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October 2016

In a Rhode Island Divorce when you Deal with Pensions Make sure Your Client has a COLA!

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Atty Chris Pearsall

Authored By:  Christopher Pearsall, RI Divorce Attorney
a.k.a.  " The Rhode Island Divorce Coach ℠ "

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Yes, it's clearly a poor play on words but it certainly makes things more interesting when I'm writing articles.

In many divorces there are pensions or other types of retirement accounts that need to be divided.  One of the often overlooked provisions in Marital Settlement Agreements or Property Settlement Agreements is the COLA or "Cost of Living Adjustment." 

A good number of pensions and retirement accounts provide for adjustments in the plan for amounts that are or will be paid out in the future.  These cost-of-living adjustments are built into the plan to account for ... as the words imply account for usually the increased cost of living.

It is never a mistake to put in your divorce settlement agreement a clause that makes sure that whatever part of any retirement or pension plan that you may receive in the settlement that you also receive a proportionate or pro-rata share of any cost of living adjustments that may be made by the plan.

For instance, John has a pension that he is not yet entitled to take but he and his spouse are splitting the pension 50/50 as of the date of their divorce.  Whether or not the lawyer takes time to look at the pension terms, he or she should presume that there is a possibility that cost of living adjustments might be made somewhere within those terms or that a term might allow for them to be built into the plan retroactively in the future by new provisions.  This is a good presumption to make because then it leads the divorce lawyer to put in that if there are any cost of living adjustments (COLAs) built into the pension plan either now or in the future that COLA's are also to be divided on a 50/50 basis.

While there may be an argument that this should not be true in every case because a spouse should only get part of what exists only at the time of the divorce, the counterargument is stronger that a Cost of Living Adjustment is applied to the entirety of the pension funds to account for the cost of living for whoever were to receive the funds. 

Thus, if the cost of living goes up for the person who is the participant in the plan then it likewise goes up for the person who receives the other 50 percent of the pension.  If only the participant received the cost of living adjustment, then the participant in the pension plan receives a windfall that was meant to be applied to 100% of the monies in the pension.  So it only makes sense that the COLA should follow the money that it's supposed to offset.  So if the COLA relates to say the entire $2,000 per month to be paid out because the economy has changed and another $200 is awarded as a COLA on that $2,000, then it only makes sense that $100 goes to the original participant in the pension plan because that's the amount that relates to the $1,000 the participant received.  Then the other $100 from the COLA should logically and reasonably go to the ex-spouse who now gets the other $1,000 of the pension funds each month.

The significance is that over time those cost of living adjustments (COLAs) might amount to a significant amount of money.  Does the non-participant's lawyer have to know every term of the pension plan in order to account for this...absolutely not.  All the lawyer needs to do is make sure there is a COLA Clause in the marital settlement agreement to protect his or her client.

You need to have that COLA Clause or cost of living adjustments might add up substantially depending upon the number of years the participant in the pension may receive payments.

So when it comes to pensions, it's always good to pause and make sure your lawyer has taken time for a COLA .... clause.

As I've said before, not all lawyers are the same.  A lawyer who routinely practices Rhode Island divorce and family law can mean all the difference between a lawyer who may only do 5 or 10 divorces a year.

Attorney Christopher A. Pearsall .... making a difference by Caring About People in their divorces for over 16 years.


Unique Rhode Island Divorce Questions: Avvo Answers Clarified

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Atty Chris Pearsall

By:  Christopher Pearsall, Esquire
a.k.a.  " The Rhode Island Divorce Coach ℠ "

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A person wanted some help and posted to the Avvo website for attorneys to provide assistance.

Three Rhode Island attorneys answered this divorce scenario.  My answer and my comments on their answers are included to show the diversity between attorneys.

Each attorney's disclaimer has been removed since it's irrelevant to the answer and the attorneys are not disclosed here.

QUESTION:  I still use the same address.  Is it more complicated to use this as my legal address or changing to my mother's Massachusetts address?

DETAILS:  We have not been together for many years but have not been able to afford divorce. I can not afford to have my own place and pay the house bills so I stay here and there which sometimes includes the house my family lives in. We would like to have the fast track divorce which looks like it will cost about $1,000.00 and can be done within 21 days of filing. It is uncontested the only deal is we need it documented that when the house sells we split the money if something happened to both of us the house would go to our sons (18 & 20). Thank you for this service.

 

Attorney Christopher A. Pearsall's Answer:

To get divorced in Rhode Island either you OR your spouse MUST be "a continuous resident AND domiciled inhabitant of the State of Rhode Island for the one year immediately before the date you file for divorce in Rhode Island.  It is not about "addresses."  You can get a post office box as an address halfway across the country with a simple telephone call but that is not a place where you have been a "continuous resident" AND "domiciled inhabitant." 

Generally speaking to be a "continuous resident" you must continuously reside (i.e. live) in the State of Rhode Island for the one year period immediately before you file for divorce in this state.  Therefore, if during the one year immediately before you file for divorce you live in Pawtucket, RI for 7 months with your spouse and then rent a place in Newport, RI for two months and then live with a friend of yours for the last three months in Warwick, RI immediately before you file for divorce in Rhode Island, then you would have been a "continuous resident" of Rhode Island for the full 12 months immediately before filing for divorce.  In that case you would have met the first prong of the test.

