Posts Tagged ‘financial support’

With This Ring I Thee Enter Into a Prenuptial Agreement

Diamonds, dresses, flowers, and caterers are what couples typically discuss when they decide to get married; but, let me tell you what the topics turn to when couples decide to get divorced; alimony, marital property, and “equitable” division of assets.

Couples can avoid all of the emotional stress and pomp and circumstance of a formal wedding by simply running off to a Las Vegas and seeking a drive through chapel.  This alternative to a traditional wedding is arguably cheaper, more adventurous, and possibly even more fun.

Like the Vegas alternative to a formal wedding, there is a cheaper, easier, and less traumatic alternative to divorce litigation; a prenuptial agreement.  Everyone thinks that prenuptial agreement is a dirty word, well, two dirty words.  I promise you that there are much dirtier words in the arena of domestic law, including attorneys fees, alimony, dissipation of martial assets, and bankruptcy to name but a few.

A common misconception about prenuptial agreements is that they are only for people who have previously been married and have a lot of assets or professional football players, actors, rock stars, i.e. the very wealthy.  This is simply not correct.  Prenuptial agreements are just as helpful to couples who have minimal pre-marital asset or pre-marital debt obligations going into a marriage because no one can know how long the parties will be married or what the parties may acquire while they are married and if those pre-marital assets or pre-marital debts become comingled with other marital property or marital debt then problems may arise.

A prenuptial agreement can even be helpful to a couple that has no pre-marital assets or debts.  Consider the young soon to be wife who forgoes her education and career to stay home and take care of the household and children?  Should she not be entitled to some percentage of her husband’s annual income for until she can take the necessary steps to become financially independent in the event of divorce?  Most people, though likely not to include her husband, would agree that she is entitled to alimony.  Regardless of anyone’s opinion, alimony is provided for by statute in Maryland.  Rather than take this matter before the court in litigation, the parties could have a prenuptial agreement to state that by agreement of the parties wife will discontinue her graduate school program to be a full-time stay at home mother until the youngest child of the parties is school-aged and if the parties divorce prior to this occurring then in addition to any child support payable to wife, wife shall be entitled to 20% of husband’s gross annual income, averaged over the previous 3 tax years.

Or again for our couple with no pre-marital assets, the agreement could be as simple as the parties hereto have no previously acquired non-martial assets and therefore they agree that all personal property, real property, bank accounts, stocks and retirement funds acquired during their marriage shall be marital property and shall be divided equitably, 50% to each party, in the event the parties should divorce.   I assume that there may be a couple of folks out there, maybe even family law attorneys, who know a little something about the Maryland Marital Property Act who are asking well what good does that do since the law provides for an equitable distribution of marital property anyway?  What the Maryland Marital Property Act actually says is that all property determined to be marital property is subject to equitable division by the court.  Let me assure you that equitable does not mean equal 50/50 shares in the minds of most parties who are going through a divorce.

If you are mature and compatible enough to contemplate entering into marriage then you should be able to have a frank discussion about what is reasonable in the event your marriage ends.  If a couple cannot even discuss the topic of a prenuptial agreement, well, need I say more?

This is the first article in an ongoing series about different types of domestic law agreements. The next article will discuss separation agreements.  As always, we here at Delaney & Keffler, LLC will provide you will practical solutions to real world problems and help you to protect your assets and your legal rights. Contact us today at 410-535-3476 (FIRM) or for a free consultation.


Alimony: The Final Frontier

In our previous article on alimony we discussed the first six statutory factors a Master or Judge must consider when making a determination regarding alimony.  To continue our discussion on the remaining six statutory factors, let’s revisit our friends Jack and Jill.   To refresh your memory:

Jack and Jill married when they were ages 18 and 17 respectively, and have been married for 30 years. Jack finished college and medical school, and is a well-respected neurosurgeon. Meanwhile, Jill gave birth to their first child when she was 18. Jill never finished high school or received any advanced skills training, and was a homemaker for the entire 30 year marriage. Jill is now 47 and has no practical or marketable skills.

The remaining six factors set forth in Maryland Code §11-106(b) are presented below.

            (7)      The age of each party.

In the case of Jack and Jill, they are both in their late 40’s, really the prime of their working life. However, if Jack was 45 and Jill was 65, the court may reach a different decision about what constitutes a reasonable alimony award because Jill’s age, among other factors, may hinder her ability to become gainfully employed.

