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Crossland appeal offers interesting guidance on alimony and equitable distribution

The March 7, 2012 Court of Appeals opinion in Crossland v. Crossland, 397 S.C. 406, 725 S.E.2d 509 (Ct. App. 2012), offers the family court bench and bar interesting guidance on frequently occurring alimony and equitable distribution issues.

Crossland involved Husband’s appeal of the family court’s alimony, property division and attorney fee awards.  This was a short term marriage, with the parties married under a decade, and with Wife having left three times before leaving for good.  In all the parties were only married and living together for about five years.  Husband was retired and disabled throughout the marriage and had property he accumulated prior to the marriage.  At the time of trial, he was seventy-six years-old and Wife was sixty-two years-old.  Wife had been marginally employed prior to the marriage but Husband asked her not to work so that they might travel.  During the marriage she developed health problems.  At trial, Husband’s income from retirement and disability was $2,429 per month.  The family court required him to pay $958.50 per month in permanent periodic alimony.

The Court of Appeals reversed her alimony award.  Wife acknowledged she was eligible to receive social security benefits but had not applied for them.  The family court failed to consider this eligibility in setting alimony.  Because of this the Court of Appeals remanded for a determination of Wife’s income derived from social security benefits and a recalculation of alimony in light of such benefits and other income, imputed or otherwise.

The Court of Appeals also reduced Wife’s equitable distribution award.  Prior to the marriage Husband owned two mobile homes, a house he purchased in 1955, and savings in the form of stocks, savings accounts, certificates of deposits, and mutual funds.  Shortly after the parties married, Husband added Wife to the accounts identified as his “savings”; however, after Wife left Husband the final time he transferred the money in the joint accounts to an annuity fund in his name only.  The family court found the annuity was marital property because it had been transmuted, and valued it at $183,000.  At the pre-trial, Husband had been ordered to obtain the value of his retirement accounts at the time of the marriage and as of the day of the commencement of the divorce action.  However, Husband produced no records before or at trial documenting the value of such accounts.  Accordingly the Court of Appeals held that the family court did not err in finding the whole annuity to be marital property and valuing it at $183,000.

However the Court of Appeals found Wife was not entitled to 40% of the marital estate and reduced her share to 30%, explaining:

Because the evidence in the record demonstrates Husband’s disproportionately greater contributions to the marriage, we find the family court erred in awarding Wife forty percent of the marital estate.  Wife brought no assets to the marriage and brought in no assets during the marriage.  Similarly, she was not earning any income at the time of the parties’ marriage and contributed only a negligible amount during the marriage to the parties’ joint accounts from earnings from her temporary position with the Census Bureau and proceeds from an automobile accident. The vast majority of the contributions to the parties’ accounts during the marriage were made from Husband’s social security, retirement, and disability benefits.  Similarly, the bulk of the funds in the accounts had been earned by Husband prior to the marriage and resulted from decades of living frugally and saving his earnings.  In addition, although the parties were married for ten years before Husband filed for divorce, both parties acknowledge several periods of separation throughout the marriage.  Finally, both parties were unemployed for the majority of the marriage and contributed to household duties.  Under these circumstances, we find the family court erred in awarding Wife forty percent of the marital estate.  Accordingly, we modify the order and award thirty percent of the marital estate to Wife and seventy percent to Husband.

Finally, because Wife’s successful results on alimony and property division were partially reversed on appeal, the Court of Appeals remanded the family court’s award of $16,024.50 in attorney’s fees and costs to Wife.

Two noteworthy items in Crossland.  First, alimony awards in which the supported spouse is clearly capable of more income are subject to reversal unless the family court considers this potential income in its award.  Second, the shorter the marriage, and the less equal the contributions to the marital estate, the greater the appellate courts are willing to deviate from a 50/50 division of marital assets.  As I frequently remind my clients and opposing counsel: 1) The Lord (and the family court judges) help those who help themselves [i.e., laziness isn’t conducive to alimony]; and 2) South Carolina ain’t a community property state.

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