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Thyden Gross and Callahan LLPCounselors and Attorneys at Law

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Maryland Divorce Legal Crier

News and comments about divorce, child support, child custody, alimony, equitable property distribution, father’s rights, mother’s rights, family law, laws on divorce and other legal information in Maryland.

Archive for the ‘Alimony’ Category

Can Alimony Be Longer Than The Marriage?

Wednesday, July 29th, 2015

Dr. Murray Malin, an anesthesiologist, was 38 when he met Marcie Minenberg, 27. She went to law school but did not pass the bar exam and was working in a jewelry store. They wed, had one child, and divorced in Maryland after three years of marriage. At the time of trial, Murray had stopped practicing as a doctor due to a drug addiction.

The trial court awarded Marcie alimony of $3,500 a month, non-taxable to her, for five years. Murray appealed arguing that (1) the court could not award alimony that was non-taxable and (2) the court could not award alimony for longer than the marriage.

The Maryland Court of Special Appeals agreed with Murray that the only alimony a court can award is taxable alimony. Parties can make alimony non-taxable, but only by agreement.

As for the length of alimony, the appeals court said there was no law against alimony that lasts longer than the marriage.

Malin v. Mininberg, 153 Md. App. 358, 837 A.2d 178 (2003)

Depreciation as Income

Wednesday, February 4th, 2015

In the Mumma case, the wife called the court’s attention to the depreciation deduction that the Husband was taking for his business.  She pointed out that depreciation is a non-cash flow event and so the money is available to the Husband.

The argument on the other side is that equipment really does wear out and needs to be replaced eventually.  When it does, it will take cash flow to purchase new equipment.

Taking a look at the Maryland Child Support Guidelines in Section 12-201 of the Family Law Article, we see that income from self employment means gross receipts minus ordinary and necessary expenses.

However, the statute goes on to say that ordinary and necessary expenses do not include accelerated depreciation, investment tax credits, or any other expenses the court determines in not appropriate to subtract.

So what about straight line depreciation?  Does the fact that the law expressly disqualifies accelerated depreciation but not straight line depreciation mean you get to deduct it from income?  Or does the catch-all provision at the end allow the court to decide?  In the cases I have tried, the trial judges have included straight line depreciation as income.

Are Gifts Income?

Tuesday, January 27th, 2015

Albert  Mumma married Jean in 1952 and they had three children together.   Albert supported the family as an architect.  He had an office in Georgetown.  In 1968 the parties had a violent altercation and they decided to divorce.

The judge awarded $200 a month in alimony and $500 a month in child support to Jean, plus attorney fees and costs.  Albert appealed complaining that he was ordered to pay support of $8,400 a year, while his income was only $9,422 in 1968 and $12,726  in 1969.   Jean countered that, among other things, he received gifts from his parents.

The DC Court of Appeals reversed the trial court, holding that “gifts do not constitute income” and suggested that Albert’s income tax returns would be an appropriate guide to his actual income in the absence of affirmative evidence otherwise.

Mumma v. Mumma, 280 A.2d 73 (1971)

Celebrity Divorce News

Tuesday, September 23rd, 2014

If you have been “Keeping Up With the Kardashians” on television, you will be interested to know that Kris Jenner filed divorce papers against Bruce Jenner yesterday in Los Angeles Superior Court, citing irreconcilable differences.

The couple have been married for 23 years.  It is the third marriage for Bruce and the second for Kris.  They had no prenuptial agreement.

The split appears to be amicable and the parties have agreed on joint physical and legal custody of their only child who is still a minor, Kylie Jenner.  Neither is asking for alimony.

Indefinite Alimony for 57 Year Old Wife

Monday, May 19th, 2014

George and Betty Lou Blake had been married for 37 years. He was 56 and she was 57 when they got divorced. He made $42,500 a year and she made $20,000 a year.

Courts now favor rehabilitative alimony for a set period rather than indefinite alimony, but there are two exceptions. The judge granted Betty indefinite alimony and the appeals court affirmed.

Since George made twice as much as Betty, the judge might have applied the second exception to rehabilitative alimony and given Betty indefinite alimony on the basis of unconscionable disparity.

Instead, the judge applied the second exception, finding that in view of her age and, given the time necessary for further education or training, “I don’t know that there’s a whole lot more that she can do. She’s doing the best she can.”

Blake v. Blake, 81 Md. App. 712, 569 A.2d 724 (1990)

IRS Loses Millions in False Alimony Deductions

Friday, May 16th, 2014

When someone pays alimony they get a tax deduction for it. But the same amount should be included as taxable income on the return of the person receiving alimony. I think most divorce lawyers believed, and cautioned their clients that the IRS computers will automatically detect any variances and flag the returns. It turns out the IRS computers are not that good.

