At issue before the appellate court in Klimeck v. Klimeck was whether the trial court:

• Properly and reasonably divided the marital estate;
• Abused its discretion by ordering the husband to pay spousal maintenance to the wife;
• Abused its discretion by imposing a gag order on the husband with regard to the wife’s medical conditions and treatments.

Ultimately, the court affirmed in part, reversed in part, and remanded. more

Wife had not been employed outside the home since 2002, and their first child was born in 2004, followed by their second child in 2007. In 2006 and 2008, Husband inherited property from his parents in Germany. He sold and invested the proceeds in several German bank accounts. Throughout the marriage, the husband had made various deposits into those accounts, including money the family later used to finance visits to Germany.

Husband filed for divorce in 2014. Shortly before doing so, he made a number of large withdrawals from the couples’ joint bank accounts. Less than a month before filing his petition for Indiana divorce, the husband transferred $280,000 from a joint account into the children’s college savings accounts without his wife’s agreement. He also reportedly used marital assets to cover the family’s living expenses while the petition was pending, even though his salary was sufficient for this purpose. He incurred approximately $66,000 in capital gains taxes as a result.

The trial court ordered Husband to pay the taxes, but otherwise divided the marital estate equally, including those German accounts. The court also ordered Husband to make spousal maintenance payments to his wife until the end of 2015 and to refrain from any public mention of his wife’s medical conditions and/or treatments.

The husband appealed. He argued that the trial courts should have separated several of his German accounts from the marital estate, at least partially because they contained the value of the inherited properties he sold. The trial court had decided to split the accounts because both parties jointly decided how to invest the money in those accounts, Husband’s earnings from international employment was deposited in those accounts, money for family travel was spent from those accounts, and the money was included in recent joint tax filings. Other key facts of this case and its outcome include:

• The appellate justices declined to find that the court abused its discretion in equally dividing these assets.
• On the issue of requiring him to pay the capital gains taxes, the court noted the husband withdrew ten times the amount of money his wife did from those accounts before the divorce filing, and she did not have access to other sources of funds (i.e., income) that he did to cover living expenses while the petition was pending. The trial court had found that the husband needlessly liquidated marital assets and in the process necessitated his wife incurring attorney fees. The trial court had found Husband inappropriately disposed of marital assets, so requiring him to pay the $66,000 tax incurred was not unreasonable – even when it resulted in an uneven distribution of assets.
• On the issue of spousal support, the court found there was sufficient evidence to support the need for these payments, even despite Husband’s arguments that Wife hadn’t proven she was unable to work.
• On the issue of the so-called gag order, the court found no abuse of discretion.
• The one issue the appellate court took issue with was the erroneous two-time inclusion of the value of a single vehicle in the accounting of the marital estate, and the court ordered a correction for that.

As our Indiana divorce lawyers can explain, any time you are planning a divorce, it’s best to discuss your financial plans with an experienced attorney to avoid the kind of penalties this plaintiff incurred.

Indiana Family Law Attorney Burton A. Padove handles divorce and child custody matters throughout northern Indiana, including Gary and Hammond.

Additional Resources:

Klimeck v. Klimeck , Aug. 11, 2016, Indiana Court of Appeals

More Blog Entries:

Peterson v. Peterson – Failure to Pay Spousal Support, Aug. 28, 2016, Indiana Divorce Lawyer Blog

Indiana Code 31-15-7-2 specifies the circumstances under which spousal support can be awarded in Indiana. Most often, spousal support is awarded during the provisional period of the divorce, which is after the filing for divorce but prior to its finalization. However, it may also be awarded when:

One spouse lacks sufficient property to meet his or her needs and/or the spouse is the custodian of a child whose physical or mental incapacity requires the custodian to forego employment. The court will consider the educational level of each spouse, whether family responsibilities resulted in an interruption in education/training or employment, the earning capacity of each spouse, and the time and expense needed for the lesser-earning spouse to acquire sufficient education or training.more

Generally, spousal support in Indiana doesn’t exceed three years. However, once it has been ordered, the spouse who is required to pay it must abide by the court’s orders. Failure to do so will result in sanctions if he or she is found in contempt of court. In some cases, even inability to pay is no excuse.

An example recently came before the North Dakota Supreme Court in the case of Peterson v. Peterson. Although this was an out-of-state case, the same basic principles apply.

According to court records, Husband and Wife divorced in 1996, at which time the court ruled the husband was to pay the wife $1,500 each month in spousal support until the wife either remarried or died.

