One rule for him and another for her as Oklahoma Supreme Court dismisses Sue Ann Arnall’s appeal

In November 2014, Harold Hamm, the CEO of Continental Resources, was ordered to pay his ex-wife Sue Ann $995.5 million in what was described as one of the biggest divorce settlements in history. With the award representing only a fraction of Mr Hamm’s estimated $18 billion empire, Sue Ann appealed, claiming that she should be entitled to a much heftier settlement due to her significant contributions during their 26-year marriage. Conversely, Harold made his own appeal, arguing that the almost $1 billion figure was excessive.

On 28/04/15, the Oklahoma Supreme Court dismissed Sue Ann’s appeal in a 7-2 decision, stating that she had forfeited her right to appeal in January, when she took possession of the marital property that had been awarded to her and cashed a cheque for $975 million. The Supreme Court did not dismiss Harold’s appeal.

The two dissenting judges branded the above decision ‘old fashioned’ and ‘draconian’. They suggested that if the only way to maintain the right to appeal was to reject the tendered cheque, this would allow the husband absolute and unfettered control over the marital property during the pendency of what could be a lengthy appeal. Not only would this provide Harold with the opportunity to deplete the marital property (admittedly a rather onerous task considering the extent of his wealth), but it would also leave Sue Ann, and other women in such a position, potentially unable to afford the cost of living in the interim period between the court ruling and the appeal. Surely it is inequitable for those who are unhappy with a court decision to have to choose between affording to live and appealing a ruling?

Not only does the Supreme Court’s ruling seem outdated, but more importantly it appears to be bias towards Harold. For if the court thinks that accepting the tendered cheque removes the right to appeal for the wife, then surely, using the same logic, writing the cheque should also remove the right for the husband. Using the basic concept of offer and acceptance, it could be argued that if there is a ‘no returns’ policy for Sue Ann, then there equally shouldn’t be room for Harold to recall the cheque that he presented to his ex-wife. It is potentially inequitable and inconsistent of the court to draw a distinction between the party’s actions.

Ironically, Oklahoma is an equitable distribution state, which means that divorce settlements must be just and reasonable. One of the big considerations for judges dealing with such disputes is what each spouse needs in order to move forward following their separation. Understandably, the judges who reviewed Sue Ann’s appeal would have found it very difficult to sympathise with an argument, claiming a life with only $1 billion is not worth living; however, they should have also considered factors such as her contributions during the marriage, as well as providing a more impressive basis for dismissing her appeal.

Craig Box, one of Mr Hamm’s attorneys, has said that it is too early to comment on whether or not Harold will appeal. However, the likelihood is that he will not and that, instead, he will be delighted with the dismissal of his ex-wife’s appeal. There is even room to suggest that Harold was content with the initial ruling in November, and appealed against it himself simply to highlight his disdain for Sue Ann’s appeal. After all, although $995.5 million is more money than most people could ever dream of earning, it is only a minute fraction of his overall wealth and therefore he could well have been relieved with the county court’s decision.

One thing that has been made very clear by the Supreme Court’s ruling is that the Oklahoma state does not believe equity necessarily requires equality. Whereas the UK has gained a reputation for being the ‘divorce capital of the world’ due to its generous divorce settlements that often entail a 50/50 split of assets, the Oklahoma courts clearly do not mirror this approach.

Don’t look back in anger? Try telling that to Dale Vince

During the couple’s relationship, the pair lived a nomadic lifestyle, surviving on very little money. Following their separation, life continued in a similar manner for Ms Wyatt, who today lives in an ex-council house in Wales with her children. However, things changed dramatically for Mr Vince when he founded Ecotricity in 1995, which is now one of the UK’s biggest green energy companies.Mr Vince’s new lifestyle mirrors his business success and he currently lives in a £3 million 18th-century castle with his new wife and their son.

At first glance, it seems obvious that any maintenance claim brought by Ms Wyatt so long after their divorce should fall flat. After all, the maths is plain and simple: Mr Vince’s success came three years after the couple divorced and therefore this surely means that Ms Wyatt’s ship has sailed and she has no right to any of her ex-husband’s earnings? This logic was certainly used by Lord Justice Thorpe in the Court of Appeal, who stated that Mr Vince was not to be Ms Wyatt’s ‘insurer against life’s eventualities’. However, shockingly, when the matter reached the Supreme Court, Lord Wilson ruled that Ms Wyatt should be entitled to bring a claim against her ex-husband and stated that the matter should be heard by a judge in the Family Division of the High Court.

