Much of the material we publish comes from Pennsylvania’s Superior Court. In most instances that court is reviewing trial court decisions based on whether the lower court committed an “abuse of discretion.” One of the challenges in reporting these cases is that the appellate opinions often miss some facts; at least some facts we would like to know about. But this past week has given us two decisions, where the entire trial court opinion is appended to the appellate decision. That is a front row seat in the sense that the trial court is setting forth its entire reasoning for how it decided to divide property or allocate time with children. The custody relocation case with a complete opinion is Leytrick. Today we write about a fairly garden-variety equitable distribution. It is a great thing to have in your law office because it allows your client to read first hand just what trial judges do when they evaluate and divide assets.
Here is a summary of the facts digested from a Somerset County opinion in Fogle v. Fogle.
Age of the parties Husband 64 Wife 60
Length of marriage 41 years 1979-2020
Employment Husband $135,000-181,000 Wife $20,000 part time @ $15.00/hr.
Children 3;ages 35-41 Wife was stay at home mother for most of their minority
Assets as allocated Husband Wife
Home net of mortgage 220,000
Husband’s 401K (divided) 231,050 231,050
IRAs 128,310
Certificates of Deposit 44,782
Vehicles/Boats 29,465 19,393
Gems/Jewelry 7,860 48,475
Guns 17,630 525
Life Insurance Cash Value 6,274 54,920
512,279 527,455
Other sources of income: Husband believes his retirement benefit from Social Security will be $2,200 per month. Wife would be eligible to claim a derivative benefit which would be $1,200.
The court does a thorough rendition of the history but it’s not anything out of the ordinary. Husband started with his employer at age 22 and is still there. 22 years ago he was one of the miners trapped in a collapsed mine for three days. His earnings began to exceed $100,000 in 2015 and he professed that his wage was being cut to $63/hour. He said he planned to retire in February 2023. The decision was rendered in December 2022. Up to that time he was paying support of $2,500 a month.
Aside from $74,000 of guns and jewelry this is a pretty standard case. The court awarded and the Superior Court affirmed a 50/50* split and denied alimony. Here, some concerns arise.
Alimony: None awarded despite 41-year marriage and pre-tax earnings disparity of either 7:1 or 9:1. The explanation offered is that Husband said he was going to retire. Certainly, there was a time when retirement at age 65 was expected if not required. But, we live in a new day. The opinions tell us that each party has had some health issues but neither is prevented from working. And if Husband continues to work or resumes working after some time off, his labor (albeit post separation) affords him the ability to earn about $10,000 a month or more net of taxes. The home mortgage was less than $20,000 so his housing costs for the marital residence awarded him appear negligible. Even if wife tuned up her employment to 40 hours a week her net earnings come in at $2,000 a month. So, she is forced to draw savings or retirement instantly even if her employment graduates to full-time.
Given the length of the marriage and the income disparity, what this writer would have expected would be indefinite alimony until Husband retires. Otherwise, he departs the marriage with the ability to save $5,000 a month or more while his former spouse is forced to pull assets to survive from the moment the decree was entered. Setting aside the $74,000 in guns, gems and recreational vehicles the retirements and cash equivalents sum to about $700,000. That’s not small change but if you look at what retirement experts tell us, this couple should be drawing 4-5% of their assets each year to survive. Wife’s “stack,” again, excluding vehicles and gems is about $475,000. Her 5% draw is $2,000 a month. Full time employment will porvide another $2,000 net. On it’s face it is arguably fair assuming Husband actually retired when he said he would.
This is kind of a classic example of late in life divorce. A couple that could weather a modest life in retirement if “together” is splitting their million in assets which means two households need to be driven by the same assets once destined to sustain only one.
The opinion and the trial court ruling are at: https://www.pacourts.us/assets/opinions/Superior/out/J-A22022-23m.pdf?cb=2.
*We acknowledge the tiny imbalance here (about $7,000) and we could try to deep dive into what exactly caused the imbalance, but, hey, it’s Christmas….
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