Unequal Property Division and Transitional Alimony; Hamilton County Chancery Court

 

BARRON V. BARRON,  Court of Appeals at  Knoxville, 11/20/2019

 

TRIAL COURT: Wife filed for divorce on the grounds of irreconcilable differences. The trial court granted husband a divorce on the grounds of wife’s adultery and other inappropriate marital
conduct. Despite the many factors found by the trial court to be favorable to husband, the trial court awarded husband only 43% of the net marital estate. It also awarded husband one year of transitional alimony at $2,000 per month.

The parties were married in December 1991. The parties live in Germany. Husband is now 62 years old and wife is 67. Husband has a plural effusion of the left lung from cancer. He had chemotherapy from 2015-2016, and hernia surgery in 2018. As a result, husband can only work a job that is sedentary. Wife is in good health, and continues to work as a speech therapist for the U.S. Department of Defense school system, in Germany. Her income is listed as $11,893.52 per month.

The parties have a biological son that was born in 1993. They later adopted a second son that had developmental delays. After the adoption of their second child, husband became a homemaker. Husband has not been employed outside of the home since 2005. Throughout the marriage, wife traveled extensively without the children and husband. Husband was often left home alone to care for them.

The net marital assets total $1,279,400. Husband’s award of $548,900 represents approximately 43% of the total assets. Wife’s award of $730,500 represents approximately 57% of the total assets. The court awarded each party its Lincoln Life Insurance policy. The court stated that “[it] is aware that the property division is not equal, but the [c]ourt determines that it is an equitable division, and the difference is a factor in the alimony award…and in the award of attorney’s fees.” The court did not clearly elucidate how its award was equitable in light of its factual findings.

The court awarded husband transitional alimony of $2,000 per month for one year, and directed wife to maintain husband’s health insurance until he reaches the age of 65. The court stated that the alimony was awarded so that husband can “come to America to establish and maintain a household and to adjust to the economic consequences of the divorce.” The court declined to grant a longer period of alimony, because “wife is 67 years old and has already passed retirement age.”

 

COURT OF APPEALS:

TRANSITIONAL ALIMONY: “It is important to reiterate that the trial court held it will be difficult for husband to find employment in Germany, once the divorce is entered, due to an established hierarchy for obtaining US government employment overseas. Because husband will not be able to obtain employment in Germany, and will no longer be a spouse of a government employee, he will lose his residency status and will only be able to remain in Germany for three months following the divorce. Therefore, the record indicates that husband is going to have to make an intercontinental move in order to re-establish himself in the United States following the divorce. Accordingly, the court stated that husband will need financial support in order to “come to America to establish and maintain a household and to adjust to the economic consequences of the divorce. The court is aware that it may take some time before the Thrift Savings Fund can be transferred to husband.”

“Despite the foregoing, the court only awarded husband one year of transitional alimony at $2,000 per month. The court’s conclusion as to the duration of transitional alimony necessary for husband, the economically disadvantaged spouse, to adjust to the economic consequences of divorce does not comport with its factual findings. The evidence preponderates in favor of husband needing a longer duration of transitional alimony. Therefore, we hold that the trial court erred by awarding husband only one year of transitional alimony. We hold that the duration of the trial court’s award is insufficient and will result in an injustice to husband. Accordingly, we modify the trial court’s holding in order to extend the duration of transitional alimony; we hold that wife is to pay husband $2,000 per month in transitional alimony for a period of five years. In order to ensure clarity, we do not disturb the trial court’s holding that wife is to also maintain husband’s health insurance until he reaches the age of 65.”

PROPERTY DIVISION: Husband has a bachelor’s degree; however, he has not worked since 2005. Wife has maintained employment throughout the marriage; the trial court determined that husband’s status as a homemaker substantially contributed to the marriage, and allowed wife to increase her earning capacity. The court determined that both parties had contributed to the acquisition of marital property and development of the household; wife’s contributions were primarily financial, while husband’s was primarily, but not exclusively, in his capacity as a homemaker. Tennessee law specifically recognizes that substantial contribution to a household can be made in the capacity of a homemaker. See Tenn. Code Ann. § 36-4-121(b)(1)(D) (stating that “substantial contribution” may include, but not be limited to, the direct or indirect contribution of a spouse as a homemaker). In addition, the court held that wife had dissipated some of the marital assets. The trial court explicitly held that “husband has the greater financial need.” The court also held that “wife has the greater ability for future acquisition of capital assets and income as she is still employed.”

In light of the foregoing findings of fact made by the trial court, we hold that the evidence preponderates against the court’s conclusion to award wife a greater share of the marital assets. The court’s conclusion to award husband only 43% of the marital assets and wife 57% was in error and not equitable. Accordingly, we modify the division of net marital assets such that the Roth IRA is split 50/50 between husband and wife. The record indicates that the Roth IRA was accumulated during the marriage and is therefore marital property and a proper subject of division. The addition of 50% of the Roth IRA to husband’s net marital assets increases his net marital assets awarded to 48.3% at $618,000; it renders wife’s awarded net marital assets 51.7% of the net marital assets at $661,000.

In addition, the trial court held that the FERS pension account is a marital asset; it awarded wife 100% of the account. The court stated that the pension would amount to retirement benefits “of approximately $2,000 a month.” The pension was awarded to wife in addition to her portion of the net marital assets.

The trial court failed to elucidate why this award to wife was equitable in light of its factual findings. Husband argues that the decision to award the entirety of the FERS pension account to wife was in error. He argues that this award of approximately $2,000 a month to wife resulted in a windfall in her favor, and that, when factored into the total awarded assets, substantially alters the percentage distribution in favor of wife and is not equitable.

We agree with husband that the decision to award wife 100% of the FERS pension account was not equitable in light of the factual findings. In order to ensure that the division of the net marital assets remains equitable, we hold that the FERS pension is to be divided in proportion to this Court’s decision as to the division of the other net marital assets. Accordingly, we hold that husband is to receive 48.3% of the FERS pension payout once the pension payout commences; wife is to receive 51.7% of the FERS pension payout once the pension payout commences.

 

http://www.tncourts.gov/sites/default/files/barron_v._barron_e2018-02257.pdf

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