A Brief Primer on Spousal Maintenance in Indiana

Okay, so you want to file for divorce in Indiana.  You’ve gone online to figure out your estimated child support (https://mycourts.in.gov/csc/parents/), you have dutifully completed your required financial disclosure (http://www.indy.gov/eGov/County/Clerk/Forms/Documents/Marion%20County_Finanacial_Declaration_Form.pdf), and you have checked out the self-service legal center to get the forms you think you will need (http://www.in.gov/judiciary/selfservice/2350.htm), and you have watched the video about representing yourself in court (http://www.in.gov/judiciary/selfservice/2361.htm).  And if you’re really smart, you’ve called a lawyer or two for a consultation just to make sure you’ve covered your bases and you know what you’re getting into.  But have you done your spousal maintenance homework?

Spousal maintenance, aka alimony, aka spousal support, is alive and kicking in Indiana – and in some cases, you could be on the hook forever.  So it’s important to do your homework before you file for divorce, so there are no crazy surprises when your divorce is finalized.  This is particularly true because, unlike child support, spousal maintenance obligations can be extremely difficult (and expensive) to modify – if they can even be modified at all.  And unlike child support (or your marriage!), they can last forever.  (For a lively discussion of this point, check out this article: http://finance.yahoo.com/blogs/daily-ticker/end-permanent-alimony-forever-opponents-122909755.html).

Let’s take a closer look at spousal maintenance in Indiana:

What is spousal maintenance?

Spousal maintenance is an obligation to pay a certain amount of money to your ex, or soon to be ex, that is usually paid monthly, weekly, or every pay period, and is typically (but not always) for a defined period of time.  And the person receiving the money is entitled to use it however he or she sees fit – whether he or she needs it or not.  There’s generally no obligation for the recipient to account for how the money is spent, so you very well might end up footing the bill for your ex to wine and dine his or her next Romeo or Juliet.  Something to think about.

When can spousal maintenance be ordered?

Spousal maintenance is governed by Indiana Code Section 31-15-7.  Under that statute, maintenance can be ordered during a period of legal separation, during the pendency of a divorce (the time period between filing the petition for dissolution and when the divorce is actually finalized), or at the final dissolution.  

The judge has the authority to order spousal maintenance in three circumstances:

1. If your spouse is disabled (physically or mentally) and, consequently her ability to support herself is materially affected.  This is called disability maintenance.  Note that your spouse doesn’t have to be completely unable to work – if she can only work part-time, or is otherwise unable to earn what she would be able to make if she were not disabled, the judge can order spousal maintenance.  Most of the time, it’s harder to convince the judge to order spousal maintenance for mental impairments than it is for physical ones, and generally the person seeking the maintenance will have to show some strong proof that she needs it.  But if the judge does award maintenance in this situation, the maintenance can be for any length of time the judge sees fit, for a temporary period of time or for forever.  In some cases, you could still be paying maintenance even if your ex remarries.

2. If your spouse has custody of a child who is disabled, and because of having to care for the child, your ex’s ability to support herself is materially affected.  This is called caregiver maintenance, and like disability maintenance, it can be temporary or permanent.

3. If the court determines that, because of her education level, her job history, or some other reason, your spouse needs a little extra help getting back on her feet, the judge can order rehabilitative maintenance.  This form of maintenance can be for no more than three years, and is most often awarded where one party has been the homemaker while the other party was the breadwinner and, because she has been out of the workforce for a significant period of time during the marriage, she needs additional training, education, or simply more time to find a job to support herself.  Sometimes this can be tied to a specific thing – like, you could be required to pay for your spouse to finish her college degree, or take a certification course.  Sometimes it’s just a weekly, monthly, or other periodic payment to help her get back on her feet.  This is the only kind of court-ordered maintenance that is specifically limited in the statute to a certain period of time – no more than three years.

Even if the judge does not order spousal maintenance, spousal maintenance can still be imposed by agreement.  This means that you and your spouse can negotiate over, and eventually agree upon, a spousal maintenance obligation, during the settlement process.  If you agree to pay spousal maintenance and the judge approves your agreement, that obligation is enforced the same way a court order is enforced – through the contempt process.

