of $164,000, or half of $235,000?

He should get half of $235,000, said the Iowa Court of Appeals.

The wife argued that her husband shouldn’t benefit from her continuing contributions to the account, but the court disagreed, because the couple was still married during that time. [Read more...]

Even if a defendant in a paternity case is actually the child’s father, he may be able to avoid paying child support by arguing that there is already an existing father figure in the child’s life, according to New York’s highest court.

The mother in the case gave birth to a daughter when she was living with a boyfriend. The boyfriend was listed as the child’s father on her birth certificate. Twelve years later, the mother filed a paternity action against another man, claiming he was actually the father and demanding child support. [Read more...]

Family law courts have the power to order many things, but they can’t order ex-spouses to get along with each other. Yet this doesn’t necessarily mean that an unfriendly couple can’t share parenting duties. A father in Pennsylvania who was planning to retire from his job asked a judge for shared custody. The judge denied the request, ruling that the mother and father couldn’t share custody because they didn’t “work well together” and hadn’t demonstrated the ability to be “civil and cordial.”

But the father appealed, and the appeals court disagreed. The appeals court said that as long as the mother and father showed a “minimal degree of cooperation,” they could share custody – it wasn’t necessary that the have a good relationship.

The fact that a divorcing mother is a Jehovah’s Witness shouldn’t be held against her in deciding who gets custody, according to the Kansas Court of Appeals. The father had argued that giving the mother custody could endanger the child, because of the religion’s prohibition against blood transfusions.

But the court said that this was mere speculation, and there was no reason to think that the child had ever been denied a blood transfusion, needed a transfusion, or was likely to need one in the future. If the issue ever actually came up, a judge could deal with it at that time, the court noted.

It’s surprising how often divorcing couples are ready to go to war over seemingly small things, such as who gets a particular piece of personal property. The item may have sentimental value, and it may become a proxy for other issues in the marriage. However, it’s often wise to step back and decide whether the battle is really worth the cost in terms of time, money and energy. [Read more...]

A New York judge recently awarded a mother primary custody of a couple’s two children in part because the lifestyle the father had created for them was overly scheduled and exhausting. The father centered the children’s life around tennis. He woke them at 6 a.m. for a half-day of school, after which they spent six hours at a tennis program, returning home after 9:30 each night. On weekends, the children – aged five and ten – participated in tennis school and/or tournaments.

The court said that the father “has displayed poor decision-making regarding his minor children in continuing with this grueling daily schedule despite the fact that the children are constantly tired, regularly late to school, their school work is suffering, and their tennis appears to be negatively impacted.” The court added that the children’s “daily schedule…is overly burdensome, exhausting and completely unacceptable.”

While the rights of stepparents have expanded over the years, they’re not entitled to the same rights as a parent. The Washington Supreme Court reinforced this idea in a recent decision that said a divorced stepfather couldn’t claim a legal right to visitation with his former stepdaughter. [Read more...]

When you get divorced, the last thing on your mind is likely to be documents such as your will. But after a divorce, it’s important to revise your will and other important documents, such as your power of attorney and health care proxy. These documents may contain provisions relating to a former spouse, former in-laws or stepchildren.

In some states, a divorce automatically revokes any bequest in a will to a former spouse. But this isn’t always the case. And in any event, once you get divorced your financial picture will have changed, and you’ll want to review all your estate planning decisions. [Read more...]

Most everyone has heard of prenuptial agreements, where a couple decide before they get married what will happen if they get divorced or if one of them dies.

But did you know that there are also post-nuptial agreements? These are pretty much the same as prenuptial agreements, except that they’re signed after the marriage, rather than before. [Read more...]