When the case does come before the High Court, Ms Wyatt will likely base her claim on her significant childcare contributions over the years. Mr Vince will rely on the ridiculously long delay in the claim being brought, as well as the fact that although the couple were officially married for 11 years, they actually only enjoyed marital cohabitation for two years.

Although Ms Wyatt’s claim may not be successful, the fact that she has received permission to bring it before a Judge is still extremely unsettling for divorcees, who should not have to live in fear that their divorces, which they presumed to be ‘done and dusted’, may rear their ugly heads in the form of a claim in the future.

If nothing more, the Supreme Court’s ruling comes as a huge warning to anyone whose marriage ends in divorce, and that warning is quite straightforward: it is imperative to get a final order so that all monetary claims are dealt with together with the divorce. It is certainly understandable why many fall into the trap of thinking that a clean break is unnecessary; after all, when a couple have lived on an extremely low budget throughout their marriage, the cost of a court order is likely be viewed as an unnecessary expense. However, it is vital for couples to realise that things can and do change – one party may win the lottery, a loved one may leave a large and unexpected inheritance, or one party may start a business that reaches a level of success they couldn’t have imagined in their wildest dreams.

Today, separating spouses are privy to the ‘online quickie divorce’, a service that allows parties to get divorced for a fixed fee of as little as £100 plus VAT. Whilst such services may appear appealing and are often very useful for those looking to keep their divorce costs to a minimum, it is imperative for couples to understand that such a service often does not deal with matrimonial finances and instead only take the couple to the decree absolute stage of their divorce.

In order for both spouses to move on with their independent lives after divorce, it is crucial that they draft, approve and sign a final financial order before submitting it to court for approval. Whilst the cost of a lawyer drafting such an agreement may be a slight inconvenience, it will be miniscule compared to a claim that could be brought years later by an ex-spouse with a hefty sense of entitlement. Nobody wants to be looking over their shoulder after divorce and the best insurance against having to do this is to tie things up at the point of divorce instead of leaving loose ends

Hohn divorce settlement secures the UK’s position as the divorce capital of the world

It has been an exciting few weeks in the world of divorce settlements. Less than a month after American Billionaire Harold Hamm was ordered to pay his ex-wife almost $1 billion, the UK’s largest divorce pay-out has hit the headlines as Mrs Justice Roberts ruled that Ms Cooper-Hohn is entitled to £337 million following her divorce from philanthropist Sir Chris Hohn.

Although the size of the couple’s wealth was a source of contention throughout the trial, it has been reported that they had assets worth more than £700 million, which means that Ms Cooper-Hohn has been awarded about 40% of the wealth. This near to equal split is miles apart from the Hamm settlement, which although saw Mrs Hamm receive a much greater sum, actually only represented one tenth of the Hamm’s fortune. The large discrepancy between the percentages awarded to the ex-wives highlights the generous awards that are often made by UK judges, which – some would argue – secures the UK’s position as the divorce capital of the world

Attempting to depart from an equal split, Sir Chris Hohn argued that he had made a special contribution that justified him retaining three-quarters of the wealth. Counsel for Sir Hohn, Lewis Marks QC explained, “The husband was the sole decision-maker in this enterprise. Without him there is no business.” Ms Cooper-Hohn strongly disputed this claim. She stated that she had worked long hours on behalf of their charitable foundation, The Children’s Investment Fund Foundation. She also claimed that she had been the one to turn her ex-husband’s attention to charitable giving, stating that when they met he had only been interested in making money.

Although the full judgement has not yet been published, what we currently have appears to reiterate the principle that one spouse’s contribution should generally not be viewed as being superior to the others. Although Sir Hohn argued that he had made a stellar contribution by claiming that he was the “unbelievable money maker”, it appears that this was rejected and, instead, the court reemphasised the Lambert principle.  As Thorpe LJ had pointed out in this 2002 case, “Special contribution remains a legitimate possibility, but only in exceptional circumstances… The stellar contributor is a very rare creature, the likes of which would seldom be seen.”