However, before you can file for divorce in Rhode Island you MUST also meet the second qualification, namely you must be a "domiciled inhabitant" of the State of Rhode Island during that time.  The key here is that you may only have one domicile at any give time.  A "domicile" may be generally thought of as a place that you intend to live in for a particular period of time and you intend to come back to it.  For instance, if you have a house that you have lived with in the year before you file for divorce in the State of Rhode Island and you have lived there with your spouse but things start getting tense with your spouse and you come back to the house occasionally but you rent an apartment in Attleboro, MA to stay in for 4 days out of the week to avoid the tension with your spouse, then there will be an issue as to whether you have been a domiciled inhabitant in the State of Rhode Island.  The idea is that you cannot at any given time have two domiciles.  You may only have one domicile . . . namely where you "really" or "primarily" live and do not intend to leave from at that particular time. 

So, you must be both a continuous resident and have your single domicile be within the State of Rhode Island during that year before you file for divorce. 

Using an address to prove residence with the court to file for divorce simply because it suits your purpose of filing because you get mail there or because that's where your license is still listed is a bad idea. 

First, this is important because when you confirm your address with the court you must do so under oath before a Notary Public.  Therefore, if you lie then you have committed perjury before the court which is a crime.

Second, this is important because even if your divorce is granted.  If it is discovered that you or your spouse did not meet Rhode Island's residency requirement to obtain your divorce, then the divorce may be found to be void.  If that is the case then you are still married.  Imagine if you got remarried and had children!!!  Then all of a sudden your wife is no longer your wife and your children would be deemed illegitimate.  On top of this, if authorities really wanted to press it, you would be guilty of the crime of bigamy.

Ultimately, you don't have a choice to play games with addresses here.  You either meet both criteria and you can file for divorce in Rhode Island, or you don't meet the criteria and you can't file or you have to wait until you do meet the criteria.

It is worth addressing the details that you gave following your question. 

There is one way your divorce will take less time.  That "one way" is if you and your spouse have been separated for a period in excess of three (3) years.

There is an uncontested divorce but there is nothing called a "fast track" divorce.  Also, there is no divorce that you can get in 21 days.

If you have not been separated for more than 3 years, then even if things work like clockwork with the court the fastest you can possibly get your divorce completed is 5 1/2 months if it is uncontested. 

If you have been separated for more than 3 years, then if things work like clockwork with the court the fastest can can usually get your divorce completed is 3 1/2 months if it remains uncontested.

You mention that you have a house that is to be sold and that you need certain provisions.  Whenever there is a house involved you should make sure you have a Property Settlement Agreement that is written and contains all the terms regarding the house and is signed by both you and your spouse under oath before a notary public.  It is never a good idea to have a house involved and NOT to have a written Property Settlement Agreement to present to the court for approval.  If you do not have such a written agreement it is possible that you could have a problem with what is known as the "Statute of Frauds" which essentially requires transactions regarding real estate to be in a signed writing.  A thorough description of the Statute of Frauds is unfortunately too detailed for answering a single question.

You also bring up what you want to happen if you and/or your spouse die.  I'm certain it sounds simple to you to so this, but you then run into not only provisions in your Property Settlement Agreement being added but also taking into consideration whether either of you has a Last Will and Testament and, if not, what the laws are relating to intestacy in the State of Rhode Island (assuming for your question that the property you are talking about is within the State of Rhode Island).

Please be aware that this answer is provided as a courtesy based only on the facts and/or circumstances given and any assumptions I have had to make to try to assist you based on the way you worded your question and the details. 

IMPORTANT NOTE:  This is not legal advice.  Also, this is NOT a substitute for sitting down with an experienced Rhode Island divorce and family law attorney and providing all the facts and circumstances surrounding your case and affording the attorney the opportunity to ask questions which could substantially change any information you may be given.  Never act on any information you find on the internet. The only way to be assured that you receive competent, accurate and comprehensive advice regarding your legal situation is by meeting with a qualified legal practitioner who has the opportunity to fully evaluate your case and ask questions relating to your situation.  The information on this page does not constitute specific legal advice to any person, nor does it create an attorney/client relationship with this attorney.

AVVO.COM OTHER ATTORNEY ANSWERS

Below are the actual answers provided by the attorneys on Avvo.com.   Avvo.com only allowed 3 attorneys to answer the question.  Above is the answer that I wanted to provide but was unable to due to the limited number of attorneys they allow to respond.

1)  Do you notice the difference between my answer and their answers?

2)  Do you notice any mistakes they made when informing the person asking the question?

3)  Do you notice any misunderstandings the person had that they did not take the time do clear up?

 

Answer by Rhode Island Attorney No. 1:

I find this question a bit unclear. You must live in RI for one year if you want to get divorced here. If you want to be legal separated here you must only live in RI for one day. Residency is, in part, a matter of intent.

 

Answer by Rhode Island Attorney No. 2:

Do not lie to the court about which state you live in.

Is the house mortgage on both your names? If so, keep in mind that if the bank can report late and missed payments on both of your credit reports.

 

Answer by Rhode Island Attorney No. 3:
 
This question will best be answered by the attorney you are paying to represent you in your "fast track" or nominal divorce on the grounds of living separate and apart for a period exceeding three (3) years. They might also explain that as long as one of the parties has lived in Rhode Island for one year or more before the filing, you should be able to proceed.
 
 
Before you make a decision about any lawyer you may consider hiring... you need INFORMATION.  Without good solid information and legal advice, how can you even know whether you should consider hiring a lawyer or how to tell whether the lawyer you are considering knows what they are doing? 
 
The answer.... you can't.
 
All Rhode Island Divorce lawyers are not the same. 
 
I'm Attorney Christopher A. Pearsall.  CAP isn't simply my initials.  You see, I've been making a difference by Caring About People like you for over 16 years practicing exclusively Rhode Island Divorce and Family Law.
 
For solid and comprehensive legal advice that you can rely upon.  Call me to set up a lower-cost advice session.  Give me a call at 401-632-6976 . . . you'll be glad you did!