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Archives: Articles
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December
2004/January 2005
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December 20, 2004 Dear Colleague at the bar: After 62 years as a Virginia lawyer and judge, I am more convinced than ever that being a Virginia lawyer is a special privilege. The history and traditions established by our predecessors in the bar of Virginia are second to none. In short, I am proud to call myself a Virginia lawyer. But I have been concerned for some time that that we may not be doing all that we should to protect and preserve the tradition of professional excellence that has been the lodestar of the practice of law in Virginia. We of this generation must remain vigilant in guarding the legacy inherited from our predecessors so that the next generation of Virginia lawyers will inherit the same legacy and feel compelled to protect it. The Virginia Bar Association has taken seriously its role as guardian of the legacy that is ours. The VBA’s Community Service Program is its most recent, and perhaps its most ambitious, effort to insure that professionalism remains alive and well in the practice of law in this great Commonwealth. I personally thank The Virginia Bar Association for undertaking this initiative and making the Program available to all Virginia lawyers. I challenge each lawyer and judge in Virginia to show our beloved state and the nation that Virginia lawyers are a breed apart by signing up to be a VBA Community Servant or a VBA Pro Bono Servant. The details of this program are available from the VBA, but it simply requires a commitment of 50 hours per year to public service, a commitment I am sure most of you already meet in the ordinary course of your practice. The commitment does not require you to become a member of the VBA; it does require that you stand up and be counted as a Virginia lawyer who is dedicated to meeting the highest ideals of our profession. In short, I ask you to be a part of tradition and join me and hundreds of other Virginia lawyers and judges in guarding our most precious legacy. Sincerely,
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In January 2004, The Virginia Bar Association launched
its Community Service Program after three years of preparation. The Program,
open to all members of the legal profession in Virginia, asked participants
to perform at least 50 hours of pro bono publico legal service and/or
nonlegal community service during 2004. More than 400 lawyers and judges
signed up for the Program’s initial year, pledging more than 20,000
hours of volunteer service.
As the Program begins its second year, its leaders seek
wider involvement by VBA members; those who sign up for 2005 will join
the 2004 participants as charter members of this groundbreaking effort.
The commitment amounts to roughly four hours per month, a level of service
most lawyers are already meeting in their personal and professional lives.
Joining the Community Service Program is easy: VBA members
can indicate interest on their 2005 dues statements; download forms in
PDF format from www.vba.org (which also answers
frequently asked questions about the Program); call the VBA office at
(804) 644-0041; or sign up in person at the VBA Annual Meeting.
Doing good will make you feel good — and your joining the Program may encourage others to join as well! Return to Top
Tales from lawyers who made the commitment in 2004
Helping homeless men with substance abuse problems in Lynchburg
“My primary form of regular public service for the
past four years has been in serving as an overnight volunteer at
a shelter for homeless men with substance abuse problems. I stay overnight,
from 11 p.m. to 8 a.m., one night a month, get to sleep about six hours,
answer the phone and respond to any questions or needs that the men have
(which are few because the men are pretty self-sufficient, but once in
a while someone wants to talk to a lawyer). I am also helping the shelter review
their lease form. The commitment does not take away significant
time from my other activities, and allows me to personally help people
who have been way less fortunate than I have.”
David Neumeyer, Lynchburg
Making Portsmouth patients smile with a certified therapy dog
“I have a certified therapy dog. Bailey and I try
to go to the Maryview Rehab Center in Portsmouth at least every other
week but my goal is once a week. We love going and he always brings a
smile to an unexpecting patient. I hope it provides the patients with
a few minutes of distraction from what they are experiencing. I quickly
learned that there is a level of comfort that a dog can offer that no
human can match. I will definitely continue to take Bailey and hope to
certify one of my other dogs as well.”
Nicole Duke, Norfolk
Transforming girls’ lives at a group home reminds a Richmonder
of her blessings
“One of the most meaningful community activities
for me has been volunteering once a month at a group home for girls. My
interactions with them are a constant reminder of how fortunate I have
been in my life and the need for society to do more to help its children.
Watching the transformation of some of the girls is truly amazing.
When they feel secure, receive the assistance they need to help them
grow, and are valued as unique human beings, they thrive.”
Name withheld by request, Richmond
Lending legal assistance to landlords and tenants in Northern Virginia
“I have found one way for a transactional lawyer who
has two left feet in a courtroom to be of help to Legal Services. Our
local program created a Landlord-Tenant Pro Bono Attorney program and
provided an excellent training of the lawyer volunteers. As I interview
the clients and learn more about their circumstances, I understand their
fatigue at how one problem just compounds another. I spend a lot of time
working with the client to understand how to look at documents, how to
handle negotiation discussions, how to handle everyday business. Aside
from the immediate issue bringing a client in for assistance, I hope the
time spent with people who are struggling to make ends meet, helps
them see themselves with dignity, more confidence and hope, and enables
them to handle everyday choices with just a bit more know-how. I think
we just have to keep on trying to lend assistance, as we would want someone
to do for us.”
