Reconciling in Virginia - The Law When You Work Things Out

As always, before reading this post, please review my disclaimer by clicking on the link above or by clicking on this link.  As always, an legal principles discussed in this post apply only to the Commonwealth of Virginia.

Introduction

What's the best thing I, as a family law attorney, can possibly hear from a divorce client?  Well, would you be surprised if I told you my favorite phone call from a divorce client is the one that starts with "Sam, stop working on my case, we've decided to reconcile"?

When I began practicing family law, I had big plans in mind for how I was always going to try to convince my clients to reconcile first, recommend counseling, anything to make it work.  It turned out, though, I had bought into the pop culture hype that people rush into divorces these days, when in reality they really don't (I dive into this a little further in my blog post discussing how the divorce rate is actually much lower than 50%).  As a result, by the time people come to me about a divorce, the odds are they've already tried most everything, and the marriage is already broken beyond repair.

Nonetheless, life happens, and while it's not nearly as often as I'd once hoped, the reality is I've had several cases over the years now that ended not with a Final Divorce Decree, but with the couple back in the same home, happily moving on with their lives together.  I even got an invitation once to the wedding of a couple whose divorce (from each other) I had handled a couple years earlier.

Now, you might look at this and say, "oh, well, there can't possibly be legal consequences from reconciling!  That's just a return to how things were - so everything resets, right?"  Well, it's actually not that simple.  The reality is, depending on how far along you were in your divorce process, what kinds of orders were entered, and whether or not you have kids, there are legal implications from a reconciliation, and actions that you have to take in order to protect yourself going forward.  In this post, I will discuss some of what happens under the law when you and your spouse begin the divorce process, but then ultimately work things out.

Simplest Case:  You've Separated, But That's It

So, the simplest case is that you separated from one another, but that was it.  No agreements were signed, no court orders were entered, no papers signed.  You just each lived apart for a while, then decided to get back together.  Here everything is simple - there really aren't legal steps you need to take.  Just resume living together.  If one of you was renting a place and are leaving that rental, make sure you talk to the landlord if you need to terminate your lease early.  But from a matrimonial law standpoint, you're set.

Slightly Tougher:  You Have a Signed Agreement

Now, let's go to the same scenario, but you've also already signed a separation or property settlement agreement and begun abiding by its terms.  However, let's assume still nothing's been filed in court, and then you reconcile.  There are a few things to know.  First, any transfers of property, changes of name on accounts or loans, etc., will survive your reconciliation.  So, if you want to get things back to how they were you will need to go through that process again.  This is particularly important for real estate, where you want to be able to take advantage of the benefits of being tenants by the entirety (a form of joint ownership only available to married couples).  Second, understand that by law a separation or property settlement agreement is terminated upon reconciliation, however, if your agreement has a reconciliation clause in it, it may survive your reconciliation.  In that case, you'll need to decide how, or if, you want the agreement to survive - particularly what happens to any support obligation while you are back together - and you should consider signing an amendment to put those changes into effect.

Remember that just because you worked things out now doesn't mean something won't go wrong again some day.  If, for example, your agreement obligates you to pay support of $1,000 a month, you reconcile and don't change anything, and then separate again in 5 years, it's possible your spouse will then come after you for 5 years of back payments ($60,000!).  You may have defenses to that claim, but they wouldn't be a guarantee - edit your agreement now, when you're on good terms.

What if Orders Have Been Entered?

Now, taking it to the next level, you might be asking what happens if custody, visitation, child support and/or spousal support orders have been entered before you reconcile?  Well, the first thing to do is figure out what kind of orders they were.  Were they pendente lite orders (orders entered after a short hearing just to determine what arrangements will be while your case is pending) or final orders?  If they were pendente lite orders, you can simply withdraw (or non-suit) the case in which those orders were entered, and by operation of law pendente lite orders terminate the moment their case terminates.  If they were final orders (say, from the J&DR Court), however, you will need to actively terminate the orders.  To do this, you will need to file a petition with the court that issued the order(s) (unless venue was transferred by the order(s)) seeking a modification based on a material change in circumstances, and then submit an agreed order terminating the order(s).

Again, the issue here, much like with agreements, is primarily protection if things go wrong down the line.  If you are reconciled for five years but then split again, you don't want to have to prove that you adequately supported your child while you were all living together to make up for your not directly paying the ordered child support.  You may be able to defend against the back support claim, but it's not a guarantee - and it could get very expensive in legal fees.  It's always safer to just not have a lingering order.

What if We Divorced?

Sometimes a reconciliation doesn't happen during the divorce process.  Sometimes it takes that time fully and completely away to realize that you've made a mistake, or that you've each grown.  So, yes, we do sometimes see reconciliations of couples that have already completed their divorce.

What you need to do in this event is going to be largely similar to the prior section, except that you almost assuredly only have final orders in place, not pendente lite orders.  Moreover, if you re-marry, any spousal support obligation would terminate at that point.  However, custody/visitation and child support orders would not, and still need to be taken care of.

There is an additional concern also at this point with property.  If you never transferred any real estate or similar property prior to your divorce, then upon your divorce you became tenants in common in any real property.  If you get re-married, this does not get automatically undone, you will need to actively re-title your property in order to become tenants by the entirety again.  Additionally, any accounts, retirement funds, life insurance policies, etc. in which you named your spouse as your beneficiary had those beneficiary designations automatically revoked at the time of your divorce.  Even if you never notified the companies of the change, you will need to re-filed your beneficiary designations in order for your spouse to again be your beneficiary.

Finally, when you divorce, if you divided any retirement accounts, it is likely that you had an Order or Orders entered to effectuate that division (frequently called Qualified Domestic Relations Orders, or QDROs).  For any defined contribution plans (401(k)'s, etc.) the division has likely already been completed, so you each now have your own accounts - it's fine to keep things that way.  For defined benefit plans (pensions, etc.), however, you will need to get an Order entered terminating the prior division Order, and get that new Order to the account administrator.  Otherwise, when you retire, you might be surprised to have money taken out and sent to your spouse.  While if you are still together at that point it may not matter, it would still be an inconvenience, and there can be administrative expenses involved - better to get that taken care of now.

Conclusion

The best news I can get as a divorce attorney is that my client and his or her spouse have found a way to work things out and have reconciled.  Nonetheless, my work does not end there, as I still need to ensure my client protects himself or herself and takes the legal steps necessary for the reconciliation to be smooth and complete.  As always, the smartest thing you can do if you are reconciling and aren't sure what your legal needs and obligations are as a result would be to consult an attorney.  If you have been going through a divorce (or are already divorced), are planning to reconcile, and want to know what you legally need to be doing, feel free to review our initial consultation policy above and then to shoot me an e-mail at SLeven@thebaldwinlawfirm.com or call (703)281-0134 to set up a consultation.  Our initial consultations are free for up to half an hour!

Why the New Tax Law Makes 2018 the Year to Get Divorced!

As always, before reading this post, please review my disclaimer by following the link at the top of this page or by clicking on this link.  As always, any legal principles discussed apply only to the Commonwealth of Virginia.

UPDATE (4/27/18):  The proposed law in the General Assembly mentioned below did not pass in 2018.  As a result, as far as I know, there is currently no plan to review or revise the child support guidelines in Virginia as a result of the potential impact of the tax law on spousal support.  The General Assembly will likely consider this again in 2019.

Introduction

"In this world nothing can be said to be certain, except death and taxes."  Benjamin Franklin's wise words, written many years ago, seem to resonate even stronger these days.  Taxes impact a shockingly large percentage of what we do in life - everything from our charitable donations to housing decisions to career and business choices.  It should be no surprise, then, that taxes play an outsized role in divorce cases as well.  It also should not be too surprising that when the Republican tax bill was passed into law late last year, the far-reaching bill included provisions ready to wreak havoc on divorce law.

The most obvious way that the tax law impacts divorce is in the field of spousal support (alimony).  Prior to the new tax law, spousal support was considered taxable income to the payee and tax deductible to the payor, unless the parties agreed otherwise.  The new tax law changes this - spousal support will now become like child support, neither taxable to the payee nor deductible to the payor.  This change, however, is not as simple as it seems.  It will make divorce cases harder to settle, child support and property decisions more complicated, and will squeeze the financial resources of already resource-squeezed divorcing families.

However, there are two twists.  While most of the tax law went into effect beginning January 1, 2018, the change to spousal support does not go into effect until January 1, 2019.  This means we know this change is coming in advance.  The second, even more important twist, is that pre-determined spousal support is grandfathered.  This means all spousal support paid as a result of an order entered prior to January 1, 2019 will still be deductible to the payor and taxable to the payee after January 1, 2019.