Can spousal maintenance be modified or terminated?

Maybe.  If the maintenance was imposed by court order, for one of the three reasons above, then it can be modified or revoked if a substantial change in circumstances has made the obligation unreasonable.  So if your ex-Mrs. marries some rich guy, or your business goes under and you go from six figures to food stamps, you may be able to get the order modified.  It’s a difficult process, however, and the burden of proof will be on you to prove that things have changed and now the obligation is unreasonable.

If it was imposed by agreement rather than by court order, though, you will face a number of hurdles if you try to modify your obligation.  The court only has the authority to modify the obligation if the court would have had the authority to impose it in the first place – so if you are considering agreeing to pay maintenance because your spouse is disabled, caring for a disabled child, or needs temporary assistance getting back on her feet, you’d better make sure that’s spelled out in your settlement agreement.  Otherwise the court will not be able to modify the maintenance obligation at all.  Also, if it appears that the payments were really part of the property settlement (like you agreed to pay her maintenance for 10 years in exchange for her keeping her hands off your pension), you will not be able to modify that maintenance.  

To put a finer point on this: There was a recent Indiana case where Husband had agreed, over 10 years ago, to pay spousal maintenance to his wife until death.  At the time, he was making six figures, and she suffered from rheumatoid arthritis and was unable to work.  Husband faithfully paid the maintenance for over a decade, rain or shine, even though both he and Wife eventually remarried other partners.  When Husband was forced to take an early retirement for medical reasons, his income was reduced to a fraction of what it once was.  He petitioned the court to modify the maintenance.  The problem: Nothing in the record indicated that he’d agreed to pay the maintenance on the basis of Wife’s medical condition.  I’ll spare you all of the nitty-gritty, but the upshot was that the court did not allow Husband to modify the maintenance, even though Wife’s financial situation was significantly better than his own, so he is still on the hook for $500 a month.  Meanwhile, he has had to drain his savings, has gotten behind on his bills, and is truly in dire financial straits.  Moral of the story: No matter how guilty you feel about the divorce, no matter how much you still feel responsible to take care of your soon-to-be ex, talk to a lawyer before you agree to pay spousal maintenance – or before you head into that final hearing, especially if your spouse is disabled or has a disabled child.  There is a time and a place for spousal maintenance, but make sure you completely understand what you’re getting into before you’re saddled with an obligation you may be paying for the rest of your life.

As always, if you have a question, feel free to leave it here, send an email to me at kflood@floodfamilylaw.com, or call me for a free consultation at 317-460-8969.  Thanks for reading!

Indiana Divorce 101

Whenever I get a phone call from someone looking for a divorce lawyer, I almost always walk them through “Divorce 101” – a basic primer on the nuts and bolts of divorce in Indiana.  (Shameless plug: Free same-day consultations – call us!  317-460-8969.)  There are some basic facts and key terminology that you need to know if you are thinking about getting a divorce in Indiana.

Basically, the process looks like this:

1. Consult with an attorney.  I highly recommend you speak with a lawyer before doing anything else, even if you will be filing your divorce yourself.  Divorce is a big deal, and it’s not something to rush into headlong without some foresight, planning, and a bit of expert advice.

2. Filing.  If you decide to hire a lawyer, she will prepare a number of documents for you, which will be filed with the court to get the process going.  These documents include her Appearance, a Summons, and a Petition for Dissolution.  

