Property Distribution

Divorces, or dissolutions as they are referred to in Iowa, can be messy.  Not only is there an irreparable breakdown of the marital relationship, but also the couple needs to come to an agreement as to the custody of their children, if they had any, and the distribution of their property.  In Iowa, property will be divided according to what the court feels is equitable to both parties.  Equitable distribution is decided by the judge presiding over the dissolution case.  The judge will decide what is fair to both parties based on the facts and circumstances of their specific situation.

In Iowa, Iowa Code 598.21 controls the disposition of property in a dissolution.  Section 5 of 598.21 states the following in regards to property distribution:

 5.  Division of property.  The court shall divide all property, except inherited property or gifts received or expected by one party, equitably between the parties…

Although equitable distribution is meant to be fair to both parties, it does not mean an equal distribution of property.  One party may receive more or less than the other because of a certain fact or circumstance.  In deciding what is fair to the parties, the judge must take certain factors into consideration, which is what the rest of section 5 of Iowa Code 598.21 states:

a.  The length of the marriage.

b.  The property brought to the marriage by each party.

c.  The contribution of each party to the marriage, giving appropriate economic value to each party’s contribution in homemaking and child care services.

d.  The age and physical and emotional health of the parties.

e.  The contribution by one party to the education, training, or increased earning power of the other.

f.  The earning capacity of each party, including educational background, training, employment skills, work experience, length of absence from the job market, custodial responsibilities for children, and the time and expense necessary to acquire sufficient education or training to enable the party to become self-supporting at a standard of living reasonably comparable to that enjoyed during the marriage.

g.  The desirability of awarding the family home or the right to live in the family home for a reasonable period to the party having custody of the children, or if the parties have joint legal custody, to the party having physical care of the children.

h.  The amount and duration of an order granting support payments to either party pursuant to section 598.21A and whether the property division should be in lieu of such payments.

i.  Other economic circumstances of each party, including pension benefits, vested or unvested.  Future interests may be considered, but expectancies or interests arising from inherited or gifted property created under a will or other instrument under which the trustee, trustor, trust protector, or owner has the power to remove the party in question as a beneficiary, shall not be considered.

j.  The tax consequences to each party.

k.  Any written agreement made by the parties concerning property distribution.

l.  The provisions of an antenuptial agreement.

m.  Other factors the court may determine to be relevant in an individual case.

Once the judge has considered the factors in light of the specific facts and circumstances of the couple’s situation, he or she will make a ruling as to the distribution of property.

An important consideration in the equitable distribution of property in an Iowa dissolution is the distinction between marital and non-marital property.  Look for more on this distinction here on the Iowa Family Law Bulletin in the coming weeks!

 

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Recently, the Iowa Court of Appeals decided a case involving spousal support.  (The court also discussed the award of attorney fees and the husband’s child support obligation.)  The case, In Re the Marriage of Jeffrey A. Richter and Lisa M. Richter, involved a marriage that had produced four children.  The parties had appealed the decree entered in their dissolution, with both parties arguing that the spousal support awarded was incorrect.

Spousal Support in Iowa

The court explains the issue of spousal support in its decision:

Spousal support “is an allowance to the spouse in lieu of the legal obligation for support.” In re Marriage of Sjulin, 431 N.W.2d 773, 775 (Iowa 1988). Spousal support is a discretionary award dependent upon each party’s earning capacity and present standards of living, as well as the ability to pay and the relative need for support. See In re Marriage of Kurtt, 561 N.W.2d 385, 387 (Iowa Ct. App. 1997). Spousal support “is not an absolute right; an award depends on the circumstances of each particular case.” In re Marriage of Dieger, 584 N.W.2d 567, 570 (Iowa Ct. App. 1998).

