30807004-alimony-word-in-white-3d-letters-on-a-ball-or-sphere-of-money-to-illustrate-financial-spousal-suppor[1]The recent decision in the case captioned R.S. v. W.E., Del Fam. Ct., No. CN10-05981, Kerr, J. (Jan. 4, 2017), warns Family Court litigants that failure to comply with discovery can have consequences. In this case, R.S. (“Wife”) was seeking (among other things) alimony. Leading up to the hearing date her ex-husband, W.E. (“Husband”) issued discovery asking for the production of documents. Husband asked for documents related to her income. In addition, he asked for an updated list of her expenses and “[a]ll documents supporting each and every monthly current expenses you wish to have the Court consider in calculating alimony….” Id. at 1. Despite the issuance of an Order on June 10, 2016 compelling the production of documents, Wife failed to produce the documents regarding her expenses. With regard to her income, she produced only a profit and loss statement from her accountant with no supporting documentation.

When the parties appeared for the ancillary hearing on January 4, 2017, Husband made a motion in limine to preclude Wife from presenting evidence relating to her income or her monthly expenses. The Court granted Husband’s motion stating:

Pursuant to 13 DEL. C. § 1512, the Court may award alimony to a dependent party. While the court can alleviate the prejudice to Husband in Wife’s failure to provide supporting documentation for her profit and loss statement by either attributing Wife with her gross receipts or attributing Wife with income from the Wage and Labor Survey, the same cannot be done for her expenses. Husband is severely prejudiced by Wife’s failure to provide documentation pursuant to the Requests on her expenses. Husband would have been able to prepare for questions regarding her expenses had the documents been provided. Wife did not even provide a bare list of expenses to Husband’s counsel or to the Court in the pretrial. If there were a lesser sanction which would address Wife’s failure without prejudice the Court would enter the lesser sanction. However, there is no lesser sanction.

Thus, the Court cannot permit Wife to testify as to her expenses. Without evidence as to Wife’s monthly expenses, dependency cannot be established as Wife’s reasonable needs cannot be determined. Wife was informed by the Court at the pretrial conference that she needed to provide the opposing party with certain documentation. In addition, two Motions to Compel were filed against Wife during a time when Wife was represented by Counsel. Therefore, the Court finds that Wife was aware that she needed to produce documentation relating to her income and expenses but failed to do so. Id. at 3 – 4.

Since the Court was unable to determine Wife’s reasonable needs, alimony was set at $0 per month.

The entire Letter Decision and Order may be found here.

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Leslie Spoltore is a Partner with the law firm Fox Rothschild LLP.  Leslie practices in Fox Rothschild’s Wilmington, Delaware office.  You can reach Leslie at (302) 622-4203, or lspoltore@foxrothschild.com.

AppealThe appeal in the case of Jones v. Jones focuses on alimony and the question of whether certain expenses are reasonable. In this particular case, the conduct of the alimony obligor was a significant consideration.

Mr. Jones (“Husband”) was dissatisfied with the Family Court Order awarding his former wife, Ms. Jones (“Wife”), alimony. Seeking relief, he filed an appeal. The Supreme Court rejected most of his arguments but explored one related to medical expenses. Specifically, the Court remand the case back to the Family Court so that the Family Court could explain how it concluded that Wife’s out of pocket medical expenses of $300 per month and her monthly health insurance expense of $715 were reasonable.

On remand, the Family Court conducted a hearing to expand the record. At that hearing, Wife testified that the cost of COBRA insurance through Husband’s employer was $715 per month. Wife also testified that due to Husband’s failure to pay alimony as ordered she was unable to pay for the COBRA insurance. As a result, Wife was receiving medical benefits through Medicaid. She also testified to out of pocket medical expenses of $143.57 per month. Husband did not dispute that he failed to pay alimony. Based on this record, the Family Court held that Husband should not be able to benefit from his refusal to pay alimony and found the $715 monthly expense for medical insurance to be a reasonable expense even though Wife was receiving benefits through Medicaid. The Court also found $143.57 per month for out of pocket medical expenses to be reasonable.

The Supreme Court agreed with the Family Court’s conclusion that Husband should not benefit from his refusal to pay alimony.  The Court affirmed the finding that Wife’s medical expense of $715 per month and her out of pocket medical expenses of $143.57 per month are reasonable.

The Supreme Court Order may be read in its entirety here.

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Leslie Spoltore is a Partner with the law firm Fox Rothschild LLP.  Leslie practices in Fox Rothschild’s Wilmington, Delaware office.  You can reach Leslie at (302) 622-4203, or lspoltore@foxrothschild.com.

For many people facing the possibility of paying alimony after separation and/or divorce, the thought that their ex may cohabit makes them positively giddy. There is an expectation that cohabitation will prevent any future obligation to pay alimony. This expectation may be based on the language of Section 1512(g) of Title 13, which provides:

Unless the parties agree otherwise in writing, the obligation to pay future alimony is terminated upon the death of either party or the remarriage or cohabitation of the party receiving alimony. As used in this section, “cohabitation” means regularly residing with an adult of the same or opposite sex, if the parties hold themselves out as a couple, and regardless of whether the relationship confers a financial benefit on the party receiving alimony. Proof of sexual relations is admissible but not required to prove cohabitation. A party receiving alimony shall promptly notify the other party of his or her remarriage or cohabitation.

