Qualified Domestic Relations Order “QDRO”

It is well settled that pension plans are marital property subject to equitable distribution. Thus, when divorcing, it is important to ascertain what, if any, pension plans exist. The Court of Appeals has held that because marital property is that which is acquired after the marriage and before the execution of a separation agreement or commencement of a matrimonial action, it is necessary to separate from the plan what interests a spouse may be entitled. This is accomplished by comparing the number of months from the date of the marriage to the date of the commencement of the action against the total number of months of employment.

Once this is figured out, how does the pension plan administrator know to pay a former spouse? The answer is the Qualified Domestic Relations Order, commonly referred to as the QDRO. This court order requires that the plan administrator separate a designated portion of the employee spouse’s account into a separate account for the non-employee spouse. A QDRO must: (1) recognize the existence of an alternate payee’s right to, or assigns to an alternate payee the right to receive all or a portion of the benefits payable with respect to a participant under a plan; (2) meet certain technical requirements. These requirements are: (a) the order must specify the last known mailing address of the participant and each alternate payee covered by the order; (b) state the amount or percentage of the participants’ benefits to be paid by the plan to each alternate payee or the manner in which the amount or percentage is to be determined; (c) the number of payments or period to which the order applies; and (d) each plan to which the order applies. In addition to the above, the QDRO must not: (1) require a plan to provide any type or form of benefit not otherwise provided in the plan; (2) require the plan to pay increased benefits; and (3) require the payments of benefits to an alternate payee which are required to be paid to another alternate payee under another QDRO.

An important provision in a QDRO that must not be over looked deals with when the non-employee is allowed to collect benefits. Make sure that the Court directs that the alternate payee be entitled to receive pension benefits upon the employee’s actual retirement eligibility date vice the day the spouse retires. This avoids a spouse waiting for the ex-spouse to actual retire. For example, if your ex-spouse is able to retire at 62, but decides to keep working past that date, you want to make sure that you are able to collect at 62 vice some date in the future. Additionally, as a practical measure, you want to make sure that the plan has a survivor benefit in your favor. That way, in the event your ex-spouse passes away, your benefits are protected.

LEARNING POINT: When dealing with pension plans, it is important to have them evaluated and if appropriate, have a QDRO entered. Of course, in negotiating a settlement, you may want to waive off your rights to a pension in exchange for a lump sum payment or some other asset. As the owner of the pension, you may want to offer a buyout of benefits. For example, if you are divorcing it is possible that sometime in the future you may want your pension to go to someone other than your ex-spouse. In that case, you may want to figure out a way to offset the rights your soon to be ex-spouse is entitled. These are complicated matters which we will be happy to guide you through.

Qualified Domestic Relations Orders

How Much Maintenance Will A Court Award?

To begin, maintenance may be defined as payments made from one spouse to another at fixed intervals in accordance with an agreement between the parties or as a result of an award by the Court. In determining whether maintenance is appropriate and the amount and length of such maintenance, the Court will rely on factors set forth in the Domestic Relations Law § 236, Part B. When considering the twelve factors set forth in §236, the Court will analyze all the available information having regard for the standard of living of the parties established during the marriage, whether recipient lacks sufficient property and income to provide for his or her reasonable needs and whether the obligor has sufficient property or income to provide for the reasonable needs of the other spouse.

The factors the Court must consider are: (1) the income and property of the respective parties including martial property distributed as part of equitable distribution; (2) the duration of the marriage and the age and health of both parties; (3) the present and future earning capacity of both parties; (4) the ability of the party seeking maintenance to become self-supporting and, if applicable, the period of time and training necessary thereof; (5) reduced or lifetime earning capacity of the party seeking maintenance as a result of having foregone or delayed education, training, employment, or career opportunities during the marriage; (6) the presence of children of the marriage in the respective homes of the parties; (7) the tax consequences to each party; (8) contributions and services of the party seeking maintenance as a spouse, parent, wage earner and homemaker, and to the career or career potential of the other party; (9) the wasteful dissipation of marital property by either spouse; (10) any transfer or encumbrance made in contemplation of a matrimonial action without fair consideration; (11) the loss of health insurance benefits upon dissolution of the marriage; and (12) any other factor which the court shall expressly find to by just and proper.

