Older Parties Divorcing After a Long Marriage: Division of Marital Estate and Determinations of Periodic Alimony

October 12, 2012
By The McKellar Law Firm, PLLC on October 12, 2012 10:44 AM |

In Rodgers v. Rodgers, No. E-2011-02190-COA-R3-CV (Tenn. Ct. App. July 9, 2012), the Tennessee Court of Appeals sheds light for Tennessee divorce attorneys on the manner in which it divides the marital estate and awards periodic alimony for a marriage of long duration in which the parties are at or nearing retirement.

The facts are as follows: Both parties were aged in their mid-to-late 60s. After more than forty years of marriage, Wife accused Husband of irreconcilable differences and inappropriate marital conduct and divorced Husband. Husband, in turn, accused Wife of inappropriate marital conduct. Wife, a registered nurse, had worked part-time throughout her career while taking care of their sons (now adults), and presently her $3350.55/month expenses exceeded her $2407.69/month income--she had received no financial assistance from Husband during the separation although prior to his retirement he was making $100,000/year using his two degrees. Husband qualified for Social Security Disability beginning in 2005. As a means of supplementing his income, Husband owned a side car sales business in which Wife was not greatly involved (and which Husband failed to report on joint income tax returns). Selling cars and a line of credit were the means by which Husband accumulated $89,011 in funds in the parties' joint account at one point in 2006; however, Husband alleged that he no longer sold cars often.

In the final divorce decree, the trial court granted Wife a divorce and periodic alimony and also divided the marital estate. The court determined that a family heirloom ring that Wife wore was to be passed to the parties' adult sons upon their engagement or marriage. It also determined that Husband's sister's flat screen TV, freezer, and refrigerator that she had shipped to TN in anticipation of a move were "gifts" that were abandoned to the marital estate. The court evaluated the expert testimony pertaining to the valuation of the lake house and marital residence, ultimately deciding that the lake house was worth $243,000 and the marital residence was worth $248,750. Six of the parties' automobiles were to be sold to satisfy the HELOC (Husband would pay any remaining disparity since he used the HELOC as an income source).

As for alimony, the court (citing T.C.A. § 36-5-121 and common law) emphasized "need" and "ability to pay" as its primary considerations. The court found that Husband's sale of automobiles generated a substantial profit and noted that Husband would make more than twice the amount in Social Security benefits as Wife when she became of age to qualify. While the parties are at an age nearing retirement (thus, "their traditional earning capacity is not relevant"), Husband's car business is likely be ongoing post-retirement. The parties were in similar physical and mental conditions and Husband was at fault for the divorce. Based on all of the information, the court awarded Wife $1,000/month in periodic alimony, required Husband to pay the premium on both his and his Wife's life insurance policy, and enabled Wife to change beneficiaries. $5500 of Wife's attorney fees were also to be covered by Husband.

The appellate court decided the following issues on Husband's behalf: "(1) Whether the trial court erred in its classification of the marital estate; (2) whether the division of the marital estate was in error; (3) whether the trial court erred in awarding Wife periodic alimony; and (4) whether the trial court erred in awarding Wife's attorney's fees."
First, the appellate court discussed the difference between "separate" and "marital" property-- according to T.C.A. § 36-4-121(b)(2)(D), "separate property" includes "property acquired by a spouse at any time by gift, bequest, devise or descent" and can become marital property "under theories of commingling or transmutation" that reveals an "intention that it become marital property." As for marital property, there is a "presumption" that "property acquired during the marriage" qualifies. The court affirmed the trial court's decision that the heirloom ring and abandoned property of Husband's sister constituted marital property. Second, the court affirmed that the 53% (Wife) and 47% (Husband) division of marital property was equitable since relative fault should not be taken into account in dividing marital property (T.C.A. § 36-4-121(a)(1)) and "equitable" does not necessarily mean "equal." The court referenced T.C.A. § 36-4-121(c) factors. The appellate court, explaining its affirmation of the trial court, noted the older age of the parties, the high standard of living to which the parties had become accustomed, and the length of the marriage.

Third, the court decided the issue of periodic alimony; maintaining the "broad discretion" of the trial court and the "factually-driven" nature of alimony determinations, the court explained that the objective of alimony in futuro (based on factors such as earning capacity, past education, length of marriage, age and health of each party, standard of living the parties enjoyed, contributions of each party to the separate and marital property, and relative fault- see T.C.A. § 36-5-121(i)) is to "provide support on a long-term basis until the death or remarriage of the recipient." T.C.A. § 36-5-121(f)(1). Finding that Husband was at fault, the parties enjoyed a high standard of living, Husband earned more income, and the marriage lasted over four decades, the appellate court affirmed the trial court's award of alimony to Wife. Fourth, the court considered the issue of attorney's fees. The appellate court said that it was reasonable under the statute to require the spouse with adequate income to pay the legal expenses of the other spouse who does not have enough income and thus affirmed Wife's award of attorney's fees.

Finally, the appellate court addressed Wife's two disputed issues: "(1) whether the trial court erred in declining to award her the vehicles she requested and (2) whether the trial court erred in requiring Wife to pay part of what Wife describes as Husband's debt out of her share of marital property." First, the court said that the trial court was justified in requiring Wife to use her portion of marital property (in this case, the vehicles) to assist with paying some of Husband's debts since the HELOC benefit (and resulting "debt incurred during the marriage") "benefitted the marriage." Second, the court asserted that Wife is not entitled to attorney fees pertaining to any appellate issue on which she did not prevail.