            (8)      The physical and mental condition of each party.

            In our original example, Jack and Jill are both in good health and have skills that could lead to a fulfilling career and adequate income. Consider how that picture would change if Jack is diagnosed with early onset Alzheimer’s during the couple’s separation. Instead of being able to provide ample income to continue to support Jill, Jack may soon become dependent on somebody, possibly Jill, to support him. 

            (9)      The ability of the party from whom alimony is sought to meet that party’s needs while meeting the needs of the party seeking alimony.

Judges don’t play Robin Hood, out to steal from the rich to pay the poor. Assume Jack makes $250,000 per year as a neurosurgeon, and Jill requests $75,000 in yearly alimony. Before the court can award Jill that amount (or any amount, actually), the Judge or Master must consider the financial impact on Jack, as well as on Jill. If such a high award would make Jack unable to meet his existing financial obligations or would put Jill in a significantly more comfortable financial position than Jack, the court is not likely to award Jill her requested amount of alimony. 

            (10)      Any agreement between the parties.

            Perhaps Jack has decided he would like to marry his young receptionist. After delivering the news to a devastated Jill, he asks her for an easy divorce and tells her that she will never have to worry about finances, promising her $100,000 per year for life. After making the promise, Jack visited his financial advisor to make sure he could afford this pay-off, and drafted an agreement which he presented to Jill. Jill signed the agreement, and each kept a copy. If Jack tries later to modify the Agreement (most likely because it cuts into the funds new receptionist wife thought she would have to spend) will the Agreement weigh into a Judge or Master’s decision to modify the alimony award?  Most definitely!  It will be given a lot of weight because it appears to have been made after Jack’s careful consideration and Jill has acted in reliance of the agreement by giving Jack an easy divorce.

This factor number 10 also covers any prenuptial and antenuptial agreement that the parties may have entered into regarding a specific amount or term for spousal support (alimony).  

            (11)      The financial needs and financial resources of each party, including:

                  (i)      all income and assets, including property that does not produce income;

            For example, during the divorce hearing, it comes out that Jill actually owns two townhomes that are in rentable condition, but have remained vacant for the last 10 years. The Judge or Master can consider the value of these homes, even though they are not currently producing any income, when deciding the most equitable alimony award.

                (ii)      the potential income from a non-monetary award or property disposition;

                If Jill decides that she would rather give the townhomes to Jack as part of the couple’s negotiated property settlement, the court may impute rental income to Jack which could result in a larger alimony award for Jill.

                  (iii)      the nature and amount of the financial obligations of each party;

                Suppose Jack has annual malpractice insurance costing $100,000, and he pays $75,000 for his business mortgage, in addition to $25,000 for the couple’s home mortgage and another $25,000 for assorted financial obligations. Jack’s $250,000 annual salary now looks more like $25,000 of take home pay—not such big bucks. A Judge or Master will take Jack’s financial obligations into account before awarding Jill an alimony amount that could leave Jack unable to meet his existing obligations.

                  (iv)      the right of each party to receive retirement benefits.

            Both Jack and Jill are probably around 20 years away from retirement in our given scenario. Having never worked outside the home, Jill has not had an opportunity to contribute to a retirement account. Jack, on the other hand, may have hundreds of thousands of dollars saved in a retirement account. While Jill is likely entitled to a portion of Jack’s retirement benefits to the extent that they are marital property, Jill’s future ability to save for retirement is probably not nearly as great as Jack’s. A Judge or Master will certainly consider the implications of retirement funds on the parties’ lives as they move forward and age.

            (12)      Whether the award would cause a spouse from whom alimony is sought and who is a resident of a nursing home or similar institution to become eligible for medical assistance earlier than would otherwise occur.

            Assume that during the couple’s separation Jack is in an accident that leaves him partially paralyzed, requiring enough medical care that he moves into a long-term nursing facility. Even though Jack has always been the breadwinner, his new circumstances may have a great impact on the couple’s financial future. A Judge or Master would need to consider the reasonableness of Jill receiving alimony from Jack, now that Jack will need to expend considerable funds to pay for his around the clock nursing care while not becoming a burden on state funded programs. 

            As you can see, alimony is about as far away from a simple calculation as it can be. If you believe you are entitled to alimony, or may have a spouse seek alimony from you, it is crucial that you consult with an attorney. An attorney will be able to discuss how the specific factors of your particular situation may impact an alimony determination.