Essentially, maintenance is awarded to a party to allow them time to get on their feet. You are not entitled to, nor are you obligated to pay, maintenance to keep the awarding party in a life style on par with the pre divorce standard of living. However, maintenance will be awarded to a party to allow them to “get on their feet.” So for example, if one spouse is a doctor making $300,000.00 a year and the other spouse was not working at all, it is clear that the Court should award maintenance. What if, in contemplation of the divorce, the unemployed spouse gets a job? What if that job pays $70,000.00 a year? Maintenance will in all likelihood still be awarded. First, in this example, the new job just began. The Court will recognize the fact that the nonworking spouse, who just obtained employment, is probably not in the position to rent another place to live. The Court will consider the fact that instead of working and saving money, the spouse was financially dependent on the doctor. Therefore, things like paying for the first month, last month and security deposit will be challenging at best. How about a car to get to this new place of employment? Second, the Court will consider, not only the pre divorce standard of living, but will also consider the disparity of incomes between the two parties in fashioning an award. Because the spouse has obtained employment, the duration of the award may not be as long, nor as much, however with a $230,000.00 gap between the two parties, a maintenance award in all likelihood be awarded.

LEARNING POINT: Maintenance is a complicated matter. The “reasonable needs” of a party is hard to define. The disparity in incomes and other factors will be considered by the Courts in fashioning a just award. The one to be most aware of is the twelfth factor, “any other factor which the court shall expressly find to by just and proper.” This is the catch all which allows Courts the discretion to make a decision based on anything they want! Contact us immediately to allow us to give you the best legal advice possible.

How Much Maintenance Will A Court Award?

Pensions Are Marital Property Subject To Equitable Distribution

The Court of Appeals has held that vested or matured rights in a pension plan, whether the plan is contributory or not, is to be considered marital property subject to equitable distribution. The basic rational for this decision is that the money that went into the pension, during the marriage, is money that would have been given to the marriage but for the diversion to the pension plan. In distributing the pension benefits, the Court may order the employee spouse to grant the nonemployee spouse survivorship benefits. Should the Court direct this course of action, the non-employee would receive the increased benefits upon the death of the employee.

How do Courts treat non-vested pension plans? The Court of Appeals held that non-vested plans do not preclude equitable distribution. The rationale is that your right to the plan is continually accruing during the years. There are two approaches to the valuation and distribution of a non-vested plan. The first is to calculate the present cash value of the pension, with a discount since the plan has not vested. The discount will take into account factors such as the pension not actually vesting due to termination of employment or other issues which will terminate the pension. The second approach is to allocate a portion of each future payment to the non-employed spouse. The Court of Appeals suggested that the second approach is best only in the event that the present value cannot be determined.

Another concern that must be addressed is how much of the plan is subject to equitable distribution. There are cases were the marriage will terminate as a result of the divorce yet, the plan will continue to grow in value. What you can generally expect is that the Court will consider at the total amount of months from the date of the marriage to the date of the commencement of the action against the total amount of number of months of employment. Therefore, where a spouse continues to work after the commencement date, which is typical, the benefits earned after the commencement date will not be subject to marital distribution.

How is the administrator of a plan to know to make payouts to your spouse and in what amount? You will need to obtain a Qualified Domestic Relations Order, better known as a “QDRO.” The QDRO must specify the name and last known mailing address of the participant and of each alternate payee covered by the order; the amount or percentage of the participant’s benefits to be paid by the plan to each alternate payee or the manner in which the mount of percentage is to be determined; the number of payments or period to which the order applies; and each plan that the order applies to.

LEARNING POINT: Evaluating a pension plan is a complicated process which one should not attempt alone. There are many different approaches in evaluating the plan and if necessary protecting your assets. If you are getting divorced and either you or spouse has a pension plan, contact us immediately to begin preparing your case.

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Filing For Divorce: On The Grounds of Adultery

With the passage of “no fault divorce”, New Yorkers rarely need to rely on other grounds for divorce. Invariably, I have clients who want to file for divorce based on adultery. Adultery is defined as the voluntary commission of an act of sexual intercourse or oral sexual conduct with someone other than your spouse. Thus an act of sex with someone other than your spouse qualifies as grounds for divorce. Technically, Adultery is a crime. See Penal Law §255.7 where in a person is guilty of adultery if he/she engages in sexual intercourse with another person while married. Adultery is a Class B misdemeanor. This crime is rarely, if every prosecuted.

