19th Edition Alimony Bench Book A Publication of the Tennessee Bar Association Family Law Section (Revised @ 12/31/2020) Table of Contents Section/Page # I. ALIMONY INTRODUCTION I-2 (By: Amy J. Amundsen, Esq.) A. Statutory History of Alimony I-1 B. Guidance in Awarding Alimony I-3 C. Rehabilitative Alimony I-8 D. Alimony in futuro I-12 E. Transitional Alimony I-19 F. Alimony in solido I-25 G. Pendente Lite Support I-32 H. Divorce Decree Dictates I-34 I. Reserve Jurisdiction to Set Alimony I-35 J. Alimony Factors Used in Conservatorship……………………………………….I-36 II. MODIFICATION OR TERMINATION OF ALIMONY II-1 (By: Brenton Lankford, Esq. and Gregory D. Smith, Esq.) A. Which Alimony Awards can be Modified/Terminated and When can the Awards be Modified/Terminated?………………………………………………………….. II-1 B. Termination of Alimony Awards Under Specific Circumstances......................... II-25 C. Classification of Alimony if Divorce Decree is Silent as to Type of Alimony…. II-28 D. Service of Process for Petitions to Modify Alimony……………………………. II-29 E. Standard for Modifying Alimony………………………………………………………II-29 F. Jurisdiction of the Trial Court Pending Appeal..…………………………………II-47 G. Marital Dissolution Agreement Provisions Precluding Modification Petitions Regarding Alimony In Futuro………………………………………………….. II-49 H. Provision Calling for Automatic Suspension of Alimony upon Failure to Wife to Supply Income Information not Enforceable…….………………….……..... II-50 I. Timing is Everything…………………………………………………………… II-52 III. THE DEDUCTIBILITY OF ALIMONY IMPLICATIONS OF THE TAX CUTS & JOBS ACT OF 2017 (“TCJA”) III-1 (By: Mark H. Westlake, Esq. and Kurt Myers, CPA/ABV, ASA, CBA, CVA) A. The Takeaway III-1 B. Deductibility of Alimony Repealed in 2019 III-1 C. Deductibility of Alimony Before December 31, 2018 III-2 D. Current Definition of Alimony or Separate Maintenance Payment III-2 E. Excess Front-Loading of Alimony Payments (Not repealed but no tax Benefit under TCJA) III-4 F. Termination of Alimony at Payee’s Death III-4 G. Prohibition of Filing of Joint Tax Returns (Repealed by TCJA) III-4 H. Payments from an Alimony Trust III-4 I. Instruments Affected by the Repeal . III-5 J. Modifications of Alimony Orders . III-8 K. Current Special Issues……………………………………………………………..III-11 L. Domestic Law Tax Planning Issues (Q&A)………………………………………III-13 IV. THE DISCHARGEABILITY IN BANKRUPTCY OF DEBTS FOR ALIMONY AND PROPERTY SETTLEMENTS AIRSING FROM DIVORCE IV-1 (By: Glen Watson, Esq.) A. Big Picture: Discharge vs. Dischargeability IV-1 B. 11 U.S.C. § 523(a)(15) Debts in Nature of Alimony, Maintenance or Support are Not Dischargeable in Bankruptcy IV-3 C. Dischargeability of Marital Obligations that are NOT Alimony, Maintenance or Support –11 U.S.C. § 523(a)(15) IV-9 D. Treatment of Marital Obligations in Chapter 7 v. Chapter 13 IV-10 E. The Automatic Stay and Domestic Relations Proceedings ………………………IV-11 V. TRUSTS AND ALIMONY V-1 (By: Michael Goode, Esq.) A. Basic Terminology and Mechanics V-1 B. Types of Trusts V-9 C. Trusts that Can Protect Against Creditors V-14 VI. CHECKLIST FOR FINDINGS OF FACTS AND CONCLUSIONS OF LAW IN REGARDS TO ALIMONY VI-1 (By: Judge Don Ash, updated by Judge Mary L. Wagner) A. Factors for Consideration Regarding Spousal Support VI-2 B. This is a Case for Transitional Alimony VI-5 C. This is a Case for Rehabilitative Alimony VI-6 D. This is a Case for Alimony in solido (Lump Sum Alimony) VI-8 E. This is a Case for Support on a Long-Term Basis (in futuro or Periodic Alimony) VI-9 F. Factual Findings to Include in Any Alimony Decision VI-11 G. Issues of Tax Deduction and Bankruptcy VI-11 H. Additional Orders VI-13 I. Modification Cases VI-14 VII. ENFORCEMENT OF ALIMONY VII-1 (By: Judge Mary L. Wagner) A. Authority of the Divorce Court VII-1 B. Execution VII-2 C. Garnishment VII-3 D. Renewal of Judgments VII-3 E. Equitable Enforcement Remedies VII-4 F. Contempt VII-5 G. Use of Qualified Domestic Relations Orders to Enforce Judgments For Alimony Arrearage VII-11 H. Use of Title IV-D Contractors VII-12 I. Foreign Support Orders, Judgments, and Decreeds in Tennessee .VII-14 J. Unique Cases VII-16 K. Attorney Fees Associated with Enforcement……………………………………………VII-18 VIII. APPENDIX VIII-1 (By: Amy J. Amundsen, Esq.) A. Sample Provisions for Alimony in solido VIII-1 B. Sample Provisions for Alimony in futuro (Periodic Alimony) VIII-2 C. Sample Provisions Combining Alimony in futuro (Periodic) & Rehabilitative Alimony VIII-3 D. Sample Provisions for Rehabilitative Alimony VIII-4 E. Sample Provision Transitional Alimony VIII-5 F. Sample Provisions Combining Alimony in Futuro & Transitional Alimony………VIII-6 G. Optional Alimony Provisions for Cohabitation…………………………………….VIII-6 H. Sample Provision of Reserving Alimony VIII-7 I. Sample Provision of Waiver of Alimony … VIII-7 J. Other Provisions