The article notes that the veracity of the story was not verified.  In it, the husband claims he loaded the app, “Find My Friends,” to his wife’s iPhone without her knowledge or consent. The application uses the iPhone’s built-in Global Positioning System to broadcast its location to a selected group of friends.  By enabling the GPS broadcast without his wife’s knowledge or consent, had he been in North Carolina, it could conceivably be a breach of privacy actionable under tort law (although there are no current appellate cases on this issue in North Carolina).

We expect these type of technology issues — especially whether it is an invasion of privacy — to become more prevalent in family law cases over the next few years.

Read the full story at Yahoo News.

Sarah Files for Divorce and John Keeps the Majority of the Money

John worked for a company for many years and had built up a 401(k) worth three hundred thousand dollars. His wife, Sarah, filed an action against him for an absolute divorce using some forms she found online. When John came to me for legal advice, we made a list of the property that he and his wife acquired during the marriage.

• Former Marital Home [Joint] $ 245,000
• Mortgage [Joint] ($ 175,000)
• 401(k) [John] $ 300,000
• His Car [John] $ 14,000
• Debt on His Car [John] $ 0
• Her Car [Sarah] $ 18,000
• Debt on Her Car [Sarah] ($ 8,000)
• Checking Account [Joint] $ 2,300
• Net Marital Estate $ 396,300

If either filed for equitable distribution and the Court agreed that the above listing accurately represented the property acquired during the marriage, it would be presumed equitable for each side to get property worth ½ the overall value or $198,150 each. However, if a divorce occurs without each side properly preserving their claim for equitable distribution then property vests based upon title. Therefore, under the facts above, John would keep his 401(k) and car worth $314,000 and Sarah would keep her car and the debt on her car worth $10,000. The joint property would be held as tenants in common with each having an undivided interest in the whole. John could sue Sarah after the divorce to divide the house with $70,000 in equity and potentially have a total of $349,000 (1/2 the equity in the house plus the 401(k) and car) while Sarah would only get $45,000 total. In theory, the checking account could also be divided through a petition to partition personalty but it probably would not be worth the cost. So it is to John’s advantage to get divorced without suing for equitable distribution. Actually, he comes out better by over one hundred and fifty thousand dollars!

Very little of it was jointly titled and most of it was in John’s name. The 401(k) like most retirement plans was solely in his name. My advice for his particular case was “let her get the divorce and then we will file a petition to partition the real property.”

The entry of a divorce judgment forever cuts off claims for the division of marital property (equitable distribution) and spousal support (post separation support and alimony). The failure to specifically apply for these rights prior to the entry of a divorce judgment acts as a waiver of these rights and they are lost forever. North Carolina law, N.C. GEN. STAT. § 50-11(e), states that “an absolute divorce obtained within this State shall destroy the right of a spouse to equitable distribution.” To preserve claims for equitable distribution and alimony, a valid claim must be asserted before entry of the divorce.

So be careful when filing for divorce in North Carolina. It is worth it to consult with an attorney and determine the best option for your particular situation. A simple divorce could cost you hundreds of thousands of dollars! It also cuts off alimony rights and if John would owe Sarah alimony in the above hypothetical, she would be in even worse shape!  In this case, Sarah made a huge mistake.

If you discover that you missed the initial filing deadline, North Carolina has a “Savings Statute” that allows the defendant to claim equitable distribution subsequent to the divorce under certain circumstances. North Carolina’s statute allows a late claim for equitable distribution if the defendant was served by publication. A late claim is also allowed when the divorce was granted in another jurisdiction.

The Uniformed Services Former Spouses’ Protection Act (USFSPA) was passed in 1982 to make military pensions subject to division by state courts in divorce and property division proceedings.  All of the states now allow the division of military pensions as marital or community property.  North Carolina enacted N.C. Gen. Stat. 50-20(b)(1) (2001) so that marital property includes vested and nonvested military pensions under the USFSPA.  Furthermore, certain amendments made by Congress to parts of the U.S. Code dealing with Reserve retirement and benefits imply that Congress intended the Act to cover Guard and Reserve retirement also.