Name withheld by request, Northern Virginia
Putting givers and needs together to benefit Hampton Roads charities
“While cleaning out my parents’ home, my siblings
and I discovered that none of us wanted a particular item – it was
too good to put out for a pickup, but it was difficult and time-consuming
to find a charity that could take it. Then I had a brainstorm: why not
use the Internet to make it easier? I worked with a local foundation to
establish a website, www.gift-link.org,
which connects charitable impulses to charitable needs in the Hampton
Roads area. It has been described by the Virginian-Pilot as ‘sort
of a reverse eBay, except no money changes hands.’ With more than
40 charities now participating, visitors to the site can search by organization
or by item to find information. In addition to donating items, people
can also contribute money to cover needs such as school supplies.”
Name withheld by request, Virginia Beach
A law student launches a career through volunteering on the Peninsula
“I’m still a student, but I can’t wait to
sign up as a VBA Community Service partner. I volunteer at the PORT Homeless
Shelter and as a CASA in Newport News. Both programs definitely make a
difference in my community and in the lives of the persons they serve.”
Elizabeth Bircher, Yorktown Return to Top
Legal Focus/Domestic Relations:
Imputation of Income to a Party Who Is Seeking Spousal
Support
Brett R. Turner
Two or three generations ago, with most women working
in the home and not earning a salary, spousal support was a simpler issue
than it is today. The court measured the wife’s reasonable needs,
compared them to the husband’s reasonable ability to pay, and made
its final award.
Today, with women either employed or employable in the
workplace, an additional step has been added to the process. Not only
are women capable of earning a salary, but they also often own substantial
property. Thus, after measuring the wife’s reasonable needs, the
court must discount those needs by the amount which the wife is reasonably
able to contribute to her own support.1 To coin a phrase,
the court must look to the wife’s “net needs”—the
difference between the base amount of her reasonable needs, and her own
capacity to meet them.
Because so many women have earning capacity in modern divorce cases, there has been significant growth in Virginia case law on imputation of income to a spouse who is receiving support.2 The purpose of this article is to set forth the basic elements of that case law. While the primary focus will be upon spousal support cases, the standard discussed here also applies to child support.
General Standard
“The burden is on the party seeking the imputation to prove that
the other parent was voluntarily foregoing more gainful employment, either
by producing evidence of a higher-paying former job or by showing that
more lucrative work was currently available.” Niemiec v. Commonwealth
ex rel. Niemiec, 27 Va. App. 446, 451, 499 S.E.2d 576, 579 (1998).
Thus, there are two distinct bases upon which income can be imputed to
a support recipient. First, income can be imputed if the recipient voluntarily
left a former position which offered higher wages than the recipient presently
earns. Second, income can be imputed if a position
offering higher wages is “currently available,” and the recipient
is voluntarily refusing to accept it.
This general standard assumes that the court has already decided that the spouse receiving support has a currently operative duty to work. Where the parties have agreed during the marriage that one spouse will remain home and care for children until they reach a certain age, the court is allowed to consider that factor in setting support, and to rule that the spouse in question has no duty to work until the children reach the agreed-upon age.3 The court is also allowed to order that the custodial parent not be required to work, or at least not work full time, if the children have special needs which are best met in the home.4
Former Position
Under Niemiec, imputation of income based upon a previously-earned
salary is an alternative to proof that a better position is presently
available. Thus, when relying on the former position prong of the Niemiec
test, the spouse paying support need not prove that any position is presently
available to the spouse receiving support. The theory, of course, is that
the recipient would still have the former position if he or she had not
left it voluntarily.
The former position theory does not apply to literally
every former position which the recipient has ever held. The best
policy discussion is from a trial court case:
[The former job theory] is premised on the concept that the pre-change employment is evidence of ability to pay or earning capacity. When the job change is recent it is reasonable to project income based on the pre-change employment. But as more time passes, it might not be reasonable to project income based upon the pre-change employment. Businesses change. Job markets fluctuate. Over time many factors beyond the control of a spouse or parent can affect income. If they exist, then they should be considered by a court in deciding a support modification motion.5
Appellate case law applying the theory usually speaks
in terms of “recent” prior employment, without providing a more
specific definition.6 Cases accepting the theory have
usually involved earnings less than two years old.7
The fact that the earnings were from employment with the other spouse’s
business during the marriage does not itself prevent imputation.8
Cases rejecting the theory have involved earnings more than 10 years old.9
A considerable grey area exists between the relatively
recent earnings in the former set of cases, and the relatively outdated
earnings in the latter set of cases. Only a few decisions have considered
cases falling within this area, and the results have generally depended
upon the facts. A Loudoun County case rejected prior earnings which were
only five years old:
[The husband] offered evidence that the Wife made over $50,000.00 in the telecommunications industry at Sprint when she left in 1995. The Husband offered merely his opinion that the Wife could be hired and retrained to make up for whatever she lost due to the changes in technology since 1995. Both parties agreed that the technology of the telecommunications industry has changed since 1995. The Husband offered no evidence of current entry level salaries in the same industry or what she could earn with retraining. Without more, the Husband has not met his burden to prove that the Wife is voluntarily underemployed.10
The result reached was obviously heavily dependent upon
evidence of specific changes in the telecommunications industry during
the five-year period. This dependency suggests that the nature of the
field of prior employment can be an important variable in determining
when prior employment is sufficiently “recent” to serve as a
basis for imputing income.