This is the final article in an ongoing series about Alimony. The previous articles can be found on our blog at As always, we here at Delaney & Keffler, LLC will take the time to fully explain Alimony, and help you obtain beneficial information. Contact us today at 410-535-3476 (FIRM) or for a free consultation.

Alimony Matters

In Maryland, Alimony determinations are based on Maryland Code, Maryland case law, and Judges may also consider guidelines such as those set forth by the American Academy of Matrimonial Lawyers or the Kaufman Center for Family Law. While none of these sources provides a strict mathematical formula, they do go a long way in offing guidelines for determining Alimony awards.

Maryland Code §11-106 (b) sets forth twelve statutory factors that a Master or Judge must consider when ruling on an alimony issue. The first six factors are presented below; the remaining six factors will be discussed in a future article.

(1)   The ability of the party seeking alimony to be wholly or partly self-supporting.

For example, Jack and Jill married when they were ages 18 and 17 respectively, and have been married for 30 years. Jack finished college and medical school, and is a well-respected neurosurgeon. Meanwhile, Jill gave birth to their first child when she was 18.  Jill never finished high school or received any advanced skills training, and she has been a homemaker for the entire 30 year marriage. Jill is now 47 and has no practical or marketable skills. Under this factor a Judge would need to consider whether given Jill’s age, lack of formal education and training, and lack of employment history, if it is even possible for Jill to obtain an income that will afford her any level of financial stability, much less how long it will take her to reach that level. 

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

Let’s imagine that instead of being a homemaker, Jill had worked for 20 years as a nurse. She retired about 10 years ago, but may be able to re-enter the nursing workforce. The parties would need to present evidence regarding the need and ability for Jill to update her nursing qualifications in order to become gainfully employed as well as how long it may take her to update her qualifications and what amount of salary she may be able to earn upon her reentry into the workforce. 

(3)   The standard of living that the parties established during the marriage.

Consider the original scenario: Jack is a neurosurgeon, and Jill is a homemaker. Assume Jack earned $600,000 per year, which allowed the couple to live in a beautiful mansion with a full staff, own a vacation villa, travel on three extended vacations yearly, and wear the best designer label clothing. The parties have lived this way for the last 18 years, since Jack finished his residency. A court will take this standard of living into account when deciding what kind of alimony award Jill needs to maintain a reasonably comparable standard of living.

(4)   The duration of the marriage.

Again, let’s look at the original scenario. A 30 year marriage is no small accomplishment. The court is likely to find that Jill is entitled to a greater alimony award for her 30 year marriage than she would be if, all other factors remaining the same, her marriage lasted only four years.

(5)   The contributions, monetary and nonmonetary, of each party to the well-being of the family.

Under our original scenario, Jack’s monetary contributions should be fairly easy to track. Jill, however, should not feel like her 30 years as a homemaker have no value to the marriage.  While nonmonetary contributions can be more difficult to prove, the courts absolutely assign value to serving as a primary caretaker for the couple’s children, work Jill did to maintain the home, clerical support Jill may have provided to Jack’s medical office, etc.  If Jill was not there to care for the family and household, Jack may not have been able to take the time and training necessary to achieve his medical degree and accompanying salary.  

(6)   The circumstances that contributed to the estrangement of the parties.

 There is no way for a court to assign an accurate monetary value to fault. The system does, however, allow the parties to present reasons why they should, or should not, be entitled to a certain alimony award in the name of fairness. First, let’s assume that Jack came home from work one day and announced that he has been having an affair with his secretary, and he is done with the marriage. The court may find that Jill is entitled to a greater alimony award because she had no way of preparing for the breakdown of her marriage. Consider, instead, that one day Jill informs Jack that she is in love with their cabana boy, and that they are running off to the Caribbean together.  If Jack presents this information to the court, he may have reduced alimony payments because Jill brought the divorce on herself, through no fault of Jack

Clients often ask me how marital fault factors into a divorce in Maryland; without a doubt, Maryland Code §11-106 (b) (6) – The circumstances that contributed to the estrangement of the parties – is a prime example of how fault can be a factor. 

This is the third article in an ongoing series about Alimony. The fourth article will continue with the next six alimony award considerations in the Maryland Code. As always, we here at Delaney & Keffler, LLC will take the time to fully explain Alimony, and help you obtain beneficial information. Contact us today at 410-535-3476 (FIRM) or for a free consultation.