In family law, we routinely try to discourage couples from moving too fast.  Divorce is a major life decision, and not one to be taken lightly.  But, we family lawyers would be doing a disservice to our potential clients if we did not make this abundantly clear - if you are contemplating a divorce, 2018 is the year in which to do it.  Beginning in 2019, divorces will be harder, more confusing, more financially draining, and less likely to settle.  If you're thinking of getting divorced - the time has probably come to make a decision.

"Grandfather" Clause

Rules and regulations about the new tax law are still being written, so read this with the caveat and understanding that some of this is still subject to change, but here's the basics.  All spousal support orders entered on or after January 1, 2019 (with the exception of modifications mentioned below) will be subject to the new rules - the support will not be taxable to the payee nor deductible to the payor.  These orders include not only new divorces, but modifications of existing spousal support orders (again with the exception of what is noted below).

So, all spousal support orders entered prior to January 1, 2019 will be subject to the old rules for so long as that order is in effect - meaning support resulting from those orders will still be taxable to the payee and deductible to the payor until the support is modified or ends.

All spousal support orders resulting from an agreement entered prior to January 1, 2019 will also be subject to the old rules for so long as that order is in effect - meaning support resulting from those orders will still be taxable to the payee and deductible to the payor until the support is modified or ends.

Finally, all modifications of spousal support agreements or orders that were entered prior to January 1, 2019 will be subject to the old ruled unless the modification order or agreement states otherwise.

So, the new rules will apply to all new spousal support orders and agreements entered after January 1, 2019 and all modifications to old agreements or orders that specifically state the new rules apply.

Beginning January 1, 2019, the old rules will still apply to all spousal support orders and agreements that were entered before and have not been modified since January 1, 2019, and to all modifications since January 1, 2019 to old spousal support agreements and orders that did not specify that the new rules apply.

Impact on Settlement

The old tax treatment of spousal support is a friend to many family law attorneys trying to settle cases.  This is because when parties cannot agree on how a piece of property is to be divided, it is quite common to turn to spousal support as the solution.  Instead of financially dividing the property directly, the higher earning spouse agrees to pay a certain amount of spousal support to the lower earning spouse in exchange for the lower earning spouse waiving his or her right to the property.  The higher earning spouse will frequently end up paying on net less than he or she would have for a straight property division while the lower earning spouse will frequently end up receiving on net more than he or she would have for a straight property division because the higher earning spouse's additional tax savings from the spousal support will be greater than the lower earning spouse's additional tax liability due to the varied tax brackets.

Moreover, the old tax laws made spousal support much easier to settle on its own.  Higher support amounts were always more palatable to a payor when he or she knew that they would be deducting that money from their taxes.  A payee may now not have to set aside funds for estimated taxes, but the lower spousal support amounts likely to result will often mean the payee will have to choose between accepting less money than he or she needs, or fighting it out in court.

Impact on Child Support

At first blush, a change to the tax treatment of spousal support does not seem like it should impact child support at all.  However, if you know how child support is determined, you quickly realize this isn't the case.  As you probably already know, in most cases child support is determined by a set of state-sanctioned guidelines.  One of the inputs for the guidelines is the income of each parent.  However, of relevance to us, the guidelines also consider spousal support - spousal support being deducted from the guidelines income of the payor, and added to the guidelines income of the payee.

There is a problem with this going forward, however.  The child support guidelines are based on gross income.  That is, income before taxes.  In a world where spousal support is deductible to the payor and taxable to the payee, the guidelines' treatment of spousal support makes perfect sense - spousal support in that world really is a change to the parties' gross income, so it should be treated accordingly.

In the new world, spousal support is instead a change to the parties' net income.  If it continues to be treated the same way by the child support guidelines, this will be unfair to the spousal support payor because the gross income impact of his or her spousal support payment is now a larger decrease than the support payment itself, but only the net income impact would be getting deducted from his or her income (and similarly, the payee gets a bit of a windfall, since the gross income impact of his or her spousal support payment is now a larger increase than the amount of support itself, but only the net amount is being added to their income).  If spousal support is removed from the child support guidelines altogether, this would be even more of a windfall to payees, unless the formula used in the guidelines were changed, which would then unfairly impact the families where there is no spousal support involved.

The most logical way to handle this, then, would seem to be for spousal support to continue to be handled the same way, except have it increased by a certain percentage when plugged into the guidelines.  Setting that percentage would be challenging, however.  The General Assembly seems to recognize this, and is currently considering HB 1331 which, if passed, will require the state's Child Support Guidelines Review Panel to conduct a review of the guidelines outside their usual every four year window.  The purpose of the review would be to propose any changes necessary to bring the guidelines into compliance with federal law, which mandates that the guidelines determine child support "appropriately."  However, the report on this review would not be due until November 1st, and any resulting legislation would likely not come into force until well into 2019.

What this all means is that, unfortunately, for some time going forward, more child support cases are going to likely have to get into deviations from the guidelines (deviations based on "tax consequences" are allowed by the Code), which, like in the previous section, likely means more costly litigation, and less settling.

Impact on Total Finances

Imagine a spouse who earns enough money to be in the 28% tax bracket and one who is in the 10% bracket.  The higher earning spouse pays $24,000 a year to the lower earning spouse in spousal support.  Under the old law, the higher earning spouse would save $6,720 in taxes because of spousal support, while the lower earning spouse would owe $2,400 in taxes because of spousal support.  This means that there was effectively an extra $4,320 available to the family unit because of tax law.

Under the new tax law, that $4,320 is gone.  The higher earner gets no savings from taxes.  In order to effectively pay the same amount, the spousal support would have to be reduced to $17,280 a year.  However, in order for the lower earner to effectively receive the same amount, spousal support would have to be $21,600 a year.  I've already discussed how this disparity is going to make cases harder to settle, but even after they do settle or resolve in court you've still got a problem - no matter what, under the new law, one or both former spouses will end up with less money than they would have under the old law.  When considering that divorcing families are already frequently in financial distress, this backdoor tax increase will create a real hardship for many divorcing families.

Why 2018 May be the Year to Get Divorced

All of this comes together to reach my ultimate point.  We know this change in law is coming, but there is a way to avoid the difficulties settling, the complicated child support calculations, and the loss of combined financial resources - get divorced in 2018.  Because of the grandfathering of the law, if you get divorced this year, you can still take advantage of the old law's tax benefits, before they disappear.

As I state in the intro, I never want to rush anyone into divorce.  But the reality is that if your goal is to keep as much money as possible within the family, avoid unnecessary litigation costs, and keep things simple - you're far better off divorcing in 2018 than in 2019.

Conclusion

The new tax law is set to make a major impact on divorces across the country.  No change is likely to have a greater impact on family law than the change in the tax treatment of spousal support.  Among other potential impacts, it will make settling cases harder, child support more complicated, and reduce the total amount of money available to divorcing family units.  Overall, it makes 2018 a financially superior year to get divorced than 2019 and beyond.  If you are thinking about a divorce, and the tax law has you ready to make your decision, feel free to read our initial consult policy, then call (703)281-0134 or shoot me an e-mail at SLeven@thebaldwinlawfirm.com to set up an initial consultation.  Our initial consultations are free for up to half an hour.

Short Topics - Virginia Law on Lease Non-Renewals, Terminating Child Support, and more

Before reading this post, please review my disclaimer by clicking on the link above or by clicking on this link.  As always, any legal principles discussed apply only to the Commonwealth of Virginia.

Introduction

Quite often, I will put up a blog post that breezes over a sub-topic of sorts, noting that the true details of that issue probably warrants a post of its own.  It shouldn't be surprising, though, that often times on the opposite end of the spectrum I get questions or encounter issues that I'd love to discuss on this blog, but are issues that also have relatively short answers and don't really warrant their own blog post.  Over the three and a half years I've been doing this blog so far, those topics have added up, so I'm hoping to finally put together a series of posts addressing a number of those "short topics" - ideas that warrant discussion on my blog, but probably don't warrant their own dedicated post.

Today's blog post will cover settlement issues in a multi-defendant lawsuit, divorces where one spouse's location is unknown, termination of child support, and refusals to renew a lease.

What happens if you're one of several people being sued and the other side offers a settlement, but you're the only one that wants to accept it?

So, we all know that in a lawsuit, multiple people can be sued at the same time for the same thing.  Just because you're all co-defendants in a lawsuit, however, doesn't mean you get along, or are united in your case strategy.  If the plaintiff offers a settlement proposal and your co-defendants don't want to accept it but you do, what can you do?

Well, first understand that if the proposal is presented to all of you, then that specific proposal must be accepted by all of you to be valid.  However, you could take several approaches.  You could personally make a counter-offer to the plaintiff offering to pay your share of their offer in exchange for your personal removal from the case.  Alternatively, you could agree to pay the entire amount of their proposal, and have the whole case dismissed.  The first option is much less expensive for you, but also less likely to be accepted.  The second would almost definitely be accepted, and there would be nothing your co-defendants could do to stop you.