Where the prior position involved only part-time work,
it is error to impute income based upon full-time employment at the same
rate.11 The past availability of a part-time position
is no guarantee that a full-time position is actually available. In addition,
some employers compensate full-time employees at a lower salary rate,
because they receive health insurance or other fringe benefits. A full-time
salary could be imputed, of course, under the second prong of the Niemiec
test.
Prior salary is a valid basis for imputing income only where the spouse left the position voluntarily. In Srinivasan v. Srinivasan, 10 Va. App. 728, 396 S.E.2d 675 (1990), the wife had been employed for a number of years at George Mason University, but she lost that position in 1982 when she did not obtain tenure. At a support hearing roughly six years later, neither the trial court nor the appellate court paid any particular attention to the wife’s former salary, and a decision imputing income to the wife was ultimately reversed. The salary at issue was somewhat dated, but the wife’s field (Indian art and religion) was not an area which changes greatly in short periods of time. A more significant factor may have been that the wife’s loss of tenure was to all indications involuntary.
Present Position
The second prong of the Niemiec test allows imputation of income
based upon the salary which the spouse receiving support hypothetically
could earn at a new position. To meet this prong, the spouse paying support
must prove (1) that the position is presently available; (2) that the
spouse receiving support would probably be hired if he or she applied
for the position; and (3) the specific salary offered by the position.
Many attempts to rely upon this prong have foundered upon
the rock of the first element—the requirement that the position be
presently available. It is clearly not sufficient to prove that the spouse
receiving support is generally qualified for a position in a certain field;
there must be proof that there are specific positions available in that
field.12
There is some suggestion that the court is not required
to impute income based upon an available position which would require
a major interstate relocation.13
In addition to proving that a position is presently available,
the spouse paying support must also prove that the spouse receiving support
would probably be hired to fill it. This requirement cannot be met simply
by showing available positions advertised in a newspaper or on the Internet.14
Many such advertisements are answered by a large number of qualified
applicants, so that the position is actually available only to persons
with higher credentials than those expressly stated in the advertisement.
Some institutions advertise positions only as a formality, when in reality
the person who will fill the position has already been chosen. Still other
employers have requirements which they will not state openly in an advertisement.
For example, no employer would openly admit to a reluctance to hire older
homemakers, or applicants of a particular race or gender, yet such reluctance
exists at times in the workplace. An advertisement, by itself, is not
sufficient proof that the spouse receiving support would actually be hired
into the advertised position.
Of course, an advertisement can certainly be in some instances
a good indication that the support recipient is qualified to fill a particular
open position. The important point is to make certain that the advertisement
is reviewed by a person with the expertise to consider the many possible
factors lurking beneath the surface of the advertisement.
This observation leads logically to a discussion of the
single most important type of evidence for imputing income under the second
Niemiec prong: the testimony of a vocational expert. Vocational
experts have the skill to determine when a position is actually available
and whether a particular person is likely to be hired to fill it. Many
such experts will rely upon a variety of hearsay sources, including the
job advertisements which are so problematic when considered by themselves.
This is not an evidentiary problem, for experts are allowed to rely upon
hearsay facts in reaching their opinions, so long as the facts are traditionally
relied upon by experts in the field.15 Vocational experts
necessarily rely upon advertisements and other job listings in determining
whether persons are employable. So long as a vocational expert has actually
assessed the various factors which could potentially operate beneath the
surface of a job listing, an expert opinion based upon the job listing
can be admissible and persuasive.
Virginia has only begun to scratch the surface of the
many questions posed by the use of vocational experts in divorce cases.
Increased use of vocational experts is probably the greatest change the
nationwide law of spousal support since the introduction of limited duration
support in the 1970s,16 so the Commonwealth is not
alone in feeling its way into this new area.
After reviewing case law across the nation for purposes
of another article,17 the author concluded that the
most important element of persuasive vocational testimony is specificity.
The expert should state that spouse X is qualified to fill positions A,
B, and C, that those positions are presently available, and that spouse
X would probably be hired for those positions if he or she applied for
them. It is helpful to have the expert refer to specific job listings,
not as evidence in and of themselves, but as part of the basis for the
expert’s opinion that the positions are available. Do not neglect
to have the expert state a specific salary or salary range for each available
position; imputed income cases can be lost for failure to prove salary,
just as personal injury cases can be lost for failure to prove damages.18
While expert testimony is most common way to prove the availability of a new position, it is important not to neglect another potential source: concessions by the spouse receiving support. If that spouse admits that employment is available at a stated amount, the court is permitted to accept that admission, even in the absence of supporting evidence.19
Conclusion
In a world in which both husband and wives are generally employed during
the marriage, the law should generally encourage both husbands and wives
remain employed after the marriage ends. The doctrine of imputed income
is essentially the device used by the law to enforce the duty to work.
Where the duty to work applies to a support recipient to begin with, the
doctrine of imputed income should apply as well.
