Memorandum about Utah Divorce Alimony and More
There are three standards the Court can use to determine alimony. They are alimony based on the Jones factors, Parties’ standard of living, and fault. UTAH CODE § 30-3-5(8).
First, in Jones v. Jones, 700 P.2d 1072 (Utah 1985), the Utah Supreme Court gave three factors a court should examine when considering the needs of a recipient spouse, for alimony purposes, as well as the ability to pay by the obligor spouse. Those factors are: “the financial conditions and needs of the wife; the ability of the wife to produce a sufficient income for herself; and the ability of the husband to provide support.” Jones, 700 P.2d at 1075. Without extraordinary circumstances, the recipient spouse’s established need is the upper limit of what the obligor spouse will pay in alimony, even if the obligor spouse is able to pay more than that established need. See Bingham v. Bingham, 872 P.2d 1065, 1068 (Utah App. 1994).
Utah Code has also laid out those and additional factors including requiring the Court to consider the financial condition and needs of the recipient spouse, the recipient’s earning capability, the ability of the payor to pay, the length of the marriage, whether Parties have minor children, whether recipient worked in business owed by payor, and whether a spouse paid for an increase in the payor’s skill. UTAH CODE § 30-3-5(8)(a).
Second, in making its award, the Court can also look at, among other things, the standard of living at the time of separation; however, the Court should also “consider all relevant facts and equitable principles and may, in its discretion, base alimony on the standard of living” at the time of trial. UTAH CODE § 30-3-5(8)(e). The Court may attempt to equalize Parties’ standards of living. Id. at § 30-3-5(8)(f). This can be done by equalizing the amount of income each Party receives or equalizing the amount each Party is short each month. This is typically used for long-term marriages with a significant difference in incomes.
Third, “[t]he Court may also consider the fault of Parties in determining whether to award alimony and the terms thereof.” UTAH CODE § 30-3-5(8)(b). Fault can include engaging in sexual relations with someone other than your spouse, causing or attempting to cause physical harm to spouse or children, causing spouse or children to reasonably fear life-threatening harm, or undermining the financial stability of spouse or children. UTAH CODE § 30-3-5(8)(c). Usually the Court only considers fault for alimony if an economic nexus can be found between the bad behavior of one Party and the financial need of the other Party.
Alimony may not be awarded in a marriage of short duration where no children were conceived or born during the marriage because the Court restores each party back to their state before the marriage. UTAH CODE § 30-3-5(8)(h).
Alimony may not last longer than the length of the marriage, unless the Court finds extenuating circumstances to justify awarding alimony for a longer period of time. UTAH CODE § 30-3-5(8)(j). If a case goes to trial, Utah courts will generally award alimony for half the length of the marriage. There’s no real reason why this is, it is simply what Utah courts do at trial.
Courts typically credit the amount a payor spouse has paid in temporary alimony prior to the divorce decree toward the payor spouse’s post-decree alimony obligation, effectively resulting in a shortened alimony award period. See Robinson v. Baggett, 263 P.3d 411, 421 (Utah App. 2011) (wherein the court reduced wife’s nine-and-a-half-year alimony award by one year as a credit for husband’s year of alimony payment under temporary orders prior to divorce decree); Thomas v. Thomas, 987 P.2d 603, 608-09 (Utah App. 1999) (wherein the court credited husband for alimony paid under temporary orders, resulting in three-year alimony award already expiring prior to entry of divorce decree).
The Court can award alimony under three theories. However, the most prevalent alimony calculation is based on the Jones factors, which caps the amount of alimony received at the receiving spouse’s actual need. Alimony cannot last longer than the length of the marriage, but typically last for half the length of the marriage.
II. REAL PROPERTY
Real property is divided equitably. This usually means Parties are entitled to half the equity in any real property acquired during the marriage. Utah courts start at 50/50 and then deviate from there if there are circumstances that warrant a deviation.
The Court may order that the home be sold and the proceeds divided equally. Andersen v. Andersen, 757 P.2d 476, 479 (Utah Ct. App. 1988). If the home is sold, Parties should receive one half of the actual sale price, rather than the appraised value. Bettinger v. Bettinger, 793 P.2d 389, 392 (Utah Ct. App. 1990) (quoting Workman v. Workman, 652 P.2d 931, 934 (Utah 1982)). The equity should be the actual sales price of the home less selling costs and expenses. Id. at 392-93.
If the real property is not sold, the Court may award the home outright to one of the parties, subject to a lien in favor of the other Party. The lien generally matures when (1) the party remaining in the home remarries, (2) the youngest child of the marriage reaches maturity, or (3) the home is sold. Proudfit v. Proudfit, 598 P.2d 1318, 1320 (Utah 1979). However, usually, the payment of half the equity to the other Party occurs when the Party remaining in the home refinances the mortgage. The refinance and/or payment of equity can occur in a few months or a few years.
Parties may also be entitled to a portion of the equity in real property that was acquired before the marriage or was one Party’s separate property. Parties are required to divide equity in any real property that was comingled. Comingling occurs when “the other spouse has by his or her efforts or expense contributed to the enhancement, maintenance, or protection of that property.” Christian v. Christian, 2014 UT APP 283, 5 (Utah App. 2014).
Comingling can occur if one Party puts the other Party’s name on the title. However, that is not required. Comingling usually requires Parties split the equity evenly or requires one Party to pay a less-than-50/50 portion of the equity to the other Party. This less-than-50/50 share usually distribution usually occurs when (1) one spouse has contributed a large amount of inheritance of other non-marital money to the real property (e.g., one spouse paid a $100,000 down payment on the marital home from inheritance money) that is easily traceable; or (2) when a property was clearly non-marital for a long period and a spouse has not been on title or making mortgage payments for very long (in this case, the later-comer spouse will usually receive a 50/50 share of equity for the period after being put on title or making mortgage payments on the property).