However, without reaching your own personal agreement with the plaintiff, there is nothing you can do to force your co-defendants to accept an offer.

My husband left and I have no idea where he is - how do I get divorced?

Most people are aware that a divorce is a form of legal action and that in order to start a legal action you need to "serve" the other side with papers.  The historic reason for this is that service of process is how the court gains personal jurisdiction over someone - in other words, how the court gains power over a person.  However, there are two types of personal jurisdiction - in personam (power over the person), and in rem (power over a "thing" or "property").

In most legal situations, you need "in personam" jurisdiction, because that's the only jurisdiction that can allow for a court order that in some way attaches to a person - affects all of their rights and properties.  A court cannot impact a person directly without having in personam jurisdiction.  However, there are situations where the real issue is a specific piece of property, but not necessarily a person, that can be brought under the court's control, and so that property is all the court needs jurisdiction over.  Some examples of cases involving in rem jurisdiction would be a case to determine the legal owner of a disputed piece of property or civil asset forfeiture cases (where the government seeks to seize specific property that has allegedly been used in the commission of a crime).

This is all relevant because a person's marital status itself has been determined to be a "thing" subject to in rem jurisdiction - meaning that a court can decide a person's marital status without having personal jurisdiction over both parties to the marriage.  This is important because the rules for service of process for in rem jurisdiction are different.  In Virginia, a court has the power to grant you a divorce even if you don't know where your spouse lives so long as you pursue service by means of an "order of publication" - an order that mails the pleadings to your spouse's last known address and publishes notice of the proceedings in a local newspaper for four weeks in a row (you can sometimes find these legal notices in the classified section of your local paper).  Once you complete an order of publication, the court can grant you a divorce without your spouse's appearance.

Now, to be clear, the court can only grant you a divorce.  It cannot grant you support nor can it divide your marital property (though that can be done via other procedures later, at least for property that is titled in your joint names).

My kid turned 18 and graduated high school - why am I still paying child support?

In Virginia law we have a concept known as "self-executing" and "non-self executing" provisions of support law.  A self-executing provision is one where support changes or is eliminated upon the happening of some event and no further court involvement is needed.  A non-self executing provision calls for changes after a certain event, but you must get a court order first.  The basic distinction is this three part question - is the fact that the event has occurred relatively indisputable and unopen to interpretation, is what the resulting support should be also relatively indisputable and unopen to interpretation, and is support paid directly without the involvement of third parties?  If the answer to all three parts is yes, the provision is probably self-executing, but if the answer to any part is no, then the provision is not self-executing and a new order is needed.

When it comes to terminating child support there is only one (normal - I'm not getting into bizarre exceptions here) situation in which its termination is self-executing: when the child is 18, has graduated from high school, is your only or youngest child with the other parent, and you are paying your support directly to the other parent.  In virtually all other situations, child support termination is not self-executing.  Let's break down the reason why.

Well, to start with, the one example given above is self-executing because your child's age, status, and sibling status should all be relatively indisputable, and if they are your youngest child with the other parent, then support should be $0.  However, if you are not paying directly, that means there's been an Income Deduction Order entered by either the court or DCSE.  Your employer is thus under a court-ordered obligation to pay the support, and cannot stop until he or she has received a new order saying otherwise.  As a result, if all of the above conditions apply except that you are not paying directly, you need to go to the source of the Income Deduction Order (the court or DCSE) and get a termination order entered.  You must also do so ASAP, as money improperly paid under the Income Deduction Order before it is terminated cannot be recouped.

The other changes from the above, simple scenario, are a bit more obvious.  If it's not your youngest child, then you still owe child support, and since the Virginia guidelines are not a "per child" guideline, the new support number is not inherently obvious.  Similarly, if they have just turned 18, or just graduated from high school, but not both, the support termination condition has not been met yet.

My landlord of 20 years has decided not to renew my lease - I've done nothing wrong, how can I fight this?

I get this inquiry a lot and unfortunately, the answer is usually "nothing."  The simple reality is that when you rent, the property you are renting belongs to your landlord and as long as they do so in accordance with the terms of their lease, they can terminate the lease for any reason they want or no reason at all.

Now, the two big defenses to a lease non-renewal are discrimination and retaliation.  Federal law bans housing discrimination on the basis of the "protected classes."  In general, if you have reason to believe your lease is not being renewed due primarily to your race, color, nationality, religion, sex, marital status, status as a veteran (namely discrimination against you for being a veteran), or disability, then you should consult a civil rights or discrimination attorney.  You may not be able to force the landlord to renew your lease, but you should be entitled to fairly substantial damages.

Additionally, in both VRLTA and non-VRLTA leases now, retaliatory conduct is prohibited.  This means if you have evidence that your landlord is refusing to renew your lease because you brought a code compliance complaint against the landlord, filed a tenants' assertion or other lawsuit or otherwise made a complaint to your landlord to fix issues with the property, you organized or became a member of a tenants' organization, or you testified in a court proceeding against your landlord, you can prevent the landlord from terminating your lease or evicting you.

However, absent one of those two issues, your landlord has a right to refuse to renew your lease, no matter how good a tenant you have been.

Conclusion

I do hope to do more of these "short topics" posts in the future.  Each of the situations above are fairly complicated, even for short topics, and as always, I strongly encourage you to retain an attorney to discuss your particular needs.  If you would like to set up a consultation with me, please review my initial consult policy, and then call (703)281-0134 or e-mail me at SLeven@thebaldwinlawfirm.com.  Our initial consults are free for up to half an hour!

Pets and Divorce in Virginia: Who Gets the Dog?

As always, before reading today's blog post, please check out my disclaimer by clicking on the link above or by clicking on this link.  As always, any legal principles discussed apply only to the Commonwealth of Virginia.

Introduction

What's the most contentious issue in divorce cases that has nothing to do with kids or money?  In my experience, it's pets.  It's no secret that as American society has evolved, we've come to view our pets more and more like members of our families.  The law, however, has been slow to catch up. Nonetheless, as wills that provide for animals, concepts of "animal rights," and even animal-focused legal organizations have become more common, the issues that relate to animals have come to play a more prominent role in all fields of law.  One of the biggest areas of law that can see animals at center stage is divorce law.

Yes, a divorcing couple fighting over the family pet may, from a distance, seem silly, but is it really?  Especially for couples with no children, chances are you've poured a lot of time, energy, money and love into your pet.  No wonder you might not want to just walk away from it.  In fact, I've seen divorces where the pets were the primary issue - where a party gave up all of her rights to her spouse's retirement pension in exchange for the cat, for example, or another where the entire divorce settlement negotiation fell apart over the family horse (and no, I'm not talking about a multi-thousand dollar thoroughbred race horse here).  There is actually published case law in Virginia regarding the disposition of a family dog.

The point is, pets are taking on an increasing role in divorce law, and in today's blog post, I hope to cover some of the legal issues surrounding the distribution of pets in a divorce case in Virginia.

First and Foremost: Pets are Property

No matter how much you may love your dog, cat, or other animal, the first thing you need to understand is that by law in Virginia, pets are property.  That's so important a point that I'll say it again - by law in Virginia, pets are property.  In theory, pets should be treated no differently in a divorce in Virginia than a TV or a sofa.  Of course, theory rarely lives up to reality, and there are a number of issues that come into play that result from pets being property.

Marital Property vs. Separate Property

Let's say you marry someone who already has kids over whom they have custody.  You are married for 8 years and you absolutely dedicate yourself to your step-children and the children truly do see you as another parent.  Unfortunately, your marriage didn't work out quite as well as your relationship with your step-kids, and you divorce.  Under Virginia law, you may nonetheless be able to get visitation with, and in some extreme cases, even custody of your ex-step-children.  The same does not apply, however, for pets.

If your spouse already had a dog, for example, when you got married, and you spent your entire marriage being the only one in the house that actually took care of the dog (fed it, trained it, took it to the vet, etc.), the dog is still property, and the dog is still the separate property of your spouse.  This means if you divorce, your spouse gets the dog, period (unless you have an agreement otherwise, which I'll get to below).

One of the effects of pets being property is that the rules of determining "marital" vs. "separate" property from the Virginia Code apply.  This means that if the pet was owned by one party before the marriage, a gift to one party during the marriage, an inheritance of one party during the marriage, or purchased during the marriage with money that was itself separate property, the pet is separate property and goes with the spouse that owns the pet.  On the other hand, if the pet is purchased during the marriage with marital money, it is marital property subject to division (for more on the difference between separate and marital property, see my blog post on the issue from October 16, 2014).

Division by Agreement

Another side effect of pets being treated like property is that you can agree to pretty much anything you want to in regards to how the pet is "distributed," even if the pet is separate property, and the court will enforce that agreement.  Unlike child support or child custody and visitation, a court has no power to set aside any agreement regarding property, no matter how ridiculous it seems, unless it is susceptible to another form of attack on a contract.