If you want to file for divorce using adultery as the basis, consider how you intend on proving your case. As most affairs are usually conducted in secret, your case may need to be made on circumstantial evidence, i.e. proof of opportunity, inclination and intent. Not an easy road to travel. What constitutes good proof? Eye witness testimony from a private investigator or another person who can be a witness to the sexual conduct between the cheating spouse. A spouse’s confession can also be used as evidence however there are some caveats to this. First, this confession must be corroborated. If the confession was made to you, that may not be enough. Your credibility will be tested during cross examination. Thus, I advise that you obtain other forms of evidence along with your spouse’s statements. In addition, you cannot force a spouse to testify. Remember, the burden to prove adultery is on the moving party. You will need to prove your case with clear and convincing evidence.

There are defenses to adultery that you should be aware. They are: (1) the offense was committed by the procurement or connivance of the other spouse; (2) You forgave the cheating spouse, which can be established by the voluntary cohabitation of the parties with the knowledge of the fact (though in today’s economic times, an argument can be made that despite knowing about the adultery, the economics would not allow one party to move out of the marital estate. I have a few clients who remain living together pending the outcome of the divorce as they simply cannot afford to move out of the house. A word of caution, if you engage in sexual intercourse while living together after the discovery of adultery, then the court might take that as proof that you have forgiven your spouse); (3) the offense happened more than five years ago, in other words, you have five years from the discovery of the adultery to bring an action and (4) where the cheating party is entitled to a divorce as a result of your adultery. In other words, you cheated on your spouse and had they filed for divorce upon discovery they would have been entitled to divorce on the grounds of adultery, then neither of you might be entitled to a divorce based on adultery.

Finally, adultery, generally, has no bearing in equitable distribution of the marriage. It is also not a factor in the determination of maintenance. Thus, I end where I began, there really isn’t an advantage in filing for divorce based on the grounds of adultery. You derive no strategic advantage in your case plus, proving adultery may be more difficult than you may have originally thought.

LEARNING POINT: If you insist on filing for divorce based on adultery, be sure you have the proper evidence lined up. Consult us immediately to begin preparing your case. Keep in mind, even if we are able to prove the adultery, it will have little to no bearing on equitable distribution and/or a maintenance award.

Ground For Divorce In New York – Cruel and Inhuman Treatment

There are multiple grounds for divorce in New York. This article will briefly describe what you must be able to show to file for divorce pursuant to DRL §170(1), cruel and inhuman treatment. Cruel and inhuman treatment can be defined as such conduct that so endangers your physical or mental well-being making it improper or unsafe to cohabit with your spouse. So the question becomes what constitutes conduct which so endangers your physical or mental well- being.

The easiest example will be repeated physical abuse. Clearly, if your spouse is physically assaulting you, that would be a strong argument for cruel and inhuman treatment. Must it be “repeated?” Depends- here are two extreme examples. Say your spouse slaps you once. Doesn’t slap you again, and never has before. Is that enough to grant a divorce under DRL §170(1)? Probably not. That does not mean this behavior is excused or that you cannot get divorced if you so choose, but under the cruel and inhuman provisions, this is probably not enough for a Court to grant you a divorce under this section. On the other hand, say your spouse physically assaults you one time, however this one time lands you in the hospital with serious injuries. Your spouse hasn’t done something like this in the past. This may be enough to qualify as cruel and inhuman treatment and the Court may grant you a divorce.

What about mental abuse? Acts of verbal abuse and torment have been held sufficient to establish grounds for cruelty where they have been of a serious nature and where a pattern of such behavior could be shown. Courts have granted divorce based on this section where a spouse was able to show be subjected to constant denigration followed by lengthy bouts of outright ignoring causing severe depression requiring psychological therapy. Flaunting extra marital affairs and refusal to return to the marriage, coupled with taunting a spouse about their physical appearance and shortcomings have also been deemed enough for a Court to grant a divorce.

