divorce | Elder Law Issues — Fleming & Curti, PLC

Posts Tagged ‘divorce’

Late-Life Marriage Leads To Property Dispute in Divorce

MARCH 15, 2010 VOLUME 17, NUMBER 9

Older individuals often get married, of course, and sometimes face legal issues as a result of separation or divorce. The legal problems associated with the end of a late-life marriage are not necessarily different from those faced by younger divorcing couples. A recent Arizona Court of Appeals decision addresses one difference that often occurs.

When Norman and Judy Flower married he was 76 and she was 55. She had a son from a former marriage, and each of them owned a home. Mr. Flower promptly transferred his home into joint ownership with his new wife; Mrs. Flower’s son was already on the title to her home, and she did not add Mr. Flower.

The couple lived together in Mr. Flower’s home for six months, while they fixed up Mrs. Flower’s residence. They took out a line of credit secured by Mr. Flower’s home and spent a total of at least $32,000 on Mrs. Flower’s home. They accumulated a total of $61,000 of debt during the marriage. After the work was done on Mrs. Flower’s home they moved into it, and her son moved into the jointly-owned home that had originally belonged to Mr. Flower.

A year after the marriage, Mr. Flower decided that his wife had been interested in him only for financial reasons and he filed a petition seeking an annulment. Mrs. Flower responded by asking for a divorce, and insisted that she was entitled to a half interest in what had been Mr. Flower’s home, all of her own (now improved) home, and no obligation to repay any of the costs of improvements to her home.

Arizona law, like that of many jurisdictions, assumes that the property division in a divorce proceeding will usually be roughly equal. The legal term, however, requires that it be “equitable,” and in rare cases that can mean something other than an equal division. The trial judge decided this was such a case.

Although the trial court denied Mr. Flower’s request for an annulment, it did grant the couple a divorce. The judge also returned Mr. Flower’s residence to him, although it required him to pay the majority of the debt the couple had accumulated. Mrs. Flower was awarded her home without any claim for the improvements made during the marriage, and she was ordered to pay $16,000 of the couple’s debts. Mrs. Flower appealed.

The Court of Appeals affirmed the unequal division of property and debts. Given the unusual facts of this case, ruled the appellate judges, the usual requirement of “substantially equal” division need not be applied. The appellate court noted that though Mr. Flower received his home, he was also required to pay most of the community’s debt incurred during a relatively brief marriage. Flower v. Flower, February 25, 2010.

Arizona, of course, is a “community property” state. Does that mean that the result in a state that did not apply community property rules would be different? Perhaps, but not necessarily. Most states apply some version of Arizona’s requirement that property division be “equitable” and assume that usually means “equal.” While Mr. and Mrs. Flowers did initially transfer his residence into “community property with right of survivorship,” the result in Arizona would not have been different if they had transferred it to “joint tenancy with right of survivorship.”

Is the result in the Flower case unusual based on unusual facts? Not really. The same day that the Arizona Court of Appeals decided the Flower property division issues, it also handled another, similar case. Retirees Carolyn and Lowell Inboden (the opinion does not give their ages) had married and purchased a vacant lot as joint tenants, but using $90,000 of Mrs. Inboden’s separate money from before the marriage. They then built a home on the lot, using $67,000 of her money, $46,500 of his, and a lot of sweat (they acted as their own general contractors).

When Mr. and Mrs. Inboden divorced a little less than two years after the marriage (and just a few months after the house was completed), the trial judge awarded her about three-quarters of the value of the home to reimburse her for her disproportionate contribution to its purchase and construction. The Court of Appeals reversed that result and returned it for further consideration.

In the case of the Inbodens’ property division, the appellate court was clear that the final result might well be an unequal division. The basis for any deviation, however, must be based on “equitable” principles, and not on a simple calculation to reimburse each spouse for their contribution of property that was previously separate. There is a presumption, difficult to overcome, that changes of title or transfers of assets are intended to be gifts, and those gifts can not be reversed if the marriage later falters. Inboden v. Inboden, February 25, 2010.

Why are these divorce issues “elder law” concerns? They are not, really — except that when older couples marry they are more likely to have property that they bring into the marriage, and less likely to have minor children. Consequently, if their later-in-life marriages fail they are perhaps more likely to present complicated property division issues and less likely to focus on child custody and support problems.