Sir Hohn does not appear to have qualified as a ‘stellar contributor’. For this reason, the Hohn case highlights how difficult it is to displace the principle that both parties’ contributions should be viewed as equal in the majority of situations. Realistically, it will likely have been the support of his wife that allowed Sir Hohn to have progressed so far in his career. Be it the emotional aid or practical assistance, such as caring for their four children and her position as chief executive officer of the ex-couple’s charity, Ms Cooper-Hohn’s actions will have aided Sir Hohn in achieving such a high level of success.

Despite the sizable figure that has been awarded to Ms Cooper-Hohn, it has been reported that she intends to appeal the decision, presumably on the ground that there should have been an exact 50/50 split. Without the full judgement it is impossible to understand Mrs Justice Robert’s logic when dealing with this case and we will therefore await with bated breath its release on 12 December.

Family Dispute Resolution Week: A Look at Mediation

Mediation will make the divorce process quicker, fairer and more empowering for both parties, says a family law expert at Manchester-based Kuits Solicitors today to mark the beginning of Family Dispute Resolution Week.

The comments come from Kuits’ Head of Family Law, Katie McCann, in response to further advancements made by the government to encourage divorcing couples to stay out of court in favour of mediation services.

“Last April saw the introduction of compulsory Mediation Information and Assessment Meetings (MIAM) for divorcing couples,” says McCann. “The purpose of these meetings is to provide the couple with information in relation to mediation and other forms of non-court-based dispute resolution. In a further attempt to encourage divorcing couples to use mediation as an alternative to the courts, a free mediation session will now be available, as long as one of them qualifies for legal aid.”

Previously, only the party eligible for legal aid was entitled to receive a complimentary session, whilst the other party had to pay for it. The Chief Executive of National Family Mediation, Jane Robey, says that the new scheme seeks to aid people’s understanding of what mediation can achieve, presumably by allowing them to experience the benefits of it first-hand.

MIAMs, along with the free initial mediation sessions, have the potential to enable ex-couples to reach agreements regarding finances and children outside of court. Commenting on the benefits of mediation the Justice Minister, Simon Hughes states: “Mediation works and we are committed to making sure that more people make use of it, rather than go through the confrontational and stressful experience of going to court.”

As well as being less stressful than court, an additional benefit of mediation is a financial one. David Norgrove, chairman of the Family Justice Review, estimates that, if used, mediation has the potential to reduce legal aid costs by £100million – and it is not only the government who would reap the financial rewards. Ex-couples would also benefit significantly due to the fact that only one mediator is required, as opposed to two lawyers, and the hourly rate of a mediator is commonly less than that of a lawyer. However, families should be aware that, should mediation be unsuccessful and lawyers instructed at a later date, costs are likely to end up higher than they would have been if lawyers had been instructed at the outset.

“There certainly exists the potential for mediation to be a success due the fact that it allows for effective communication between the parties, who are able to speak directly, as opposed to having to pass their opinions and negotiations through their lawyers,” says McCann. “Not only can this save a lot of time, but it also ensures that words are not minced or misinterpreted. Without the court getting involved, an ex-couple can potentially reach a subjective, tailored arrangement that works best for them, without feeling that they are being ordered to do so. Significantly, it is often the non-forced nature of the arrangement reached that attracts separating couples to mediation.”

McCann also thinks that the fact that an ex-couple have managed to sit down and reach an agreement using mediation will mean that they have effectively communicated and compromised with each other. The skills acquired will hopefully allow them to renegotiate their arrangements should they require adaptation in the future, especially in relation to arrangements for the children.

“Due to the benefits attached to mediation, it is understandable why the government are encouraging more couples to attempt it,” says McCann. “Although couples cannot be forced to mediate, the existence of compulsory MIAMs suggests that there is some sort of pressure being placed on separating parties to consider it. However, the government should consider whether this pressure could potentially threaten the success of mediation, due to the fact that it removes the voluntary element – if an ex-couple attend mediation against their wishes, there may be less chance of them co-operating in order to reach a suitable agreement.”

McCann goes on to note that, even when attendance at mediation is voluntary, there are still risks attached to the process, particularly for cases involving intricate financial complexities: “Mediation does not attract the same disclosure mechanisms as the court does and therefore a party may find it easier to conceal financial information during the mediation process,” explains McCann. “This, together with the fact that the mediator remains neutral throughout the process, offering no legal advice, can result in an unfair agreement being reached. As long as both parties are aware of these potential limitations, for many, mediation will provide a welcome alternative to court proceedings.”

