James R. Balmforth: Financial Misconduct in Utah Divorce Cases

What is financial misconduct? In Utah, it is a basis upon which an Utah divorce court can make a distributive award.

Consider this:

If a spouse has engaged in financial misconduct, including, but not limited to, the dissipation, destruction, concealment, nondisclosure, or fraudulent disposition of assets, the court may compensate the offended spouse with a distributive award or with a greater award of marital property.

So what does this mean in plain English? It means if you are getting divorced and your spouse is destroying, ruining, hiding, or getting rid of assets in a sneaky way, the court can give you some of their separate property to punish them. When a court does this, it is called a distributive award.

So what is separate property?

(a) “Separate property” means all real and personal property and any interest in real or personal property that is found by the court to be any of the following:

(i) An inheritance by one spouse by bequest, devise, or descent during the course of the marriage;

(ii) Any real or personal property or interest in real or personal property that was acquired by one spouse prior to the date of the marriage;

(iii) Passive income and appreciation acquired from separate property by one spouse during the marriage;

(iv) Any real or personal property or interest in real or personal property acquired by one spouse after a decree of legal separation issued under section 3105.17 of the Revised Code;

(v) Any real or personal property or interest in real or personal property that is excluded by a valid antenuptial agreement;

(vi) Compensation to a spouse for the spouse’s personal injury, except for loss of marital earnings and compensation for expenses paid from marital assets;

(vii) Any gift of any real or personal property or of an interest in real or personal property that is made after the date of the marriage and that is proven by clear and convincing evidence to have been given to only one spouse.

So what does this all mean? It means if your spouse has separate property, and they are playing games with the marital property, the court can remedy this by giving you some of their separate property.

Retroactive Arrearage Modification Not Prohibited

The Supreme Court has decided that parties to a support order may modify child support by agreement. In Byrd v. Knuckles the Supreme Court held that nothing prohibits a juvenile court from adjusting an existing arrearage in child support if the parties agree to do so.

In this case, as part of an agreement to consent to a step-parent adoption, the Mother agreed that the Father’s child support arrearage would be reduced by 50%. After the adoption was completed, the Father attempted to have his child support arrearage reduced pursuant to this agreement, and the Court found that it had no authority to reduce this arrearage under the Law. This matter was appealed, and then brought before Supreme Court.

The Supreme Court noted that this decision does not mean that a court MUST accept a parties’ agreement to reduce a prior arrearage, but that a court is not prohibited from doing so pursuant to the Law. As in this case, this issue is particularly relevant where one party is willing to sign away their legal rights in order to be released from future, and possibly past child support obligations.

Free Consultation with a Utah Divorce Lawyer

If you have a question about divorce law or if you need to start or defend against a divorce case in Utah call Ascent Law at (801) 676-5506. We will help you.