As a side note, I'd point out this is one area where the fact that the pet is a living being does probably have some effect.  If you decided, for whatever reason, to agree to divide a sofa by literally sawing it in half, you'd be allowed to do that.  However, animal cruelty violates public policy, so an agreement to divide your cat by literally sawing it in half would not be enforceable.

Nonetheless, short of that kind of issue, you can do pretty much whatever you want with the pet by agreement, and the court will enforce that agreement.

Division by Court

If, however, you have a pet that is marital property, and you cannot reach an agreement on what to do with the pet, then the decision will be made by the court.  As with all issues of marital property, the court will be guided by the rules of equitable distribution laid out in Virginia Code Section 20-107.3.  This includes considering the list of factors in that Code section - in which, I would note, "the best interests of the property" is not a factor.  Of particular relevance is that the Code states "the Court may... divide or transfer or order the division or transfer, or both, of jointly owned marital property."

For a long time, all courts took this to mean that all that a court can do is award the pet to one spouse or the other and then order the other spouse to be compensated for a share (usually half) of the determined monetary value of the pet.  Of course, pets have all sorts of sentimental value, but as property, that doesn't go into the equation.

It's important to note that most judges still view the division of pets this way.  As a result, many fights have erupted over who took care of the pet the most (the contributions of each party to the "maintenance" of property is one of the explicit factors for dividing property), whether or not the pet is even marital property, whether or not one party has "title" to the pet (since a court cannot order "title" to be transferred even for marital property - only for the other spouse to be awarded a part of the monetary value) and so on.  Where the court does divide the pet, usually the party that has taken the most care of the pet will get it, but that's of course not always true.

However, some judges have taken a different view.  Several judges have now concluded that the word "may" in the Code section makes the division or transfer optional, and that the court may also elect not to divide or transfer a marital pet, and instead order the joint ownership to be maintained while awarding varying forms of possession.  What does that mean?  It means custody and visitation.  Yes, several trial judges in Virginia have ordered custody and visitation arrangements regarding pets in the past five years or so based on this reading of the law.  The judges have asserted this is allowed because a) as weird as it would be, they could do exactly the same thing for a sofa or TV if they thought it appropriate, and b) given all of the intrinsic value of a pet, determining an equitable distribution of the pet is unreasonable.

The Court of Appeals has yet to weigh in on this matter, and as a result it is not the law across Virginia, but it's worth knowing that those judges are out there, and the idea is gaining popularity.  Now, as pets are property, the "best interests" of the pets are not factors in setting that custody and visitation schedule, but nonetheless, the schedules put out by some of these judges have resembled common child custody and visitation schedules quite a bit.

All of that being said, I do want to re-emphasize once again that most judges still will distribute the pet to one spouse or the other rather than order a custody and visitation arrangement.

A Brief Note About Protective Orders

Pets' status as property has meant many bad things for pets over the years.  One of the worst has been in the context of protective orders.  We heard many stories where a protective order was entered and the estranged spouse, ex-boyfriend or girlfriend, or other abuser would do something horrific to a pet in retaliation, with little penalty.  Even worse, if the ex-boyfriend or girlfriend or the estranged spouse technically owned (either on his or her own, or jointly) the pet, they could just take the pet and disappear with it.

In response to this problem, last year Virginia became one of the first states in the country to include pets in protective orders.  This is a very small step - protective orders still cannot be taken out on behalf of pets or in response to violence against pets - but an important one.  Today, if someone obtains a protective order, they not only can require the target of the protective order to stay away from them, their home, their family members and their children, but they can also require the target to stay away from the household pets.  This means that attacking a pet in retaliation for a protective order being entered, or running off with the pet, would now violate the protective order itself, which is a criminal offense subject to more severe penalties than most animal cruelty charges.

Conclusion

While the law is always changing and developing, how to deal with pets in divorce is a very complicated and growing issue.  If you are involved in a divorce and need help figuring out what to do with the pets, please feel free to call us at (703)281-0134 or e-mail me at SLeven@thebaldwinlawfirm.com to set up a consultation.  Our initial consultations are free for up to half an hour!

Relevant Changes in Virginia Law - 2016 Edition

As always, before reading this post, please review my disclaimer by clicking on the link above or by clicking on this link.  As always, any legal principles discussed apply only to the Commonwealth of Virginia.

Introduction

I believe I have mentioned before that one of my favorite parts of being a lawyer is that it keeps me on my toes because the law is constantly changing.  Everything I've written in the past could well prove false in the future with a stroke of the Governor's pen or a new appellate opinion.  While caselaw is its own monster, late April and early May is an interesting time to be a lawyer in Virginia - at this point, we know all of the new laws that will take effect this year, but they won't take effect until July 1st (except for emergency laws), so we have some time to get ready.

As I did in 2014 and 2015, I have reviewed the new laws being implemented this year that I consider relevant to this blog, and will summarize them below.  As noted, all laws listed here do not go into effect until July 1st.

Strengthening Protective Orders

One of the major legislative compromises of this session was a deal reached between Governor McAuliffe and the Republicans in the legislature regarding guns.  McAuliffe agreed to allow a finding of Attorney General Herring which ended Virginia's reciprocity with most states for concealed carry permits to be reversed in exchange for the criminalization of possessing a firearm when a family abuse protective order is entered against you.  Under HB 1391 and SB 49, it is now going to be a felony to possess a firearm if a family abuse permanent protective order has been entered against you (previously it was just a misdemeanor to buy or transport a firearm while under a permanent protective order).

Additionally, HB 610 now makes it a felony to stalk someone who holds a protective order against you, or to assault and batter such a person if the assault and battery caused any bodily injury.  Previously it was only a felony of the assault caused "serious bodily injury."

Finally, HB 1087 and SB 323 makes it a felony if you violate a protective order while possessing a firearm (it is typically only a misdemeanor to violate a protective order and there was previously no enhancement for using a firearm while violating one).  While this would seem unnecessarily cumulative with HB 1391 and SB 49, it's actually not, because HB 1087 and SB 323 apply to all protective orders, including preliminary protective orders, emergency protective orders, and non-family abuse protective orders, while HB 1391 and SB 49 apply only to final/permanent family abuse protective orders.

Child and Spousal Support for Support Prisoners

One of the oddities of support law is that the harshest tool the court has available for someone who refuses to pay support is sending them to jail - but sending them to jail will typically prevent them from making any support payments at all.  HB 428 orders any city or county with a prisoner who is in a prison work program to pay between $20 and $40 per week to the Department of Social Services for them to provide as support to the spouse and/or children of the prisoners.  Obviously that's not a whole lot of support, but when you're usually getting nothing, something is still an improvement.

Legal Age for Marriage Changed

In Virginia, the law has been for some time that the legal age for marriage is 18 without parental consent, 16 with parental consent, and, in some circumstances involving pregnancy, can be as young as 14.  However, with the modern awareness that some parents don't always act in their child's best interests, and with an increasing amount of concern about coerced or forced marriage, there has been a growing consensus towards getting rid of "parental consent" marriages that could really be "parental coercion" marriages.  HB 703 now sets a uniform age of marriage in Virginia at 18, and parental consent is no longer involved.  A minor under the age of 18 may petition a court for emancipation in order to get married, in which case a judge must make a series of findings, including that there is no parental coercion (or any other kind of coercion) involved and that the minor is mature enough to make this major decision.

Spousal Support when Divorce Denied

Just a couple months ago, I mentioned that one of the major divorce uh-ohs is not requesting spousal support in your pleadings, and I noted that you should include such a request in all of your initial pleadings, in case one gets struck.  This was based on a case from 2014 where a woman had her complaint for divorce struck when she failed to prove her grounds of divorce, and then the divorce was granted based on her husband's counter-claim, where he did prove his ground.  The woman requested spousal support in her complaint, but not in her answer to the husband's counter-claim, and the husband did not say anything about spousal support in any of his pleadings.  The Court of Appeals held that since the woman failed to prove her grounds of divorce and her complaint was struck, her entire complaint was gone, including the request for spousal support, and she was stuck with nothing.

The General Assembly decided this was unfair and has now enacted SB 71.  SB 71 provides that if a party fails to prove their ground of divorce and their complaint or counter-complaint for divorce gets struck as a result, their request for spousal support still survives.  It's still a best practice to request spousal support in all of your initial pleadings, but if you make the mistake the poor woman in 2014 did, you now have an avenue for relief.