The North Carolina Court of Appeals case of Draper v. Draper, 159 N.C. App. 465, 583 S.E. 2d 426 (N.C. App. 2003) involved the division of military retirement benefits in equitable distribution. The plaintiff, Ms. Draper, requested an interim distribution of the defendant, Mr. Draper’s, retirement benefits. The defendant was married to the plaintiff during his entire service as a member of the United States Air Force.  At the trial court level, the plaintiff was unsuccessful in getting any of the Defendant’s retirement benefits because she did not offer evidence of the date of separation value or the present value of the defendant’s benefits.  On appeal, the Court of Appeals reversed the trial court on the issue of equitable distribution. The Court remanded the case to the trial court to value under the deferred distribution method and equitably distribute the defendant’s military retirement benefits, except for defendant’s disability benefits. The Court explained that the North Carolina trial courts are not limited to the present value method, as long as the court values the retirement benefits as of the date of separation.

North Carolina calculation

Equitable distribution and pension issues are addressed in N.C. Gen. Stat. 50-20.1 in which it provides a formula to value the marital portion of the benefits:

Years of Marriage that Coincide with Employment

Year of Employment

An example of division in a hypothetical case may help to illustrate how it works.  Assume that the couple has been married for 5 years and that, for all 5 years, she was employed by the company, government or organization providing the pension.

Also assume that her pay with 20 years of employment is $4,800 per month, and that she can retire after 20 years of service with 50% of her base pay.  Thus, the monthly retired pay of the employee spouse is $2,400.

$2,400 × 5 years marital pension service = $600 (marital part of pension)

20 years total pension service

Military Calculation

Deferred Division: The marital fraction is calculated as follows:

Years of marital pension service =  M

Years of total pension service            T

The numerator (M) represents the years of marital pension service, and the denominator (T) represents the total number of years of creditable service that the service member will perform.

An example of deferred division in a hypothetical case may help to illustrate how it works.  Assume that a service member has been married for 5 years and that, for all 5 years, he was on active duty in the United States Marine Corps.

Also assume that his active duty pay with 20 years of service is $4,800 per month, and that he can retire after 20 years of service with 50% of his base pay.  Thus, the monthly retired pay of the service member is $2,400.

$2,400 × 5 years marital pension service =  $600 (marital part of pension)

20 years total pension service

Present Value Offset: In addition to the future division of retired pay, all states recognize a second method of pension division called a “present value offset.” This represents the present value of a series of money payments over the course of the service member’s life. The money payments are their retired pay, present value is the amount used so that the service member keeps the entire pension. The parties are left with a complete division of this asset.

How is present value calculated? There are several options available. Sometimes an expert is needed for trial. If settlement is possible, a mail order pension evaluation can be done by a party or parties, approximately $300–$500.

There is also a second method of determining present value, and this one makes no assumptions regarding interest rates, life expectancies or inflation.  It involves pricing an annuity that will yield a monthly payment equal to the pension. You and your attorney can seek out a professional to create a proposed annuity that might provide a better outcome.

North Carolina allows for several options to handle a military pension. Make sure you and your attorney consider all of the options.

As one might have guessed Eunice H. Chapman did not have the same legal standing and property rights as women have in modern society.  When Eunice married James Chapman she lost her property rights and legal standing as an individual. As a result, when her husband attempted to reconcile only to be rebuffed by Eunice, her husband took the remaining property and their three children to the Shaker religious group. 

It is worth pointing out that Eunice did not want to reconcile for a couple of reasons. First, James was notorious for drinking and wasteful spending, leading to him selling much of the couple’s property before abandoning his family. Second, James claimed to have changed and wanted to live in Shaker society in which the couple would not live together alone as Husband and Wife. Eunice was not interested in the type of life offered by Shaker society, and this refusal set off the battle between Eunice and the Shaker religious leaders of James’ group.

