Five Don'ts During a Divorce

Posted on November 12, 2008 by J. Benjamin Stevens

A divorce is a complicated procedure, legally, financially and emotionally. It’s up to you to make the process as smooth as possible in order to prevent unnecessary stress and expenses. If you’re going through a divorce or contemplating one, here’s what you mustn’t do:

1. Don’t change lawyers midstream: It’s your personal prerogative, but changing lawyers anytime during the divorce proceedings adds to the already enormous expense through extra procedures and more time. Make it a point to investigate your attorney carefully before you hire him or her and get someone whom you trust right from the word go, someone who’s both experienced in family law and who comes highly recommended.
2. Don’t get too emotionally attached to your attorney: If your attorney’s the caring kind, you may end up literally crying on his or her shoulder unable to take the mental stress any longer. It’s not advisable to get too close emotionally to your attorney because it complicates the process even more. Also, there are laws that prohibit a client and attorney from getting involved romantically or sexually for the duration of the case.
3. Don’t take financial issues for granted: Don’t take your future finances for granted once you’ve decided on a divorce. Talk to your spouse about who gets the house, how taxes are going to be paid, how credit card debts are going to be resolved, how joint accounts are going to be handled, how much child support is enough, and about other financial aspects that are likely to affect both of you. If you go through this process as amicably as you can, you’re both going to save a ton of money.
4. Don’t make your kids suffer: Just because you no longer get along with your spouse, there’s no reason to take it out on your kids. They’re already going through a rough patch knowing that their parents are about to get divorced and that their life is going to be a sort of tennis match where they’re the figurative balls being batted from one parent to another. Don’t take out your frustrations on them or abuse your spouse when they’re around. Make them understand that even though you both are splitting up, you still love them a lot.
5. Don’t indulge in physical relations with your spouse: If your decision to divorce is final and there’s no room for a permanent reconciliation, it’s best to refrain from having sex with your spouse. You may still be living under one roof and sexually compatible, and if the divorce is amicable you may feel that there’s no harm in sleeping with each other as long as no one else knows. But there are emotional complications that will mess up your divorce and leave you with more issues to contend. If you’ve agreed to separate, keep it that way in the bedroom too.

Jon D. McLaughlin, Esq.

Cannell & Maulson, P.C.

211 West Jefferson Street

Bloomington, Illinois 61701

(309) 828-5600

Jon@CannellandMaulson.com

Family Case in the Supreme Court

A case before the US Supreme Court may make divorce (even a no-fault divorce) a little more complicated. Under current law, parties to a divorce can release their right to the other spouse’s pension by signing a property settlement agreement which says so.  They can also lose any interest in the other spouse’s pension when a Final Decree is entered which does not award them the pension (or otherwise reserve their rights).

In Kennedy v. Plan Adm’r for DuPont Sav. & Inv. Plan, 497 F.3d 426, 427-28 (5^th Cir. 2007), the Supremes will decide if a spouse may waive his or her interest in the other spouse’s pension without a Qualified Domestic Relations Order (”QDRO”).  QDROs are not exactly do-it-yourself documents so requiring one every time a spouse releases his or her right to any interest in the other spouse’s pension will likely mean more attorney fees and fewer do-it-yourself divorces.

In Kennedy, the parties were divorced in Texas in 1994. They entered into a marital settlement agreement in which the wife waived her interest in the husband’s DuPont Savings & Investment Plan (”SIP”) benefits. The parties did not prepare or sign a QDRO to that effect. The husband never removed the wife’s name as the plan’s beneficiary.

When the husband died in 2001, the Estate requested the benefits. DuPont refused and sent the benefits to the ex-wife. The Estate sued DuPont in the U.S. District Court for the Eastern District of Texas for recovery of the SIP benefits under ERISA, 29 U.S.C. § 1132(a)(1)(B). ERISA federal law preempts state laws pertaining to employee benefit plans. See 29 U.S.C. § 1144(a). Therefore, the text of ERISA is generally applied to determine such cases. If ERISA is silent on an issue, however, federal common law is applied instead. The district court applied federal common law, under which the wife’s waiver was valid because it was “explicit, voluntary, and made in good faith.” 497 F.3d at 428. The district court consequently granted summary judgment to the Estate and awarded it the benefits.

The United States Court of Appeals for the Fifth Circuit reversed and held that federal common law does not apply, because ERISA’s “antialienation” provision prohibits the wife’s divorce decree waiver. The antialienation provision prevents beneficiaries from transferring their pension plan benefits, including transfers through Domestic Relations Orders (”DRO”), such as divorce decrees. On the other hand, QDROs, which satisfy ERISA criteria, provide an exception to the antialienation provision and can be used by beneficiaries to transfer plan benefits. However, the divorce decree waiver at issue was not a QDRO. The Fifth Circuit consequently held that the wife’s waiver violated ERISA’s antialienation provision because the waiver constituted an “indirect” transfer from the wife to the Estate: When the wife relinquished her right to the benefits, the Estate, as the next beneficiary in line under the SIP, automatically received the right to them. According to the Fifth Circuit, however, the wife would have to have submitted a QDRO to transfer her interest in the pension benefits, because QDROs are the “sole exception” to the antialienation provision in cases of divorce.

The Court’s decision on this issue could have a significant impact on those who failed to prepare a QDRO to waive their pension benefits. Should the Court decide that the only valid means of waiving a pension is through a QDRO, the impact on attorneys will also be significant, as former clients will need QDROs to effect their settlement agreements.

Stay tuned….

Source: The Nat’l Legal Research Group’s “Lawletter.”

 

 

Jon D. McLaughlin, Esq.

Cannell & Maulson, P.C.

211 West Jefferson Street

Bloomington, Illinois 61701

(309) 828-5600

Jon@CannellandMaulson.com