Ultimately, McCann applauds the government’s support of mediation: “Anything that empowers couples going through the upset of divorce is a great thing. A settlement reached on their own terms is always better than an artificial result imposed by a stranger: the judge. At Kuits, we are great supporters of empowering clients to reach fair and equitable resolutions in the quickest and most effective way.”

“Of course, while divorce cases can often be extremely acrimonious (and therefore the government cannot expect every separating couple to mediate), for the majority of separating couples, mediation provides a real opportunity for them to settle their disputes outside of the court room – and the service is set to get even stronger in the future.”

Indeed, from January 2015, the Family Mediation Council (FMC) will introduce a new accreditation scheme and new professional standards that all mediators will have to work towards. In addition to this, all mediators and those training to be mediators will have to register with the FMC. It is hoped that the stricter criteria will result in a greater confidence being placed in the mediation system, which in turn will result in a rise in its popularity. Although the government is unlikely to ever make mediation itself compulsory, if its effectiveness is well documented then couples will be eager to use it without pressure.

Billionaire Hamm’s is one of the biggest divorce settlements in history, but is it big enough?

American entrepreneur Harold Hamm, best known for his position as CEO of Continental Resources, has been ordered to pay his ex-wife, Sue Ann Hamm, $995.5 million in what has been referred to as one of the biggest divorce settlements in history. Although an enormous figure to most, it is only a fraction of Mr Hamm’s $14 billion empire and Sue Ann plans to appeal the decision on the grounds that it is inequitable. For this reason, the ruling invites an intriguing question – is the Oklahoma County Court’s decision reasonable compared to the conclusion that a court in England and Wales would have reached?

Oklahoma is an equitable distribution state when it comes to the division of property on divorce. This means that any settlement must be just and reasonable. In order to achieve this, a judge must take into consideration the contributions of each party during the marriage, as well as deciding what each ex-spouse needs in order to move forward following the separation. Also to be considered is the standard of living enjoyed by the ex-couple whilst they were married and any factors that are clearly relevant – such as a spouse’s ability to pay. As the 24th richest man in the United States, it is fair to assume that Mr Hamm wouldn’t exactly struggle to make payments to his ex-wife. One would also be forgiven for suspecting that the ex-couple enjoyed a rather comfortable standard of living.

Whilst equity is central to property division in Oklahoma, its synonym fairness is the main consideration of judges making financial orders following marriage breakdowns in the UK. But what exactly is fair? And would Lord Nicholl’s famous ‘yardstick of equality’, together with the S25 factors of the Matrimonial Causes Act 1973, place Sue Ann Hamm in a better position? Let’s consider the facts. Harold 68 and Sue Ann 57 were married from 1988 until Sue Ann filed for divorce in 2012. Although Harold made mention of the fact that the couple had been separated since 2005, in England and Wales a marriage of 17 years could be considered long for the purposes of financial distribution. The affair that Sue Ann alleged Harold to have had would be irrelevant in an English court, as only conduct with the ‘gasp factor’ would be taken into account. The ex-couple have two children together: Jane, 23, and Hillary, 20. Although a UK court would investigate their financial needs together with their earning capacities, the reality is that this would not be a huge consideration due to the fact that they are both over the age of minority.

In Oklahoma, a significant factor for consideration was how Mr Hamm acquired his fortune. Just your ‘regular’ multi-millionaire when he married Sue Ann, Harry went onto purchase one million acres of land leases, which saw Continental Resources become a major oil producer and in turn propelled him into billionaire’s territory. Oklahoma law states that money earned during a marriage can form part of a divorce settlement if made through skill, as opposed to ‘luck’, or a change in the economy in which case it cannot. Mr Hamm’s argument that he had ‘stumbled across’ his additional wealth fell short when Judge Haralson stated that Harold’s skill, effort and leadership had been the driving force behind the success of Continental Resources.

Although Mr Hamm’s argument was unsuccessful, looking at how wealth has been generated in this way would be completely alien in the UK. Whether by luck or skill, this amount of wealth would fall into the pot for consideration.

