Question: Since my wife and I have had a lot of problems of late, I decided to research what it would cost me if we divorced, rather than going to a lawyer before I knew what I was talking about. Because I found your Internet site very helpful, I am emailing you for more information.
I am 59, and she is 57. We have three grown children. Our home is worth $150,000 and is paid for. We have nearly $200,000 in bank accounts, and no debt. I inherited nearly $1,000,000 from my parents during the past two years. I have more than $700,000 in my company pension. I am getting ready to retire, but she has not worked outside the home since the children were small and has no marketable skills. During our 32 years of marriage, we have lived in seven different states for various periods of time. I can’t understand how alimony and property division interplay. If she gets property, will that count toward her support? Will my inheritance count?
Answer: The fact that you lived in and acquired property in seven different states complicates your situation, especially if one or more of the states in which you resided and acquired assets was a community property state.
Eight of our 50 states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, and Washington) are “community property” states where property acquired during the marriage by the labors of the spouses immediately belongs to the “marital community,” not to either spouse individually. In these states, spouses can change the ownership of community property only in limited circumstances. Each of these states takes different approaches when it comes to alimony.
The other 42 states are “equitable division” jurisdictions where marriage is looked upon as sort of a partnership where each spouse contributes directly and indirectly to the acquisition of assets, thus entitling each to a fair share at divorce based upon the proof presented to the court.
The principal difference between community property and equitable division states is that in the former, spouses are immediate partners, while in the latter, spouses become partners only if they contribute during the marriage. Therefore, if you lived in a community property state and acquired property, the law of that state will apply to those assets – no matter where you now live.
Since your wife has not worked outside the home and has no marketable skills, she obviously will need support for herself. If the law of your state authorizes permanent alimony (and some don’t), it appears likely that your wife will receive an award. Because she will also be entitled to a division of the property, in setting alimony, the court will generally take into consideration the extent to which the property she receives is or could be income producing.
And, in determining what you can afford to pay, the court will make a similar determination of the assets you hold. For example, even if the $1,000,000 you inherited from your parents may not be divided, the income that property can produce will be a factor in determining what you can afford to pay. On top of that, alimony can be awarded in a number of different forms depending on where you live, and each has its own tax ramifications.
If permanent alimony is not permitted in your state, your wife may be awarded a larger share of the property which she will be expected to invest in order to provide for herself. For example, she could be awarded a disproportionate share of your pension.
Because alimony and property division are different legal concepts governed by different rules, the courts coordinate the awards in an effort to be fair. Since the rules concerning property division and alimony vary from state to state, it is essential that participants in the divorce process seek competent legal advice before taking any step.