Winning Isn't Easy: Long Term Disability ERISA Claims

Episode 21: The Impact of Filing For Divorce On The Disability Insurance Benefits Process

January 18, 2021 Nancy L. Cavey Season 1 Episode 21
Winning Isn't Easy: Long Term Disability ERISA Claims
Episode 21: The Impact of Filing For Divorce On The Disability Insurance Benefits Process
Show Notes Transcript

In this week's episode - Nationwide ERISA Long Term Disability Attorney Nancy Cavey talks about  "The Impact of Filing For Divorce On The Disability Insurance Benefits Process" with Divorce Attorney  Kristina Feher and much more!

Resources Mentioned In This Episode:

LINK TO ROBBED: https://caveylaw.com/get-free-reports/get-disability-book/

LINK TO PROFESSIONAL BOOK: https://caveylaw.com/get-free-reports/disability-insurance-claim-survival-guide-professionals/

FREE CONSULT LINK: https://caveylaw.com/contact-us/

ATTORNEY KRISTINA FEHER:
Her boutique firm practices in the areas of bankruptcy law and family law. For more information about a specific legal issue, Her contact information is:

Phone: 727-359-0367
Website: www.feherlaw.com

She represents clients in St. Petersburg, Clearwater, and the Tampa bay area.

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Nancy L. Cavey:

I'm Nancy C avey national ERISA and individual disability attorney. Welcome to winning. Isn't easy today. We're going to talk about disability and divorce with my special guest Attorney Kristina Feher. Unfortunately the better or worse portion of the wedding vows can be tested and even destroyed by disability. I've asked her to answer some common questions that we both encounter in our practice. Before we get started, we both have to give you a legal disclaimer, this podcast isn't legal advice. The Florida bar association says, we have to say this. So we've said it, but nothing prevents us from giving you an overview of disability a nd divorce. So off we go. So Christina, can you first tell us about yourself and how you became a family law attorney? Tell us about your journey

Divorce Attorney Kristina Feher:

Morning. Thank you for having me. I became a family law attorney back in 2010. I was working for a law firm that actually didn't do family law. And we had a client who was a very good client of the firm and she was going through a divorce and we decided we were going to do whatever we could to help her. And it was a little awkward for me. I haven't experienced divorce in my life. I don't know anybody who got divorced at this age. She was a little bit older in life, but she was so open with me about her struggles, her fears, the process, the questions. And so it really dawned on me that this was an area of law that I could really help people and helping people. I'm very excited because I'm born and raised here in St . Petersburg. So I get to help the people that helped raise me. I get to help people in the community that I grew up in and that now my family lives into

Nancy L. Cavey:

Congratulations. So , um, I always get these calls by , from my clients about I'm thinking about divorce and they have some very basic questions. Then we're going to get into some more specific questions about divorce and disability, but what do clients generally need to know about divorce?

Divorce Attorney Kristina Feher:

Sure. So the overview of divorce that I give most clients is there's really two ways out of divorce. Option. One is you and your spouse are going to resolve everything and come to an agreement that's option one, option two. On the other hand is a judge is going to decide the outcome of your case. And so that's kind of the overview we give. Then the second part of that overview is divorces. Look at five main topics and what the court calls. It is an acronym. We call peace P E a C E. And that stands for the court's going to look at a parenting plan. Do you and the other person have children? And do we need to address time sharing decision-making health issues, et cetera. The second thing the court's going to look at is equitable distribution, and that's not equal distribution. Sometimes people make the , the confusion about that equitable distribution. The court is going to look at all of your assets, all of your debts, and then decide who should share what burden of that distribution. Who's going to get the house. Who's going to end up with the credit card debt, et cetera. The third thing that the court looks at is alimony. Are you entitled to alimony who has the ability to pay, who has the need for it? So alimony is also a calculation of courts will look at fourth is child support. Obviously that only comes in if you have children under the age of 18, or if a child has a disability, which continues beyond the age of 18 and has a continued need for support. And then the final thing the court is going to look at the fifth thing is everything else. Are there any other issues that the court has to resolve in order to finalize everything that took place during your divorce? So those are the two overviews we provide all of our clients when we start talking about the divorce process.