At the same time, it is absolutely essential in all contexts that imputed income be based upon a factually realistic assessment of the salary which the spouse in question is actually capable of earning. The two-prong Niemiec test recognizes this requirement by linking the amount of imputed income to actual salaries earned through past or available present employment. While the test imposes an evidentiary burden on the spouse paying support, its consistent use should go a long way toward ensuring that imputed income findings are solidly based in economic reality.
About the Author: Brett R. Turner is a Senior Attorney with the National Legal Research Group in Charlottesville, specializing in the field of family law. He is author of Equitable Distribution of Property (West Group 2d ed. 1994), a leading nationwide treatise on equitable distribution, and editor-in-chief of the monthly law journal Divorce Litigation. Together with Laura W. Morgan, he is also author of Attacking and Defending Marital Agreements (American Bar Association Family Law Section 2001), the first nationwide treatise to address validity and construction of antenuptial and separation agreements from the viewpoint of the attorney who must deal with them after they have already been signed. A regular speaker at CLE seminars, he has almost 20 years of experience researching family law issues for attorneys all across the nation. His law degree is from the University of North Carolina at Chapel Hill, and he is a member of the North Carolina Bar Association. Return to Top
NOTES
1. On the law, of course, Virginia has always considered
the wife’s earning capacity as a factor in setting support:
It must also be borne in mind that the appellee is a young woman, only 28 years of age, and that under modern conditions there is open to her practically every avenue for making money that is open to her husband . . . that her time is her own; that she has no right to remain idle at the expense of her former husband; and that it is her duty to minimize his loss, albeit it was through his fault that she was compelled to ask that the contract of marriage be rescinded.
Barnard v. Barnard, 132 Va. 155, 111 S.E. 227,
230 (1922). But cases in which the wife actually had earning capacity
were once rare upon the facts, so that case law on the issue was seriously
underdeveloped. In the past 20 years, with women having earning capacity
on the facts in the great majority of all cases, case law on the issue
has grown dramatically.
2. While most support recipients are women, some support
recipients are men. This article will consider case law discussing imputation
of income to any recipient of spousal support, regardless of gender.
3. See Va. Code Ann. § 20-107.1(E)(11); Massa
v. Massa, 2004 WL 612836 (Va. Ct. App. 2004). Since there is no comparable
provision under the law of child support, Massa raises the possibility
that the law of imputing income might be different under the law of child
support than under the law of spousal support, where the parties agreed
that one of them should limit work time to care for young children.
4. Driskill v. Driskill, 2004 WL 1486958 at *3
(Va. Ct. App. 2004) (where “the parties’ son had special educational
and other needs including counseling, tutoring, and medical care,”
trial court did not err by failing to require that the wife accept additional
employment).
5. Cherpes v. Cherpes, 2003 WL 22257982 at *6
(Va. Loudoun County Cir. Ct. 2003).
6. E.g., Mir v. Mir, 39 Va.App. 119, 130, 571
S.E.2d 299, 304 (2002) (“There is no evidence in the record that
husband . . . had recently left a job that paid a similar amount”);
Miklovic v. Napier, 2002 WL 1796990 at *2 (Va. Ct. App. 2002) (“Appellant
is an articulate, educated professional, with marketable skills evidenced
by recent, well-compensated employment”).
7. See Silberblatt v. Silberblatt, 1999 WL 1129653,
*3 (Va. Ct. App. en banc 1999) (initial support case; wife worked as a
nurse in husband’s medical practice until divorce filed, and worked
several days per month for third party during pendency of practice); Miklovic
v. Napier, 2002 WL 1796990 (Va. Ct. App. 2002) (husband lost employment
on September 10, 2001, and filed motion to reduce support on the same
day); Tatum v. Tatum, 2000 WL 1774173 (Va. Ct. App. 2000) (wife
left a nursing position to attend seminary in July, 1998; hearing on modification
held in March of 1999); Kaminsky v. Kaminsky, 2002 WL 31802736
(Va. Fairfax County Cir. Ct. 2002) (husband left employment in March,
2000; modification proceedings filed in April, 2002).
8. See Silberblatt v. Silberblatt, 1999 WL 1129653,
*3 (Va. Ct. App. en banc 1999) (relying in part on wife’s earnings
working as a nurse in husband’s medical practice). There was no suggestion
in the evidence that the wife was treated differently because she was
married to the husband, and her earnings with the husband’s practice
were generally consistent with her earnings in other employment. If the
evidence shows that the terms of employment were influenced by the existence
of the marital relationship, prior earnings working for a spouse’s
business should logically be less relevant. Such influence could exist
where the spouse was given the job only because of the marital relationship,
or where the existence of the marital relationship resulted in a salary
which was either lower or higher than commercially reasonable.
9. See Carr v. Carr, 2002 WL 927601 at *4 (Va.
Ct. App. 2002) (“[w]ife, a nurse, had not worked outside the home
for 15 years prior to the parties’ separation”); Grover v.
Grover, 2001 WL 1356495 at *2 (Va. Ct. App. 2001) (wife “had
not worked as a medical technician for over 20 years”).
10. Balleweg v. Balleweg, 2000 WL 511824 (Va.
Loudoun County Cir. Ct. April 24, 2000).