This went on for nearly two decades. Then, in early 2015, Wife petitioned the court to find her ex-husband in contempt for failing to pay spousal support. She alleged he had not done so since the fall of 2014. Husband responded with a petition for termination of spousal support obligations, or at least a modification. The trial court denied his request, found him in contempt, and ordered him to make back payments plus reimburse his ex-wife for attorney fees.

Husband appealed, arguing the district court erred. He argued that he should not be held in contempt because he was unable to make the support payments.

The state supreme court noted that when a party is unable to comply with a court order, it is not acceptable to simply ignore it until the person owed the support takes action for contempt. Even if a court’s order is erroneous, the parties are bound to it until it is reversed, modified, or set aside on appeal. If the husband in this case believed he was unable to pay the court-ordered support, the action he should have taken was to immediately move the court to abolish or reduce the court-ordered support based on a material change in circumstances. It is not acceptable, to simply stop making support payments, as Husband did here.

In this case, although it was disputed, the court did find that the husband had sufficient income – both direct and indirect – to continue to meet his court-ordered obligation.

Indiana Family Law Attorney Burton A. Padove handles divorce and child custody matters throughout northern Indiana, including Gary and Hammond.

Additional Resources:

Peterson v. Peterson, July 2016, North Dakota Supreme Court

More Blog Entries:

Luttrell v. Cucco – Same-Sex Couple Cohabitation Affects Spousal Support Payments, May 11, 2016, Gary Divorce Lawyer Blog

But there are still some gray areas in our nation’s civil court systems with regard to these relationship. Take for example the recent case of Luttrell v. Cucco, weighed in on by the Virginia Supreme Court.

At its core, this case was a dispute over spousal support. As is common in many temporary spousal support agreements, a provision indicated that the support agreements were subject to termination in the event of “cohabitation,” as defined in Va. Code 20-109. The law states that maintenance and support of an ex-spouse may be discontinued upon cohabitation, remarriage, or death. Specifically, the law states that an ex-spouse who has been “habitually cohabitating with another person in a relationship analogous to a marriage for one year or more” is subject to termination of spousal support benefits. more

In this case, plaintiff (Husband) and defendant (Wife) were married in 1992. They later separated and Wife filed for divorce in 2007. Pursuant to the divorce agreement, Husband was to pay Wife monthly spousal support for a term of eight years. However, those payments could be terminated earlier if the wife died, remarried, or began cohabitating in a marriage-like relationship. The agreement also indicated that reasonable expenses incurred by a party in the successful enforcement of the agreement would have to be paid by the defaulting party.

In 2014, the husband hired a divorce lawyer and sought an amendment of the spousal support agreement, arguing that his ex-wife was engaged to be married and had been living continuously with her fiancée for at least a full year. He sought to terminate his spousal support agreement, and he also wanted his ex-wife to refund the equivalent of one year’s worth of payments.

At the hearing, Wife did not dispute the allegations, but she contended that because her relationship was with another woman, it wasn’t technically “cohabitating” under the terms of the law.

The circuit court decided that the right to marry was a separate question from the issue of cohabitation for spousal support purposes. Citing dissent in a prior Court of Appeals decision, the court ruled that only opposite-sex couples could cohabitate for purposes of spousal support termination. Several prior decisions had held that cohabitation be interpreted as a “man and a woman” and as “husband and wife.” Husband’s motion was denied and he was ordered to pay his ex-wife’s legal fees.

He appealed. The court of appeals affirmed, but the Virginia Supreme Court reversed.

Justices stated that they favored an interpretation that would further the statute’s purpose, rather than obstruct it. The court noted that the legislature, in wording the law, had not modified the word “person” with the phrase “of the opposite sex,” meaning it could include persons of either sex. The court further noted that although same-sex marriage wasn’t legal in Virginia in 1997 when the law was written, that was not relevant because the phrase “a relationship analogous to marriage” doesn’t equal “marriage.”

Therefore, a same-sex relationship could be considered “analogous to marriage,” regardless of whether the two could legally marry (which, of course, now they can). The lower court’s ruling was reversed.

Indiana Family Law Attorney Burton A. Padove handles divorce and child custody matters throughout northern Indiana, including Gary and Hammond.

Additional Resources:

Luttrell v. Cucco, April 28, 2016, Virginia Supreme Court

More Blog Entries:

Ahls v. Ahls – Appeals Court Favors Wife in Indiana Divorce Settlement, April 20, 2016, Indiana Divorce Lawyer Blog

This is a good example of why it’s important to carefully review retirement accounts when determining a divorce settlement.