The inspector general for the IRS has issued a report, according to the Washington Times, that the U.S. government loses hundreds of millions of dollars a year in false alimony deductions. The report says that the IRS doesn’t have a system for detecting the false claims. 47 percent of returns filed in 2010 got it wrong said the inspector general.

Most cases involved a deduction for alimony without matching income on the recipient’s return. In other cases, taxpayers did not report who they were paying alimony to or gave a false taxpayer identification number for the recipient. “Apart from examining a small number of tax returns, the IRS generally has no processes or procedures to address this substantial compliance gap,” the report said.

Maryland Alimony Factor #2

Monday, April 28th, 2014

In order to make a fair and equitable alimony award, the divorce court judge must look at all the factors necessary, including the following:

(2) the time necessary for the party seeking alimony to gain sufficient education or training to enable that party to find suitable employment.

Employment is not required, however, if a party is already self-supporting. Mrs. Hull was almost 61 years old and her husband was 66 at the time of their divorce. The wife never worked during the marriage and the husband was retired from the CIA. The parties had both inherited funds and when they sold their home, they each had assets of over one million dollars.

The trial judge found that both parties were self-supporting and therefore no alimony was required. The wife appealed and the appeals court affirmed the ruling of the trial court.

Hull v. Hull, 83 Md. App. 218; 574 A.2d 20 (1990)

The Indefinite Alimony Exceptions

Friday, April 25th, 2014

Since 1980 the law in Maryland has favored rehabilitative alimony over indefinite alimony. Rehabilitative alimony is for a fixed period. Indefinite alimony is until one of the parties dies or the party receiving alimony remarries.

The purpose of alimony is to make a person self-sufficient and not to award a life- time pension. Nevertheless, the legislature has recognized two exceptions where indefinite alimony might be appropriate.

The first is where the dependent spouse cannot become self-sufficient due to age, illness, infirmity, or disability.

The second is where there will be an unconscionable disparity in the standard of living of the parties after the divorce.

Section 11-106(c) of the Family Law Article, Maryland Code.

The Alimony Factors

Tuesday, April 22nd, 2014

Section 11-106 of the Family Law Article of the Maryland Code requires the court to consider certain factors in determining the amount and duration of alimony.  This next series will take a look at the factors one by one.

Alimony Factor #1.  The ability of the party seeking alimony to be partly or wholly self-supporting.

Alimony Before 1980.

Alimony originally was awarded on a permanent basis to a financially dependent spouse who was not at fault for the destruction of the marriage.  The thought was that the financially dependent spouse ought to be able to continue with the same standard of living to which that spouse had become accustomed during the marriage, provided the other party could afford it.  Alimony could be modified in the event of a change in circumstances but basically lasted until one of the parties died or the party receiving alimony remarried.

Alimony Today.

The Governor’s Commission on Domestic Relations Report dated January 18, 1980, changed the concept of alimony in Maryland.  New alimony laws were adopted at sections 11-106 and 11-107 of the Family Law Article.

The court in Holstein v. Holstein described it like this:

Under the present statute, the principal function of alimony is rehabilitation. Thus, when awarding alimony, the chancellor is required to consider not only those factors relating to the financial situation, age and health of each party, their standards of living, the duration of marriage and the contribution of each party to its well being but also the ability of the party seeking alimony to be wholly or partially self-supporting and the time deemed necessary for the party seeking alimony to gain sufficient education or training to enable that party to find suitable employment. It is apparent, therefore, that the concept of  alimony as a lifetime pension enabling the financially dependent spouse to maintain an accustomed standard of living has largely been superseded by the concept that the economically dependent spouse should be required to become self-supporting, even though that might result in a reduced standard of living.

There are two exceptions when indefinite alimony should be awarded.  These will be discussed in my next post.

Husband Wins Prenup Challenge by Wife

Friday, October 4th, 2013

James Stewart, at age 24, was married with three children, and owned a successful construction business.  He was worth about two million dollars.  Then he met 26 year old Barbara Stewart, who worked at a day care center for minimum wage.  Her only asset was a vehicle worth about $500.  They had an affair, lived together for a year, and eventually married in 1988 after James got his divorce.

Four days before the wedding James and Barbara signed a prenuptial agreement.  Twenty one years later they divorced and Barbara challenged the agreement claiming she signed it under duress, without counsel, without full disclosure, and that the agreement was unfair.

The trial court upheld the agreement and the Maryland Court of Special Appeals affirmed.  The court said that four days was enough time to consult with a lawyer and that it was her choice not to do so.

While the agreement did not disclose an IRA worth $60,000 and it did not list values for the assets nor their total, the court found that the agreement and Barbara’s knowledge of the assets from living with James were sufficient disclosure to let her know she was giving up something significant by signing the agreement.

The court also found that she had not waived alimony nor a marital award in the prenup.  In fact, she settled the divorce for over a million dollars.  So, the court said, the prenup was not unfair.

Stewart v. Stewart, Maryland Court of Special Appeals (October 3, 2013)

 
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