  • Appearance: The document by which the attorney informs the court, and your spouse, that she is formally representing you.  Once the Appearance is filed, the court will communicate directly with your lawyer.  Also, if your spouse has a lawyer too, he or she will no longer be permitted to speak with you directly – he or she will have to go through your lawyer instead (to protect you from getting talked into things, or simply harassed by your spouse’s attorney).
  • Summons: The document which formally informs your spouse that he or she is being sued for divorce.  The Summons will provide all of the important information about what the lawsuit is over, who the parties are, what court the suit is in, what could happen if your spouse doesn’t show up for a hearing, etc.
  • Petition: This is the document that actually asks the court to do something – in a divorce case, you are asking the court to dissolve your marriage, which is why the formal name for divorce is dissolution.  In some states, the Petition has to state that your spouse did something wrong in order for the court to let you get divorced.  But in Indiana, we are a “no fault divorce” state, which just means that all you have to tell the court is that the marriage didn’t work out and can’t be saved.  The legalese term for this is irretrievable breakdown of the marriage.  The Petition will also tell the court whether you and your spouse have children, and if so, where they are living and how old they are.  And it will tell the court whether the wife is currently pregnant (if so, typically the court will not permit the divorce to be finalized until after the baby is born, for reasons that mostly have to do with paternity), and whether either spouse is currently deployed on a military tour of duty.  The Petition will typically request a provisional hearing as well – but more on this later.

Typically, the date that these documents are filed with the court is your date of separation, but sometimes the date of separation can be an earlier date if, for example, the two of you have been living apart for a few months.  The date of separation is very important, because in Indiana, if you have been married for more than a few years, generally all of your assets and debts will be “commingled” with your spouse’s – meaning that all that you own, and all that you owe, goes into one big pot called the marital estate, which will be divided when your divorce is finalized.  The reason the date of separation matters is because everything after the date of separation is not commingled – it’s separate.  So if you win the lottery, or if the Mrs. goes out and racks up $20k in credit cards, you’re in luck as long as it happened after the date of separation.  If it happened before, you’ll be splitting your millions – or her debt.

3. Service.  After the court has received your documents, your spouse will be served with an official copy of the Appearance, the Summons, and the Petition, as well as with an Order to Appear, if your lawyer asked for a provisional hearing.  The most common way to serve a party in a divorce case is by certified mail, because it’s cheap and low-drama.  But, if necessary (or if you just really want to), you could also send the sheriff to your spouse’s home or work, or have a private process server track him or her down at the bar or (my personal favorite) at their girlfriend or boyfriend’s house.  Or if things are truly amicable with you and your spouse, you can just hand them their papers and ask them to sign something that says they got them.

4. Provisional Hearing.  This is a hearing where the court will issue temporary orders (also referred to as “provisional orders” or “preliminary orders“) about things that need to be dealt with right away, like temporary custody and parenting time of the kids, temporary child support or spousal maintenance (kind of like alimony), temporary possession of the marital residence (your house) and the cars, etc.  This hearing is usually critical when kids are involved, but because financial and other matters can be addressed too, it’s pretty common to have one even if you don’t have any kids.  However, this hearing is by request only, so if your lawyer didn’t ask for one in the Petition, a provisional hearing will only be scheduled if your lawyer or your spouse asks for one.  The orders the court issues will remain in place during the pendency of the dissolution, meaning the time period between filing and finalizing.  If you and your spouse are able to come to an agreement about preliminary matters, however, the hearing can be vacated (cancelled), and your agreement can be submitted to the court instead.  As long as the agreement looks alright to the judge, he or she will approve it, and it becomes an order of the court, which can be enforced the same way as other court orders.

5. Negotiations.  After the provisional hearing or agreement, it’s time to get to work.  This is the part of the process that usually takes the most time (and money).  If you and/or your spouse really dig your heels in and refuse to give one another a single inch, then your lawyers might walk away with a bigger share of your net worth than either of you do.  So it’s important to be as flexible and reasonable as possible, and to talk to your lawyer about what’s really important to you.  If you really, really want the house, then consider being prepared to part with a chunk of your 401(k), etc.  Don’t be so attached to a set of silverware you got from Bed Bath & Beyond 8 years ago that you rack up another $2,000 in lawyer fees while your attorney tries to negotiate for that item on your behalf.  Keep a sense of perspective, and keep your priorities in mind.  Maybe it’s alright that Wifey gets the whole DVD collection if she keeps her mitts off of your IRA.  Maybe you can live with Hubby taking the Ford, if he takes the credit card debt too.  Try to keep in mind what you are likely to be entitled to in court (usually roughly 50% of the net value of the marital estate), and talk to your lawyer about how to best structure the splitting of assets and debts so that you get what you really want, you can afford the debts you take on, and money isn’t wasted on carrying costs, taxes, fees, etc.  The other main bone of contention, besides the money and the “stuff”, is almost always the kids.  Custody battles can be loooooooong, and very expensive.  I will do a separate post about these sometime soon, but again, keep in mind your true objectives: most of my clients really do want what’s best for the kids, and a good lawyer will help you keep that in mind (and try to keep your emotions somewhat in check) during this process.  Repeat after me: The children are not pawns or bargaining chips.  Offering up Junior to get a bigger hunk of that 401(k) is not going to earn you any points.