These events leading to Eunice’s extraordinary acheivement are very interesting. At first, Eunice maintained custody of her three children until her husband and the Shaker leaders lured Eunice away from her home and then removed her children and the remaining property from the home. For a couple of years Eunice attempted to settle custody with the Shaker leaders, without success.  Eunice was determined to get her divorce and custody so she sought the assistance of the New York legislature. Around 1817, after years of talking in person and writing to the NY assemblymen, Eunice was given a “legislative divorce” from her husband, and no actual trial occurred. Even Thomas Jefferson noticed and commented on Eunice’s case. 

Eunice may have received her divorce, but she did not have custody of her children yet. She reportedly resorted to gathering a mob to go to the Shaker group that had possession of her three children. Again, Eunice remarkably overcame the religious leaders by getting her three children back.

New York law later changed around 1966 so that a divorce was not solely dependent on proving adultery.  In the majority of states the law is either based on a “no fault divorce”, or the divorce law is dependant on a period of separation, as in North Carolina.  However, religion does still play a role in some custody disputes. (For more information see Richard Kern’s Article: Custody and Religion). 

The current news is full of interesting court cases about marital rights, multiple marriages, and interstate custody battles, but Eunice H. Chapman’s remarkable legal battle is truly noteworthy. Litigants in 2010 are understandably frustrated by the amount of time required to get a divorce, but their divorce and custody matters usually only last one to two years. In light of the many years spent in pursuit of Eunice H. Chapman’s legislative divorce the modern legal system has come a long way.

Gottman’s claim to fame was putting couples in a room, and video taping 57 couples interacting with each other. By observing their facial expressions and interactions, Gottman developed a system to predict which couples would divorce.

And he could do so with blinding accuracy. The group of therapists, counselors and others, could only predict the divorce possibility 53.8% of the time.

Specifically, he watches out for certain corrosive interactions that, left unchecked, will kill a relationship. He calls these the “Four Horsemen”: criticism, contempt, defensiveness, and stonewalling.

Since he published his research, some have been critical of his approach. His predictive model was developed looking backward. For the 1998 study, which focused on videotapes of 57 newlywed couples, he waited six years to check on their marital status and then created a computer model using the video data to “predict” what had already occured. “He asked the computer, in effect: Create an equation that maximizes the ability of my chosen variables to distinguish among the divorced, happy, and unhappy.”

Notwithstanding the criticisms of his prediction model, Gottman and his institute have certainly made significant contributions to the study of marriage and divorce.

Gottman continued his research and discovered two periods to be the “most critical for the survival of marriages: (a) the first seven years of marriage, during which half of all divorces are known to occur, and (b) the period during which the first child reaches 14 years of age, which has been suggested as a low point for marital satisfaction in the life course.”

The Institute has determined there are strong negative consequences to separation and divorce on the mental and physical health of both spouses. These include increased risk for psychopathology, automobile accidents, and physical illness, suicide, violence, and homicide. In children, marital distress and disruption were associated with depression, withdrawal, poor social competence, health problems, poor academic performance, and a variety of other difficulties.

Gottman offers weekend workshops in Seattle, Washington to help couples improve their marriage. He teaches seven principles to make marriage work. Workshops based on his research closer to North Carolina are available in the Washington, DC area.

Other couples retreats, marriage enrichment events and seminars include those offered by the North Carolina Baptists , the North Carolina National Guard, The Catholic Diocese of Raleigh, and others.

Certainly improving our marriages is a positive step toward curbing all those negative effects of divorce.

Luke says, “All right, I ‘ll give it a try.”
Yoda responds, “No. Try Not. Do, or do not. There is no try.”

Yoda’s right. There is no try!

We often connect the word try with an expectation of failure. The use of the word alone signals that the speaker expects that you may fail. Yoda ‘s imperative to do or do not has a power that the word “try” simply does not convey—don’t waste time with fruitless efforts.

