Opinion ID: 1699668
Heading Depth: 1
Heading Rank: 4

Heading: property division and support

Text: Mr. Lien, as appellant, attacks the property division and support allowances as excessive and an abuse of the trial judge's discretion on the following grounds: a. because it fails to fully consider the federal income tax consequences, b. because Mrs. Lien did not contribute to the accumulation of the property except through socialization and business entertainment, c. because Mrs. Lien does not have experience in handling the large sums of money and support awarded her, d. because the award fails to take into account all of Mrs. Lien's property, e. because compliance with the award will work a catastrophe on Mr. Lien's personal and business financial status, and f. because the support allowance is substantially in excess of Mrs. Lien's requirements for support, and because Mrs. Lien has no current plan for seeking employment even though she is in good health, has a college degree and is capable of working. We have carefully considered all of these circumstances and Mr. Lien's arguments in their support, and are not persuaded that the trial judge clearly abused his discretion. We must and do therefore affirm the judgment as to the amount of property division and support. Mr. Lien's claim that the trial judge failed to fully consider the federal income tax consequences of its judgment is three pronged: (1) that the judge should have deducted the federal income tax which would accrue if Mr. Lien liquidated all of his assets (which would be $1,582,400) in arriving at Mr. Lien's net worth, (2) that Mr. Lien's high income shouldn't have been considered because much of it was from Subchapter S corporations and wasn't actually received by Mr. Lien, and (3) because Mr. Lien is in a 70% tax bracket, his before tax income shouldn't be considered. The claim that the trial judge must reduce a party's net assets by the deferred federal income tax accruable on a total liquidation of assets would be valid if (a) the property division compelled a total liquidation of assets and (b) if it were probable that the most disadvantageous method of sale from a tax standpoint would be used. Neither of these assumptions find any basis in the record. It was not error for the trial judge to refuse to consider theoretical tax consequences of a sale which is neither necessary nor probable but merely conjectural. Wahl v. Wahl (1968), 39 Wis.2d 510, 159 N.W.2d 651. In this case, the trial judge did deduct $300,656 [5] for this item in computing Mr. Lien's net worth, and such action is adequately supported by the record. With regard to Mr. Lien's income and his income tax bracket, the record is clear that the trial judge understood and gave those factors only the weight to which they were entitled. After the trial judge's first memorandum opinion, several hearings were held at which both counsel were permitted to offer evidence and arguments. Throughout the proceedings in the trial court and in this appeal, Mr. Lien's most serious and spirited attack on the property division and support award is on the basis that Mrs. Lien did not contribute to the acquisition of his property, and therefore she should not receive any substantial share of his property, but should be limited to the assets she had at the time of the divorce together with an allowance for support in the amount of $3,250 per month. While contribution of each party to the accumulation of the property is one of the factors to be considered in making a division of property and support award, it is not the only factor. Mrs. Lien spent 23 years of her life in the traditional role of a wife, and it clearly appears from the record that she performed the role well. She is now separated from her training by 25 years and has acquired no readily marketable skills during that period. Her future income potential is very modest in comparison with Mr. Lien's earning capacity. All of the appropriate factors in this case point to Mrs. Lien having a substantial equitable claim on Mr. Lien's assets. The trial judge's action in awarding her cash, deferred payments and support approximating one-third of Mr. Lien's assets was not a clear abuse of discretion. The fact that she does not have experience in the business world in handling such large sums of money is not a valid reason for not doing equity. Financial advisors are readily available to those who need their services. The trial judge refused to consider the value of jewelry and art objects which Mrs. Lien had received as gifts over the years or her household goods in making a division of the property. His reason for not doing so was that he also did not consider Mr. Lien's personal property or fringe benefits available to him through his various companies. Mrs. Lien's property which was not considered was worth in excess of $90,000 and is therefore substantial. However, we believe the equities between the parties were clearly balanced out when the trial judge also excluded from consideration as Mr. Lien's assets of $155,000 in assets of questionable value and $384,000 of potential contingent liabilities. Our examination of the record satisfies us that the trial court did not abuse his discretion in this regard. Mr. Lien's claim that compliance with the judgment herein will be a financial catastrophe to him finds no real support in the record other than his bare conclusion. It is true that he may have to sell part of his assets to make the payments required by the judgment. But an inevitable result of virtually every property division is that the husband who is required to turn over part of his assets to his wife at the termination of a marriage has fewer assets after the division than before. Such a result cannot defeat an equitable division of assets. Mr. Lien objects to the support allowance in the judgment on the grounds that Mrs. Lien does not need this support because of the money given her as a division of property, and cites the language used in Guindon v. Guindon (S.D.1977), 256 N.W.2d 894 at 898: Alimony will not be awarded in such an amount as would allow a wife capable of work to sit in idleness, nor will it be denied merely because she may be able to obtain employment and support herself. Such language has no application to a case like this one where the assets of the parties are so substantial that both parties could easily sit in idleness if they chose to do so. A division of property and allowance for support must be considered together to determine whether a court has abused its discretion. Van Cleave v. Van Cleave (1978), 201 Neb. 211, 266 N.W.2d 900. Throughout this case, Mr. Lien has sought to have as much as possible of the property division payable in such a manner as to make it tax-deductible to him and taxable to his wife. In fixing this support allowance, the trial judge was clearly acceding to this request, and it was proper for him to do so. Vaughn v. Vaughn (S.D.1977), 252 N.W.2d 910. Viewing the property division and support allowance together the combined total is not so large in relation to the total assets and income of the parties that we can say the trial judge clearly abused his discretion.