11. Joynes v. Payne, 36 Va. App. 401, 551 S.E.2d
10 (2001) (part-time salary of $80,990 per year was not evidence of full-time
earning capacity of $170,386 per year; imputing earnings only at the lower
amount); see also Hoegle v. Hoegle, 2004 WL 351145 (Va. Fairfax
County Cir. Ct. 2004) (wife was last employed one and one-half years ago
at part-time position earning $40,000 per year; refusing to impute income
at rate higher than $40,000 per year, on grounds that the wife’s
alcoholism and absence from the job market would prevent her from earning
higher amount).
12. See Srinivasan v. Srinivasan, 10 Va. App.
728, 396 S.E.2d 675, 679 (1990) (error to impute income to wife, “an
expert in oriental studies, concentrating in Indian art and religion,
with a knowledge of the Sanskrit language”; no proof that position
was presently available); Pellegrin v. Pellegrin, 2002 WL 119711
(Va. Ct. App. 2002) (expert testimony that general market for mental health
counselors was strong was not sufficient to show that a position is presently
available, particularly where wife’s had little experience in the
field and her diligent job search had been unsuccessful); Brooks v.
Brooks, 2001 WL 15701 at *1, *4 (Va. Ct. App. 2001) (wife had not
worked as a teacher since 1977, though she had renewed her teaching certificate;
“wife conceded that she could earn $27,500 as a teacher, [but] there
was no evidence presented regarding the availability of teaching positions
in wife’s field (English and drama)”; “We cannot say the
court abused its discretion by refusing to impute income to wife before
she had a reasonable period of time to re-enter the job market”);
Goldman v. Goldman, 2003 WL 23272407, *3 (Va. Fairfax County Cir.
Ct. 2003) (wife had not worked as a nurse since 1984, although she had
retained her nursing license; rejecting physician-husband’s argument
that wife needed only a five-week refresher course to be immediately employable;
under Srinivasan, refusing to impute income).
13. See Turonis v. Turonis, 2003 WL 941199, *6
(Va. Ct. App. 2003) (“wife was capable of earning $100,000 to $130,000
per year in the Washington, D.C., area, where she and husband resided
at the time of their separation, and $75,000 per year in the Atlanta,
Georgia, area, where she moved after the parties’ separation in order
to be closer to her family”; trial court properly imputed income
of $75,000); see also Reece v. Reece, 22 Va.App. 368, 376, 470
S.E.2d 148, 152 (1996) (listing eight factors to be considered in determining
whether refusal to accept employment in another geographic area is voluntary;
on the facts, trial court properly refused to impute income to support
payor).
14. Hanyok v. Hanyok, 2002 WL 1837869 at *5-*6
(Va. Ct. App. 2002) (husband’s testimony as to job listing on the
Internet was inadmissible hearsay); Grover v. Grover, 2001 WL 1356495
at *2 (Va. Ct. App. 2001) (husband’s opinions based upon advertisements
and Internet research were unreliable).
15. Va. Code Ann. § 8.01-401.1 (2004).
16. Virginia allows limited duration support only in
cases filed after July 1, 1998, but limited duration support was recognized
in most other states roughly 15 to 30 years earlier. See Brett
R. Turner, “Rehabilitative Alimony Reconsidered: The ‘Second
Wave’ of Spousal Support Reform,” 10 Divorce Litigation 185
(October 1998).
17. Brett R. Turner, “Earning Capacity and Spousal
Support: The Uses and Abuses of Vocational Evidence in Divorce Cases,”
14 Divorce Litigation 213 (December 2002).
18. Where employment is available but the salary is
not proven, it may be possible to impute income at the statutory minimum
wage. See Bonin v. Bonin, 2003 WL 22518409 (Va. Fairfax County
Cir. Ct. 2003). The minimum wage will obviously be less than most spouses
are capable of earning, and its use is proper only where proof exists
that employment at minimum wage is actually available.
19. See Hatloy v. Hatloy, 41 Va. App. 667, 588
S.E.2d 389 (2003) (husband admitted that he could reasonably be expected
to earn $1,000 per month at one job and $600 per month at another; court
had little difficulty holding that his earning capacity was $1,600 per
month). Return to Top
Legal Focus/Domestic Relations:
You’ve Got to Sign Your Love Away*
Glenn C. Lewis
Frank Morrison and Ann Vaden recently approached me about presenting a program on premarital agreements for the VBA and Virginia CLE. On looking into the matter, I soon learned nothing had ever been written or presented focusing on what I believed are the real life problems and challenges we face in this important arena. I quickly accepted the assignment with two provisos:
1. There would be just one live presentation (with all
the video replays they desired); and
2. We could focus on what I thought was important, whether or not it meshed
with conventional wisdom.
Writing the materials and presenting this program were
a daunting challenge. More to the point, the feedback received that day
and from dozens since has contributed to what has proven to be one of
my most satisfying teaching adventures, ever. Almost without exception,
comments consistently have included expressions of relief that someone
else has shared the surprising pain, discomfort and profound sense of
responsibility flowing from such representation.
It is unnecessary here (and impossible given constraints
of space and time) to recount everything that leads to these conclusions
and observations. However, it does seem worthwhile to share at least a
glimpse of what may provoke such strong reactions and emotions in experienced
and grizzled lawyers, some of whom have always appeared impervious to
such distractions.