In the context of marriage, separation and divorce, there is also no “try.” While it is true that in the context of a relationship, your partner can hinder your efforts and perhaps derail them entirely, you still remain responsible for your own actions. You can succeed or fail, but you can never try.

If you want to improve your marriage, take steps to improve your marriage. Ask your spouse to attend marital counseling, go to counseling alone if they refuse, read the Love Dare, and do something positive but don’t “try.”

If you need to end your marriage, download our free eBook, Steps to Divorce, begin our free online divorce workshop and plan your future.

The dependent spouse depends upon their supporting spouse to pay the bills for the food, home, etc., which can lead to a lack of control over their life. In the event the dependant spouse intends to separate from the supporting spouse, they should consult an attorney to learn about their many options. The options below are not exhaustive and will not apply to every situation.

In the event the supporting spouse will not leave the marital residence, the dependant spouse and children should seek a temporary home so that a Complaint and Motions can be filed after the parties separate. The temporary home may be required for a couple of days or months. Before leaving the residence, the dependant spouse should make copies of important documents, refrain from arguments, and limit computer activity. It is necessary to shut down social networking pages on the day you leave the residence, and take your computer to a shop to ensure that spyware was not installed by your spouse. However, the dependant spouse should leave immediately in a case of domestic violence and, in this situation, a local legal aid office and shelters for victims will usually provide free assistance.

In an attempt to provide stability to the dependant spouse and children, an attorney can file a complaint, motion for interim distribution, and motion for sequestration. In these documents an attorney can request that the dependant spouse be supported financially, and the Court can order that the supporting spouse be removed from the former marital residence so that the dependant spouse can return to the residence. The Court can order an interim distribution of marital and separate property pursuant to N.C. Gen. Stat. §50-20(i)(1) (Distribution by Court of Marital and Divisible Property), which provides as follows:

(i)(1) Unless good cause is shown that there should not be an interim distribution, the Court may, at any time after an action for equitable distribution has been filed and prior to the final judgment of equitable distribution, enter orders declaring what is separate property and may also enter orders dividing part of the marital property, divisible property or debt, or marital debt between parties.

For more information about equitable distribution, see the property settlement page on our Website.

se·ques·tra·tion [see-kwes-trey-shun], legal definitions:

1. Seizure of property.
2. A writ authorizing seizure of property.

The order for sequestration is similar to a temporary restraining order. It is a common law remedy that is used on a regular basis in this type of situation. A Judge can order the property to be sequestered with or without the presence of the supporting spouse or opposing counsel. It is highly recommended that the dependant spouse change the locks on the home as soon as they return to the former marital residence. If the supporting spouse returns to the former marital residence, the dependant spouse can request that the police enforce the Court’s Order and eject the supporting spouse from the property. Another option is to file charges for domestic criminal trespass, in which case the accused might be taken to jail. For more information about protective orders, see the domestic violence page on our Website.

A dependant spouse may choose to have an attorney prepare a separation contract or Separation and Property Settlement Agreement (SAPS). These two documents can settle some important issues. The agreement should attempt to maintain the status quo of the current child custody arrangement. For instance, the dependant spouse would maintain primary custody of the children throughout the week, while the supporting spouse visitation on some nights and every other weekend. The amount of custody and/or visitation of the supporting spouse will vary according to their work schedule. This type of custody arrangement can provide a stable environment for the children. Of course, the agreement should provide for interim financial support for the dependant spouse in order to provide a safe home and necessities for the children. The agreement can even contain a clause providing for “Temporary Possession of the Marital Residence.” See the sample separation contract on our Website.

These are a few of the legal options provided for stay-at-home parents and dependant spouses in North Carolina. To learn about additional options, get the free eBook on Separation & Divorce. In all of these cases the children’s best interests and safety should be the primary concerns of the parents.

The above is presented as general information on separation and interim distribution and sequestration. It is not exhaustive coverage of these issues but only a general explanation from an attorney’s perspective. Seek help from a licensed attorney for more information.