The view is, however, overly optimistic.  Cohabitation is not an absolute bar to alimony in every instance. The timing of the cohabitation is key. As the Family Court note in the case of C.G.B. v. R.S.B. (which recently became available online),

‘1512(g) is a termination statute, not an eligibility statute for alimony under Delaware Law.’  Delaware Courts have held that where a party has cohabitated, but the cohabitation ends prior to the time the party becomes an ‘alimony recipient,’ § 1512(g) does not preclude an award of alimony.

The decision may be read in its entirety here.

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leslie_SpoltoreLeslie Spoltore is a Partner with the law firm Fox Rothschild LLP.  Leslie practices in Fox Rothschild’s Wilmington, Delaware office.  You can reach Leslie at (302) 622-4203, or lspoltore@foxrothschild.com.

 

Dollar SignsIn addition to stress and host of other emotions, a divorce will likely raise a number of financial concerns. Lawyers and financial planners can partner to help clients through the court process.  Although each case is unique and requires specific consideration and analysis, the commonly asked questions set forth in my recent article in ThinkAdvisor, titled “Top 5 Things Financial Planners Need to Know About a Divorce,” can assist financial planners in their general understanding  of the divorce process and the role that finances play.

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Leslie Spoltore is a Partner with the law firm Fox Rothschild LLP.  Leslie practices in Fox Rothschild’s Wilmington, Delaware office.  You can reach Leslie at (302) 622-4203, or lspoltore@foxrothschild.com.

 

Appeal-300x300In the case of Grant v. Grant, Del. Supr., No. 283, 2015 (Apr. 25, 2016), Justin Grant sought to challenge the Family Court order requiring him to pay $254.21 per month in alimony to Darlene Grant.   Mr. Grant did not argue that in reaching its decision the Family Court had erred as a matter of law.  To the extent he argued that the Family Court erred in its findings of fact, the Supreme Court noted those findings “will not be disturbed on appeal unless [they] are clearly wrong and justice requires they be overturned.”  Id. at 3.  However, Mr. Grant did not provide the Supreme Court with the transcript of the alimony hearing.  The Supreme Court concluded that under the circumstances it had no basis to overturn the Family Court’s findings.  The judgement of the Family Court was affirmed.

 

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Leslie Spoltore is a Partner with the law firm Fox Rothschild LLP.  Leslie practices in Fox Rothschild’s Wilmington, Delaware office.  You can reach Leslie at (302) 622-4203, or lspoltore@foxrothschild.com.

A divorce raises any number of tax issues in the short and long term.  As described in my recent article in Delaware Business Times entitled “If there’s one sure thing in divorce, it’s taxes,” couples going through a divorce may need to consider who will claim the dependency exemption for their children, whether financial support is considered alimony for tax purposes, and whether legal fees associated with a divorce are deductible.  Gathering the necessary information and planning ahead can help parties avoid stress at tax time and beyond.

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Leslie Spoltore is a Partner with the law firm Fox Rothschild LLP.  Leslie practices in Fox Rothschild’s Wilmington, Delaware office.  You can reach Leslie at (302) 622-4203, or lspoltore@foxrothschild.com.

 

Whether someone is paying or receiving alimony they typically want to know how long it will last.  As with many legal questions, the answer is “it depends.”  Determining the answer begins with knowing whether the alimony order was issued by a judge after a hearing or whether it is the result of an agreement of the parties themselves.

The Delaware Code provides that when alimony is awarded by judicial determination:

AlimonyA person shall be eligible for alimony for a period not to exceed 50% of the term of the marriage with the exception that if a party is married for 20 years or longer, there shall be no time limit as to his or her eligibility; however, the factors contained in subsection (c) of this section shall apply and shall be considered by the Court. 13 Del. C. § 1513(d).

So, if a couple is married for ten years, the statutory period is five years.  If a couple is married for more than 20 years then there is no statutory period.  In either instance the obligation to pay alimony terminates upon the death of either party or the remarriage or cohabitation of the party receiving alimony. 13 Del. C. § 1513(g).  Additionally, alimony awarded by the Court may be modified or terminated upon a showing of real and substantial change of circumstances. 13 Del. C. § 1519(a)(4).

When, however, the issue of alimony is resolved by an agreement of the parties themselves the Delaware courts have ruled that general contract principles apply to control the interpretation, duration and modification of alimony.  So, in that instance the parties themselves set the terms regarding duration, termination and modification.

 

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Leslie Spoltore is a Partner with the law firm Fox Rothschild LLP.  Leslie practices in Fox Rothschild’s Wilmington, Delaware office.  You can reach Leslie at (302) 622-4203, or lspoltore@foxrothschild.com.

