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Marital Property. Part IV. February 27, 2003. Bar Problem – Supp. Page 155. 1981 – Hal and Wendy marry 1982 – Hal’s father leaves him house which becomes T/E 1985 – Wendy contributes to IRA 1986 – Hal buys condo from inheritance 1994 – H & W separated 1995 – Wendy wins lottery
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Marital Property Part IV February 27, 2003
Bar Problem – Supp. Page 155 1981 – Hal and Wendy marry 1982 – Hal’s father leaves him house which becomes T/E 1985 – Wendy contributes to IRA 1986 – Hal buys condo from inheritance 1994 – H & W separated 1995 – Wendy wins lottery Marital property? Will Hal get a monetary award? What effect will judgment of divorce have on title to house?
Amount and Method of Payment of Monetary Award • Court has discretion as to lump sum vs. installments • Pension: if, as and when preferred to lump sum payment
Use and Possession of Marital Home and Family Use Property? Available when: 1. 2. 3. Standard: Contribution:
Use and Possession of Marital Home and Family Use Property? Available when: 1. Used as principle residence when parties lived together 2. Owned or leased by one or both parties at time of div. 3. Will be used as principle residence by custodial parent and minor child(ren) Standard: Best interest of the child vs. hardship to non-custodial parent Contribution: Court may award non-custodial parent share of post sep payments
Particular Kinds of Property or Property Interests • Personal injury settlements; workers’ comp; contingent fees; future commissions: - variations among jurisdictions - has there been marital initiative or effort to acquire asset? 2) Pension: number of years married number of years employed 3) Goodwill: Is goodwill transferable w/o owner or professional? 4) Appreciation: active (marital effort) vs. passive
Marital Debts MD definition: debt directly traceable to acquisition of marital property ex.: $25,000 purchase money mortgage on home? $25,000 home equity loan to finance year of college? $25,000 home equity loan to purchase Lexus?
If debt deemed “marital” court doesn’t “distribute” or allocate between spouses in Maryland but relevant for either: 1) Reducing value of marital asset, or 2) Determining “economic circumstances of party” for purposes of monetary award or alimony
Pre 1970’s Available only to W Fault – disqualifies Only indef. or perm. No monetary award Modern H or W Fault = factor Rehabilitative/Temp. Mon. award can be combined w/alimony Alimony – Historical Overview
Goals of Modern Alimony 1. 2. 3. 4.
Goals of Modern Alimony 1. NEED/REHABILITAION: Absolute vs. Relative 2. COMPENSATION/RESTITUTION: for non-monetary contributions to marriage 3. PUNISHMENT/REWARD
Analysis of Alimony Problem in Maryland 1st Question: Should H/W be awarded alimony? Look at statutory factors 2nd Question: If so, what kind? MD: Rebuttable presumption that it should be rehabilitative unless 1) age or illness make self-support impossible 2) even with rehab, incomes of party still unconscionably disparate
Henry and Wanda Should Wanda Be Awarded Alimony? Factors favoring award of alimony to Wanda include: a) b) c) d) e) f)
Henry and Wanda Should Wanda Be Awarded Alimony? Factors favoring award of alimony to Wanda include: • Duration of marriage – 20+ years • Financial needs & resources of parties; H – a lot; W- not much • Standard of living during marriage – high • Wanda’s monetary and non-monetary contributions – (put H through school and raised children) • Ability of H to meet his needs while paying W alimony • H’s misconduct
Henry and Wanda Henry’s arguments against an award of alimony: a) b) c)
Henry and Wanda Henry’s arguments against an award of alimony: • W’s ability to be self-supporting – can teach • W’s AGE – cuts both ways c) W’s likely monetary award
Wanda’s argument for indefinite alimony: 11-106(c)(2)(b) UNCONSCIONABLE DISPARITY: Even if Wanda retrained and gets teaching job her salary ($40,000?/yr.) will always be much less than H’s ($300,000+/yr.) • 2-3X diff. - not enough • 8-10 enough • Here 7-8x – probably enough for indefinite alimony
Henry’s argument for rehabilitative alimony: • Alimony’s primary purpose is REHABILITATION or NEED • W has ability to become self-supporting after a few year’s retraining
Assume the court awards Wanda alimony of $3,000 per month for four years beginning in July, 2002. What can the court do if, because of child’s special needs, she will not be able to complete her degree until July, 2007?
Assume the court awards Wanda alimony of $3,000 per month for four years beginning in July, 2002. What can the court do if, because of Harold’s special needs, she will not be able to complete her degree until July, 2007? Extend the award of alimony as long as: • Cir. arise during alimony per. that would lead to harsh & inequitable result w/o extension • Must petition during period of award (Petition after award expires: too late)
What can Henry do if after the first year of paying alimony he becomes disabled and cannot work: • Petition for modification – lower amount • Petition for termination (termination if alimony recipient remarries or either party dies)