If, during this stage, you and your spouse come to an agreement about some or all of the divorce-related issues, then your lawyer will draft up a marital settlement agreement, which is a contract between the two of you that sets the rules for the rest of your lives, post-divorce.  Everything goes into this contract: the house, the cars, the accounts, the life insurance, the kids, the child support.  Often, my settlement agreements end up being 20+ pages long, but that’s because I can’t think of anything more important than making sure to be as clear and thorough as possible when dividing up all of your earthly possessions and debts, and determining what will happen with the kids.  Make sure that you ask your lawyer about anything that doesn’t sound right, or anything you don’t fully understand, because this agreement, once it is signed by each of you and approved by the court, is very hard to change.  Children’s issues (support, custody, visitation) can be modified under certain circumstances as a matter of law, but that usually involves going back to court and requires, usually, a substantial change of circumstances.  Other things, like if you agreed to pay spousal maintenance until forever, will be almost impossible to change.  So be thorough, be thoughtful, be patient, and get this document as close to perfect as you can.  Trust me, it’s worth the money you will spend on lawyer fees at this stage, because if you don’t get it right, you are going to have to either live with it, or lawyer up again later to try to undo it.  And that’s not a good situation.  

If you and your spouse have come to an agreement on everything, then you’ll both sign the document and your lawyer will file it with the court.  As long as all of the provisions about the kids are in the children’s best interest, and as long as the agreement is otherwise sound, the judge will approve it and you’re done!  You can skip steps 6 and 7 because you are a negotiating genius.  Congratulations, you are divorced.

6. Mediation (sometimes).  If you and your spouse were not able to come to an agreement about anything, or even if you agreed on some things but not others, then you may be ordered to mediation.  To put it very simply, mediation involves sitting in a room with your lawyer and some snacks, waiting for what seems like eternities, receiving an offer of settlement from your spouse and responding to it with a counter offer, and then more waiting.  But mediation can be a very positive thing if the parties are both negotiating in good faith, the mediator is skillful in helping point out areas of possible agreement, and everyone remains as patient as possible.  It is a lot cheaper to spend eight hours mediating your divorce than to spend eight hours litigating it, especially considering attorney prep time, etc.  And people are more likely to follow their agreement than a court order, because they have invested in the process.  If you’re able to reach an agreement, the mediator and the lawyer(s) will draft up a mediated settlement agreement which you will both sign.  This will be filed with the court, and as with a marital settlement agreement, becomes a court order upon the judge’s approval.  If that happens, you’re done!  Cross the finish line, pass go, collect $200, you are DONE.  But if not, then proceed to the final step.

7. Final hearing (rarely).  A final hearing is an outcome that I personally prefer to avoid when possible, because no matter how much time the court sets aside for you, and no matter how great a job your lawyer does, you are still letting a relative stranger in a flowy black dress bang the gavel and make critical decisions about your stuff and your kids.  But if you do have to go to a final hearing, make tripple sure that you have a good lawyer who fully understands what you want, what you don’t want, what you’re going to say at trial, and what your spouse is going to say (especially about you) at trial.  Preparation is critical. Your lawyer should prep you on the questions that she is likely to ask you, and that your spouse or his/her lawyer will likely ask on cross-examination.  Trial is very stressful, so do what you need to do to remain calm and keep a level head.  The good news is that once the hearing is over, most of the time you will be divorced, even if the judge takes a couple of days or weeks to issue an order about how to divide the things and what to do with the kids.  So, even if you and your spouse cannot agree on what color the sky is, much less whether the little ones should go to Montessori school and who gets which debts, the good thing is, he or she cannot force you to remain married to him or her.  