More Spousal Support Changes

Another recent case of some controversy is one from 2013 where a husband was ordered to pay pendente lite spousal support and he did so by using funds that were unquestionably marital funds.  As a result, when it came time for the trial in the case, he had greatly depleted the marital funds available for division, while just tucking away his post-separation earnings to build up a large stockpile of separate money.  The Court of Appeals held that this was acceptable under Virginia Law, and he was in no way obligated to pay the pendente lite support using separate money without a court order saying so.  SB 70 now reverses that equation - a party ordered to pay pendente lite spousal support (or child support) must do so using post-separation earnings unless the court orders otherwise.

Additionally, the factors that are used to determine spousal support have long had an oddity - the law required that the court consider what led to the breakup of the marriage when deciding whether or not to award spousal support at all, but once the decision has been made to award support, then the cause of the breakup of the marriage is not one of the factors the court is to consider when setting the amount and duration of the support award.  Now, practically speaking, these things still got into the factors because they were often treated as either "negative non-monetary contributions to the well-being of the family" or "such other factors" as the court sees proper to consider - two things that are properly part of the statutory factors.  However, HB 668 has now expressly made whatever leads to the breakup of the marriage a factor for the court to consider when setting the amount and duration of spousal support.

Landlords Can't Kick Tenants Out in a Tenant's Assertion

The first time I ever took a tenant's assertion to trial, the landlord's attorney caught me off-guard by trying to turn one of the tenant's tools into a double-edged sword.  My client was seeking relief in the form of a rent abatement, future escrow payments, and other such remedies, but one of the remedies available in a tenant's assertion is the power of the judge to terminate the lease and order possession returned to the landlord.  This is a tool often used by tenants who both want a rent abatement and to just get out of the property because the relationship with the landlord has broken down so badly - but in this case, my client didn't want to leave for many reasons.  The landlord, however, knowing there was still almost a year left on my client's lease, thought my client was too much of a trouble maker (she was suing him, after all) and wanted her out.  In my case, the judge felt this demand was ridiculous - my client was entitled to the services she'd bargained and contracted for - but I later learned that not all judges felt this way, and this was a common tactic of landlords to get rid of troublesome tenants.

HB 1209 and SB 377 finally take this power away from landlords.  The law is now being changed such that the lease termination remedy of a tenant's assertion can only be invoked by the court if it was requested by the tenant and possession can only be ordered returned to a landlord in accordance with an unlawful detainer action.  This is one more step in the very long process to try to equalize the power between landlords and tenants in Virginia courts - although some would say there's still a long way to go.

Conclusion

To me, there's little more exciting than the routine changes in the law I practice.  But it is also my job, not yours, to keep track of these laws.  If you think that your legal situation may have changed because of a change in law, you should consider talking to an attorney.  If your situation is in a field I practice, review my initial consult policy, then call (703)281-0134 or e-mail SLeven@thebaldwinlawfirm.com to set up your consultation.  Our initial consultations are free for up to half an hour!

Virginia Divorce Uh-Ohs: 5 Big Legal Mistakes You Can Make in a Divorce

As always, before reading this post, please review my disclaimer by clicking the link above, or by clicking on this link.  As always, any legal principles discussed apply only to the Commonwealth of Virginia.

Update:  Some of the information contained in this blog post is outdated due to changes in the law.  Please review the 2018 and 2020 Relevant Changes in the Law post for details.

Introduction

I can say over and over again that family law in general, and divorce law in particular, is too complicated for most people to go it alone.  That you really should have an attorney to represent you in the divorce process.  That the cost of an attorney is generally worth it, even in "simple" cases.  Yet, time and again, we have clients walk in our doors who represented themselves for some or all of their divorces, and now want us to clean up the messes they made.

With that in mind, knowing that at least some of you still won't hire an attorney and will try to do it yourself, in today's blog post I will discuss five of the biggest legal mistakes people make in their divorce cases that I've seen, many of which cannot be fixed or undone after they've happened.  Please read and take heed.

1.  Agreeing to pay indefinite spousal support without a modification mechanism.

This is by far the most common mistake I see that people have made for which there is absolutely nothing I can do to fix it.  I deal with many people who understand that, when things change, child support can be modified, even when the child support is fixed by a signed agreement.  What many people don't realize, however, is that the same is not true of spousal support.

The Virginia Code contains a provision stating that when two parties to a divorce sign a spousal support agreement, the court is prohibited from ordering anything contrary to that agreement.  As a result, any spousal support agreement you sign is permanently binding on the court.  This means that, unless your agreement itself spells out how and when spousal support can be modified, the spousal support can never be modified without the other side agreeing to that modification.

This is important to remember, because an amount that sounds reasonable for you to pay now may not be so reasonable when you're sick, disabled, retired, laid off, or your spouse suddenly hits the $20 million lotto jackpot - but if you signed a spousal support agreement without a built in modification mechanism, then none of that matters, you're still stuck paying, and if you can't, then you could end up found in contempt of court and find yourself in jail.

This is why I've often told clients that if they are going to pay support indefinitely, they're better off getting that ordered by a court than they are agreeing to it - since court ordered spousal support can be modified.  So please, whatever you do, do not sign an agreement that commits you to pay a certain amount of spousal support without a guaranteed end date or a modification mechanism.

2.  Agreeing to pay child support for your adult child without a modification mechanism.

Your love and care for your child doesn't end when that child turns 18, so for many parents, there is a gut instinct that says their support shouldn't end then either.  So, while Virginia law terminates child support at age 18 (or, if the child is still living at home after turning 18 and is a full time high school student, then the earlier of turning 19 or graduating from high school), many parents agree to support their child past age 18 - with frequent termination dates I see being age 21, 22, or graduation from college.

While this is an admirable choice for non-custodial parents to make, the courts no longer view this support as "child support."  Once the child is no longer an age where the court can order support, all the protective mechanisms that kick in for court ordered child support goes away, including the court's power to modify support.  As a result, once the child reaches the age where the court can no longer order support, the agreement governs the support.  This means that if the child support was ever modified, it automatically reverts back to what it was set at in the agreement, and becomes unmodifiable, much like agreed spousal support.

And, like agreed spousal support, the way around this rule is to build in a modification mechanism into the agreement.  The most common one I use is "Upon the child reaching the age of majority, child support shall remain the same as it was for the last payment due prior to the child's majority, and shall be modifiable in the same manner as if the child were still a minor."  Include that in the agreement, and you're golden, but otherwise you can end up with some very wacky results.

3.  Not taking action to protect marital assets.

I'm always surprised to discover how much people think they know about divorce law vs. how much they actually know.  Rarely is this gap greater than it is in the field of post-separation use of marital funds.  I've had multiple clients walk in the door saying they discovered their spouse had spent x huge sum of dollars of jointly owned funds since separating, and asking me to get it back.  Here's the thing - the Court of Appeals says not so fast.

Under Virginia Law there are two types of post-separation uses of marital funds - proper purposes and waste.  When funds are used for proper purposes, the money is gone.  When they are wasted, then the person who wasted those funds must reimburse the "marital estate."  Note, however, there's no middle ground.  There's no "unfair" or "uneven" or "just used for one party's benefit."  If money is used for a proper purpose, even if it solely benefits one party, it's gone, and you cannot get it back.

So, what constitutes a "proper purpose"?  This is literally everything except what one would reasonably call waste (solely unnecessary expenses).  According to the Court of Appeals, "proper purposes" include things like rent, the mortgage, groceries, other living expenses, a child's school tuition (even private school and college tuition), and even paying your own attorneys' fees.  The appellate opinions on this are so strong that many attorneys, myself included, will often advise clients with no income or funds of their own to take some of the marital funds before they separate to live off of until a support arrangement can be set up.

There are actions you can take, however, to prevent this from happening.  You can get into court pretty quickly to get a judge to freeze marital accounts.  Now, if your spouse earns a lot less than you, you might get ordered to pay some support in the meantime, so you have to calculate if that is a risk you are willing to take - but you do need to understand that if you don't take steps to protect your marital assets, they could be taken, and there could be nothing you can do about it once they are gone.

4.  Failed to object to an appealable order.

As an attorney who does handle family law appeals, every now and then someone walks in my door to appeal an order they had lost on in the trial court while representing themselves.  To date, every single person in this situation who has walked in my door has shown me a final order in which they did not list any objections, and then their time to file a motion to reconsider has passed.

To appeal a case, you must show the Court of Appeals that you objected to the order at the time it was entered in a manner sufficient to allow the trial court to fix its own error before you appeal.  This can be done in two ways - either by listing your objection on the order itself, or by filing and getting a ruling on a motion to reconsider.  If you fail to object on the order itself, anything you cover in a motion to reconsider which has been denied will generally be accepted by the appellate courts, but remember that once 21 days from entry of the final order have passed, the court loses its jurisdiction to rule on the motion to reconsider, so unless a suspending order is entered, if that time runs out without a ruling on the motion, you're out of luck.  As a result, by far the safest bet is objecting on the order itself.