Factors Considered by the Court in Awarding Spousal Support

The Iowa Code addresses spousal support in Section 598.21(A).  Here, the criteria for determining support are listed.  They are:

  1. The length of the marriage
  2. The age and physical and emotional health of the parties
  3. The distribution of property made in the dissolution
  4. The education level of each party at the time of the marriage and at the time the action is commenced
  5. The earning capacity of the party seeking maintenance
  6. The feasibility of the party seeking maintenance becoming self-supporting at a standard of living reasonably comparable to that enjoyed during the marriage
  7. The tax consequences
  8. Any mutual financial agreements between the parties
  9. Any antenuptial agreement
  10. Other factors the court determines relevant

As the court notes, they give “considerable discretion” to the district court in awarding alimony and will only decide differently than the district court when there has been a failure to do equity.

Spousal Support Decision

In this case, the husband has monthly income of approximately $10,000 and the wife has a monthly income of approximately $3000.  After monthly living expenses are considered, there was a $6000 difference between incomes.  The four children lived with the wife.  The district court decided that since the wife was awarded over $20,000 more in the distribution of property, that it was appropriate to award her less spousal support and for a shorter amount of time.  The court awarded her $2200 per month in traditional alimony for twelve years.

Both parties appealed this decision.  The court of appeals agreed with the district court’s award.

Factors in Determining Spousal Support

As in other cases determining spousal support, or alimony, the court took several of the factors listed in Iowa Code Section into consideration.  In affirming the ruling, the court noted that the marriage lasted twelve years.  The husband had a higher earning capacity than the wife.  There were four children produced during the marriage and the wife was working part-time, which was agreed upon at the time of the birth of their youngest child by both parties.  The wife’s employer provided a letter stating that there would be no full time work opportunities for the wife in the near future.

The court states that the amount of alimony is enough for the wife to continue caring for the children as they were cared for during the marriage and gives her time to become fully employed.

 

 

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Orders for Spousal Support

Recently, the Iowa Court of Appeals entered a ruling in a case centered on Iowa Code Section 598.21A, Orders for Spousal Support. The statute lists the criteria courts shall consider when determining spousal support.

Criteria the Court Considers when Determining Spousal Support

The criteria include the length of the marriage, the age and physical/emotional health of both parties, and the distribution of property made in the divorce. The court will also consider the educational level of both parties, the earning capacity of the party seeking maintenance, and responsibilities for the children. The party seeking maintenance will also be examined as to the length of time it will take for them to become self-sufficient at a standard of living similar to what they enjoyed during their marriage.  There are other minor factors the court takes into consideration as well.

In Re the Marriage of Wattonville

In the case of In Re the Marriage of Wattonville, decided on April 25, 2012, the Iowa Court of Appeals affirmed and modified the ruling of the district court.  The district court’s determination of the amount of spousal support was upheld, however, the Court of Appeals extended the time the husband was required to pay the support.

The couple married in their twenties, had three children and enjoyed a very comfortable lifestyle due to the husband’s gainful employment at John Deere.  The wife allowed her cosmetologist license to expire and stayed home with their children.  Unfortunately, the wife was diagnosed with brain cancer which has affected her current ability to work.

Spousal Support Extended but not Increased

Originally, the district court awarded the wife with alimony to last 10 years after their divorce.  She appealed on this issue, arguing she should be awarded alimony for the rest of her life, or until she is eligible for the husband’s retirement accounts and his Social Security. She also argued the amount should be increased.  The Court notes the previously mentioned criteria in determining amount and length of support and determined that the wife will receive support until she remarries or cohabitates, either party dies, or the husband reaches retirement age.  They do not see it necessary to modify the amount of support she will receive.

Property Distribution

The Court also addresses the parties’ appeals on the issue of property distribution in their divorce.  As the Court notes, Iowa law does not require an equal division, but a fair and equitable division.  The Court determines that the wife must list the marital home for sale since the deadline for her remaining in the house has passed, that she is not entitled to more than 43% of the husband’s 401K that he began earning before the marriage, and that the district court’s ruling regarding the livestock in the couple’s lambing operation should not be disturbed.

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