Life Insurance in Divorce Actions

In my time as a family law lawyer, I saw a lot of divorce petitions that requested my client (usually the husband) carry a life insurance policy for the benefit of opposing party after the divorce.  I hate those clauses myself.  I think once you’re divorced, you’re Not Married, and therefore neither party should be required to support an ex-spouse after they die.  Hard pass.  But that doesn’t mean that people remember to change the beneficiary on their life insurance policy after a divorce is finalized, so…..what then?  Wouldn’t that end up giving the ex-spouse the benefit of the policy after the parties aren’t married anymore?

In Utah, that’s a No.  With an Unless….

At UCA 75-2-804(2), which is part of the Utah probate code, it says that “[e]xcept as provided by the express terms of a governing instrument, a court order, or a contract relating to the division of the marital estate made between the divorced individuals before or after the marriage, divorce, or annulment, the divorce or annulment of a marriage,” the spouse as beneficiary is automatically dropped when the divorce is final. (emphasis added) That language in quotes up there is the actual statutory language.  What it means is that it has to be expressly stated that the ex spouse will remain the beneficiary, either in a “governing instrument”–part of the life insurance policy, either in the policy itself or in a document referred to by the policy–or in a court order.  If not, the ex is automatically dropped as a beneficiary in the event of a divorce.

There have been a couple of Utah appellate court cases that have addressed what all that means.  The first one, which was decided in 2012, is Malloy v. Malloy, 283 P.3d 597 (UT App 2012).  In Malloy, the fight was between a former Mrs. Malloy and a more recent Mrs. Malloy, Mary Beth and Rhonda, respectively.  Mary Beth and Dan Malloy had been married first.  Dan got a life insurance policy through the Federal Employees Group Life Insurance (FEGLI).  He named Mary Beth as the beneficiary on it.  They got divorced, and Dan married Rhonda.

Dan never changed his beneficiary on his FEGLI policy.  Dan then dies.  Mary Beth was sent his death benefit through his life insurance policy.  Rhonda sued Mary Beth, saying she was the wife when Dan died, and she should get the proceeds from his life insurance.  Mary Beth won.  The court explained why.  The FEGLI policy, in a document that was referred to and incorporated in the policy itself, said specifically that divorce would NOT automatically drop the beneficiary (ex) spouse from getting the death benefit; that the policy holder had to make the change themselves on purpose.  The court said that constituted “express terms” under the UCA 75-2-804.  Ex-wife therefore got the death benefit, because Dan hadn’t specifically made the change before he died.

You seriously think your dead ex should support you…?

Fast forward 5 years, to 2017, and the next time this issue came up in the Utah appellate court.  This time it was the Utah Supreme Court that addressed the issue, in a case called Hertzske v. Snyder, 390 P.3d 307 (UT 2017).  In this case, Snyder was the (now) ex-wife.  She married Edward Hertzske, father of the Plaintiff, Tyler Hertzske.  While life was good between Snyder and Hertzske Sr., Hertzske Sr. took out a life insurance policy on himself for $500,000 and made Snyder the beneficiary, with Tyler listed as the contingent beneficiary.  Later on Snyder and Hertzske Sr. divorced.  Hertzske Sr. apparently didn’t like Snyder At All at that point.  He even changed his will saying he wanted to disinherit her in any and all ways possible, but he never changed the beneficiary on his life insurance policy.  Hertzske Sr. subsequently died.

The lawsuit was over who got the $500k from the life insurance policy–Snyder or Tyler.  The divorce didn’t address the life insurance policy at all; and the policy language was kind of vague about how beneficiaries are changed–it didn’t say anything about how or if a divorce would change the beneficiary.  Definitely nothing “express” as required by Utah law.

The court said that it was necessary to interpret how UCA 75-2-804 interacted with UCA 30-3-5(1)(e), which is part of the divorce code.  We already looked at what 75- says, above.  UCA 30-3-5(1)(e) says that the court “shall” include language in the divorce decree “if either party owns a life insurance policy or an annuity contract, an acknowledgment by the court that the owner: has reviewed and updated, where appropriate, the list of beneficiaries; has affirmed that those listed as beneficiaries are in fact the intended beneficiaries after the divorce becomes final; and understands that if no changes are made to the policy or contract, the beneficiaries currently listed will receive any funds paid by the insurance company under the terms of the policy or contract.”