30807004-alimony-word-in-white-3d-letters-on-a-ball-or-sphere-of-money-to-illustrate-financial-spousal-suppor[1]123rf.com

If the Family Court finds that a party seeking alimony is dependent and in need of support, the next consideration is how much is enough.  The statute instructs that alimony “shall be in such amount and for such time as the Court deems just, without regard to marital misconduct, after consideration of all relevant factors.” 13 Del. C. § 1512(c). Relevant factors include,

(1) The financial resources of the party seeking alimony, including the marital or separate property apportioned to him or her, and his or her ability to meet all or part of his or her reasonable needs independently;

(2) The time necessary and expense required to acquire sufficient education or training to enable the party seeking alimony to find appropriate employment;

(3) The standard of living established during the marriage;

(4) The duration of the marriage;

(5) The age, physical and emotional condition of both parties;

(6) Any financial or other contribution made by either party to the education, training, vocational skills, career or earning capacity of the other party;

(7) The ability of the other party to meet his or her needs while paying alimony;

(8) Tax consequences;

(9) Whether either party has foregone or postponed economic, education or other employment opportunities during the course of the marriage.

As with many Family Court matters, the statute contains a catchall providing that the Court may consider “any other factor which the Court expressly finds is just and appropriate to consider.”

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Leslie Spoltore is a Partner with the law firm Fox Rothschild LLP.  Leslie practices in Fox Rothschild’s Wilmington, Delaware office.  You can reach Leslie at (302) 622-4203, or lspoltore@foxrothschild.com.

Dollar Signs

In connection with a divorce the Family Court has jurisdiction to divide marital property and to award alimony.  Prior posts have examined what factors the Court will consider when dividing marital property.  But what does the Court consider in an alimony claim? The Court will begin by considering whether the party seeking alimony needs it.  Is he or she dependent on support from the other party?  Section 1512(b) of Title 13 of the Delaware Code specifies that the Family Court may award alimony only if the party seeking alimony:

(1) Is dependent upon the other party for support and the other party is not contractually or otherwise obligated to provide that support after the entry of a decree of divorce or annulment;

(2) Lacks sufficient property, including any award of marital property made by the Court, to provide for his or her reasonable needs; and

(3) Is unable to support himself or herself through appropriate employment or is the custodian of a child whose condition or circumstances make it appropriate that he or she not be required to seek employment.

If a party is dependent, the next question is how much alimony is appropriate.  Stay tuned . . .

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Leslie Spoltore is an attorney with the law firm Fox Rothschild LLP.  Leslie practices in Fox Rothschild’s Wilmington, Delaware office.  You can reach Leslie at (302) 622-4203, or lspoltore@foxrothschild.com.

The case of Smart v. Smart, Del. Supr. No. 433, 2014, April 6, 2015, presented several issues on appeal including a challenge to the Family Court’s determination that Ms. Smart is dependent and therefore entitled to alimony.

30807004-alimony-word-in-white-3d-letters-on-a-ball-or-sphere-of-money-to-illustrate-financial-spousal-suppor[1]

The Trial

As the proponent of a claim for alimony it was Ms. Smart’s burden to prove her dependency – her inability to support herself through appropriate employment (or other resources).  At the hearing Ms. Smart was employed as a part-time sales clerk earning $9,000 per year.  In support of her claim for alimony, Ms. Smart testified that she suffered from chronic back pain due to a prior car accident.  She also testified that she had been diagnosed with PTSD and ADHD, though she was not treating these conditions due to the expense associated with treatment.  Ms. Smart did not provide any documentation regarding her diagnosis and she did not present the testimony of a medical professional.  When asked if her medical issues impacted her ability to work, Ms. Smart testified, “I don’t allow it to, no.  No, I go no matter what, so no it does not.”  Id. at 7.

Arguing against the claim, Mr. Smart testified that he was aware of her back issue, but did not know anything regarding the other diagnosis.  He asserted that Ms. Smart is capable of earning more than her part-time work provided.

Ultimately, the Family Court concluded that Ms. Smart was in fact dependent.  In reaching this conclusion, the Court found that, “While the testimony on [her] mental health was not as complete as it could have been, [the Family Court is] satisfied that [her] current untreated mental health issues are a factor in her not being able to be more gainfully employed.” Id. at 9.  Having found Ms. Smart to be dependent, the Court ordered Mr. Smart to pay alimony of $1,055 per month.

The Appeal

In his appeal to the Delaware Supreme Court, Ms. Smart argued the Family Court erred in finding Ms. Smart to be dependent because Ms. Smart did not meet her burden of proving that she is unable to maintain full-time employment.  The Supreme Court agreed that the evidence in the record was insufficient to support the Family Court’s finding.  Specifically, the Supreme Court held that “[a]n award of alimony may not be based on speculation or conjecture” and concluded that [a]lthough [Ms. Smart] may indeed be dependent on [Mr. Smart] for support, we find the Family Court’s conclusion that [Ms. Smart’s] ‘mental health issues pose an obstacle to her obtaining … full-time employment’ to be unsupported by the record.”  Id. at 11.  The case has been remanded to the Family Court for further proceedings.

The decision may be found here.

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Leslie Spoltore is a Partner with the law firm Fox Rothschild LLP.  Leslie practices in Fox Rothschild’s Wilmington, Delaware office.  You can reach Leslie at (302) 622-4203, or lspoltore@foxrothschild.com.