Objecting on the order is fairly easy.  With rare exception, you are given the option to "endorse" every order - this is where you sign at the end of the order indicating that you've read it.  Above your name, there will likely appear the word "Seen."  The simplest way to object is to write in there "Seen and objected to because [list of what you object to and why.]"  While saying "Seen and objected to" on its own is not sufficient, it is sufficient, if you have nothing else to add, to say "Seen and objected to for the reasons stated in open court."  However, no matter how good your case is for appeal, if you have no objection and no motion to reconsider ruling, you likely have no appeal.

5.  Ignoring discovery.

Once when I was about four months in to my current job, I had a potential client walk in the door to ask for representation at his divorce trial a month later.  He had been representing himself to that point, so I asked to see discovery.  When I dug in, I found he'd never sent discovery requests to the other side (it was now too late), and not only had he failed to respond to their requests, but an order had been entered forbidding him from presenting any evidence at all at trial.  Needless to say, at that point, there was little good my representation is going to do.

Discovery is serious and ignoring it has serious consequences.  Failing to respond to the other side's discovery requests and get you hit hard with court sanctions.  Failing to make discovery requests of your own can leave you with absolutely nothing to go on in court.  In short, ignoring discovery is practically just giving away your whole case.

There's not much I can add to this one but this occurs far more often than you think.

Conclusion

If you're getting divorced, get a lawyer.  There are far too many legal pitfalls and problems for most people to handle on their own.  If you don't, however, please at the very least remember these big mistakes I see all the time.  Obviously these aren't the only mistakes I see, but these are perhaps the ones that are the combination of most common and most damaging.  If you'd like to consider hiring an attorney to help you avoid these mistakes (or try to fix the ones you've already made), please feel free to call (703)281-0134 or e-mail me at SLeven@thebaldwinlawfirm.com to set up an initial consultation (although I would advise you to review my initial consultation policy first).  Our initial consultations are free for up to half an hour!

 

Annulments in Virginia - A Brief Primer

As always, before reading this post, please review my disclaimer by clicking on the link above or by clicking on this link.  As always, any legal principles discussed apply only to the Commonwealth of Virginia.

Introduction

As most middle school history students can tell you, once upon a time, divorce did not exist as a legal entity in the western world.  Instead, the only way you could end a marriage was by getting an annulment, an instrument declaring that your marriage was invalid to begin with.  As you can imagine, this was hard to do (in fact, the difficulty doing it was what led to Henry VIII splitting the Anglican Church off from the Catholic Church, directly impacting the past 400 or so years of history).

In the current age, the availability of not just divorce, but no fault divorce, makes the concept of an annulment somewhat quaint, but it does still exist under the law, and our firm does get at least a few inquiries each year about annulments.  In today's post, I will do a very brief primer on what Virginia law is regarding annulments.

Advantages of Annulment vs. Divorce

Now, your first thought might be, why bother with an annulment when a divorce is so much easier to get?  Well, annulments do offer several advantages.  Outside the legal context, annulments are sometimes necessary for you to remarry within your religious order.  Moreover, there can be psychological benefits if your marriage was toxic to having some confirmation that you should never have been married in the first place.  Within the legal realm, an annulment of a void marriage (as opposed to a voidable marriage, which I will get to in a moment) ensures that you will not be responsible for spousal support, and takes away the availability of equitable distribution of property, which depending on where you stand, can be advantageous.

Void vs. Voidable Marriages

Now, it's important to note that there are two types of annulments - annulments of void marriages and annulments of voidable marriages.  In the case of void marriages, these are marriages that were invalid the moment they were supposedly entered into.  In fact, under the law, they have no effect whatsoever, and you don't even need a Decree of Annulment to leave the marriage and remarry.  Nonetheless, a Decree of Annulment does clarify and finalize that you were, in fact, in a void marriage, that you can't later be hit up for spousal support, and that you can't be charged with bigamy if you re-marry.  A voidable marriage, however, is actually a marriage with a defect that makes it improper, but you can overcome it by either later ratifying your marriage, or simply disregarding the problem.  A voidable marriage is considered valid until a Decree of Annulment is entered, so while you can still say you've never been married before after an annulment of a voidable marriage, you cannot remarry until the annulment has been entered, and you can still be hit for spousal support and have to divide up property equitably since the marriage did create certain rights while it was valid.

So, what kinds of invalid marriages are void and what kinds are voidable?  The list is actually incomplete, as it comes from both statutory and case law, but here's a short list of some marriages that are void in Virginia:

• Bigamous marriages;
• Incestuous marriages;
• Marriages where either party is under 18 without consent of their parents;
• Marriages where either party is under 16 (with an exception for pregnancy).

As you can probably guess, prior to 2014, same sex marriages were also void, and prior to 1967, interracial marriages were also void in Virginia.

Some examples of invalid marriages that are merely voidable are:

• Marriage based on some form of fraud;
• Marriage involving at least one party that lacked capacity to consent;
• Marriage where one party was impotent at time of marriage;
• Marriage where one party had been convicted of a felony prior to the marriage without the knowledge of the other party;
• Marriage where the wife was pregnant with another man's child at the time of marriage without the spouse's knowledge;
• Marriage where another woman has the husband's baby within 10 months after the marriage and the spouse was unaware of the pregnancy at the time of marriage;
• Marriage where either party had ever been a prostitute without the other's knowledge;
• Per a very recent Virginia Court of Appeals case - marriage that was not properly licensed at the time it was entered (as opposed to a marriage not legally licensed at all, which would be void).

Fraud

So, the most common form of annulment we see is a claim of fraud.  Fraud occurs where your spouse made some kind of material misrepresentation to you prior to your marriage, that not just you subjectively, but a reasonable person objectively, would not have entered the marriage had you known the truth.  Some common examples are where the spouse claims to make substantially more money than he or she actually does, denies having any sexually transmitted diseases that he or she actually does, or claims that he or she does or does not want to have children when the opposite is true.

If you can prove that this fraud occurred, and that you would not have gotten married had the fraud not occurred, you actually do have a case for annulment (though remember, fraud makes a marriage voidable, not void, so the legal value of an annulment is limited).

Cohabitation and Two Year Marriage Rule

After all of that, however, we get to a big catch.  For most voidable marriages (not all, but most), even if you can prove your case, you still cannot get an annulment if either a) you "cohabited" with your spouse willingly after you learned of the facts that give rise to the annulment complaint, or b) you have been married at least two years.  Yes, this is even true of fraud - after two years, you can only get divorced, not get the marriage annulled, even if you don't discover the fraud until years later.

This rule is why our firm turns away most potential annulment clients - they usually have been married for two years, and no longer can seek an annulment.

Conclusion

Annulments are an ancient element of family law that is rarely available and even more rarely useful today.  Nonetheless, it is still a part of modern family law, and there are situations in which pursuing an annulment is worth your while.  If you are considering an annulment and would like to consult an attorney, feel free to call us at (703)281-0134 or e-mail me at SLeven@thebaldwinlawfirm.com (although you may want to check out my new Initial Consultation Policy page before you do).  Our initial consultations are free for up to half an hour!

Virginia Divorce and Your Retirement - What Happens to Your 401(k) When You Divorce?

As always, prior to reading this post, please review my disclaimer by clicking on the link above, or by clicking on this link.  Any legal principles discussed apply only to the Commonwealth of Virginia.

Introduction

In this day and age, saving up for retirement is a critical part of any person's career.  When you get divorced, however, your retirement savings generally do not escape unscathed.  After all, if your spouse has been staying at home to take care of the kids, allowing you to work and make substantial income, is it really fair for your spouse to get stuck with none of your retirement savings?

The law surrounding what happens to one's retirement in a divorce is very complicated.  One blog post cannot possibly hope to capture the scope of this issue, but in this post, I hope to provide a basic outline of how retirement assets are handled in a divorce in Virginia.

Retirement Benefits Earned During Your Marriage are Marital Property - With One Big Exception

First of all, like all money earned while you are married, and property purchased with money earned while you are married, retirement benefits earned while you are married are marital property, and subject to division by a divorce court.  There is one big exception to this, however, and that is Social Security benefits.  Your Social Security benefits are always your separate property (this is by mandate of federal law), so a divorce court cannot touch your Social Security.

Now, you might already be thinking of some questions.  How do I determine what benefits were and weren't earned during the marriage?  What time period counts as "during the marriage"?  How does a court determine how to divide those benefits?  Moreover, since I can't touch my retirement until I'm a certain age, how does a court physically divide those assets?

The Basic Rules for Dividing Retirement Benefits

Well, first of all, the basic rules for dividing retirement benefits are laid out in the Code of Virginia - specifically Section 20-107.3(G)(1), where the Code states that "upon consideration of the [equitable distribution factors]...  the court may direct payment of a percentage of the marital share of any [retirement account]... the court may only direct that payment be made as such benefits are payable.  No such payment shall exceed 50 percent of the marital share of the cash benefits actually received by the party against whom such award is made. 'Marital share' means that portion of the total interest, the right to which was earned during the marriage and before the last separation of the parties, if at such time or thereafter at least one of the parties intended that the separation be permanent."

