Category Archives: Considering Income From All Financial Resources

Gray Divorces Are Increasing!

A recent development is that in the last several years I have represented many individuals in their fifties and even sixties who are commencing divorces after many years of marriage. Twenty years ago I rarely ever represented fifty plus aged people in divorces.

Many experts are writing about the reasons for this reality. I wish to share an interesting article from the Huffington Post:

The 5 Big Reasons Why Couples Divorce After Decades Of Marriage
Here’s what to do before it’s too late.
Mar 20, 2016
Linda Melone Next Avenue
SPECIAL FROM Next Avenue
By Linda Melone
If you or someone you know recently divorced after 20 or more years together, you’re not alone. Splitting up later in life, sometimes called “gray divorce,” is on the upswing. In 2010, one in four divorces occurred among people age 50 and above and the 50-plus set was more than twice as likely to be divorced than in 1990, according to the National Center for Family and Marriage Research at Bowling Green State University in Ohio.

But why do couples split up after so much time together? And how can you prevent this from happening in your marriage?

There are five big reasons why couples divorce after decades of marriage:
1. They Grow Apart
The process that leads to gray divorce isn’t typically a sudden event or trigger, says Stan Tatkin, author of Wired For Love. Rather, it often happens slowly over time. “It’s like an unbreakable plate you drop repeatedly,” he says. “The relationship develops microcracks inside the structure you can’t see. Then it finally reaches a critical mass and shatters.”

Hormonal changes that arise with age can cause significant shifts in sex drive.

— Jessica O’Reilly, author of ‘The New Sex Bible’

It’s a reason many couples that split late in life say they’ve simply grown apart. This usually comes as a shock to close friends and family, such as when Al and Tipper Gore separated in 2010 after 40 years of marriage.

An undercurrent of dissatisfaction can happen for a number of reasons, but several dominant themes crop up regularly, says Tatkin. “Often one person — usually the woman — feels she’s given up too much. She may have put aside her career as she raised the children. She feels the wear and tear of the relationship because it wasn’t collaborative.”

2. Their Age
Other times age is a factor. A big age difference that was not an issue at the beginning of a relationship may become a problem later in life, Tatkin says. Or people may hit middle-age and crave a reboot.

Tatkin explains that people go through physiological and biological “brain upgrades” at certain times in their lives, including at age 15 and again at 40. “Every time you experience one you want to go back [in time],” he says. Starting a relationship with a younger person satisfies this urge for some people.

3. They’re Bored
Steve Siebold, a psychological performance and mental toughness coach and author of 177 Mental Toughness Secrets of The World Class, cites boredom as a factor. “Being around the same person 24/7, depending on the relationship, can lead to boredom,” he says. In other cases, people stop trying. “You work hard, play hard and take care of business, but you’ve stopped being the attentive, attractive spouse. You’ve allowed yourself to become complacent.”

4. Their Money Issues
Differences in spending habits and financial difficulties may finally come to a head cause a break-up. One spouse may be a big spender while the other likes to save, Siebold says. “The kids’ activities, expenses and college funds eat the family’s discretionary cash and you’re deep in debt,” he notes.

5. Sex
Sexual incompatibility can become more pronounced, says Jessica O’Reilly, author of The New Sex Bible and Astroglide’s resident sexologist. “Hormonal changes that arise with age can cause significant shifts in sex drive. And though every couple of every age experiences differentials in desire, these can become more pronounced with age.”

Couples who may be heading down the path to divorce can take steps to pull themselves back with these five tips:

1. Put the Relationship First
You should be about protecting each other in harsh environments and have each other’s back, says Tatkin. “You must become experts for each other and protect each other in private and public — and never threaten the relationship.” In addition, Tatkin says, couples should have a strong sense of why they’re together. “Know the purpose that you serve as a couple,” he says.

2. Take Care of Yourself
Gaining weight, not exercising and dressing slovenly sends a message to your spouse that you don’t care anymore, says Siebold. “Try cutting the carbs, trimming the fat and heading to the gym,” he advises.

3. Assess Your Role in the Problem
Before you give up on your marriage, look in the mirror, says Siebold. “If there’s a boring person staring back at you, you may be the problem,” he notes.

And if that is the case, Siebold suggests making a decision to create some excitement in your life. Plan a new adventure together, start a new business, learn a language or develop a new skill together. These activities create new stories and may reignite your passion.

4. Talk About Sex
Couples who talk about their sexual expectations, changing needs and vulnerabilities can manage their differences, O’Reilly says. “Communication is essential. As your body changes you need to discuss what feels good both physically and emotionally to cultivate intimacy,” she adds.