The upshot was that the court concluded that if a person wanted their ex-spouse to still be the beneficiary on a life insurance policy after the divorce was final, that the language in UCA 30-3-5(1)(e) HAD to be included in the divorce.  End of story.  And if it’s not, then UCA 75-2-804 applies.  Because if there was some other way of interpreting it, then the legislature would have created statute that was unnecessary, and they don’t do that.

The court said that since Snyder and Hertzske Sr.’s divorce didn’t have the statutory language from UCA 30-3-5(1)(3), Snyder, the ex-wife, didn’t get the $500k.  And since Tyler was the next in line for it under the life insurance policy as the contingent beneficiary, he should receive his father’s life insurance payout. (Which honestly only seems right.)

The moral of the story, then, is this:  In Utah, unless it is expressly stated with the language from the divorce code in the divorce decree itself, OR the life insurance policy says expressly that the beneficiary will NOT change after a divorce automatically, exes are automatically bumped from being beneficiaries on the others’ life insurance policies when a divorce is final.

Now you know.

Child Support: How it’s Calculated (Utah Specific)

Child support calculation can be a bit of a mystery to those who haven’t had to deal with it before. And honestly, that means just about anyone who’s not had a family case.  In Utah–and LET ME BE TOTALLY CLEAR ON THIS:  I’M JUST TALKING ABOUT UTAH–the income numbers used are whatever your gross income is on a 40 hour a week job, if you’re a W-2 employee.  The gross income number is different if you’re self-employed, so we’ll get to that in a different post.

The Office of Recovery Services has included a child support calculator on its website, which you can find here.  This is what the calculator on the website looks like:

CS Calculator 1CS Calculator 2

 

You input the names of the parents, the number of kids, the number of overnights (if you’re doing a joint physical custody plan), income of the parents, push the button, and TaDa, you have a child support worksheet printed out that you can file with your documents, like this:

CS Worksheet Sample

And now the details:

Your income that you input is for one months’ worth of one 40-hour per week job, UNLESS you have ALWAYS worked overtime or ALWAYS get a big bonus at the end of the year.

  • If you’re a normal, 9 to 5 worker, who doesn’t get bonuses/work overtime/have pay variations, you take the number of paydays you have per year, multiply the gross amount from ONE pay period by that many paydays, divide it by 12, and that’s your monthly income.  For example:  Say I gross $1000 per paycheck.  I get paid every other week–which comes out to 26 paychecks per year.  My total yearly gross income is $26,000.00.  Divide that total amount by 12 months in a year, and my gross monthly income that I’d put in for myself on the child support calculator is $2,167 (we round to the nearest dollar, which in this case means rounding Up.)
  • If you get paid once a month, you use the amount of your gross income for one month, so long as there aren’t any big variations month to month on your income.  If there are, add up the 12 gross amounts of those paychecks, divide by 12, and that’s your monthly income.
  • If you get paid twice monthly without pay variations, add up all of them for the year (all 24) and divide by 12.  That factors in the shorter month of February, but spreads that shorter month’s pay out over the year.
  • If you’re one of those people who get bonuses every year, you’ll need to use your gross income tax that’s reported on your yearly tax return.  You’ll divide that number by 12, and that’s your monthly gross income.

You do the same for the other party.  That’s their gross monthly income that you input into the child support calculator.

If one parent has not been regularly employed, or has not been employed full-time outside the home (as in the case of a stay-at-home parent), the court will “impute” that parent at a minimum wage income.  That means that the court assumes that unless you are permanently disabled either mentally or physically, a stay at home parent could conceivably at least work at a minimum wage job.  Whether that’s realistic or not is something you might end up arguing in court, but minimum wage is the standard for a parent who hasn’t previously worked.  The UNLESS, here, is Unless that unemployed parent had been employed prior to being married, or had received special training or education at some point prior to or during the marriage, and could theoretically find work at a rate higher than minimum wage with that skill set.

Minimum wage is roughly $1,257.00 per month gross (rounding up, per U.C.A. 78B-12-205(8), though it doesn’t make any difference in the child support amounts to round up minimum wage–we’re just going for consistency here.)

In our sample worksheet picture, above, you see that child support calculation takes into account BOTH parents’ incomes.  (Our sample puts Mom at minimum wage, and Dad is set at a roughly $26 per hr wage. )  The monthly incomes are added together, the state’s algorithm is applied to determine how much of that total would theoretically be spent to support children if the parents were together, and then each party’s percent contributed to the total is determined.  Each parent is responsible for their portion of this total amount in child support–which means that the parent that the children do NOT live with full time pays their portion (in this example, $992.00) to the other parent, who doesn’t actually pay anything out to anyone else (unless you count the landlord, the power company, school lunch, etc.)