Nancy L. Cavey:

So let's say we have one of the spouses or a partner who is disabled, unable to work applying for are collecting social security, disability benefits, or short or long-term disability benefits. How does a disability impact first off the timing of filing for divorce? So

Divorce Attorney Kristina Feher:

The timing could be affected , especially if you're looking at receiving a lump sum, lump sum, payouts are usually where everything gets thrown in the wind, things start hitting the fan. So you want to make sure that if you are expecting a lump sum payout, that you sit down with an attorney and discuss if you should wait, or if you shouldn't wait. And that's hard to give kind of a, an overview, because in some instances you may want to file for divorce before that lump sum comes in. If there's a concern that you don't need that disability payout for your regular expenses and their needs right now, that could be considered an asset that the court wants to look at to split between the parties or that lump sum payout could say, maybe you should wait because it will help balance out the equitable distribution that's going to take between you and your spouse.

Nancy L. Cavey:

So let me , uh, sidetrack a second. Um, let's say that the , uh , disabled individual has been injured in a workers' compensation case, and they're going to get that lump sum payment, or they've been involved in , uh , a personal injury lawsuit. And they're going to get a lump sum. You're saying that the timing of filing for divorce could be impacted by the potential receipt of that lump sum payment for settlement of any of those kinds of cases,

Divorce Attorney Kristina Feher:

Correct? Correct. And we're looking at settlements of all kinds, certainly today we're focusing on disability payouts, but that would be the same as you said, with worker's comp personal injury cases, inheritances. So anytime there's a large sum of money coming to you, timing could be impacted one way or the other. So that's why it's always great to sit down with a divorce attorney just to help get your ducks in a row.

Nancy L. Cavey:

So let's say , uh, this, this particular individual , uh, wasn't involved in an accident or injury that will result in a lump sum payment, they're disabled, they're collecting their social security disability benefits on a monthly basis, or they're collecting their short or long-term disability benefits on a monthly basis. How does that ongoing , uh, income from their disability , uh, either impact the timing of the divorce or how is it considered , uh , by the court in a divorce?

Divorce Attorney Kristina Feher:

So the monthly payments really shouldn't affect the timing of the divorce. That's going to be a constant recurring payments . And what we do then is we include any disability payments on your financial affidavit and a financial affidavit is a required document to be filed in your divorce, which lists out all of your income and all of your deductions as well as then your monthly expenses. So the disability payment is going to be included on your financial affidavit. That's going to be included as income for purposes of calculating alimony or for purposes of calculating child support. And that is true, whether you're collecting it through long-term or short-term disability, or if you're receiving social security disability benefits also.

Nancy L. Cavey:

So let's say that unfortunately, the disability insurance carrier stops paying the long-term disability benefits , um, or for some reason, social security stops paying disability benefits. What impact does that have on the divorce? Uh , can someone come into court and say, I need to modify or change the amounts in my benefits because, or my , my divorce payments, because my source of income is gone.

Divorce Attorney Kristina Feher:

Yes, absolutely. And the concern here is you need to move quickly. And so there's a very small window of what we like to see clients do for an easy resolution. And so you can't modify until the change has actually taken place. So if you know that the disability insurance is going to stop in December, you can't file in October. You actually have to wait until the payment change is made, whether that's up or downward. And so then once the change occurs, you want to go back into court and say, my income has changed if your case is pending. That could be as simple as just filing a new financial affidavit to show that that payment has changed or has stopped if your case is completed, you've gotten divorced. And now we're two years later where that change is going, then you're going to need to reopen the case file a petition to modify, and then file that new financial affidavit. The problem we see with a lot of clients is that they wait. And so the court is not triggered to change your payment, unless, and until you file that document. Now, a lot of times when you try to get a hearing to modify or change your payments, that could take a little bit of time. If you file your paperwork timely, and you've been actively moving your case forward, hopefully with an attorney, because we can do that a little bit better. Then the court will grant that modified payment back to the original date that you filed the paperwork. So it's really important to know when is my payment going to change? And then what do I do in the court system to get that moving? So the payment can be modified until, and unless the court enters an order modifying your payment, you still have to make the prior payment. So it's really important to get that order from the judge, confirming that you can change your payment.

Nancy L. Cavey:

So as lawyers, we know that , um, alimony and child support can go both ways that in fact, they will person can be ordered to pay alimony and child support. So what you're saying is if there's any change, they have to go into court to get the court to lower or change the amount, but they have this continuing obligation to continue to pay the child support or the alimony till the court correction . Is that right?