Courts have also held that intoxication and/or drug abuse, in the right circumstances may qualify. For example, if your spouse is an alcoholic and when your spouse is drunk engages in either physical or mental abuse, the Courts have granted a divorce based on cruel and inhuman treatment as a result of your spouses habit.

Proving cruel and inhuman treatment can be challenging. Generally speaking, such acts which rise to the level of cruel and inhuman treatment happen in the marital residence behind closed doors. Rarely are there witnesses. That being said, while the Court of Appeals (the highest court in the State of New York) has not specifically ruled on this issue, the second, third and fourth departments have expressly held that corroboration is not required to prove cruel and inhuman treatment. Clearly, medical documentation would corroborate abuse or witnesses to said abuse would strengthen your case however, as just mentioned, it not always possible. The final point to be made is that while it is necessary to draft pleadings with enough specificity to allow your spouse to defend the action, the Courts have recognized that an abused spouse rarely if ever keeps a log if every separate incident of abuse, however, generally speaking you need to narrow the times of the abuse enough as to give your spouse an ability to defend the claims you are making. Additionally, claims of abuse should be no more than five years old. Once you start making claims more than five years old, while it might be useful to show a pattern, you may run into a statute of limitation problems. Generally, misconduct occurring more than five years prior to the commencement of the action may not be used to support the cause of action.

LEARNING POINT: Getting divorced pursuant to DRL§170(1) is a complicated matter, which thankfully isn’t necessary because New York has recently allowed for no fault divorces (to be discussed in later blogs) however, if you do want to pursue getting divorced under this provision of the statute, you must be ready to discuss the various forms of abuse you were subjected to and be ready to prove them in Court. Contact us for more detailed information on how to secure a divorce under this provision of the DRL.

Joint Custody

Joint Custody In New York

Domestic Relations Law §240 grants the Court authority to award custody of a child to both parents, otherwise known as joint custody. What does this mean? If it works, it can mean equal custody. I’ve seen it done two ways. First, the parents keep the marital home and the children live in there. The parents swap in and out of the house. Second, I’ve seen it where the children split the week between the two parents. This of course normally lasts only until one of the two parents move on and begins a new relationship. Thus, the joint custody arrangement is fragile at best, even if both parents are working together in good faith. An easy example of how this arrangement may break down is if one parent needs to relocate just far enough making joint custody impracticable. In order for joint custody to work, both parents have to agree. If one party does not agree, the Court will not order joint custody especially where it can be shown that the parents cannot work together.

When thinking about joint custody, there are two components. First, there is joint legal custody. Joint legal custody refers to joint decision making in such things as health care, education, religious upbringing and discipline. Then there is joint physical custody. Physical custody is concerned with the child’s day to day residence. Thus, joint legal custody does not necessarily equate to joint physical custody.

Another way to think about this is as follows. Joint legal custody deals with life decisions for your child. Normally, absent Court intervention, you will always have a say in raising your child. You will have input on all major decisions. What you are really concerned about is residential or physical custody. In other words, where will your child sleep at night on a regular basis? Normally, the parent who is awarded residential custody will have final say on major decisions regarding the child. So, if you do not have residential custody, you still have input on major decisions however, if an agreement cannot be reached, then your ex-spouse will ultimately have the final word. All of this will be spelled out in an agreement and or Court order.

LEARNING POINT: Custody is a serious issue which can be hard to navigate, especially if parents cannot get along. While joint physical custody is an option, it is rarely used because of the difficulties in maintaining such an arrangement. Call us for a free consultation regarding what steps you need to undertake and what factors you need to consider when contemplating a divorce with children.

Modification Of Child Support

As a general proposition, child support can be modified either upward or downward, only if an unreasonable or unanticipated change in circumstances has occurred. The primary concern with regards to child support is the best interest of the children in question. Thus, even if there is a Court order, either in the form of a separation agreement which was merged into an order, or simply an order regarding child support, a parent can petition the Court for a modification. When considering whether to modify child support, the Court will consider the assets, earnings and obligations of the supporting spouse as well as the financial status of the custodial spouse. Unless there has been an unanticipated and unreasonable change in circumstances, the Court will not change the support order. Factors to be considered by the Court include whether increases of expenses were foreseeable at the time the Court originally made the support order. If the expenses were foreseeable at the time the order was decided and the Court deems that the order was fair and equitable at the time the order was made, you may not get a modification.