Why do sparks fly so quickly when we discuss and consider
the subject of premarital agreements (PMAs)? Well, for starters, by definition,
PMAs are the antithesis of romance. Think about it: Someone’s fiancée,
on the brink of life’s greatest quest for fulfillment, enters your
office as does no other client: Daydreaming of unbridled happiness, relentless
passion…everlasting love. We begin the ordeal by raising least desirable
outcomes. We dwell on worst-case scenarios, on divorce and death.
Prospective spouses seek PMAs for a myriad of reasons,
many good, some terrible. Upon death or divorce, they may want to ensure
that property distribution does not occur as otherwise prescribed by statute.
Or, if one was previously married to another for a long time, he or she
may wish to protect against a new spouse sharing in the wealth of the
first marriage, to the detriment of older or adult children, or even grandchildren.
Perhaps the client may simply wish to guard against a
bad marriage. By illustration, if marriage ends in separation within five
or 10 years of the wedding, the couple may intend that no property or
wealth changes hands, that husband and wife both return, as close as is
practical, to prior economic positions.
The list goes on. There are dozens more scenarios sensibly
leading to consideration of a PMA. No matter what applies, I forcefully
argue that the highly professional and ethical practitioner has one duty,
overarching all others:
Honor the relationship and first, do no harm.
It may seem strange I would borrow from the medical profession
for such a singular commandment. Well, arriving at a valid and enforceable
PMA is a delicate process. However dramatic it sounds, I promise it is
true. The nature and tone of negotiations demand precision in thought,
word, and action. Consequences for doing otherwise can be cosmic. A single
misstep or thoughtless word spoken can haunt a relationship for decades.
A tiny miscue can doom the marriage from the outset.
We recently consulted with a man married to the heiress
apparent to one of the nation’s great media empires. After catching
the wrath of his dynastic wife and rumpled from several nights on his
buddy’s couch – away from his three young children – he
came in to discuss options. He produced a 20-something-page PMA the couple
had signed. He offered a sad rendition of their zealous (in retrospect,
ill-advised) disputes over seemingly important, if arcane, details, such
as elective shares and intestate rights. As this poor soul sat there,
clinging unrealistically to a glimmer of a hope of reconciliation, he
openly reflected on what he now saw as the imprudence of his former counsel
– a high-priced and well-known lawyer – and disclosed his long
held notion that the very process of negotiating the agreement had sullied
the marriage long before vows were exchanged. Before either said, “I
do,” they were already ‘done,” the marriage doomed from
the get-go.
PMAs distributing property rights upon divorce are a relatively
new creation, rooted in less than a half century of jurisprudence. Prior
to 1970, many courts held such agreements per se invalid, reasoning that
enforcement would encourage divorce and leave economically inferior spouses
dependent on state treasuries for support. Eventually a burgeoning nationwide
divorce rate, and the advent of the “no fault” divorce, led
the Supreme Court of Florida in 1970, to validate the first divorce provisions
in a PMA in Posner v. Posner, 233 So.2d 381 (Fla. 1970).
For the next 13 years, state courts following those decisions
evaluated PMAs according to common law contract principles. They held
that as long as PMAs complied with both substantive and procedural safeguards
for the economically inferior or less sophisticated prospective spouse,
PMAs could alter property distribution rights upon divorce or death and
not trespass on sound public policy.
Thereafter, in 1983, to offer a more general framework
for state legislatures and courts, the National Conference of Commissioners
of State Laws promulgated the Uniform Premarital Agreement Act. In the
years that followed, the District of Columbia and 25 states, including
Virginia, codified some form of the UPAA into law.
The Virginia Premarital Agreement Act (Virginia Act),
enacted in 1985, governs all PMAs executed after July 1, 1986. Virginia
courts will enforce PMAs signed earlier, if they otherwise would be valid
contracts. The leading Virginia opinion on pre-Virginia Act PMAs is Batleman
v. Rubin, 199 Va. 156 (1957). Batleman required that a PMA
must contain a fair and reasonable provision for the economically inferior
party (the “wife”). Id.
Absent a fair and reasonable provision for the “wife,”
the proponent of the agreement must prove that both parties: (1) Completely
disclosed their assets; (2) Voluntarily signed the PMA; (3) Individually
received independent legal counsel; and (4) Fully understood their respective
legal rights before signing. Id. Also under Batleman, where
a PMA provides the economically inferior party with less than one-third
of a couple’s combined assets, the proponent must overcome a presumption
of invalidity with proof that full disclosure of assets took place. Id.
The Virginia Act, comprised of Sections 20-149 through
20-155 of the Virginia Code maintains decidedly less stringent requirements
than Batleman. Under the Virginia Act, courts presume that a written
and signed PMA is valid and enforceable. Burdens of proof shift to the
agreement’s opponent. Specifically, an opponent must demonstrate
that: (1) He or she did not sign the PMA voluntarily; or (2) The PMA is
unconscionable, and no full disclosure of assets took place, and the opponent
did not waive the right to a full disclosure of assets. Va. Code §
20-151.