That’s the basic child support calculation.  There are other circumstances that the calculator takes into account, however–joint physical custody, for example.  Or split custody (each parent has at least one child living full time with them), or if one of the parties already has a prior court order requiring them to pay child support or alimony to another person.  Or if a parent has other children at home that they’re supporting.  Those circumstances will reduce the amount of income a parent is required to put into the “pot”, so to speak, of what the total income amounts are that are considered for the current child support order.  For example:

CS Child in Household

If you look at 2d in the picture above, you see a number that Mom’s income is being reduced by as a result of her having 1 child in her household that she’s supporting that’s not part of the child support order we’re working through.  You can run that calculator with the parent being single, or the parent being remarried.  If the parent is remarried, then the current spouse’s income is taken into account to determine how much the parent would be “paying” in child support to take care of the kids in the parent’s current household–something of a legal fiction there, since Mom in this example isn’t actually “paying” anything.  The point is to not take away from kids living in Mom’s household (or Dad’s, as the case may be).

If you have a straight up custodial/non-custodial parent time situation, you don’t need to enter the number of overnights.  If you have parents in a joint physical custody situation, however, you do need to.  It changes the child support numbers–not always by a lot, but it does make a difference.  Joint physical custody is any parent time schedule that has one parent having at least 111 overnights–the other parent would then have 254, as we’re looking at overnights in an average year (no, we’re not counting Leap Year overnights).  The new joint physical custody parent time statute, UCA 30-3-35.1, puts the parents at 145 and 220 overnights, respectively.  Using our same income amounts and plugging the overnights into the calculator, we get this:

CS Worksheet sample joint custody

Go ahead and run numbers yourself.  You can play with the split custody, overnights, income amounts, other kids in the house, etc…..there are a lot of variations in people’s different circumstances, and the calculator does a pretty good job with keeping up with those circumstances and making it easier to determine what child support will be.

Child support is not like alimony–there IS a number that applies to your situation, and it’s NOT generally negotiable…at least insofar as the court is concerned.  But there are legitimate variables, so make sure that you’re running the right calculator for your situation.

 

Website Translation Tool!!!

So, it’s not a super pretty tool, but it’s pretty effective.  I found a website translation tool, so if you know someone who does not speak English, but could use the info on my blog, point them to this new link.  I’ve added it to My Links on the right side of this page, like so:

Translation tool link

The link is right there, highlighted and circled in the pic, in the My Links section down the right side of the page.

Click on the link, copy and paste the web address into the first field, select your language, click OK, and Voila!  My page in Spanish.  Or Bulgarian. Or any of a few dozen languages.  I have no idea how good the translations are, but something’s better than nothing, no?  Here’s hoping…

 

Change…Can be Good (but is it?)

utah state capitol building

Where the lawmaking magic happens in Utah…

Utah’s legislature is looking into a bill to change some of the wording/organization of the child custody determination factors in statute.  You can view the wording of the bill here.  Take a look at the changes.  If you’ve got issues with it, contact your representative.  OR if you think it’s great, that would be something to contact your legislator about as well.

Something to note:  The language about not favoring a parent based on their gender is still in the proposed language…they just relocated it further down in the text.  Some changes proposed in the bill are just reorganizing/re-numbering/condensing language from other statutes.

Anything that is underlined is new; text lined through is what would be removed in the new version.  Text not underlined OR lined through is existing text that isn’t being considered for change.

I’d be interested to hear what you think of it.  Leave me some feedback in the comments.

…and it’s That Time of Year again

Winter holidays tree

For whatever holidays you celebrate this winter…Have a Happy one.

I post every year about the holidays and parent time, and though I’ve said it before, I’m gonna say it again:  Please, for the sake of your own peace and sanity and that of your children, behave yourself during the holiday parent time designations and exchanges.  It takes little more than putting yourself in the place of your child to see why this is important.  And think back to your own childhood–was it a good one?  Was it bad?  And WHY?  Do you remember the holidays being a wonderful, exciting time that you got to spend with family?  Or do you remember your parents jerking you around while they tried to “get back at” each other?  What kind of holiday season do you want for YOUR children?

I had a really wonderful childhood.  My parents are still married; they like each other, even.  And they really love us kids.  We could feel it.  Even when we were dirt poor, the holidays always felt special and magical and Safe.  And Peaceful.  My children have not had the benefit of having parents who are not divorced, but they HAVE had the benefit of parents who have NOT used them as pawns to get back at each other for real or perceived offenses, particularly during the holidays.  Because I DO want my kids to have had a great childhood, my and their father’s decisions not withstanding.