What will the Court use to determine if a modification is appropriate? The Court will look to: (1) whether the increased needs of the children are due to special circumstances or to the additional activities of growing children; (2) whether there is an increased cost of living which results in a greater expense for the children; (3) was there a loss of income or assets by a parent or substantial improvement of the financial condition of a parent; and (4) the current and prior life styles of the children. If after the Court considers these factors, it deems that there should be a modification of child support, the Court will utilize the Child Support Standards Act to calculate the appropriate level of child support, and whether there should be a deviation of said support. A downward modification of child support is carefully scrutinized since the primary concern is the best interests of the children. Thus, if you are attempting a downward modification, you must show an unanticipated and unreasonable change in circumstances otherwise the court will in all likelihood deny your request.

Word of caution: If you lost your job through no fault of your own, i.e. you were terminated as a result of cut backs, or your boss simply let you go, the Court will take that into consideration when calculating child support. If however, you purposefully lost your job, i.e. you quit or you took another job to lower your income and thus lower your child support payments, the Court may impute income to you. In other words, you were making $100,000.00 and you quit your job and now you are making $50,000.00. If the Court determines that you did this to lower your child support obligations, the Court may award child support award based on the $100,000.00 salary regardless of what you are currently earning. The key determination surrounding your loss of income will be how it happened. If you simply quit your job or, as in a recent case of mine, decided to follow your passion and embarked on a new career, one that decreased your salary by $40,000.00, the Court may not grant your modification request.

Learning Point: Modification of child support will be considered keeping the best interest of the children in the forefront of the Court’s mind. Adequate preparation in showing the Court that there has been a significant change in circumstances warranting the Court to modify a current order providing for child support. A downward modification will be given close scrutiny. Preparation and presentation will be crucial in your attempts to convince a Court to modify your current child support order.

Calculating Child Support Factors

The starting point for the calculation of child support is the previous year’s tax returns. This is simply the starting point, there are many factors which may lead the Court to enhance or adjust your income when determining the proper amount of child support. Courts will also look to your most recent pay stubs. The Court may look at the most recent pay period or the year to date figures. Why? There may have been a dramatic change in your income since the filing of your latest tax return. It is easy to foresee two quick examples where using the last tax return will provide a child support award that is inadequate or unjustified. If you lose your job after your tax return, clearly the award based on job you no longer have will be unduly burdensome (more on this later). If you receive a significant pay raise after your taxes are filed, you may not be paying enough.

When calculating child support the Court will investigate to determine whether or not the non-custodial parent receives a bonus that is not reflected on the tax returns. Such bonuses may be reflected on pay stubs or in an employment contract. The Court will include these bonuses to the child support calculation. Other factors the Court will consider include but are not limited to: (1) investment income; (2) workers’ compensation benefits; (3) disability benefits; (4) veteran’s benefits; (5) pension and retirement benefits; (6) fellowships and stipends; and (7) annuity payments. A personal injury settlement may also be considered when calculating child support payments, especially if part of the award was granted for future and/or loss wages.

Imputation of income: I began this topic with what happens if you lose your job and thus your tax returns may not accurately describe your income. While true, the Court will look into the facts and circumstances of the loss of income. If you lost your job through no fault of your own, i.e. you were terminated as a result of cut backs, or your boss simply let you go, the Court will take that into consideration when calculating child support. If however, you purposefully lost your job, i.e. you quit or you took another job to lower your income and thus lower your child support payments, the Court may impute income to you. In other words, you were making $100,000.00 and you quit your job and now you are making $50,000.00. If the Court determines that you did this to lower your child support obligations, the Court may award child support award based on the $100,000.00 salary regardless of what you are currently earning. This also comes into play when the non-custodial parent owns his/her own business and the tax returns do not adequately reflect the true income to be used in the calculation for child support.

LEARNING POINT: The tax return is simply the starting point in the child support calculations. There are many considerations that must be taken into account to determine the proper child support award. Contact us to help guide you through this process.