If possible, both parents should read A Child’s Bill of Rights and sign the agreement before sitting down with the kids.

When & how to tell children about divorce

When you and your spouse are absolutely certain that you will be separating to obtain a divorce, you should jointly decide when to tell the children and what to tell them. It is best to do this shortly before one parent moves out of the house. Both parents should be present when the children are told and all children should be told at the same time. This is a mature, responsible way to deal with the issue and it sends a positive message to the children about their future. Arguing about what to tell the children in front of the children is a recipe for disaster.

What to say to children about divorce

Above all, reassuring the children that both parents have unconditional love for the kids is paramount. It is important to reassure the children that it is not their fault and that you both love them and will continue to be with them. Above all, be honest and remain calm for the kids so that they can see that things will be ok. Neither parent should be blamed for the impending divorce. Kids often expect an explanation for what is happening and it is appropriate to give a general explanation but no specific details should be shared about why you are getting a divorce. However, specific details regarding where the kids will live, where the departing parent will live and how often the children will see and spend time with each parent will comfort them. Therefore, working all of this out in advance is best for the children and will make the “telling” process simpler. One therapist, has created an interactive web-site where you can create a personalized storybook for use in telling your children about the divorce.

What children want to know

• Where will I live?
• How often will I see dad? …mom?
• Will I change schools?
• Will I stay with my brothers and sisters?
• What happens to my dog, cat, etc.?
• What happens if I get sick?
• Did I cause this?

What not to do

Children should not be expected to deal with adult problems. Here are just a few definite “no’s”:

• Never blame the child for the divorce or make him or her think it is their fault.
• Don’t put the children in the middle of an argument let alone an all our war.
• Don’t pull the kids out of class at school to tell them. Do it at home in a safe place.
• Don’t blame the other parent or say bad things about them.
• Don’t ask the child what he or she wants to do. You are the parent and the child expects you to be in charge.
• Don’t pressure the child to choose sides.
• Don’t make promises to the child for the purpose of gaining favor.
• Don’t use guilt!
• Comfort your child; don’t expect the child to comfort you!

Get professional help

Each family situation is different. Before you sit down with your children, you should consult an attorney and work out the specifics on child custody and visitation. You should also consult with a licensed mental health professional for advice on how to address your children’s needs before you break the news. At Rice Law, we often work with Denise Scearce, MSW, LCSW and Bridge Builders Counseling and Psychotherapy in Wilmington.

Sources
http://helpguide.org/mental/children_divorce.htm
http://love.ivillage.com/lnsproblems/lnsdivorce/0,,p5dw,00.html
http://singleparents.about.com/od/communicatingwiththekids/tp/Tell_the_Kids.htm
http://life.familyeducation.com/divorce/parenting/45564.html

Her article addresses such issues as:

• Filing status as Married Filing Joint, Married Filing Separate, and Head of Household
• Dependent exemptions
• Capital gains on property transferred incident to divorce; and
• Joint estimated tax payments

It is a very good starting place but even the author acknowledges that “these are just some of the tax issues that face divorcing couples.” Another resource is IRS Publication 504, Divorced or Separated Individuals, an excellent publication for help in preparing your return.

Alimony

Alimony is tax deductible by the payor and taxable to the payee. 26 U.S.C. § 71 details the tax law concerning alimony. Gross income includes amounts received as alimony or separate maintenance payments. 26 U.S.C. § 215(a) allows an “above the line” deduction for alimony paid. In order for payments to truly be alimony for tax purposes, certain requirements must be met:

(1) Payment is received by a spouse under a divorce decree, court order, or separation agreement;

(2) The divorce decree, court order or separation agreement does not designate the payment as not being alimony;

(3) The spouses are not members of the same household when the payment(s) are made;

(4) Payments cease upon the recipient’s death.

If the payments fail to meet the above requirements, they are not alimony. If alimony payments decrease substantially or end during the first three years, special alimony recapture rules may apply which can have negative tax implications.

