Marital Property is Not Always Divided Equally

This is a divorce case from Baldwin County, Alabama, in the case of Kleinatland v. Kleinatland. This case is a great representation in regards to marital property division and illustrates how the court divides property equitability not equally.

According to the divorce decree, the husband was to pay the wife “an amount equal to one-half of the amount in his Retirement System of Alabama account as of the date of separation.” The trial court also required the husband to pay one-half of the equity of the home that amounts to $20,000 and “wives car insurance that was due during the pendency of the divorce.”

The husband appealed arguing that the trial court erred in awarding the wife one-half of the value of his retirement account with the Employees’ Retirement System of Alabama (“RSA”). The husband argued that the RSA retirement account cannot be equitably divided under Ala. Code 1975, § 36-27-28, which provides that benefits accrued or accruing to a person who is a member of the RSA are “exempt from any state or municipal tax and exempt from levy or sale, garnishment, attachment, or any other process whatsoever and shall be unassign-able…”

Further, the Court addressed a similar statute that applied to the Teachers’ Retirement System of Alabama that was discussed in Sockwell v. Sockwell. Sockwell v. Sockwell, 822 So.2d 1219 (Ala. Civ. App. 2001). In Sockwell, the Court held that while such a retirement account could be consider in dividing the parties property, the trial court could not require that the account be liquidated; therefore, the Court ordered the husband to pay the wife one-half of its value of the retirement plan. When a piece of the parties’ marital property cannot not be divided, such as a RSA, the trial court can order the spouse whose name the property is vested under to pay the other spouse the value of their equitable share of marital property in as alimony in gross. Hager v. Hager, 293 Ala. 47, 54, 299 So.2d 743, 749 (1974).

Alimony in gross is an award for a fixed lump sum of money. Even though alimony in gross is an effective way to award property that cannot be divided, it has limitations. The court cannot award alimony in gross if the spouse does not have the ability to pay the alimony in gross without undue hardship. In this case, the divorce proceeding ordered the husband to pay one-half of the value of the retirement plan and not to liquidate the retirement plan. Therefore, the Court affirmed the order on the basis that the husband failed to demonstrate that he could not pay the alimony in gross proceedings through some other means.

Secondly, the husband argued that that the trial court erred in calculating the equity in the marital home. Specifically, the husband claimed the value of the house was between $115,000-$120,000, while the wife claimed that the house was valued at $145,000. The trial court ruled that the house was worth $139,000, and the Court affirmed that determination of value of the house was within the trial courts power.

Lastly, the husband protests that he should not be required to pay the wife’s automobile insurance that accrued during the pendency of the divorce. Here, the wife stopped sending the husband her insurance bills in 2014, and the husband claims that it is unjust to pay bills that were not forwarded to him. The trial ordered the husband to pay the insurance bill through a Pendente Lite Order. A Pendente Lite Order is an order that is entered by the court while a case is pending litigation; Pendente lite orders are commonly used to provide support to the lower income spouse during a divorce proceeding.

Here, the Court held that if the Pendente Lite order had conditioned payment on the receipt of the bills from the wife, then the husband would not have a duty to reimburse her; however, that was not contained in the Pendente Lite order at hand. Therefore, the Court affirmed the judgment of the trial court.

The most important lesson from this case is that a divorce trial is before a judge and not a jury. Sometimes the parties are better off to reach a settlement than let a judge decide their fate.

If you are considering divorce, please call Ingram Law to discuss your case at (205) 236-3997.

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