A consideration of the UK court would be the needs, obligations and responsibilities of both Harold and Sue Ann. Due to the extreme wealth of the couple, this factor is likely to be reviewed in conjunction with the standard of living enjoyed by the parties before the breakdown of the marriage. This is because the ‘needs’ of a party are extremely subjective and will therefore be very different depending on the lifestyle a party has become accustomed to. A UK court would be looking to ensure that Sue Ann would be able to continue living comfortably; however, the difficulty arises when trying to decide how much money she will need to do this. Realistically, the almost $1 billion that she is set to receive in Oklahoma would allow her to have a life of luxury beyond anyone’s wildest dreams.

Also relevant is the fact that Sue Ann Hamm was not a lady of leisure throughout her marriage. She was a lawyer in Harold’s company when the couple married, playing a significant role negotiating the company’s land deals. Her work could be found to be a significant contribution to the family, alongside Harold’s contributions. Also, if she stopped working to take care of the children (which is currently unreported), she could have an argument to be compensated for the loss of her career.

Taking all of the above factors into account, it appears that there could be a strong argument in the UK in favour of Sue Ann receiving an equal distribution. After all, she had a long marriage and contributed to the family’s welfare. In addition, Harold certainly has enough money to fund an equal split. However, the ruling of Cowan v Cowan[1] throws a significant curve ball into the equation. In this case, the Court of Appeal held that a stellar contribution by one spouse is enough to justify a departure from the yardstick of equality. Charman v Charman[2] seems to confirm that Harold’s $14 billion business could be viewed as stellar, hence creating a shift in his favour.

So what would all this mean for Sue Ann here in England? All the factors certainly point to potentially more than the 1/14th share she has been awarded. Some might say it’s no wonder she is trying her luck on appeal!

[1] [2001] 2 FCR 332 [2] [2007] EWCA Civ 503

A Collaborative Divorce Interview: Clients and their Attorneys

In November 2013, Tyler Nelson and Pamela Nelson of Tampa, Florida, sat down for an interview with The World of Collaborative Practice Magazine.  The Nelsons had decided to Divorce using the Collaborative Process, as they did not want to fight in Court and they wanted to focus on the best interests of their daughter.  Tyler was joined by his collaborative attorney, Adam B. Cordover, and Pamela was joined by her attorney, Joryn Jenkins.  The interview was conducted by carl Michael rossi.

You can find the full interview at The World of Collaborative Magazine, and you can find excerpts below.

Tyler: A child needs her mother and father, even if they’re not together…Pamela was the one who found out about the collaborative process and told me about it. You know, you’re always going to have some kind of fear. Is this going to work out like it should? What is everyone going to have to do to make this work out? But as soon as I spoke with Adam about everything, all of my fears were gone. He explained everything and the way it was going to work, how it was going to work. I’m pretty sure Pam felt the same way, as soon as she spoke to her lawyer, she probably went through everything. That’s the one good thing about our lawyers, that they explained everything that was going to happen before it happened.

Pamela: Not everybody knows about collaborative divorce, yet. We really didn’t know until it was explained to us. It was a better process for us, rather than go to court and fight.

Tyler: Everything that needed to be addressed, has been addressed…Everything that we wanted to agree on, we did, and everything that we wanted put down on paper, it was.

Pamela: We also have different visitation rights with our daughter. More than, likely, other people have. We already had that situated, and we just needed to put it on paper. It was kind of different than normal people, where they only see their kids every weekend. We do our schedule every week, and we split the holidays. We had to work that out, and put that on paper.

Pamela: The judge actually said that she agreed that we were doing it the best way and that we were dealing with the divorce in a good way. Instead of people fighting and it being a bad thing, it was actually a good situation.

Adam: It was interesting that, at the end of that final hearing, Tyler and Pamela had their pictures taken with the judge. It was described afterwards as being not so much like a divorce setting, but strangely enough kind of like a wedding setting. They had their picture taken with the officiating person. Judge Lee was fantastic and was praising Tyler and Pamela for dissolving their marriage in a way where they keep their focus on their children and not on fighting. To divorce in a way that
was in the best interest of their daughter.

Joryn: I can’t remember doing another divorce where the judge congratulated the parties afterwards, and I’ve been doing this for thirty years.

Tyler: (regarding an interdisciplinary team) They told me about the financial manager [Monicas Ospina, CPA], and she was great. So was the psychologist [Jennifer Mockler, Ph.D.], she was great. They were all great.

Pamela: [The financial professional and mental health professional] were very helpful. They helped us with our tax returns, to see who should file for dependency exemptions to get the most out of it. And the mental health professional helped us stay on the same page with our daughter to make sure that we were doing the right thing. The psychologist made sure we were on the same page in how we were raising our daughter and determine what’s best for her.

