Using PEACE for a Peaceful Divorce
The thought of a marriage ending is stressful regardless of whether the change is wanted or not. A divorce can make it impossible to focus on what matters. As is often the case, PEACE will help you remain focused. In the context of a divorce, PEACE is an acronym that can be used to prioritize the steps in a divorce. PEACE stands for:
P – Parenting Plan – Under Iowa law, in divorces involving minor children, the custody of the minor children must be decided. Custody is comprised of legal custody and physical care. Legal custody refers to the ability to participate in and make major life decisions on behalf of your child(ren). Physical care refers to the right and responsibility to maintain a home for your minor child(ren) and provide for the routine care of your minor child(ren). In Iowa, physical custody is typically categorized as one of two arrangements. One parent can be the primary physical custodian, with the other parent having visitation rights, or the parents can share physical custody – commonly referred to as joint physical care. It is important to focus on physical custody arrangement that prioritizes your minor child(ren)’s best interests. In this time of turmoil, it is easy to focus on what is best for you, but emphasizing a parenting plan that promotes your minor child(ren)’s best interest will yield the best result. If there are no minor children that will be affected by the dissolution you can skip this step.
E – Equitable Distribution – The Court, in Iowa, is tasked with dividing all property, except inherited property or gifts received or expected by one party, equitably between the parties. In determining what constitutes equitable distribution, the Court considers several factors including, but not limited to, the length of the marriage, the property brought into the marriage by each party, the age and physical and emotion health of the parties, and the provisions of a prenuptial agreement. It is important to note that absent a prenuptial agreement, gifted or inherited property is not given an absolute exclusion. The Court can include inherited or gifted property if the Court makes a finding that in would be inequitable to exclude the property. Equitable distribution comes before alimony because alimony is tied to need. Obtaining income producing assets through the divorce may diminish the need for alimony.
A – Alimony - In Iowa, the decision to award alimony or spousal support lies in the discretion of the Court. In making its determination, the Court looks at a several factors identified by the Iowa legislature. These factors include, but are not limited to, the length of the marriage, the age and physical and emotional health of the parties, the educational level of each party at the time of marriage and at the time the action is commenced, and the provisions of an antenuptial agreement. Iowa courts recognize three types of Alimony – traditional, rehabilitative, and reimbursement. In looking at whether traditional alimony is appropriate and determining the duration and amount, the Court typically looks at one party’s need and the other party’s ability to pay. Rehabilitative alimony is awarded to a spouse that is able to become self-sufficient with some training. Reimbursement alimony is awarded for sacrifices made during the marriage.
C – Child Support – The Iowa Child Support Guidelines are based in part, on the parties’ respective net incomes, their respective overnights with their minor child(ren), and credits for child care and health insurance payments. Child support is dealt with after alimony because alimony received is considered income to the recipient and an above the line deduction to the taxable income of the payor*.
E – Everything Else – This is a catch all provision. Once you have navigated the categories above, if there is anything left to be decided, it should be handled now. Typical issues decided in this category include entitlement to attorney’s fees, tax filing status, and life insurance to secure child support or alimony payments.
*The Iowa Supreme Court amended the Child Support Guidelines effective January 1, 2018, to require alimony to be characterized as income to the payee spouse for the purposes of calculating child support. The Court has not commented on how it will amend the rules, if at all; in the wake of the changes to the tax code that now make alimony non-deductible to the payor and not income to the payee.