Unpredictable Alimony Awards

Alimony has always been of the most unpredictable issues for spouses and attorneys.  The chair of the Family Law Section of the American Bar Association indicated in a recent article “Divorce law is one of the most discretion filled areas of the law…”

In many states, including North Carolina, judges have wide discretion in awarding alimony, both in amount and duration.  Compare this to child support awards that are largely determined by a formula in North Carolina.

A recent article in the February 2012 issue of the American Bar Association’s Journal highlights national efforts to create more predictable alimony awards. 

The article states, “Many agree that divorcing spouses deserve more predictable outcomes” and that the current alimony process in court “has been attacked as antiquated, unbalanced and unfair.”

Here are some of the proposals and efforts that have been undertaken by other states or legal groups according to the article:

• In 2011 Massachusetts passed the Alimony Reform Act.  The new law created a formula for calculating alimony awards.  The law also ends alimony when the paying party reaches retirement.  Further there is now a 12-year limit on alimony payments in that state.
• Oklahoma is trying to reduce a party’s ability to get military retirement pay as alimony.
• Rhode Island generally limits alimony payments to five years.
• In 2004, a Florida lobbying group tried to end alimony in that state forever.
• The American Academy of Matrimonial lawyers suggests the following formula:
  • 30% of the paying party’s gross income minus 20% of the receiving party’s gross income
  • The receiving party should not receive more than 40% of the couples’ total combined gross income
  • For example: If one spouse makes $100,000 and the other makes $50,000, the numbers look like this:  $100,000 x 30% = $30,0000; $30,000 minus $50,000 x 20% ($10,000) = $20,000.  So, the receiving spouse would get $20,000 a year in alimony.
  • And, the duration would be calculated by multiplying the length of the marriage by a fraction.

These efforts clearly indicate that there is a big problem for divorcing couples using the courts to determine alimony awards.  

Their outcomes are highly discretionary and therefore very difficult to predict. Of course, couples always have the option to opt out of the unpredictable alimony system currently in place. They are free to resolve alimony issues in whatever way they choose in processes such as collaborative divorce and mediation. 

As the current alimony system comes under further attack, wise couples may elect to do just that. 

Empathic Communication Crucial to Negotiation

Perhaps the most crucial foundational skill of productive negotiation and communication is the ability to empathize with the other person.  Empathic communication (also known as “Non-violent communication”) is the cornerstone of the collaborative divorce process and interest based mediation. 

But, in the world of adversarial, positional and leverage based legal negotiations, this is a foreign concept.  Even today, in the vast majority of legal negotiations, the goal is not to understand the other party, but to “win”.  Period.  This seems to be especially true in divorce, custody, alimony, equitable distribution and other family law related cases.

The legal profession as a whole is simply behind the times in negotiation skills and processes. 

The business world has understood the importance of understanding and empathy between parties to a negotiation for decades.

As early as 1989, Stephen R. Covey, in his bestselling book The Seven Habits of Highly Effective People named empathic interest based communication as one of the seven habits.  Covey calls the habit “Seek First to Understand, Then To Be Understood.”

This book has been widely read and applied to the business world for over 20 years. 

Here’s what Covey has to say about empathy: 

“When I say empathic listening, I mean listening with the intent to understand.  I mean seeking first to understand, to really understand.  It’s an entirely different paradigm.”

“Empathic listening gets inside another person’s frame of reference.  You look out through it, you see the world the way they see the world, you understand their paradigm, you understand how they feel.”

“Empathy is not sympathy.  The essence of empathic listening is not that you agree with someone; it’s that you fully, deeply, understand that person, emotionally as well as intellectually.”

“Empathic listening is so powerful because it give you accurate data to work with.” 

“Next to physical survival, the greatest need of a human being is…to be understood, to be affirmed, to be validated, to be appreciated.”

“When you listen with empathy to another person, you give that person psychological air.  And after that vital need is met, you can then focus on influencing or problem solving.”

From a negotiation standpoint, the bottom line points are:

1. That seeing the situation from the other party’s point of reference is crucial.
2. That you do not have to agree with the viewpoint, just understand it.
3. That empathic listening produces accurate data for the negotiation.
4. You cannot influence the other person or problem solve until you have sought to understand the other party. 

Whether you are involved in a business negotiation or a divorce negotiation, understanding the crucial role that empathic communication plays in the conversation will be the foundation to finding an intelligent, durable and mutually beneficial resolution.

Is Alimony Reform Headed to North Carolina?

As described in this article, Massachusetts has recently revised its alimony laws.

The lawmakers in that state established stricter guidelines as to the length of alimony payments, among other revisions. 

Could Massachusetts’s reforms begin a trend towards alimony law reforms across the United States, and more importantly for us, in North Carolina?

Currently, North Carolina has no guidelines that directly tie an alimony award to the length of a marriage.  Rather, the alimony statute lists “the duration of the marriage” as one of 16 factors that a court must consider in making an alimony decision.  The statute is silent as to the weight of each of the 16 factors. 

In practice, North Carolina judges have wide discretion in making alimony decisions.  With so many factors to consider and the freedom to give more weight to some factors and devalue others, alimony decisions can vary widely from judge to judge and from county to county.

Many North Carolina judges use a “needs and income” approach to alimony.  That means that a judge determines what income is available to the spouses, and then determines the financial needs (not wants) for each party.   After that, the judge can use the 16 factors in the statute to settle on a number that they believe is reasonable.

It appears that Massachusetts’s judges have retained some discretion on making alimony decisions under their new laws, but now have stricter boundaries for their decisions.

The question is whether other states, including North Carolina, will follow Massachusetts’s lead and move toward more defined rules for alimony decisions in the future. 

New Divorce Options Presentation

I find that many clients are completely unaware that they can actually choose the process for resolving their family law or divorce issues.  

As many people are stunned to discovery, in North Carolina you don't have to go to court to resolve the issues of property division, cash flow, support (alimony and child support), and co-parenting (child custody).

While a legal divorce does require court action, the other and usually more pressing issues can be resolved privately, through a number of other processes.  

I have created a presentation that explains the basics of each process and briefly analyzes the pros and cons of each.  This was initially presented to a large Triangle company through its employee services program.  But, I think many more people can benefit from this information.

This informaiton may help you discuss your options with each other, and with any professionals that you consult.  

Feel free to contact me if you have questions about this information.  

Divorce and Taxes

As this article from Time Magazine points out, there are many tax issues involved in a divorce.   Even parents who have never been married (and therefore never divorce) face tax issues related to sharing time with their child.

There are special tax treatments for alimony, post separation support, property division, dependency exemptions, child tax credits, head of household status and a myriad of other issues in family law.  

While the five issues mentioned in the article about divorce and taxes are important, they are not the only issues involved.

I generally recommend that clients at least consult a CPA or other tax professional before and after their divorce to determine how the tax ramifications of the divorce may affect them.

A good family law attorney will understand most of the tax issues involved in divorce.  But, a family lawyer is no replacement for the advice of a good tax professional. 

Randolph (Tré) Morgan III is an experienced family law and collaborative divorce attorney accepting cases in Raleigh, Cary, Apex, Garner, Fuquay-Varina, Clayton, Smithfield, Wake Forest, RTP, Durham, Chapel Hill, Holly Springs and surrounding areas.  He focuses his practice in divorce, child custody, alimony, child support, equitable distribution, property division, paternity, guardianship and other family related matters.