* * *
In addition to more obvious ways, PMAs are unique from
ordinary contracts in that the act of marriage takes the place of traditional
consideration. In fact, there is no additional consideration required
for finding a PMA valid and enforceable. Va. Code §20-149. In form,
a PMA should contain six general parts: (1) information about prospective
spouses, (2) definitions, (3) recitals, (4) substantive provisions, (5)
signatures, and (6) appendices.
Perhaps the most overlooked or underutilized of these
PMA elements are recitals. Attorneys frequently squander strategic opportunities
by reducing recitals to fine print or boilerplate provisions. Given that
the Virginia Act presumes recitals in a PMA are factually true, the skilled
practitioner will maximize use of recitals, to the client’s advantage.
Va. Code § 151(B). For instance, an attorney whose client opposes
a PMA may properly resist inclusion of standard language or stipulations
in a PMA aimed at ensuring the agreement’s enforceability. This is
particularly true where such language is nonspecific or otherwise inapplicable
to the circumstances of a given case.
Similarly, one representing the party advocating for an
agreement can make equally effective use of recitals. One television personality
approached us with a daunting task: He sought a PMA within one week of
his wedding. In most cases, we “just say no” to this kind of
request. A last-second PMA is almost always a bad idea because courts
may give undue weight to proximity of the wedding in determining how truly
“voluntary” each signature is. However, once he readily agreed
to accept the risks and caveats compelled by the situation, we agreed
to try.
This particular man was in his 70s. He had amassed millions
of dollars in assets throughout a majestic career in broadcasting. His
fiancée was much younger, virtually penniless, and had never even
tried to begin writing a curriculum vitae. Through use of carefully crafted
recitals, we were able to account for their enormous differences in wealth,
bargaining power, and sophistication. We also were able to make effective
use of references to the obvious limits of the marriage’s potential
duration. This was done by gaining and including her stipulation that,
given her man’s advancing age and colossal success, she could never
make a marital contribution sufficient to matter.
To this day almost 10 years later, they remain happily
married. The agreement seems stronger than ever, as he works well into
his 80s.
Substantive provisions in PMAs require the utmost thought,
care, and tact. Therein rest potentially life-altering consequences for
wives, husbands, parents, children, stepchildren, grandchildren, and others.
The Virginia Code permits PMAs affecting rights in eight substantive areas:
(1) Future property; (2) Altering the status of property; (3) Conditions
to change status of property on a given event; (4) Spousal support; (5)
Formation of instruments to carry out the agreement; (6) Insurance death
benefits; (7) Choice of law; and (8) Contracting in an area not contravening
public policy or criminal law. Va. Code §20-150.
In PMAs, process is everything. It begins with the attorney
and client. Before approaching the other side’s counsel, we should
gather as much information as possible about both parties. This not only
includes bottom line financial data, but also each party’s expectations,
hopes, dreams, fears, perceptions of what would best serve him or her,
and each of their likely perceptions on where they stand with one another.
Also, we want an informed “guesstimate” on both parties’
tolerance for risk and for what might offend their respective sensibilities,
i.e., are we dealing with the emotional analogue of the “eggshell
skull.” Or, to cut to the chase, “Will he/she hold our discussions
against you, forever?”
The attorney then develops a strategic plan and negotiation
strategy consistent with these data and the client’s goals. For the
proponent of an agreement, the goals are relatively simple: Structure
the agreement to protect his/her client’s interest(s), while, to
the extent possible, not disserving the other’s. If you have a party
less sanguine about the wisdom of having a PMA, the assignment gets a
bit more dicey, and difficult to identify. The attorney will explore different
approaches with this client. In some cases, a seemingly counterintuitive
tactic may best serve the relationship. For example, where a future wife’s
wealthy parents force her to pursue a PMA, the husband may wish to sign
the proposed PMA exactly as proposed, to the letter and comma. This takes
a good deal of courage, but in the right circumstance (such as knowing
negotiations will lead nowhere, are likely to be contentious and will
probably irreparably damage a once sacred mutual trust), this can be the
very best move you can make, and your finest hour as a lawyer.
Conundrums which flare up in PMAs can take on the look
of a bar exam and professionalism question, all rolled into one. Example:
While representing one opposing a PMA, you develop a strong basis to question
the sincerity or commitment of the opponent, the proponent of the PMA.
A “moment” is reached: The lawyer must decide how far to go,
even as relates to counseling the client. PMA negotiations provide an
opportunity to expose the proponent’s “other face.” It
may be that an aggressive counterproposal might trigger an ugly reaction.
This may reveal a dark side to your client that he or she never described
or knew of. Your client may find cause to reconsider the marriage. Of
course, don’t go jumping off every bridge you reach! If these insights
expose little more than an unpleasant personality trait, perhaps you let
it go. However, if you lie awake some night, and come to realize your
insomnia is due to your certainty that you have witnessed real warning
signs for future abuse, or indications of present psychopathology, you
will soon wonder if your client is about to enter into a lifetime of an
abusive relationship. In that miserable moment, I question your professional
right to walk away from such a clear signal, without first confronting
your client. Either way, one or both of the parties may seriously reconsider
the marriage, and all because of something you have said. Talk about high
stakes!