According to court records, husband and wife married in 1993 and had one child together. After 20 years of marriage, wife filed a petition for divorce.more

At that time, the child was leaving for college and was considered emancipated, so there was no need to work out a child custody or support arrangement.

Among the marital assets that needed divvied up were three vested retirement accounts: A Military pension, a Civil Service Pension and a Thrift Savings Plan. The two parties presented expert witnesses that offered conflicting valuations of those accounts.

According to the husband’s expert, the military pension was valued at $265,500, the thrift pension was valued at $311,200 and the civil pension was valued at $290,000.

Both sides did agree that 62 percent of the civil and thrift accounts were earned during the marriage and 36 percent of the military pension was earned during the marriage. The rest of those accounts were earned by the husband before the couple married, and thus they were set aside and not considered marital assets for consideration in the Indiana divorce settlement.

The court adopted the husband’s calculation of the account values, awarding wife 15.5 percent of each the thrift and civil accounts and 9 percent of the military pension account. Husband was ordered to pay $52,000 on top of that as part of an equalization judgment. The order did not mention survivor benefits, should the husband die first. The court also ordered both parties to pay their own respective attorney fees.

Wife appealed, arguing the calculations of her share of the retirement accounts were incorrect and also challenging the decisions not to award her survivor benefits or attorney fees.

Specifically, wife contended the court improperly applied the coverture fraction. This is a formula that a trial court can use to distribute retirement plan benefits or pensions from the earning spouse to the non-earning spouse. This method involves taking the value of the retirement account and multiplying it by a fraction (based on the period of time during which the marriage lasted).

The problem was the coverture fraction method was applied incorrectly, she argued – and the Indiana Court of Appeals agreed.

For example, with regard to the civil and thrift plans, where 62 percent of the plans were considered marital assets. By dividing this 50/50, as the courts had decided to do, the wife should have received 31 percent – not 15.5 percent. The court had in effect divided the amount twice, instead of just once. Under the court’s calculation, she was awarded just one-fourth of the two-thirds that had accrued during the marriage, when in fact, she was entitled to one-half of the two-thirds.

The same issue was raised with regard to the military pension, of which she was entitled to 18 percent – not 9 percent.

Ultimately, that means wife was entitled to $116,000 more than what trial court awarded to her.

However, with regard to attorney fees and survivor benefits, the appeals court found the trial court acted appropriately within its discretion.

Indiana Family Law Attorney Burton A. Padove handles divorce and child custody matters throughout northern Indiana, including Gary and Hammond.

Additional Resources:

Ahls v. Ahls, March 11, 2016, Indiana Court of Appeals

More Blog Entries:

Carr v. Carr – Survivor Benefit is Marital Asset, Indiana Appeals Court Rules, Feb. 20, 2016, Hammond Divorce Lawyer Blog

That’s why January has a reputation for being “divorce month.”

But as heartbreaking – or freeing – as the process may be, one of the first things we recommend to those on both sides of the aisle: Companionship.

Not with each other, of course, but with an experienced divorce attorney. You’re going to need a legal, tax and investment professional to help guide you through this change so you don’t end up on shaky financial ground. The goal is to keep things as amicable as possible and as equitable as possible. In cases where relations are contentious or strained, it’s especially important to have a third-party to help mediate the conversation and goals.more

Some ways in which you can help to reduce cost and lessen the financial and emotional burdens:

Keep it civil. For one thing, if you have children, this is best for their emotional stability through what is already a confusing and tumultuous time for them. But beyond that, if you start squabbling over every minor asset and issue, you’re going to spend time and money fighting over details that may not matter in a few short years.

Recognize what is no longer “on paper.” Even just a few years ago, a significant portion of financial records were “on paper.” That’s no longer the case. Most financial information is now in a digital format, usually on computer hard drives, smart phones and other digital devices. There are many laws protecting what can and can’t be accessed and how. You may be entitled to information your spouse is holding, but you have to be careful how you collect it.

Review your taxes. Nobody likes looking at taxes, and many people’s eyes glaze over at the thought. However, it’s worth it to become familiar with your joint tax return. This usually contains important information about partnerships, investments and other sources of income.

Educate yourself. If you have generally been the one to avoid dealing with money and investment issues, the time to get educated about these issues is now. It’s fairly common for spouses to hide investments from one another, and this is where working with a divorce lawyer can help you uncover those assets – to which you are entitled a portion.