So, let's parse all of that out.  The first part tells us that retirement assets are divided upon consideration of the equitable distribution factors listed in Section 20-107.3(E).  So this tells us that the division of a retirement account is, generally, subject to the same rules as division of all other marital property - meaning there is no automatic 50/50 division of the property, rather the court must decide what is fair based on the list of factors.

The next part just tells us that the court can divide retirement accounts.  After that, we see that the court cannot require those benefits to be paid until they are actually payable - so you can't face a penalty for having an early withdrawal from a 401(k) since the court cannot force you to make such an early withdrawal.

Next, we see a requirement that the non-owning spouse cannot be awarded more than 50% of the marital share of the benefit.  This is an important difference between how retirement benefits and other marital property are divided.  While the court may generally conclude that the 20-107.3(E) factors warrant your ex getting 65% of the marital property, the court cannot award your ex more than 50% of the marital share of your retirement account.

Note also that the rule does not restrict the other direction.  In other words, if the court determines that the factors under 20-107.3(E) warrant your ex only getting 35% of the marital property, then the court also has the option to only award your ex 35% of the marital share of your retirement benefits.

Finally, the section tells us that the "marital share" of those benefits is the rights in the benefits that are earned between the date of marriage and the date of separation (not the date of divorce), so all benefits earned after the separation are your separate property.

How to Calculate the Marital Share

So, saying how the marital share is defined is one thing - actually calculating it is quite another.  So, what does all the legal jargon about "that portion of the total interest, the right to which was earned during the marriage" actually mean?  Well, it depends on what type of retirement account you are referring to.

There are two types of retirement accounts - defined contribution plans, and defined benefit plans.  A defined contribution plan is a plan where you contribute certain amounts over time, and then, within certain rules, once you reach a certain age you withdraw what you want to withdraw.  Examples of defined contribution plans are 401(k)'s, federal Thrift Savings Plans, and IRAs.  A defined benefit plan is one where, upon certain conditions being met, you become entitled to certain regular payments for the rest of your life (or until a set time).  Examples of defined benefit plans are your standard pensions, retirement annuities, federal FERS and CSRS benefits, and Virginia state VRS benefits.

For defined contribution plans, the marital share is all contributions made between the date of marriage and the date of separation, plus all earnings and losses attributable solely to those contributions.

For defined benefit plans, the marital share is usually defined by a formula.  You take the total number of months (a) between the date of marriage and date of separation, and (b) where you were employed by the employer whose plan you are dividing, and then divide that by the total number of months you were employed by the employer whose plan you are dividing (both during and not during the marriage).

An example would be that if you began work for an employer with a defined benefit plan on January 1, 2010, got married on January 1, 2011, separated on January 1, 2012, and left that employer on January 1, 2013, your numerator would be 12 (total months you were employed during the marriage), and your denominator would be 36 (total months you were employed), for a fraction of 1/3.

Similarly, if you got married on January 1, 2010, began work for an employer with a defined benefit plan on January 1, 2011, separated on January 1, 2012, and left that employer on January 1, 2013, your numerator would be 12 (total months you were both employed and married), and your denominator would be 24 (total months you were employed), for a fraction of 1/2.

Once you get your fraction, you then multiply it by your periodic payments, to give you the portion of those payments that is marital.  This is not the portion your spouse gets - it's just the portion that is marital.  That is the portion that gets divided.

How do courts physically divide the retirements?

So, this probably sounds very complicated, especially if you have to do it yourself.  Moreover, since the benefits can't be kicked in until you'd normally be eligible, you might be wondering if you have to keep this in mind for potentially decades, then meticulously calculate a division of each payment.  Fortunately, you do not - rather, the Court will enter an order directing your retirement benefit administrator on how to divide your retirement assets.  It is then on your administrator to make sure it is done properly.

A federal law called the Employee Retirement Income Security Act of 1974 (ERISA), which has been amended multiple times since 1974, creates a large number of protections for retirement accounts, and also provides the means of dividing most retirement accounts.  ERISA creates a concept known as the "Qualified Domestic Relations Order" (QDRO, generally pronounced like "quad-row").  QDROs are universally recognized orders that, if they meet certain conditions, will require a retirement administrator anywhere in America to properly divide a retirement account.

For defined contribution retirement plans, the QDRO will lay out the relevant dates, and then require the plan administrator to calculate the marital share, divide the marital share, then take the other spouse's portion of the marital share and open a 401(k), IRA, or other equivalent account in that spouse's name with the funds.  Once the new account has been created and the money removed from one and put in the other (known as the funds being "segregated"), the process is complete and you are back to having complete control of your account.  No penalties are given for early withdrawals, taxes, etc.

For defined benefit plans, the QDRO will contain the formula mentioned above, and the plan administrator will retain that until the denominator is determined (since you may still be working at that employer when you divorce).  Once the denominator is determined, the administrator will determine the share of funds your ex will be entitled to, and once you retire and start earning funds, the account administrator will divert your ex's share directly to your ex.

Note, however, that ERISA does not apply to federal employees.  As a result, federal retirement plans are divided by what is known as a "Court Order Acceptable for Processing" (COAP).  Rules for COAPs are put out by OPM on a routine basis.  Note that TSPs and FERS/CSRS plans have different administrators, so you will need a separate order for division of a TSP and for division of a FERS/CSRS plan.

Finally, the State Department and military each have their own systems separate from the rest of the federal government.  The military will divide military retired pay via an allotment, which can be done if the proper language is included in the Final Decree of Divorce itself.  State Department retirement plans must be divided per State Department rules.

Conclusion

Remember how I said at the beginning of this post that retirement division is far too complicated a topic for one post?  Then do you see how complicated this post was?  Well, I stand by what I said at the beginning - this post is only a basic overview.  Once you get into the details, it gets very muddy.  If you are involved in a divorce and there are substantial retirement assets involved, I cannot strongly enough recommend that you get an attorney.  If you would like to discuss your case with an attorney, please feel free to call (703)281-0134 or e-mail me at SLeven@thebaldwinlawfirm.com to set up a consultation.  Our initial consultations are free for up to half an hour!

Violating Court Orders in Virginia Family Law Cases - What Happens Next?

As always, before reading my post please review my disclaimer by following the link above or by clicking on this link.  As always, any legal principles apply only to the Commonwealth of Virginia.

Introduction

One of the harshest realities that family law clients face is that just because a court orders your spouse, ex-spouse, significant other, etc., to do something doesn't mean he or she actually will - and unless you take action, their violations will go entirely unpunished.  The result of this is that I often get clients come to me with an old order that's been violated for years and ask me why the court hasn't done anything - when in reality, they also have done nothing, and at this point it may be too late.

In today's blog post, I will discuss what to do if your ex is violating a family law order, some considerations to think about, and what can happen as a result of your actions.

Orders vs. Judgments

I have covered before the difference between orders and judgments - including the basic rule that a judgment does not require anyone to do anything, while an order does.  I believe I have also mentioned that in a family law context, almost all orders made by the court are orders, not judgments.  As a result, if you are dealing with a family law ruling - custody/visitation order, an order dividing property, ordering support to be paid, etc., the odds are you are dealing with an order that actually requires each party to take certain actions.  Additionally if you had a property settlement agreement that was incorporated into a court order, you are also obligated by order to follow that agreement.  This means failure to follow the order is contempt of court, and as a result the violator can face some serious penalties as long as the right procedures are followed.

Orders are not self-executing

That all being said, orders do not take care of themselves.  If the parties violate an order, nothing happens unless the other party does something.  There's a practical reason for this - the court simply cannot police its own orders, but also a logical one - if you both don't like an order and can agree to do something differently, why should the court interfere with that agreement?

The result of all of this means, again, if your ex violates the order, it's on you to do something about it - it won't just take care of itself.  There is a slight exception that if your support is being collected by DCSE, DCSE might take action, but it is no way guaranteed that they will.

So, what should you do?

Realistically, the first step to take is to go to an attorney.  There's a decent chance you will get an award of your attorneys' fees as a result of the action you take, but even if you don't, an attorney is going to know best how to compel your ex to comply.  The most common approach is to request that the court issue a "Rule to Show Cause."  This is an Order that requires the other party to appear before the court and defend their actions, and if they cannot do so, they will be held in contempt of court.

What happens if they are found in contempt?