Of course, divorce is not the only venue for property division concerns. Even the popular press has begun to consider the possibility that later-in-life marriages might create property disputes between surviving spouses and children from prior marriages or relationships.

Subjects: Arizona Court of Appeals, community property, community property with right of survivorship, divorce, Judy Flower, marriage, Norman Flower, right of survivorship
No Comments »

Death of Husband Ends Wife’s Right To Spousal Maintenance

OCTOBER 14, 2002 VOLUME 10, NUMBER 15
Walter and Geraldine Brown had filed for divorce before first Mr. Brown and then Mrs. Brown became incapacitated. When guardianship proceedings were initiated for both of them, the divorce proceeding was simply dismissed.

Mr. and Mrs. Brown lived in Indiana, where the language of guardianship is a little different from Arizona. What Arizonans would call a conservator is referred to as a “guardian of the estate” in Indiana. Two separate banks were appointed as guardians of Mr. and Mrs. Brown’s respective estates.

During the first months of the divorce action Mr. Brown had been ordered to pay spousal maintenance (better known as alimony) to his wife. After the dismissal of the divorce the bank handling Mrs. Brown’s estate asked the probate court to order the bank responsible for Mr. Brown’s estate to continue to make monthly payments. Mr. Brown was ordered to pay $1,600 per month to Mrs. Brown’s guardian.

Mr. Brown had been married before, and he had two sons from that marriage. Mrs. Brown had no children. Mr. Brown’s will left one-third of his personal property and a life estate in one-third of his real estate to his wife, and the balance of his estate to his two sons.

Mr. Brown died shortly after the spousal maintenance award was entered. His sons filed a probate proceeding, divided the estate in accordance with his will and began the process of closing the estate.

At that point Mrs. Brown’s guardian filed a claim against the estate for spousal maintenance that might be due for the rest of her life. After a hearing the probate court agreed and, considering Mrs. Brown’s life expectancy of 13.9 years, set the amount due from Mr. Brown’s estate at just over $160,000.

Mr. Brown’s sons appealed the judgment. Mrs. Brown’s guardian pointed out the Indiana statute (Arizona has a similar law) that allows child support payments to be reduced to a lump-sum claim against a deceased parent’s estate. In these circumstances, argued Mrs. Brown’s guardian, the court should make a similar calculation for spousal maintenance.

The Indiana Court of Appeals disagreed. In reversing the award the Court noted that there is no statute authorizing such a calculation for surviving spouses, and that the state legislature presumably could have created such a claim if legislators thought it necessary. Mrs. Brown’s spousal maintenance award, however, ended with her husband’s death. Estate of Brown v. Estate of Brown, October 2, 2002.

Although Arizona uses “conservator” rather than “guardian of the estate,” the laws of the two states are similar in other respects. The same result should be expected in Arizona, especially where no divorce proceedings have been finalized.

Subjects: alimony, conservator, divorce, Estate of Brown v. Estate of Brown, guardian of the estate, Indiana, Indiana Court of Appeals, spousal maintenance, Walter and Geraldine Brown
No Comments »

Federal Law on Beneficiaries Overrides State Divorce Rules

MARCH 26, 2001 VOLUME 8, NUMBER 39

Assume that Mr. and Mrs. Smith, happily married, sign wills leaving all their assets to one another. Some years later their marriage fails, and the Smiths divorce. Will their old wills still be valid?

Arizona, like many other states, has a provision that effectively revokes Mr. and Mrs. Smith’s wills. Each is treated as having died before the other, so whatever alternate provisions they have made will take effect instead. This seems fair and proper; we can assume that Mr. and Mrs. Smith no longer wish to leave everything to each other if they no longer live together. In fact, Arizona law goes further, and provides that the Smiths’ designation of life insurance beneficiaries, joint tenancy and other substitutes for wills are also invalidated.

Washington state law is similar, and so the results in that state should be about the same. If Mr. and Mrs. Smith (or, in the case offered for our current review, Mr. and Mrs. Egelhoff) get divorced, any designation of joint ownership or beneficiary designation is automatically revoked.

Donna Rae and David A. Egelhoff were divorced in 1994. Mr. Egelhoff was an employee at the Boeing Company, and had a company pension and life insurance policy. Both named his wife as beneficiary. Mr. Egelhoff was killed in an automobile accident two months after the divorce, before he had gotten around to changing the beneficiary designations.