5. Talk About Everything Else, Too
Lastly, Tatkin says you both need to tell each other everything. That’s the only way to work out your problems.

 

My experience is that a reality is that people change and often grow apart and have different interests after their children are grown and move on with their individual new lives. It appears people also often have less patience and are unwilling to live under the control of a bossy financially or emotionally controlling spouse realizing they are not going to live forever and want to pursue what they deem satisfying and rewarding. They no longer focus on the children’s needs, but their own, which now have changed.

The reality is it is important to retain an experienced divorce attorney in a grey divorce as often times your best earning years are behind you and it is important to obtain a fair and equitable property settlement and sometimes spousal maintenance to secure your financial future. Dividing pensions, retirement assets, or businesses and real estate can often be complicated. Promptly seek an experienced divorce attorney if you find yourself in this now common scenario.

Jeff from Arrigoni Law has 33 years experience as an attorney and has been practicing exclusively in family law, divorce, and mediation for over 27 years and will work hard to protect your rights and secure an equitable fair settlement.

Court Reverses Trial Court Permanent Spousal Maintenance Award And Directs Rehabilitative Maintenance and Also Directs Smaller Monthly Sum

In Spolum v. D’Amato, A14-1335, A14-1720 (Minn. App. August 17, 2015)  the Court of Appeals reversed a Ramsey County  trial court decision awarding Permanent Spousal Maintenance and remanded to the trial court to recalculate Spolum’s  monthly expenses, D’Amato’s income, and to reduce the monthly maintenance award of $14,072 and further held only Rehabilitative Spousal Maintenance was appropriate.

D’Amato, an orthopedic surgeon, and Spolum, a flight attendant, were married in 2001 and had one son, born in 2003. The parties separated in July 2010.  A legal separation action was started and then the parties attempted reconciliation but continued to live separately. A divorce trial began in August 2013. At that time, Spolum was age 49 and D’Amato was age 45.

To plan for the wedding, Spolum took a leave of absence as a flight attendant and extended it after the 911 attack and returned to work 5 years later. She quit in 2006 because her commute was stressful. She is high school educated with some college and art school classes.

Spolum worked at a clothing boutique and as a yoga instructor. When the parties reconciled she opened a chocolate shop, but the business failed. Trial evidence reflected she was “brilliant and creative”.  She was interested in animal-welfare and was on the board of directors for an animal-welfare organization. Spolum desired to establish a career as an animal welfare advocate. A vocational rehabilitation evaluation was completed concluding without additional training she could work in a position earning between $10-$12 an hour, but could attend a two year vocational program.

During the marriage D’Amato was let go in a physician practice. He applied to Health Partners. He was initially rejected, but Spolum testified she invited the head of HealthPartners to their home to advocate for reconsideration and D’Amato was then hired.  D’Amato also began a second job as an independent medical-legal consultant, working approximately 20 hours a week. Near the end of 2011 D’Amato quit the second job as it was time-consuming and stressful causing him anxiety and to be unhealthy. He testified he was already working 50 hours a week at HealthPartners.

D’Amato testified his earning in 2013 would be $800,000 and that he was seeing fewer patients as they were being diverted to other doctors. The Director of HealthPartners testified there has been a decrease in patient volume and surgeries. D’Amato’s income has been decreasing since 2011 and he predicted this trend would continue. He could earn additional income based on his production, but patients were decreasing. D’Amato testified he projected his salary in 2014 to be $750,000. D’Amato proposed the court use his 2013 income of $800,000 and that he pay spousal maintenance for 4 years to allow Spolum to acquire employment and training.

In the Judgment the trial court set D’Amato’s income at $950,538 using a 3 year average and despite finding he had quit his second job to create a more balanced life. The  judge stated that in the event the court overestimated his income D’Amato was in a better position to correct the error by pursuing additional options.

The trial court found Spolum’s discretionary spending at $9,943 per month and then modified that to $8,383 based on D’Amato’s claim this was even higher than she requested. In the original decision the court ordered $18,225 per month in spousal maintenance which was subsequently amended to $14,072 after post-trial motions. Apparently the trial court made findings concerning Spolum’s earning capacity and ability to re-enter the job market, but ignored those facts in making it a permanent maintenance award. The court found she was in good physical and emotional health and found no reason why she could not pursue a successful career because she was healthy, intelligent, articulate, creative, and capable.

The court found permanent spousal maintenance was appropriate based on: (1) the high marital standard of living, (2) the length of the marriage, (3) Spolum will never be able to support herself in the manner close to the marital standard of living, and (4) the fact D’Amato’s income would not decrease. Spolum was awarded $1.2 million dollars in assets, including the Caribbean home “Seacliff” which D’Amato requested be sold and artwork of $110,000, but found the assets were not available until retirement.