The dangers are obvious. To be sure, on the upside, a
prospective spouse involved in a speedy courtship or unenlightened about
his or her fiancée’s insincere or worse motivations may avoid
years of misery, in part due to your insight and courage in sharing it.
Regardless, do not be naïve: Even if you save the client from decades
of hell for this good deed, you will surely be punished! It is hard to
visualize a happy ending between client and attorney after such a point
is reached. Yet, where this has happened (as we have seen on occasion),
it can be quite fulfilling, and in our experience has led to a grateful
client and years of thanks and happy referrals for your good and noble
efforts.
There are countless ways to approach PMA negotiations
in a client’s best interests. Perhaps most illustrative is a what-not-to-do
scenario that arose in my practice several years back. A young prospective
wife read about our firm and called us, in a panicked state. Her prospective
husband was a professional athlete who had just signed a guaranteed contract
worth over $20 million during the first two years of their marriage, through
salary and endorsements. This was no “locker room tryst” gone
awry: She was already the mother of his five-year-old child, and was seven
months pregnant with his second.
The day before the couple was to leave town for Las Vegas
to wed, the athlete’s high-profile New York attorneys had faxed the
prospective wife a 30-page single-spaced proposed PMA for her signature.
After quickly calming the prospective wife and hurriedly reviewing the
document, we immediately set up a conference call with the prospective
wife, the athlete, and his counsel. In the intervening hours, we repeatedly
refused to speak with counsel alone, continuing to insist that both parties
join us on the conference call.
Within seconds of the call starting, the New York “suits”
demanded our client sign the onerous and obnoxious document. Waiting until
they were done, I paused, then launched into my own short speech. I spent
a brief moment addressing both parties hoping to strike a chord of decency
in a young athlete, deafened by his handlers’ “advice,”
until then blind to the consequences of their advice, and the effect it
had on his fiancée. Following another brief silence, the suits
went after my client again; that is, until the athlete told them to shut
up and hang up. To my delight, the athlete realized what many prospective
spouses and what many more practitioners never do: These negotiations
were about to cost him the chance at a happy life with his true love and
the mother of his children. He bested his emotionless attorneys that afternoon
and quite smartly put his fortune at risk. His respect, love, trust for
his wife, and noble act impressed his future bride. They remain happy
ever after. (Well, at least so far, so good.)
* * *
This was obviously a once in a lifetime event, and yes, it could have gone terribly wrong and been a disaster. I mention it only with the hope you might think back on it if presented with such an opportunity to do the “right thing.” Experienced colleagues in the profession can share these same types of war stories. Situations range from marginalized mail-order brides to wretched dirty old men. Our mission as attorneys is nonetheless clear. Premarital agreements are easily trivialized and discounted in importance: They bring in miniscule fees and invite disproportionate liability.
Negotiating PMAs is not a joyful exercise. Exceptions
prove rules, and my happy stories aside, clients cannot generally be counted
on to thank you for working hard on their PMA. Whatever, we still owe
our clients a duty to advise when a PMA is or is not necessary, to understand
the consequences of our carelessness, and to use every ounce of our skills
and experience on this sacred and dangerous mission. We must devote all
we have to PMAs, same as we would to pricier and less demanding exercises.
Above all, beyond concerns of professional liability, we must be ever
mindful of our potential destructive powers, and constructive possibilities.
We should avoid being the inappropriate cause of the demise of a relationship,
particularly when that relationship was entrusted to us by someone intent
on the chance for a long and prosperous life.
If these thoughts and observations leave you less than enthused, or if you do not share these values or comprehend why my approaches might work for you, all I ask is that you rethink the matter. Either way, merely by engaging in such analysis and reflection, and permitting yourself to consider these issues, a very serious practice area may be elevated, inevitably for the good of all.
*With apologies to fans of the Beatles for the title of this monograph. Further, I wish to acknowledge Laura O. Pomeroy and Dennis Belcher of McGuireWoods LLP in Richmond, who deserve attribution for what was borrowed from their outstanding presentation: “Until Death Do Us Part: And then the premarital agreement controls.” Finally, my thanks and credit to Greg Goldberg, currently a third-year law student at the George Mason School of Law, and a law clerk with The Lewis Law Firm, for all his hard work in assisting with the production of this article, and the program and paper which spawned it. Return to Top
About the Author: Glenn Lewis, a member of the VBA Board of Governors, is Chairman and Founder of The Lewis Law Firm, P.C. — based in Washington, D.C., with a national law practice emphasizing family and matrimonial law. He is a former chair of the VBA Domestic Relations Section, co-chair of the VBA Coalition on Family Law Legislation, a frequent lecturer for continuing legal education programs and author of articles on family law. He is also chief legal analyst and commentator for BBC World TV. For nearly three decades, he has been at the helm of groundbreaking developments in family law. A perennial selection by his peers for inclusion in The Best Lawyers in America, Lewis is also a Diplomate and Fellow of the American Academy of Matrimonial Lawyers. In March 2000, Washingtonian magazine published the only comprehensive survey ever taken of divorce lawyers in the D.C. metropolitan area, in which Lewis was cited by his peers as one of the top two divorce lawyers in the area, and the top trial attorney in Northern Virginia.. Return to Top
Copyright 2007 The Virginia Bar Association