So, if your ex is found by the court to be in contempt, the court has a wide range of options at its disposal.  It can enter a monetary judgment against your ex (meaning you can then garnish his or her wages to collect what you are owed), it can order your ex to pay fines, it can even sentence your ex to jail time.  Most violations of court orders have a maximum sentence of ten days, but failure to pay support can result in a sentence of up to a year in jail.  Frequently if someone is sent to jail for non-payment of support, the court will set a "purge" amount - an amount less than what they owe, but still a significant amount - that they can pay you to at least get out of jail.  You'd be shocked how many people who "don't have the money to pay" find the purge money all of the sudden when facing serious jail time.

Typically, you will also be awarded your attorneys' fees in pursuing the contempt charge, and continuing violations of the order can be re-raised for new contempt charges since continuing to violate the order would be considered new violations.

What if they don't show up?

Of course, all of this depends on their showing up for court on the Rule to Show Cause.  If they don't show up, however, and they were served personally with the Rule (rather than served via a family member or posting on their front door), then the court can find them summarily in contempt based on just your evidence.  Moreover, the court can issue a "capias," which is a warrant authorizing their immediate arrest to be held until they answer for the charges raised.

Right to counsel

An important side note is to understand that, as a contempt proceeding is quasi-criminal and your ex faces potential jail time, if your ex actually is indigent, he or she will be entitled to have the court appoint an attorney for them.  As a result, you cannot use a Rule to Show Cause to take advantage of the fact that your ex does not have a lawyer.

Some considerations

In general, contempt of court is a serious charge, and courts are not going to have patience for someone being brought in front of them for petty violations.  As a result, if your ex shorted you $5 on support one month, that's probably not worth a Rule.  Nonetheless, a series of petty violations may add up to a not so petty violation, and then you can bring a Rule for all of them.

Another consideration is that support has a statute of limitations.  Support automatically becomes a judgment when unpaid, and in 2011 the Virginia Supreme Court ruled that this meant that the 20 year statute of limitations on collecting judgments applied.  As a result, if unpaid support is more than 20 years old, you are out of luck.

Additionally, an order becoming impossible to follow is also a defense against contempt.  So, if you don't go after your ex until they are broke and unemployed, or until the car they were supposed to sign over to you has been destroyed in a wreck, you may be out of luck anyways.

The end result is, while you probably should let minor violations go, when a not so minor violation occurs, you really should not sit on your rights - you need to take action right away.

Conclusion

There are few things more frustrating than sitting there, doing what you are supposed to do, while your ex flagrantly refuses to do the same.  Even more frustrating, though, is that if you do nothing about it, your ex will get away with it.  A lawyer will have the best idea, however, of how to compel your ex to comply.  If you have a family law order that your ex is violating, please feel free to call (703)281-0134 or e-mail me at SLeven@thebaldwinlawfirm.com to set up a consultation.  Our initial consultations are free for up to half an hour!

Virginia Uncontested Divorces: When the Fighting is Over

Before you read this blog post, please review my disclaimer by clicking the link above or by clicking on this link.  As always, any legal principles discussed apply only to the Commonwealth of Virginia.

[UPDATE:  Some information contained in this blog post is no longer accurate due to subsequent changes in the law.  Please see my changes in the law blog post for 2019 for more information.]

Introduction

Given the entire industry of family law and the horror stories we hear about cripplingly expensive divorces, you might be surprised to learn that most divorces are short, simple and relatively cheap.  Generally speaking, divorce tends to be more likely to go to a contested trial than other areas of litigation, but that's because there are, in many cases, about five areas in which there are potential issues to dispute (grounds of divorce, property division, spousal support, child support, and child custody/visitation) - so while each of those five areas is about as likely to settle as any other type of litigation, settling all five in one case is much more challenging.  That being said, divorce cases being "more likely" to go to trial is not the same as saying divorce cases "generally do" go to trial - they do not.  Most cases ultimately do settle completely - it's just, in my experience, closer to 60-65% of divorce cases, as opposed to about 85-90% of other types of cases.

So, what happens if, despite the hurt feelings and all the emotions that caused your marriage to end, you find yourself in a situation where you and your soon-to-be ex actually are in agreement on the five issues I listed above?  In today's blog post, I hope to cover the basics of obtaining an uncontested divorce in Virginia.

First, Get it in Writing

If you are in agreement on everything, it would be to everyone's benefit to get it in writing.  Technically, you can do this on your own - write down your agreement, each of you signs it in front of a notary public, and suddenly you have a binding marital agreement (see this post for more on marital and pre-marital agreements).  That being said, there are many ways that you can screw up putting this together, so it's always best to have a lawyer draft your agreement (typically referred to as a "separation agreement").

So, why have a signed agreement?  Well, first of all this allows you to get divorced faster if you do not have children (after six months of separation instead of a year).  Moreover, this prevents your spouse from backing out of your agreement at the last minute, as separation agreements are very hard to challenge.  Finally, it provides clear guidance to attorneys, courts and each spouse going forward as to what is supposed to happen - much clearer guidance than you typically get without a written agreement.

Next, Wait the Requisite Time Period

If you do not have children and you have a signed separation agreement, you can get divorced after six months of separation.  If you do have minor children or do not have a separation agreement, you must wait until you have been separated for a year.  In either case, you cannot take further action to get divorced until that time has elapsed.  During the waiting period, however, you can start getting your ducks in a row so you can complete the remaining steps as quickly as possible.

Identify a Corroborating Witness

To complete your divorce you will need someone to "corroborate" your eligibility for divorce.  This should be someone who is not you or your spouse, who knows both you and your spouse, knew when you and your spouse separated, and has visited you in your home at least several times since your separation.  Your corroborating witness can be any adult other than you or your spouse, so it does not matter if they are "biased" (such as a parent, sibling, or adult child).  It is best to talk to your corroborating witness as soon as possible to make sure they are comfortable serving in that role.  Let them know they will not need to come to court and will just be signing an affidavit.

File Your Paperwork in Order

Once the time period for separation has passed, it is time for you to file.  It is very important that you file your paperwork in Order however.  The paperwork you will need to file in court is as follows (and in this order):

• Complaint for Divorce (initiates the divorce suit)
• Acceptance/waiver of service of process and notice signed by your spouse (allows divorce to proceed faster)
• Affidavits for divorce signed by you and your corroborating witness
• Completed Virginia State Form VS-4
• Final Decree of Divorce signed by you (or your attorney) and your spouse

Note that the Acceptance/waiver, affidavits, VS-4 and Final Decree can all be filed at the same time - only the Complaint has to be filed first.  The above order must be followed, however, if you do not file the other documents at the same time.  If you file all of those documents, in that order, and they are completed properly, your divorce should proceed without you or anyone else ever having to appear in court.  You will probably have to wait about two or three weeks for your Final Decree to get in front of a judge, but then it should be signed and mailed back to you (assuming you provided the court with a self-addressed, stamped envelope).  That's it - you are divorced.  Note, however, that under Virginia law you cannot get re-married until 30 days after your divorce is entered.

Why Hire an Attorney

So, the above process probably seems simple enough - so why hire an attorney for it?  Well, because as simple seeming as it is, it is very easy to screw up if you are not familiar with the process.  In fact, I have many clients come to me with cases they filed where their divorce got rejected, and often their case is so messed up by the time it gets to me I have to close their original case and start over from scratch - which is typically more expensive than if they had just come to me in the first place.

So, what's so easy to screw up?  Well, it's easy to have a separation agreement that doesn't actually cover everything it has to, or leaves important matters out.  It's easy to not include all the statutorily required statements in the Complaint, Acceptance/waiver, affidavits, or Final Decree (the affidavits and Final Decree are the toughest since there are things that are required by law to be in them that many people do not know about).  While you can often get samples from your local courthouse, they usually are not perfect, and moreover, they usually do not include sample affidavits, meaning you will have to go to court for what is called an ore tenus hearing, rather than proceed with a simple affidavit.

On top of it all, an attorney for an uncontested divorce is much cheaper than an attorney for contested divorces.  Attorneys typically charge flat fees for uncontested divorces - and depending on the complexity of the case, these fees can be as little as $600 (though $1,200 or so is more common, with up to $2,000 or so for more complicated cases that require drafting and negotiation of a separation agreement along with filing of the divorce itself).  Compare this to the $15,000 to $75,000 that a typical contested divorce runs (with atypical contested divorces I have heard of running as high as $250,000 to $500,000 in legal fees) and you can see how an uncontested divorce is a much cheaper option.

All in all, for the security that comes from having an attorney handling your uncontested divorce, the cost truly is not that high, and is certainly worth it.

Conclusion

Most divorces in Virginia are uncontested.  They require neither protracted litigation, nor even an appearance in court.  Hiring an attorney is the simplest way to make sure that your uncontested divorce runs as smoothly as possible.  If you are involved in a divorce where all matters are actually resolved (or look to be resolved fairly easily), please feel free to call (703)281-0134 or e-mail me at SLeven@thebaldwinlawfirm.com to set up an initial consultation.  Our initial consultations are free for up to half an hour!