Child support & dependent exemptions

Child support is not tax deductibe and no tax is paid upon receipt of child support. Child dependent exemptions are also a consideration and there is new tax law on when the custodial parent can revoke the dependent exemption.

Attorney fees

In general, the Internal Revenue Code allows a deduction for reasonable and necessary expenses incurred in the production of taxable income. This may entitle a client to a deduction of all, or a part of, the attorney fees paid to our Firm for the pursuit of post-separation support, alimony, and/or taxable pension payments. Check with your tax advisor or tax preparation professional so that he or she can assist you in determining your entitlement to this deduction.

Get professional advice

Even if you normally handle your own taxes, you should enlist the help of a CPA when you are going through a divorce. Many of our clients seek help from Steve Smith, a local CPA in Wilmington in preparing their taxes and Peter Starr, a Financial Advisor, in making decisions about their personal finances and money management. We strongly encourage you to work with a CPA and financial advisor of your choice. You may also require the services of a tax attorney in certain circumstances.

IRS CIRCULAR 230 DISCLOSURE: Rice Law, PLLC does not provide tax advice. Accordingly, pursuant to requirements imposed by the Internal Revenue Service, any tax advice contained herein (including any attachments) is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code or promoting, marketing or recommending to another person any tax-related matter.

We list certain steps you should take here. Some of these can be done as soon as you legally separate and some you should do after you are divorced. If you or your spouse have obtained a Divorce from Bed & Board, some rights such as the “year’s allowance” are revoked by operation of law.

Steps to take after you separate

1. Revoke any Power of Attorney (POA), Health Care Power of Attorney (HCPOA), and Living Will in favor of your spouse. Prepare and execute new POA, HCPOA, and Living Will in favor of someone you trust with your most important financial and health care decisions.
2. Change your bank accounts to Payable on Death (POD) accounts to a new beneficiary.
3. If you move, notify all of your creditors of your change of address. Change your address on your bank accounts and checks.
4. Change the beneficiary on your life insurance policy, pension, 401(k), IRA, etc.

   Note: some companies will not allow you to do this without the consent of your spouse or until you are divorced.

5. If you have children, make sure you obtain a child custody and child support court order to protect you rights. Also, update emergency contact information at the doctor, school, etc. as needed.
6. Consult with an attorney concerning spousal support and property division.
7. If you have not been the person primarily handling the family finances, you should consider meeting with a financial advisor to help you budget your money and plan for the future.
8. Update your tax withholdings with your employer.

Steps to take after you obtain an absolute divorce

1. Execute new Last Will & Testament. In North Carolina, a will is not automatically revoked upon a divorce but the provisions in favor of your former spouse are revoked. This can have unintended and negative effects on the distribution of your property. It is best to execute a new will as soon as possible. See N.C. GEN. STAT. § 31-5.4.
2. Notify your auto insurer of any changes in automobile drivers, ownership, and addresses.
3. If you change your name (such as by reverting to your maiden name) as a result of the divorce, notify all of your creditors of the change. Also, notify the Social Security Administration of your name change and obtain a new card. You will also need a new driver’s license and to change the name on bank accounts, checks, etc.
4. Execute all necessary COBRA documents to ensure continued health insurance coverage, as appropriate. Once you are divorced, your former spouse cannot continue to insure you as he/she no longer has an insurable interest in you.
5. Keep a copy of your Divorce Judgment. You will probably need it in the future.
6. Take all actions as required by your Separation Agreement & Property Settlement and/or your Equitable Distribution Order including ensuring that your name has been removed from all joint debts and loans that are no longer your responsibility.
7. Make sure that the Qualified Domestic Relations Order (QDRO) is entered and implemented, if required under the ED Order.
8. You can revisit child support when the parties income changes substantially or every three years.

These steps are intended as general advice for individuals in the State of North Carolina. It is not applicable to other jurisdictions. You should consult with your attorney regarding the facts of your specific situation to see if you should take different actions at different times.