Mr. Egelhoff’s two children from a prior marriage pointed to the Washington statute, and argued that they should receive both the life insurance and the pension benefits. The problem: both plans were covered by the Employee Retirement Security Income Act of 1974, popularly known as ERISA.

Most employer-provided plans that include pension and life insurance benefits are governed by ERISA. In order to protect workers from state variations, ERISA expressly provides that state law is ineffective in any attempt to determine ownership rights in the plans. The so-called “pre-emption” provision of ERISA overrides any state law to the contrary.

But, argued Mr. Egelhoff’s children, the Washington law did not really affect ownership of the retirement plan and life insurance. The Washington State Supreme Court agreed, and ordered the benefits paid to the children. Mrs. Egelhoff appealed to the United States Supreme Court.

Last week the U.S. Supreme Court overruled the state courts and ordered that the proceeds belonged to Mrs. Egelhoff. Mr. Egelhoff could have changed the beneficiary designations, but he would have to have done so in accordance with the strict provisions of the retirement plan and federal law. Washington’s state law (and almost certainly Arizona’s as well) failed to protect Mr. Egelhoff’s children from his failure to make the formal change. The Court’s holding only applies to benefits plans covered by ERISA, but since most retirement plans and company life insurance benefits are covered the effect is far-reaching. The state law that automatically rewrites a divorcing couple’s wills is still valid, but not necessarily the provisions relating to life insurance and pension rights. Egelhoff v. Egelhoff, March 21, 2001.

Subjects: divorce, Egelhoff v. Egelhoff, Employee Retirement Security Income Act of 1974, life insurance
No Comments »

Grandparent Visitation Rights Upheld In Arizona Court Case

JANUARY 1, 2001 VOLUME 8, NUMBER 27

In June of 2000 the U.S. Supreme Court decided the case of Troxel v. Granville, concerning the rights of grandparents to secure court-ordered visitation with their grandchildren. In the wake of that case many observers predicted that no such right could survive. Arizona’s Court of Appeals last week disagreed, and upheld Arizona’s law giving visitation rights to at least some grandparents.

Robert and Christy Thon had two children before their marriage broke up in 1994. Christy retained custody of the children, but in 1997 Robert’s mother Sandi Tangreen successfully petitioned the Yavapai County court in Prescott for visitation.

Arizona law (Arizona Revised Statutes section 25-409) permits a grandparent to request court-ordered visitation in three circumstances:

•	If the parents have been divorced for at least three months, or
•	If one parent has been missing for at least three months, or
•	If the child was born out of wedlock.

The trial judge found that the basic requirements had been met, and that visitation would be in the children’s best interests. Visitation was ordered and continued for the next year.

By 1998 Christy had married Steven Jackson, and her new husband wanted to adopt the children. Robert, their father, agreed, and the adoption was shortly completed. The Jacksons then sought to terminate Ms. Tangreen’s rights to visitation.

The trial court determined that adoption by a stepparent does not terminate the biological grandparents’ right to visitation, and ordered that the visits continue. While the Jackons’ appeal was pending the U.S. Supreme Court decided Troxel v. Granville.

The Arizona Court of Appeals, in a decision filed the day after Christmas, decided that the U.S. Supreme Court opinion did not control their decision. Noting that the Supreme Court decision had been divided (a 6-3 vote had found Washington State’s similar statute unconstitutional), the Arizona court reasoned that the defects in the Washington statute are not found in Arizona’s law.

The Court of Appeals pointed to several distinctions between the two state statutes. Among the differences:

•	Washington applied its visitation rights to any interested person, but Arizona’s statute is limited to grandparents and great-grandparents.
•	Arizona law only permits visitation orders in cases of divorce, missing parents or out-of-wedlock births.
•	Arizona’s statute requires the trial court to consider “all relevant factors” in determining the child’s best interests.

Jackson v. Tangreen, December 26, 2000. Arizona’s grandparent visitation statute has survived its first challenge in the wake of the U.S. Supreme Court ruling in Troxel. This area of the law, however, is far from finally settled.

Subjects: divorce, grandparents’ rights, Jackson v. Tangreen, Troxel v. Granville
1 Comment »

Posts Tagged ‘divorce’

Subjects

Latest Issue

Subscribe

Archives

Categories

Authors