Pamela:  (regarding the collaborative process) There’s no arguing, you know, there’s not really fighting or going back and forth or going to court or having the records be there out in public. There’s more privacy. I would definitely recommend it to anybody considering divorce.

Tyler: I have to agree with her…If you go and do the collaborative divorce, you have a lawyer there…They are not trying to make us fight. They are just there to write down what we want, and that’s the best thing about collaborative.

Tyler: We all sat down and talked. There was no arguing.

Pamela: The professionals worked around our schedules instead of us being court ordered to go to court on certain times and dates.

Pamela: (regarding going to the state-mandated parenting class) Everyone else was crying and hated their ex and wanted to kill them and I was like “well,
we’re friends, and everything is good.”

Tyler: “If anybody is thinking about doing a divorce, they should look into a collaborative divorce instead of jumping into it and going to court and fighting.”

Adam: “What I found excellent about this process and this couple, as opposed to the court-based divorces that I generally go through, is that when we were sitting around the table together with the mental health professional and financial professional, and we were talking, we weren’t just talking “civilly.”  We were talking in earnest.  We were actually just joking around at a few times and able to communicate in ways that you just couldn’t imagine doing in other divorce processes, even at a mediation table when there is the threat of litigation.

Joryn: “It is a much more protected environment, I think. It freed me up, and I’d like to think Adam, as well, to feel like we were teammates. We didn’t have to be adversaries, even though we were both representing different interests.”

Adam B. Cordover, Joryn Jenkins, Monica Ospina, and Jennifer Mockler are all members of Next Generation Divorce, formerly known as the Collaborative Divorce Institute of Tampa Bay.  Next Generation Divorce is made up of professionals dedicated to respectfully resolving family disputes.

Social Security Disability Benefits in the New Year

Social Security Disability Benefits Elizabeth struggles from Post-Traumatic Stress Disorder (PTSD) and a mid- stage of a rare, but deadly form of lung cancer, mesothelioma.  Twenty years ago, Elizabeth was working as a volunteer firefighter when she was called to the scene of a fire at a historical building.  By the time Elizabeth arrived, the building was completely engulfed in flames and her husband, who was also a firefighter, was stuck in the building and was not rescued until it was too late.  Elizabeth was traumatized from the event, but had to keep on moving forward for her family.  Last year, she started to feel very ill and had her most severe panic attack to date when her son went away to college.  After visiting a doctor, Elizabeth was told she had been and was suffering from undiagnosed PTSD, attributed to witnessing her husband’s death.  Her early diagnosis of mesothelioma was a surprise for a younger woman of 50, but the doctors had speculated that she had breathed in asbestos particles from her husband’s clothing and body (after he fought fires) and from all of her own exposure while firefighting.  Her overall diagnosis is not good, but Elizabeth has a life expectancy of at least 2 to 3 years, maybe more if she’s able to manage her health in other ways.

Elizabeth never remarried and has worked hard, as a book keeper, to provide for her 3 children.  At one point, she had attempted to return to school and get her Master’s degree in Financing, but was too overwhelmed by the physical, emotional, and financial stress.  With one teenage child still living at home, Elizabeth cannot afford not to work, but is physically and mentally unable to.  Six months ago, she filed for social security disability benefits (SSD) and was initially denied because her condition was not severe enough, after being given a more thorough and accurate diagnosis, she was approved to receive benefits, as she is expected to be “disabled” for at least one year or until death.

One Mother’s Struggle, Millions Needing Assistance

Elizabeth is just one of millions of people who are struggling with physical and mental health issues on a daily basis, so debilitating that they are unable to keep or find a job.  Unfortunately, not every one of those people “qualifies” for assistance.  Filing for SSD is a lengthy, frustrating, and complicated process with strict guidelines that are based upon how much work you have performed throughout your life (and paid into Social Security) and if your disability falls within the List of Impairments.  Monthly SSD benefits can range from $300 to $2,200 with the average 2013 payment being about $1,132.  For many recipients, the benefits they receive are barely enough to get by and for others, not even enough to meet a “living wage”.

The 2013 National Poverty Guidelines for a Household of 1 is $11,490.  If a single parent with a child or a couple received the “average” monthly SSD payment they would fall below the poverty line for a 2 person household ($15,510).  Depending on where you live, how you live, and what you need, will determine if you are receiving a livable wage.

