Monday, March 29, 2010

How Double-Dipping For Alimony Affects Your Retirement Account

Excerpt from an email discussion on retirement distribution:

..... One of the problems with finding a case that counters the 2005 "Acker v Acker" Supreme Court [in Florida] precedent is that it seems to take about three years for a case to move from county court to the appeals court, and another three years to just get to the Florida Supreme Court, much less be published.   Basically, any case that would do me any good, has probably not even made it to an appeals court, yet. 
..... I have a problem with Mr. Schultz's analysis of the "Acker v Acker" precedent and his discription of "Double-Dipping" in conjunction with how retirement plans should be counted.   He discusses treating pre-divorce accumulations in retirement plan as being subject to being divided as a marital asset, then treating Post-divorce accumulations as a source of income to be used to calculate alimony.   What he doesn't take into account is when in the initial divorce division of assets, BOTH the pre- as well as post-divorce accumulations are considered.   In Mr. Acker's case, his half of the assets included ALL of his retirement plan.   His Ex received other assets to offset his getting this retirement plan.   I am in a similar boat in that I gave up exactly half of my pre-divorce accumulations in my retirement.  I also gave the Ex over 100K in exchange for any future accumulations.   Now a decade later she has spent much of the retirement that was turned over to her, but mine is still intact.   Under "Acker" the ONLY thing that counts in a Modification of Alimony hearing is "Need vs Ability to Pay".   Since she has spent a lot of her retirement assets, and I haven't, guess who the court thinks is in "Need" and who has the "Ability to Pay" ? 
..... Here is a senerio that more clearly shows how unjust the "Acker" precedent is.
..... Mr. & Mr. Smith get divorced simultaneously with his retirement.  Under the divorce agreement each party gets half interest in his retirement pension plan.  As with many pension plans, there is an option to either take all the benefit as an annuity ..(lifetime monthly payments).. or as a lump-sum, or proportioned between the two.   Mr. Smith chooses to take his half as $2,000/mo. annuity.   the Ex chooses a $1,000/mo. annuity and $150,000 as a lump-sum.   Several years later after the Ex has spent all of her lump-sum, she ask the court for alimony since she is in "Need" by having only $1,000/mo. and Mr. Smith has the "Ability to Pay" from his $2,000/mo. income.   Under the "Acker" decision, the equitable distribution of assets during the initial divorce does not count, only the present difference of income.   Therefore, she would be awarded alimony  which could only be paid from his remaining half of his pension.


Sunday, March 28, 2010

A Sampling of the Arguments for and Against Alimony

The Women's Argument for Alimony:

 If a  woman (or the man) has been home caring for the children (whether the couple wanted it that way, or it was a necessity because of a sick or disabled child(ren)) think of what it would take to replace a person for 24/7 child care, do the laundry, do the dishes, keep the house clean,  planning and cooking the meals, run everyone's errands including picking up husband's clothes from cleaners and taking the kids shopping for school needs, clothes, shoes, etc, getting gifts for people at his office, entertaining his employers or clients, taking kids to appointments and activities and going to school functions and helping out in the kid's class room, customer service skills, interpersonal skills......If a parent is a stay at home parent, they are usually putting in 18-20 hour days.
 The parent that stays home does not get social security disability benefits should s/he become disabled after the divorce.  They are losing out on gaining experience, seniority, pension, 401Ks benefits.   When they go to work, they are starting from scratch, with usually their age against them already.
 And most women still do not get the top jobs or top pay or top benefits....just look at the Fortune many CEOs are men and how many are women, then compare their compensation and benefits packages....  Why do you think so many women are moving into management positions...because it costs the businesses more money for men than women.
 Look at politics...look at the supreme court.....
 I don't want to rain on your parade, but women are still discriminated against in the workplace.
 I don't think this alimony thing is going to go away until women (or the parent that stays home) are protected with social security, disability, in the workplace, etc.
 There are many women who worked while putting there husbands through college, master degrees, and some through PhDs putting aside their education and climbing the career ladder.  The women today are starting to say their career is just as important as the man's and they get housekeepers, day care providers, etc. and the husband has to share the expenses    But when the woman starts to climb higher or make more than the man, many men today still have ego problems.  Now men, you can't have your cake and eat it too.

A Rebuttal Against That Argument:

Here's the problem with that argument.  If you work for an employer who has you to do a job that requires a skill set in very low demand, then you do not have the right to a salary after the employer fires you or lays you off.  You get six months to a year's unemployment and that's it.  The understanding between you and the employer is that you are being paid to do a job that will not advance your career, will not improve your skill set, will not give you seniority and certainly will not provide for you if the employer cuts the relationship.  This is the risk the employee assumes when taking that type of job.  The employee can decided to stay or find a better arrangement.

And so it is with marriage.  If you decide that staying at home is best, then your decision to do so is a risk you assume, including losing out on other possible career moves.  If your spouse insists that you stay and home, you are free to find a better arrangement, or assume the risk that comes with staying at home.

Every time I hear this argument it makes my stomach churn.  The argument basically says that women (and this argument is always applied to women no matter how gender neutral the law is) are never responsible for themselves or accountable for their actions.  Women will never be equal to men as long as this attitude of irresponsibility and unaccountability prevails.

When the women's movement first started and NOW was in it infancy, they group attempted to have alimony laws abolished.  Since the early 70's NOW has abandoned that position.  But I find it interesting that they admitted early in their quest for equality that women would not be equal to men unless they were willing to assume the same risks as men.

As for women being discriminated at work, I say that's complete hogwash.  I work on wall street in the computer side of the business.  I have been in positions that required hiring large number of people many times over the past 25 years.  Each and every time I ask recruiters for resumes I get an abundance of quality resumes - all men.  In 25 years I have seen the resumes of only 3 women, two of which I hired.  Again, currently, for whatever reason, women are unwilling to do the same things and assume the same risks as men.

And as for the nonsense of women not being in the top positions, again that's hogwash.  After my divorce I had the pleasure of dating a woman who owned her own business, had taken it public and decided to retire, all within five years.  She had a net worth of about $30 million.  This woman was willing to do what was necessary and willing to take the same risks that many men take.  And the rewards were plentiful for her. 

Her take on the state of women is the same as mine.  Most women are unwilling to take on the same risks as men. In fact, when she was running her business, she was the only woman on board of directors and the only woman in the management team.  She did all the hiring.  I think that says enough.