The court of appeals reversed the amount and duration of the award and stated Permanent Spousal Maintenance was not warranted and that the award should be Rehabilitative. The court explained a court may award spousal maintenance (1) if a spouse lacks sufficient property, including allocated property to provide for reasonable needs considering the standard of living, or (2) is unable to provide self-support through appropriate employment, in light of the standard of living. Minn Stat. 518.552, subd.1.  In determining an award the court should evaluate (1) the financial resources of the requesting party, including marital property awarded to the party, and the party’s ability to meet needs independently, (2) time necessary to become self-supporting, (3) marital standard of living, (4) duration of marriage, (5) loss of employment benefits and opportunities foregone by requesting party, (6) age, physical condition, and emotional condition of the requesting party, (7) ability of the obligor to meet the needs of both parties, and (8) contribution of each party in the acquisition, preservation, and depreciation of marital property. Minn. Stat. 518.552, subd. 2.

The court stated the trial court put an overriding emphasis on the standard of living, which was merely one factor to be considered. The court did not agree the assets awarded to Spolum were not available until retirement. The court held the evidence and findings support an award of rehabilitative maintenance, not permanent spousal maintenance. The court noted the standard of living was over emphasized because Spolum also testified the standard of living was excessive and unnecessary and was a mistake and was based on D’Amato previously working two jobs and that it was unfair to consider a lifestyle based on income from a prior second job that contributed an average of additional income of $200,00 per year. The court also stated the parties had only lived together as husband and wife for 9 years. It noted prior to the marriage Spolum made $46,000 annually as a flight attendant. The court stated the evidence only supported a rehabilitative award.

The court also stated the trial court failed to consider Spolum’s dubious use of assets during the separation where she transferred $125,000 from the parties’ joint account and only had $40,000 left.

The  court stated the trial court’s finding of the need for discretionary spending of $8,343 per month was excessive. The court also found the trial court clearly erred in finding D’Amato’s income was $950,838 and that spousal maintenance should be based on the obligor’s income at the time of trial. The court noted it was unreasonable for a court to require D’Amato to work a second job in order to satisfy a maintenance award when Spolum is not required to work even one job.

The issue of spousal maintenance is a very difficult matter and requires careful evaluation of numerous factors and often the assistance of experts, including an experienced family law attorney. It is critical to promptly retain an experienced divorce lawyer if spousal maintenance is a potential issue.

Denial of Spousal Maintenance Not Abuse of Discretion In Considering Investment Income From Property Settlement Sufficient To Meet Monthly Needs

In Curtis v. Curtis, A14-1841, (Minn. Ct. App. June 22, 2015) the Minnesota Court of Appeals affirmed a trial court decision to deny a wife’ request for spousal maintenance, based on imputed income from the reallocation of a property settlement from growth investments to income investments based on an  expert who testified wife could earn 7 percent on her investments if she allocated them from growth funds to income funds. The expert testimony was not rebutted at trial. The court determined the trial court did not abuse its discretion by considering the reallocated investment strategy  and that the investment income was sufficient to meet wife’s monthly needs. The court noted that the reallocation of investments in the property division was not an invasion of assets or improper in light of the expert testimony to support the determinations.

In Curtis the court was faced with a couple who was married in 1990 and separated in 2012 or 2013. Husband worked as a dentist and managed the parties investments. They had two children one was now an adult and a 16 year old son. Wife was awarded the house and investments totaling $2,209,399 or 57 % of the marital estate , while husband received 43% of the estate.  Based on expert testimony the trial court determined wife could reallocate growth funds to income producing funds and meet her reasonable monthly expenses. It was noted the spousal maintenance statute, Minn. Stat. 518.552, subd. 2(a) requires a court to consider financial resources, which include income generated by liquid assets citing to Fink v. Fink, 366 N. W. 2d 340, 342 (Minn. Ct. App. 1985).

The court stated the trial court’s decision did not invade her property award to meet her expenses and was not an abuse of discretion. A dissenting Judge noted the tax consequences of reallocating the assets would be significant and was not considered.The court, however, found the trial court was within its discretion not to consider the tax consequences citing to Maurer v. Maurer, 623 N. W. 2d 604, 608 (Minn. 2001), which found that whether to consider the tax consequences of a property division lies within the trial court’s discretion.

This case raises many potential issues to be carefully considered in spousal maintenance cases and makes it clear it is important to present expert testimony on potential investment income and its impact on cash flow or other important financial issues.