Promising News for the New Year

Starting in the 2014, some recipients will see a 1.5% increase in SSD benefits.  For some struggling recipients, this will be the boost they need offering a little financial cushioning while others will continue to struggle with their disability and trying to make ends meet.  Individuals, who have once worked hard to try to make a living wage, but have all of a sudden been thrown a “curveball” (like a disability), deserve and are entitled to financial assistance.  If you are disabled and are no longer able to work, will you file for benefits you deserve or suffer your financial, physical, and mental struggle in silence?

Boomers: Have You Planned for Retirement?

Boomers Have You Planned For RetirementCompared to retirees of just a generation ago, older Americans are staying in the workforce longer, and they’re returning to the workforce post-retirement in higher numbers, too. The shift began slowly in the late 1990’s when the labor force started to see an influx of post-retirees looking for work, but accelerated, in part, due to the recession of 2007. The ever increasing cost of living, combined with the negative impact the recession had on investments and home values, meant that SSI/SSD simply wasn’t enough to cover the bills. That left many retirees with no choice but to go back to work.

Though many retirees who were financially pressured to return to work were already receiving monthly social security insurance benefits, some may not have been aware that there were ways they could have increased the amount they received prior to retirement. Had they known, some may not have had to return to work, could have returned to work for a shorter period of time, or could have returned to work but worked fewer hours. If you are planning for retirement, here are a few tips you can use to ensure you receive the maximum SSI benefits available to you so you can avoid returning to work, if possible.

  • Make it Count: Start by confirming that your earnings are being properly reported so you’ll know the taxes that you’re paying into the system are being credited to you. A paystub will give you information, but only by downloading your earnings statement from the Social Security website can you verify that the information on the paystub was correctly reported. 
  • Claim Delay: This isn’t an attractive option, and for some it may be impossible. But, if you are able to delay claiming social security benefits until the age of 70, your SSI benefits will increase by 8 percent for each year you delay the claim after you reach full retirement age. 
  • 35 Years: Since SSI benefits are calculated using the beneficiaries highest 35 years of wages earned, you’ll want to make sure that you work for at least 35 years. Otherwise, zeroes will be averaged in, and that will lower your benefit amount. 
  • Claim Twice: Married couples who have reached retirement age can claim spousal benefits and then switch to payments using their individual work record (once they reach 70). That way, the benefits will increase because of the delay in claiming benefits until after the age of 70. 

Post-retirement Benefits

For anyone who is currently planning their retirement, but is unsure how their SSI benefits might be impacted if they do decide to continue working, the rules are pretty straightforward. As long as you work until full retirement age, you can still receive the full benefit amount to which you are entitled, no matter how much money you earn post-retirement. However, if you claim SSI benefits prior to reaching full retirement age, your benefits could be reduced, depending on your earned income.

The Social Security Administration also reviews the earnings of SSI recipients annually. So, if a beneficiary worked during the previous year and those earnings reflect one of his highest years, the SSI benefits will be recalculated to reflect an increase.

Just as with SSI recipients, if you receive SSD benefits, you can also work, but there are income and time limits. Whether you live in Reno, Rochester, or Raleigh, SSD terms are the same and, like SSI rules, they apply to everyone.

 

With so many older Americans working past retirement age, and returning to work once they have retired, it’s important to know where you stand with Social Security benefits. Educating yourself about the ways to maximize your monthly SSI payment may not completely eliminate your need to work, but you may be able to work less and for a shorter period of time, so you can finally enjoy your retirement once and for all.

 

 

How Military Divorce Differs from Regular Divorce

Military divorces are much like any other divorce. Two people decide they no longer want to be married, and go through the process of separating property, assets and determining child custody issues. However, the way these concerns are addressed, and the way things are separated between the two parties, requires a consideration of the military member’s lifestyle and benefits. Understanding how survivor benefits and military pensions are divided up, and how custody of children is determined, is important for both spouses considering divorce.

Child Custody

Many military marriages involve an active duty spouse and a civilian spouse. The lifestyle of these families adapts to the military world, with active duty personnel moving regularly for various deployments, and with the military spouse frequently away from home. Families that fit this description should be aware that the courts will rarely grant full custody to the active duty spouse.