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Person In Need Of Supervision

A person in need of supervision, or PINS, covers youthful misbehavior which does not amount to a crime. The Family Court Act §712 defines PINS as a male less than sixteen years of age and a female less than eighteen years of age who does not attend school in accordance with the provisions of part one of article sixty-five of the education law or who is incorrigible, ungovernable or habitually disobedient and beyond the lawful control of parent or other lawful authority or who violates the provisions of section 221.05 of the penal law. So what does this mean? Truancy or any other acts which parents and/or local authority are unable to control. Important requirement under PINS is that the acts be habitual. A single act of truancy, incorrigibility or disobedience does not suffice. Essentially a significant pattern must be present before a PINS case may be made. Of course, with most things, there is an exception. Acts involving marijuana need not be habitual and one act will be enough to make out a case for PINS.

A PINS case is formally originated by filing a petition in the Family Court which possesses exclusive original jurisdiction over PINS matters. There is a long list which can be found in the Family Court Act §733 of who can file or initiate a PINS petition. Examples of people authorized to file such a petition include a police officer, a peace officer, a parent or guardian or any person who has suffered injury as a result of the child’s activity. In reality, the overwhelming majority of PINS cases are filed by parents. Before a PINS case can be filed, it must first be referred to probation services. At probation services, a determination will be held to ascertain whether there are treatment programs which the child in question may be eligible. Probation services has 90 days or 180 days with leave of the Court, to assess and enroll a child in specific services. If these services fail, a statement must be filed along with the PINS petition informing the Court of what if any services were provided and the reason for failure. In the event that probation services fail to act within the allotted time frame, then you are allowed to file your PINS petition.

There are specific elements which must be pled in the petition. Specifically, the petition must show that the child in question meets the age requirements as mentioned above. Second, the child in question is in need of services. In addition, the child, and/or their guardian must be notified no less than 24 hours before the initial hearing. Once the petition is filed, upon the child’s first appearance, a law guardian will be appointed. Of importance is that the Court, in its discretion can order the release or detention of the child pending a hearing on the issues.

LEARNING POINT: PINS is a detailed and complicated process for children in need of services. Before filing a petition seek our assistance in preparing the petition and preparing the case. If the petition or case is not properly prepared, there will be a delay in providing the child in question with the services they may need.

My Spouse Wiped Out The Account, What Will Happen To My Money?

joint bank account divorce spouseI recently had a client come into my office wanting to get a divorce. Here was my client’s concern. The spouse in question, who apparently knew that a divorce was imminent, wiped out their joint marital account to the tune of $500,000.00. After this discovery coupled with the fact that my client was not informed where the money went, I was asked what will happen?!

Clearly this is a significant issue with respect to equitable distribution. On its face it is hard for a court to equitably distribute an asset that no longer exists when the action is filed. Automatic orders are meaningless as the money is already gone. Rest assured, the Court cannot and will not simply ignore this missing money. The issue for the Court to decide is whether there was any fraudulent intent on behalf of the spouse that took the money. Normally, the Court will not put itself in the position of second guessing every spending decision of the spouse accused of wiping out an account. There are a multitude of reasons a spouse may have when it comes to spending money from a joint account. Granted, in our example, a spouse will be hard pressed to explain how spending $500,000.00 happens in the routine course of daily bills. Where a spouse cannot provide an adequate explanation for what happened to the marital funds which disappeared on the eve of filing a divorce action, the Court will bestow an award based on the missing asset. Or in other words, my client needs not worry. The Court will equitable distribute the $500,000.00. This may come as credit to other assets, or an outright money award.

Rarely are cases so cut and dry. Here is a more typical example. Wife is a partner in a law firm. On the eve of filing the divorce she is fired from the firm. Husband now seeks to have her partnership evaluated as part of the equitable distribution award. The Court will need to look into the facts and circumstances of the wife’s termination at the firm. If the husband cannot show that the cfamily onduct, the firing, was aimed at depriving him of what would normally be distributed in the due course of the divorce action, the practice will not be valued and distributed.

LEARING POINT: If you realize a divorce is imminent, dissipation of marital assets will not be in your best interest. If your spouse does squander assets you will need to show that it was in an effort to cheat you out of what you’re entitled. Hire an attorney and let them advise you as to how best navigate these issues.

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