I hope this helps you get a feel for the divorce process in Indiana.  If you have any questions about this stuff, or if you’re ready to go ahead and start the process, give me a call.  See if I’m the right person to represent you in this process.  

Thanks for checking in,

Kate Flood

Indianapolis Divorce Lawyer

It’s TAX TIME!

Do you have kids?  Do you have an ex (or a soon-to-be ex)?  If so, then you have some figuring-out to do, because it is tax time, and who gets the tax credits for the kids is one of the most fought-about issues in divorce and custody cases.  

Fortunately, the Indiana Child Support Guidelines (http://www.in.gov/judiciary/rules/child_support/) offer some guidance on this question.  Here is what the Guidelines have to say about the right to claim the minor tax exemption for your kids:

Tax Exemptions. Development of these Guidelines did not take into consideration the awarding of the income tax exemption. Instead, it is recommended that each case be reviewed on an individual basis and that a decision be made in the context of each case. Judges and practitioners should be aware that under current law the court cannot award an exemption to a parent, but the court may order a parent to release or sign over the exemption for one or more of the children to the other parent pursuant to Internal Revenue Code § 152(e). To effect this release, the parent releasing the exemption must sign and deliver to the other parent I.R.S. Form 8332, Release of Claim to Exemption for Child of Divorced or Separated Parents. The parent claiming the exemption must then file this form with his or her tax return. The release may be made, pursuant to the Internal Revenue Code, annually, for a specified number of years or permanently. Judges may wish to consider ordering the release to be executed on an annual basis, contingent upon support being current at the end of the calendar year for which the exemption is ordered as an additional incentive to keep support payments current. It may also be helpful to specify a date by which the release is to be delivered to the other parent each year. Shifting the exemption for minor children does not alter the filing status of either parent.

The noncustodial parent must demonstrate the tax consequences to each parent as a result of releasing the exemption and how the release would benefit the child(ren). In determining when to order a release of exemptions, it is recommended that at minimum the following factors be considered:

(1) the value of the exemption at the marginal tax rate of each parent;

(2) the income of each parent;

(3) the age of the child(ren) and how long the exemption will be available;

(4) the percentage of the cost of supporting the child(ren) borne by each parent;

(5) the financial aid benefit for post-secondary education for the child(ren); and

(6) the financial burden assumed by each parent under the property settlement in the case.

That is an awful lot of information to consider, so let me break it down for you:  The court in your case doesn’t have the authority to award an exemption to anyone, BUT it DOES have the power to order that one parent RELEASE the exemption to the other parent.  The default is that the exemption goes to the custodial parent, unless the court orders it released to the other parent.  Releasing the exemption involves the custodial parent completing a form (http://www.irs.gov/pub/irs-pdf/f8332.pdf) and giving it to the noncustodial parent.  The noncustodial parent then attaches the form to his or her tax return when filing.

So, who’s going to be entitled to claim the kids, anyway?  Again, the default is that the custodial parent gets the exemptions.  But if you are the noncustodial parent, you may be able to get a court order for the release of the exemption to you.  To do so, you will need to file a petition with the court (the same court that handled, or is handling, your divorce/paternity/custody case).  You will have to prove that you having the exemption would be beneficial to the kids.  The court is going to look at factors including the dollar value of the exemption to you vs. to the other parent, each parent’s income, the age of the child(ren) and how many more years an exemption will be available for him/her/them, the percentage of the cost of supporting the kids that each parent is paying, the financial aid benefit for the kids’ college expenses, and, in cases of divorce, the financial burden each of you was left with under the terms of the property settlement.  So be prepared to tell (and show) the judge exactly why you think it’s better for the kids that you get the exemption.

And remember, noncustodial parents are only allowed to claim the exemption if they are at least 95% current on their child support obligation – so make sure you’re paid up before you claim the kids.

If you have any questions about this topic, or about divorce, custody, support, or other family law issues, here’s how to get a hold of me:

Remember, we offer free same-day consultations with Indiana divorce and custody lawyer Kate Flood, so please call.  We don’t bite. 🙂