Re-examine your financial needs. Your plans for savings, spending and investment may change significantly once you are single. For example, all that money you were setting aside for your child’s college fund? You may need to revisit that.

Adult children and real estate. Increasingly, older couples are divorcing and wrangling with questions about how to divvy up real estate like beach houses or downtown condos, because they want their children and grandchildren to be able to enjoy them. But these properties are almost always more hassle than they are worth, once you factor in upkeep, scheduling conflicts, etc. It’s often best to sell the property and divide the proceeds among the kids.

The bottom line is that each case is going to be different. Our legal team can help set you on the right financial path as you embark on this next leg of the journey.

Indiana Family Law Attorney Burton A. Padove handles divorce and child custody matters throughout northern Indiana, including Gary and Hammond.

Additional Resources:

How to Handle Investments When You Divorce, Nov. 16, 2015, By Lou Carlozo, U.S. News & World Report

More Blog Entries:

Gertiser v. Gertiser – Indiana Supreme Court Weighs Spousal Maintenance, Dec. 20, 2015, Hammond Divorce Attorney Blog

Typically, this is offered when one spouse earns significantly more than the other. Usually, this type of support is temporary, though a judge may determine it should be indefinite if the lesser earning spouse is disabled or unable to return to work for other reasons.

Whether spousal maintenance is permanent or temporary, parties may request modification or even termination when there is a material change in circumstance, such as remarriage. However, the 1994 Indiana Court of Appeals case of Roberts v. Roberts was clear in establishing the fact that spousal maintenance is not automatically terminated upon remarriage. There still needs to be proof presented by the moving party that the marriage means a significant change in the former spouse’s ability to support himself or herself.

This issue was weighed against recently by the Indiana Supreme Court in Gertiser v. Gertiser. more

According to court records, parties involved were married for 25 years before divorcing in 2007. At the time of their divorce, wife took home approximately $11,000 a year in Social Security Disability payments and meager earnings doing work-at-home medical transcription. Husband, meanwhile, earned $145,000 annually.

Wife suffered from disabilities related to her sight, and since 1998, her eyesight degenerated to the point that present day, she is effectively blind. She can do some reading with materials an inch from her face, but cannot drive and her ability to support herself is materially affected. Family court ordered husband to pay wife $1,180 a month in support.

In the years following that decision, both husband and wife remarried. Upon learning of wife’s remarriage, husband petitioned trial court for termination of spousal benefits, arguing the marriage created a substantial and continuing change in her financial conditions that made any further support by him unreasonable. He asserted her husband brought substantial assets into the marriage and had a duty to support her. He also asserted his ex-wife’s occupational skills had been advanced with assistive technology.

Trial court, however, refused this request. Judge stated the original divorce settlement with spousal maintenance was not predicated on wife being totally incapable of working, and neither her disability nor potential earning power had since improved. Also, while ex-husband’s income had increased, ex-wife’s minimal income was unchanged. Since her remarriage, the only real thing that changed was that she no longer needed to borrow money from her father to pay her monthly mortgage.

Further, the court stated that remarriage alone isn’t enough to establish a substantial change in circumstances. Trial court denied the request and ordered ex-husband to pay ex-wife’s $7,000 in attorney’s fees.

The Indiana Court of Appeals, however, reversed, finding the marriage to a man with significant means amounts to a substantial change in ex-wife’s ability to support herself. The court also reversed the award of attorney’s fees, finding there was no disparity in resources between the two parties and in fact, ex-wife had more resources available to pay attorney’s fees than the ex-husband did.

However, the Indiana Supreme Court disagreed and affirmed the trial court’s decision. While the new husband did technically earn more than ex-husband and brought substantial resources to the marriage, much of that money was used for supporting his ex-wife, paying child support and paying college tuition for his older children.

The court took care to note ex-husband was not requesting a mere modification of the original agreement, but termination of it altogether. In weighing all relevant factors, the court noted any change in ex-wife’s circumstances was not of a magnitude that it was unreasonable to leave the maintenance order in place.

Indiana Family Law Attorney Burton A. Padove handles divorce and child custody matters throughout northern Indiana, including Gary and Hammond.

Additional Resources:

Gertiser v. Gertiser, Nov. 10, 2015, Indiana Supreme Court

More Blog Entries:

Carmer v. Carmer – Prenuptial Agreements, Personal Injury Annuities and Property Division, Nov. 20, 2015, Indiana Divorce Lawyer Blog