Ending Permanent Periodic Alimony: A Crisis for Enforcing Equitable Distribution Waiting to Happen.

Author:Reiss, Jerry
 
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The Florida Legislature has taken steps in recent years to end permanent periodic alimony. If they are successful, this will have a major impact on enforcing equitable distribution on a wide array of assets. These include assets controlled by one spouse before the final judgment is entered and are subsequently "stolen" by that spouse after it is entered. They also include assets intentionally dissipated before filing the petition for divorce, which then cannot be dealt with by unequally distributing other assets, has been cured in the past by awarding permanently periodic alimony. (1)

The assets affected include a plethora of things awaiting distribution under the deferred distribution method. They include most retirement plans, executive compensation payments and perks, unvested nonretirement benefits, and compensation enriched by future work effort designed to pay bonuses, including but not limited to employer stock and stock options. Assets affected also include forgivable loans repaid with a bonus schedule that is automatically repaid in full at death or disability, equalization payments, and intellectual properties. In most instances these assets, when present in equitable distribution, represent the lion's share of assets divided. Because they include most retirement benefits, few economic classes will be immune from the impact.

This article addresses appellate rulings that are part of the reason for the harmful effect and possible corrective measures that the legislature might consider passing into law that cannot work under our current state constitution. It will show that some of these matters are long overdue for our Supreme Court to address.

Problems of Enforcement

The enforcement problems can begin when the final judgment is entered. Property awarded is considered distributed and is enforceable only with respect to individual rights arising from the final judgment. (2) This means if that asset or its proceeds are no longer available, the court no longer retains jurisdiction to enforce that award against other marital property. (3) Thus, one issue ripe for consideration by the Florida Supreme Court is whether certain appellate rulings conflicting with the majority of sister state rulings that came to an opposite conclusion on whether the proceeds of the assets are no longer available are correct as matter of law. This will be dealt with when we address the faulty reasoning the First DCA employed in its ruling in Board of Trustees v. Vizcaino, 635 So. 2d 1012 (Fla. 1st DCA 1994), the refusal of other DCAs to rule otherwise, (4) and the issues the Fifth DCA raised in Langford v. Langford, 833 So. 2d 230 (Fla. 5th DCA 2002), certifying its ruling as a matter of great public importance to the Florida Supreme Court. The holding in Vizcaino cannot be cured simply by the Florida Legislature drafting a state statute for a qualified domestic relations order because that statute cannot do more than require municipal and other state retirement benefits to be enforced as property with an income deduction order. Anything else increases plan cost not presently funded, and the bill cannot require municipalities to increase plan cost not previously approved by city council. This would violate Fla. Const. art. X, [section] 14, by increasing costs that have not been funded. Such a statute will do nothing to cure the underlying cause where it traces back to whether the proceeds are available as cash (to be discussed later in the article).

* Fraudulent Conveyance to Jointly Titled Real Estate--If the proceeds of any affected awarded asset are deposited to joint or tenants by the entireties property after the final judgment is entered, the only way it can be secured is by civilly piercing through that protected status by invalidating it. This requires proving fraud by showing the other spouse committed a willful fraudulent conveyance of property. After that is done, the property must be partitioned, and unless it can be shown that the other spouse had knowledge of and actively participated in the fraud, partitioning will release only half of the asset because the new spouse owns the other half once joint titling takes place. If the value of the "stolen" property exceeds that half, recovery is limited by half the proceeds on the sale. In addition, a successful outcome often requires litigating in more than one court. Then, as oftentimes is the case, the property is outside Florida, this requires litigating the matter in two separate states, which involves registration of that judgment and adjudication of the fraud. This can be done, but is an expensive undertaking. (5) A foreign court may need to be called upon to construe Florida law.

* Enforcement in a Foreign Country--A spouse who liquidates some assets and relocates with the remaining assets to a foreign country may be subject to enforcement if that country is part of the Hague Convention. (6) That involves a great deal of expense because a lawyer knowledgeable about Hague located locally must be employed along with a lawyer in the country where the property is located for a coordinated effort. If the person resides in a country not subject to Hague, alimony can be used to get access to pension benefits not awarded with a qualified domestic relations order (QDRO) or an income deduction order (IDO), as applicable. (7) If none, there are always Social Security benefits that can be garnished, but only for need. (8) But they are only available as a source to pay support. (9) If permanent alimony ends, recovery is limited to the term limit on alimony.

* Role Permanent Alimony Plays--Permanent alimony affords some relief because temporary awards can be made permanent when this occurs. (10) Likewise, a...

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