VIII-7 IX. Tennessee Published and Unpublished Cases (8/8/2003 – 12/31/2020) IX-1 (By: Brenton Lankford, Esq.) Foreword It has been a "Terrible, Horrible, No Good, Very Bad Year" with COVID-19 bringing economic hardships to many families, business owners, and self-employed individuals!1 This 19th Edition of the Alimony Bench Book recognizes and addresses special alimony considerations arising from the income, payments, or benefits from the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the Coronavirus Response and Relief Supplemental Appropriations Act of 2021, including the Paycheck Protection Program. (See Chapter III). It has been a relatively quiet year for caselaw, except for the Barton case addressing the pitfall of pledging LLC assets to secure alimony payments when the business is not a party to the lawsuit. (See discussions of Barton in Chapters I, VII, and VIII). Our Tennessee General Assembly significantly amended Tenn. Code Ann. §28-3-110 to remove the 10-year statute of limitations on judgments or decrees in domestic relations matters which shall "be enforceable and remaining in effect from the date of entry until paid in full or otherwise discharged." 2019 Tenn. SB 2651. (Effective March 20, 2020). However, absent the application of Tenn. Code Ann. §28-3-110(e), attorneys will want to continue to advise their clients about the need to renew any judgment within ten years of the judgment's date. (See Chapter VII). We also learn the importance of involving a Trust attorney early when the Trustee of a Trust is subject to "in personam" jurisdiction of a Tennessee Court and the Trustee's fiduciary duties to protect the Trust assets located in another state. (See Chapter V on Sekik v. Abdelnabi case). We thank the authors and members of the Alimony Bench Book Committee. They continue to dedicate their time to researching, reading, digesting, and writing these chapters in the Alimony Bench Book to continue the mission of: 1) educating lawyers and Judges; 2) facilitating the rendering of more consistent and reliable trial court decisions; 3) increasing understanding of how the law applies to the facts through a thorough review of relevant case law, legal precedent, and new statutes; and 4) reducing attorney fees and costs, plus litigation expenses from appeals and remands, by providing the correct tools to evaluate, mediate and litigate cases. Our authors include Judge Mary Wagner, Brenton Lankford, Gregory Smith, Michael Goode, Glen Watson, Mark Westlake, Kurt Myers, CPA, and Amy Amundsen. We thank Maresa Whaley, Sections, Committee & CLE Coordinator from the Tennessee Bar Association, who helps us ensure the Alimony Bench Book is made available to our Judges at their Spring Conference. We appreciate all of you. Co-Chairs, Amy J. Amundsen, and Siew-Ling Shea 1 Credit is given to Judith Viorst and “Alexander and the Terrible, Horrible, No Good, Very Bad Day” for the inspiration for this Foreword, and that despite or inspite of problems in this unusual year, there are positives or solutions. I. ALIMONY INTRODUCTION The Courts in Tennessee have the authority to award alimony pursuant to T.C.A. § 36-5- 121. [(codified on July 1, 2005) formerly T.C.A. § 36-5-101]. (a) In any action for divorce, legal separation or separate maintenance, the court may award alimony to be paid by one spouse to or for the benefit of the other, or out of either spouse’s property, according to the nature of the case and the circumstances of the parties. The court may fix some definite amount or amounts to be paid in monthly, semimonthly or weekly installments, or otherwise, as the circumstances may warrant. Such award, if not paid, may be enforced by any appropriate process of the court having jurisdiction including levy of execution. Further, the order or decree shall remain in the court’s jurisdiction and control, and, upon application of either party, the court may award an increase or decrease or other modification of the award based upon a showing of a substantial and material change of circumstances; provided, that the award is subject to modification by the court based on the type of alimony awarded, the terms of the court’s decree or the terms of the parties’ agreement. TENN. CODE ANN. § 36-5-121(a) (2019). A. STATUTORY HISTORY OF ALIMONY Alimony was originally “allowed in recognition of the husband’s common law liability to support the wife.” Rush v. Rush, 232 S.W.2d 333, 336 (Tenn. Ct. App. 1949). In 1949, the legislature enacted two types of alimony: alimony in futuro and alimony in solido. T.C.A. § 36-820 (alimony in futuro) provided that upon the dissolution of the marriage or a court decreed separation: the court may make an order and decree for the suitable support and maintenance of the complainant by the respondent, or out of his or her property .