Your children did not choose your divorce.  Please don’t make them pay for it, especially at this time of the year.

Let there be peace on earth

(For the holiday parent time schedule in Utah, see my blog post with it spelled out, or UCA 30-3-35.)

Right of First Refusal in Childcare

If you’re trying to look this up in the Utah state statutes with this term, you won’t find it.  “Right of first refusal in childcare” (commonly shortened to ROFR when lawyers start talking in writing about it) stands for the proposition that it’s better for a child to spend time with the other parent than with a babysitter.  It IS in statute, however, if you know where to look.  At UCA 30-3-33(15), the Advisory Guidelines, it says: “Parental care shall be presumed to be better care for the child than surrogate care and the court shall encourage the parties to cooperate in allowing the noncustodial parent, if willing and able to transport the children, to provide the child care.”

Mom&SonCooking

It takes time to teach…

So let’s break that down.

First:  parental care is better than surrogate care.  So who is a surrogate?  Anyone who is NOT a parent is a surrogate.  That means stepparents, grandma, aunts, uncles, a babysitter, a friend…ANYONE who isn’t mom or dad.

Second: the noncustodial parent–this is whichever parent is not the one who has physical custody of the kids at the time the care is needed.  That means that even if the parties have joint physical custody of a child, if it’s NOT mom’s time to have the kid, and dad needs someone to take care of him/her, Mom is the noncustodial parent in this situation, and she should be given the option FIRST of taking care of the child.  FIRST, as in, call her first before you talk to the babysitter, grandma, or stepmom about watching the child for that period of time.  If she can’t care for the child at that time, for whatever reason, then dad would go to someone else to see if they can help with childcare for that time period.

Third:  “if willing and able to transport the children..”  In the above example, if Mom wants to have the child while Dad is otherwise occupied, she’s got to provide the transportation–the pick up and drop off.  If she can’t, Dad’s not obligated to use Mom for childcare on that occasion.

That’s the statute.  How does that translate in YOUR custody order?  Well, your custody order may have other factors included, like ROFR only applies if the custodial parent will be away from the child for x amount of hours, commonly like 3 or 4.  Or ROFR will NEVER apply, for whatever reason–maybe because the parties don’t get along and any time they interact there’s conflict that bleeds over onto the kids, or because you live too far away from the other parent to make it practical to use.  Or because there have been issues of abuse.  Or because the other parent can only have the kids while they’re supervised, and there’s no supervisor available on short notice.  There are definitely reasons to NOT have ROFR included in your Order, but if it’s not specifically excluded, the statute applies–even if it’s not mentioned anywhere at all in the custody order.

Dad&DaugherCar

…if there’s no time, the life skills teaching can’t happen.

The goal with right of first refusal if for both parents to have the opportunity to spend as much time as possible with their kids.  Kids need BOTH parents, and having that extra time with Mom or Dad is important for building that parent/child relationship.  Being a good parent means encouraging that relationship.  So make sure you’re doing what you can in your own custody order to help your kids that way.  Right of First Refusal, those words, aren’t anywhere in the statute.  But they very well should be in your own parenting philosophy and practice.

September

fall leaves depression

It’s beautiful, really…

September has been my least favorite month for a lot of years now.  Bad things, hard things, miserable things, challenging things, depressing-life shifting-exhausting things happen in September. Every September.  For more than a decade.

This September, my middle child left home to serve a religious mission in the Farmington, New Mexico area.  He’ll be gone for the next 2 years.  When he returns, he’ll go straight to the university, out of town.  He’s gone, basically, and will not be Home with me again.

My oldest child, who had been living with me during the month of August, moved out of state–I drove the Yukon hauling the trailer with all (most) of his belongings myself to get him there.  He’s not planning on moving back to Utah any time soon, so this is effectively a permanent move.

Autumn & DyingMy husband has been gone most of the month with work and then elk hunting, which meant these first weeks of going from 4 kids that drop in or live with me constantly to 1 child with me part of the time and the drop-ins dropping off sharply, I’ve been largely on my own.

A dear friend lost his father, quite unexpectedly, and has struggled personally through the month prior to his dad dying–and, obviously, since as well.

My anxiety and depression have been through the roof.

Basically, it’s been a September.

I am thrilled that we are putting this month to rest in a couple of days.  I’ve had enough of it.  I will breathe a sigh of relief when September is Done.

Green Day got it right….

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