When determining child custody, the courts always look out for the best interests of the child. It is understood that, while the active duty spouse is doing much for his or her country, the lifestyle is ill suited for raising children. Military families should assume that child custody will go to the non-active spouse, and this will likely include child support payments.

Division of Military Pensions

Active duty service members are entitled to a pension after 20 years of service. The courts answer the question how to divide up this pension in the case of divorce. Most military couples are aware that the non-military spouse is entitled to half of the pension after 10 years of marriage. However, not all are aware that this division is negotiable.

The couple can come to an agreement on the division of the pension in their own way. This includes if the marriage has been shorter than the standard 10 years, and it includes the possibility of a payout of less than 50 percent of the pension after the 10-year mark.

The 10-year and 50 percent standards are simply guidelines for the court to go on. The arguments presented by both divorce attorneys and the decision of the court can produce a number of different results. Each spouse may wind up with more, or less, than he or she was aiming for.

It should also be noted that only after ten years of marriage can the finance center pay the awarded portion of the pension to the spouse. If the non-military spouse wins some of the pension, but the marriage did not last for at least ten years, it is the responsibility of the retiree to make the payments to the ex-spouse.

Survivor Benefits

Some spouses make the mistake of assuming that the Survivor’s Benefit Plan (SBP) – the payout that happens upon the death of the military spouse – will still go them in the event of death. While the SBP can be awarded to the divorced spouse during the divorce proceedings, this is certainly not guaranteed.

If the ex-spouse is not awarded the SBP, then he or she will stop receiving pension payments in the event that the military member dies. This is something to remain aware of during divorce negotiations.

Military Divorce Lawyer

Spouses considering a military divorce should seek the help of an experienced military divorce lawyer. This will help ensure the best possible results from the divorce.

Legal Issues with Family Finances

Imagine the following scenario, you are the parents of three children, a boy age 17 and two girls, ages 9 and 12. You have been meaning to attend to certain legal and financial issues regarding your family such as establishing a last will and testament. You may feel secure if you and your spouse have life insurance through your employer that amounts to around $500,000 in death benefit when either of you die, and you named as beneficiary each of your children in equal amounts (per stirpes).

Here is a summary of the worst case scenario in the event that both you and your spouse predecease your children before they reach the age of majority (which is 18 in in the United States). Your assets will not automatically pass to your three children if they are under the age of majority at the time of both of your deaths. What is worse is because no individual was appointed guardian of the children, a court would appoint what is known as a guardian ad litem to represent the best interests of the children.

Issues Arising From the Death of a Parent with Minor Children
As you can see, failure to address the issue of a will while alive forces the hand of the state to take action and appoint an individual to look after your children. Questions will arise from this scenario about the financial status of the estate left behind by the demise of you and your spouse.

When the joint deaths occurred (and we will set aside for a moment the issue of who died first) and no will was left behind, you are said to have died intestate, or without a will or a set of written instructions that determine the disposition of your estate, guardianship of the children, and settlement of your affairs. This invokes the involvement of the probate court to fix these matters, a process which could take some time. Consider the size of your estate and how likely it may be to cause disputes among members of your surviving family (i.e. parents, siblings, grandparents, etc.).

Simultaneous Death or Death Caused by a Common Disaster
Now back to the issue of who dies first. Under what is known as the Uniform Simultaneous Death Act, insurance contracts have what is known as the common disaster clause. If you and your wife were involved in an accident that resulted in your deaths, the determination (in the absence of clear evidence to the contrary) would be that you predeceased your spouse, meaning the proceeds of the insurance would go to your estate, not hers. Regardless of the relationship you have with the children you are raising from another marriage or her children from another marriage, if she were the primary beneficiary the proceeds would pass to her at the time of death.

What Can Be Done?
There is a common myth that estate planning is something only for wealthy people and a will is not necessary if there are not a lot of assets to distribute. If you own a home, participate in a retirement savings account like a 401(k) plan, and have money in the bank, you need to protect those assets for your surviving children in the event that simultaneous deaths were to occur. The effort to plan for the protection of your children and their financial interests cannot take place if you and your spouse are no longer around to protect them.

This article was written by Robert Tritter, an aspiring lawyer who looks forward to helping you understand legal issues better. He recommends taking a look at the finance jobs with moneyjobs.com if you’re interested in a career in finance. Check out their website today and see how they can help you!