Real property is divided equitably between Parties, which is presumed to be an equal share. Separate property can become comingled and be subject to the same division as marital property.
III. PERSONAL PROPERTY
The Court should order Parties to equitably divide their personal property. When dividing property, the Court has to consider whether the property is marital property or separate property. Hall v. Hall, 858 P.2d 1018, 1022 (Utah App. 1993).
Each Party is entitled to all of his or her separate property and fifty percent of the marital property. Hall at 1022. Premarital property is separate property. Id. Separate property must be kept separate and not comingled. Finlayson v. Finlayson, 874 P.2d 843, 847 (Utah App. 1994) (quoting Burt v. Burt, 799 P.2d 1166, 1168 (Utah App. 1990)).
Separate property is property one Party earned before the marriage or was obtained by gift and/or inheritance during the marriage.
The award should include any appreciation or enhancement of its value, unless (1) the other spouse has by his or her efforts or expense contributed to the enhancement, maintenance, or protection of that property, or (2) the property has been consumed or its identity lost through commingling or exchanges or where the acquiring spouse has made a gift of an interest therein to the other spouse. An exception to this rule would be where part or all of the gift or inheritance is awarded to the non-donee or non-heir spouse in lieu of alimony.
Weaver v. Weaver, 442 P.2d 928 (Utah 1968). Gains from separate property (e.g., investment gains) realized during marriage remain separate property, unless comingled.
There is a general presumption that marital property is divided equally; however, the Utah Supreme Court determined District Courts may, under exceptional circumstances, overcome this presumption. Dahl v. Dahl, 2015 UT 23 at 121 (Utah 2015). Additionally, although separate property should be awarded to the owning spouse, separate property can become marital property if its identity is lost through commingling. Bingham v. Bingham, 872 P.2d 1065, 1069 (Utah App. 1994).
A marital asset is only property that is possessed by Parties. Dunn v. Dunn, 802 P.2d 1314, 1317-18 (Utah App. 1990) (quoting Gardner v. Gardner, 748 P.2d 1076, 1079 (Utah 1988)). The Court cannot divide property that is not actually owned by Parties.
It is presumed each Party is entitled to all of his or her separate property and an equal share of the marital property. Separate property may lose its identity as separate property through comingling, gifts, or if the other Party contributes to the enhancement, maintenance, or protection of the separate property.
IV. RETIREMENT ACCOUNTS
Each Party is awarded half of the retirement benefits that were accrued during the marriage. The present value of the retirement account as well as any deferred earnings of retirement accounts are marital assets and should be valued at the time of the divorce and should be equitably divided. Dunn v. Dunn, 802 P.2d 1314, 1319 (Utah Ct. App. 1990).
Retirement accounts where the present value of the account cannot be ascertained, like a defined benefit plan (e.g., pension), should be divided according to the Woodward formula. Both Parties are entitled to the portion of the benefit incurred during the marriage. Woodward v. Woodward, 656 P.2d 431, 432-434 (Utah 1982). For example, if a pension is received after 30 years of employment and Parties were married for 15 of those 30 years, then the spouse is entitled to one-fourth of the pension amount determined at the time of divorce.
The calculation for defined contribution plans (e.g., 401(k)s) follows the Woodward logic, but isn’t quite the same. This is the language we use in our stipulations regarding dividing defined contribution plans: “Parties should equally divide the marital share of all defined contribution plans (e.g. 401(k), IRA, annuities, etc.). Marital share should be defined as contributions, interests, dividends, and earnings made and acquired during Parties’ marriage.” The non-marital share is awarded to the person who owned the defined contribution plan. Please note, until recently, almost all Utah attorneys used the Woodward formula as short-hand when dividing defined contribution plans, but a recent Utah Supreme Court case found the Woodward approach to be inappropriate in some defined contribution plan division situations, although it did not specifically state the proper division calculation. This means things are a bit in flux, but the above language reflects the division calculation Utah attorneys have actually used for some time.
Alternatively, the Court can award each Party their own retirement accounts. Davis v. Davis, 76 P.3d 716, 719-20 (Utah Ct. App. 2003). An unequal division of marital property is only justified when the court provide detailed findings showing exceptional circumstances to support the distribution. Davis at 719 (quoting Bradford v. Bradford, 1999 UT App 373, 27, 993 P.2d 887 (citation omitted.)
All retirement benefits accrued during the marriage or a future benefit is received during the marriage is marital property and should be divided equally.
V. DIVISION OF DEBTS
The Court should order Parties to equally divide all joint marital debts. Any separate debts or debts incurred after the date of separation should be the responsibility of the individual who acquired the debt. UTAH CODE § 30-2-5(1).
Any marital debt should be divided evenly between Parties. Marital debts are subject to a fair and equitable division. Finlayson, 874 P.2d at 849. Marital debt is debt incurred for family expenses. UTAH CODE § 30-2-9. Any debt incurred during the marriage for family expenses should be divided evenly between Parties.
Although there is a presumption that marital debts are divided evenly, an unequal distribution can be made in exceptional circumstances. “Neither spouse is personally liable for the separate debts incurred by the other spouse during the marriage. But both spouses are responsible for family expenses.” Dahl, 2015 UT 23, 139 (Utah 2015). There is no fixed formula for determining the division of debts as long as there are adequate factual findings. (Id.)
The presumption is that marital debts are divided equally between Parties, unless there are exceptional circumstances to allow for an unequal distribution. Separate debts and debts incurred after the date of separation are the responsibility of Party incurring the debt.
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