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     A recent Tennessee Court of Appeals case shows how a person’s actions after divorce can affect her award of permanent alimony.

     When Wife divorced, she was forty six years old and employed as an elementary school teacher, earning about $31,000.00 per year.  The trial court awarded her permanent alimony of $750.00 per month.  The court stated that it was unlikely she could be economically rehabilitated, because her current employment offered no opportunity for promotion, and if she switched careers she would start over at an introductory level.

      Six years later, Wife had stayed in the education field, but was now a school principal earning $64,000.00 per year.  Husband filed a petition to reduce his alimony obligation, saying that Wife’s switch from teaching to school administration was an unanticipated change of circumstances and that Wife no longer needed $750.00 per month in alimony payments.  The trial court agreed, determined that Wife still had some financial need, and reduced Husband’s alimony payment to $500.00 per month.  The Court of Appeals took a different view.  While agreeing that Wife’s employment change was a substantial change of circumstances, the Appeals Court also determined that Wife had effectively rehabilitated herself by changing career tracks and more than doubling her income.  Because of this, the Appeals Court determined that Wife no longer needed any alimony and reduced Husband’s obligation to $0.00.

     Permanent alimony continues until a former spouse remarries or dies.  The amount can be adjusted up or down depending on the future economic situation of the former spouses.  Rehabilitative alimony is a non-modifiable payment for a specified period of time, intended to assist a former spouse with improving her earning capacity.  In this case, the Court of Appeals reclassified the original alimony award from permanent to rehabilitative, and finding that Wife had successfully rehabilitated herself, ended her alimony all together.

     You can read the full decision here:  https://www.tba.org/sites/default/files/williamss_030212.pdf

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The Status of Alimony Law in Tennessee

Nov/16/2011 Posted by Ted Kern in Ted's Blog

On September 16, 2011 the Tennessee Supreme Court issued its decision in Gonsewski vs. Gonsewski, the Court’s first review of Tennessee alimony law in several years.  The full decision, which is available at www.tncourts.gov/courts/supreme-court/opinions, provides a history of the development of alimony law in Tennessee and should be read by anyone seeking alimony in a divorce.  In summary form, this is where things now stand.

There are four kinds of alimony in Tennessee:  alimony in futuro; alimony in solido; rehabilitative alimony; transitional alimony.  Alimony in futuro is intended to provide long term support to a former spouse until that person’s death or remarriage.  It is appropriate in situations where the recipient is economically disadvantaged by the divorce and, because of age, disability or other reason is unable to improve his or her economic situation.  Alimony in futuro is paid in regular installments and is subject to modification in the future.  Alimony in solido is also a form of long-term support, but the total amount is set at the time of the divorce and it is paid in lump sum or in installments until paid in full.  The most common reason for awarding alimony in solido is to adjust an unequal division of marital property.  Rehabilitative alimony is payment over a fixed period of time to help a disadvantaged party improve her employment options through education or training.  A typical reason to award rehabilitative alimony arises where one party has stopped working to stay home with the children, and must either resume a former career or start a new one.  A person seeking rehabilitative alimony should be prepared to present a plan that sets out what that person intends to do (obtain a college degree, professional license, etc.), how long it will take and what it will cost to complete the plan, and the expected benefits in employability or salary increase when the plan is finished.  Transitional alimony is also a short-term form of support, intended to help one spouse cover the costs of moving to life as a single person.  For example, if one spouse is keeping the marital residence, the other spouse might receive transitional alimony to cover the cost of renting an apartment for a fixed term.

Tennessee statutes set out a number of factors which a court is required to consider when determining whether to award alimony, what kind to award, and for how long.  The most important factors are the disadvantaged spouse’s financial need and the obligor spouse’s ability to pay.  There is a preference for awarding rehabilitative or transitional alimony over alimony in futuro or alimony in solido, the intent being to help an economically disadvantaged spouse acheive self-sufficiency if possible.  Alimony in futuro is awarded only when court finds that the economically disadvantaged spouse will be unable to improve his or her financial position with the help of short-term alimony.

In Gonsewski, the parties had been married for twenty-one years.  They were each forty-three years old at the time of divorce, each had college degrees and had worked throughout the marriage, and each was in good health.  Both parties received approximately the same value of marital property.  Wife had worked for the State of Tennessee for sixteen years and earned $73,500.00 per year.  Husband was an accountant and earned $120,000.00 to $130,000.00 per year.  The Supreme Court determined that alimony in futuro and was not appropriate because both parties earned enough money to meet their individual financial needs.  Rehabilitative alimony was not appropriate because both parties already had college degrees and were employed in established careers.  Alimony in solido was not appropriate because the parties had received approximately equal shares of marital property, and becauase neither party showed financial need.  Transitional alimony was not an issue in this case, and was not addressed.

The Court specifically stated that the fact Husband made significantly more money than Wife at the time of the divorce was not reason to order payment of alimony.  The lesson from this case is that a spouse who expects to receive alimony in a divorce is going to have to provide evidence of financial need before the court will consider the claim.  Once financial need is established, the court will move on to determine what kind of alimony is appropriate, and for how long.

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When a married couple divorces, Tennessee law creates a presumption that any property which either spouse owned before the marriage is that spouse’s separate property which he or she is allowed to keep.  However, Tennessee law also says that what started as a spouse’s separate property can be transformed into marital property, which is then subject to division in the divorce.  A common situation where this arises is when one of the spouses owned a house before the marriage, and the other spouse tries to claim a share of the property’s value in the divorce.

Tennessee courts use four factors to determine whether a house owned by one spouse before the marriage has been transformed into marital property:  whether the property was used as a marital residence; the amount of on-going management and maintenance of the property contributed by both parties; whether title to the property was placed in joint ownership; whether the credit of the non-owner spouse was used to improve the property.  The court considers the specific facts of each case to determine whether, based on these factors, separate property has turned into marital property.

A recent case from the Court of Appeals in Nashville, Liner vs. Liner, Jr., demonstrates how this works.  Husband owned a house before he and Wife married.  During the marriage, Husband refinanced the house, did not put Wife’s name on the title to the property, but did add her name to the mortgage, making her equally responsible for the mortgage debt.  Wife earned much less income than Husband during the marriage, but what she did earn went into a joint checking account from which the mortgage, utilities, and other expenses were paid.  Wife also contributed to the upkeep of the house by making repairs, painting, laying flooring, installing counter tops, landscaping, and other actions.  The court determined that the house had become marital property based on:  it was used as a marital residence; Wife’s credit was used in the refinancing; Wife had made substantial contributions (more sweat equity than financial) to the maintenance and management of the property.

This case does not set out any new legal standards, but it contains a clear statement of the rules for determining when separate property has been transformed to marital property.  The full text of the decision is available at
http://www.tba2.org/tba_files/TCA/2011/linerc_041411.pdf

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Children learn about relationships from the people around them, starting with their parents.  I have interviewed many people who are uncertain about whether to divorce a spouse.  In many cases a major concern is how the divorce will affect their children.  This article, which appeared in the Huffington Post, explains how parents with the best intentions may be sending the wrong message to their children if they stay in an unhappy marriage.  http://www.huffingtonpost.com/david-wygant/can-divorce-be-for-the-sa_b_842037.html

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