Divorce Attorney Kristina Feher:

That is absolutely correct. And that's sometimes the hard part too, especially if that payment is going away, then you're obligated at this amount, which is becoming feasibly harder to make because you don't have that extra income. So that's why it's really important to move that case forward promptly, and to not show a delay, if you, as the person who is pain is working towards getting that payment modified in a diligent manner, then the court's going to accept that. However, if you sit back on your hands and wait two years, then file your paperwork and say, yeah, but two years ago is when it changed. The court's not going to look upon that favorably. They're going to say that if you let this go for two years, then it wasn't important. And so we want to make sure that we notify the court and tell them this is important. Additionally, most people who have an alimony or child support obligation are under a court order to pay. So it's really important that you understand that you have that obligation pursuant to a court order to make that payment unless, and until it's modified by another court order. So that's why getting that modified court order from the judge is so important.

Nancy L. Cavey:

A lot of my clients are concerned about what's going to happen with their children , uh, because of the divorce and their disability, that there might be an argument that they're not physically capable of taking care of their children or that the amount of time they get to spend with their children is going to be impacted by their own disability. Um, can you comment on that for me place ? Sure. So

Divorce Attorney Kristina Feher:

One of the things the court is going to look at and the standard that we use across all our cases is what is in the best interests of the child. And so this may take on the role of looking at whether the person with the disability has a physical or a mental disability. And then we look at what limitations would that have for that client to be able to interact with care, for provide safety, food shelter for the client, for the child. I'm sorry. And so one of the things that we might look at is if a veteran has PTSD and they're receiving veterans funds or SSD for that, then it's possible that interacting with their child, isn't going to have any effect on it. However, if we have someone who has a disability that prevents them from walking, then maybe having a small child who needs to go to the playground who has a lot of physical activity, who needs to be driven to extracurricular activities that disability may impact the parent's ability to spend time with the child. So it's really going to look at what is the nature of the disability and how does it impact the best interests, safety, and welfare of their child.

Nancy L. Cavey:

So who's going to be making that decision. Are there going to be like expert doctors or psychologists or social workers? How does that work?

Divorce Attorney Kristina Feher:

So the family law system is not structured to have expert witnesses readily available to address these kinds of things. So in most instances, the only thing we have available is either doctor's reports or doctor's testimony of the person who has diagnosed the patient, or we have that individual's own testimony as to what their abilities are, what their disabilities are. And the court's also going to ask some questions during that hearing to say, additionally, it's possible. The spouse also has some information based on their history with their spouse as to what the spouse's limitations are. So for example, if you haven't been able to be mobile outside of the house, or you have a mental limitation that makes it difficult for you to leave the house that spouse could testify to that, as opposed to you trying to say, Oh, no, you're fine to go out of the house. You can take the child to the playground, you can drive them to school. So a lot of times we're just looking at the testimony of the spouses, if there's any way to bring in experts or doctors, that responsibility is going to fall solely on the individual. And having doctors testify in court can be very expensive and cost prohibitive. So that makes it really difficult to open the flood Gates of experts and witnesses and doctors and all of that.

Nancy L. Cavey:

So , um, how has the inability to work , uh, generally considered by the court? I know that we may be getting income for that disability, but the, does the court look at this inability to work in and factor that into child support, alimony, custody issues?

Divorce Attorney Kristina Feher:

They certainly can. And as lawyers, we always want to put the asterisk out there that are, it always depends. And so what the court is really going to look at in an inability to work situation is, is that parent voluntarily underemployed. And so there's different issues that come up here because you have the factor of what maybe your insurance company or social security determines your ability to work versus what the court sees. So the court is going to see you come into court. Are you well presented? Are you well-dressed ? Are you able to articulate and interact with the court? Are you able to sit at the table? The court may consider that you might be voluntarily underemployed because you are able to work, but are not. And we have a of clients that we've seen who have a hundred percent rating disability from the military, or they're on SSD, but they're still able to work. So if the court determines that you're voluntarily unemployed or underemployed, what they could do is they could, what's called impute income to you. And when the court imputes income, they're saying, you could be working, you could be earning more and therefore we're going to base your alimony or child support on the amount you could or should be making. And so that could really affect someone who is either representing themselves or who doesn't have really good documentation as to their inability to work. And so that's definitely our main idea that we want to share with everyone who's watching today is make sure you have clear documentation as to physical limitations, mental limitations. What is it that you can do? What is it that you can't do? What are you restricted from doing by your doctor? That's all going to be information that the court could consider as well as for individuals to know, this is what my doctor says, and this is how a court is going to view it.

Nancy L. Cavey:

Great. Well, let's take a break for a minute and we'll come back with some more questions. Welcome back to winning. Isn't easy. I'm here with my guest who is an expert in the world of divorce. So Christina, tell me what mistakes can you make generally , uh, when you're thinking about divorce or, or in the divorce process,

Divorce Attorney Kristina Feher:

The most common mistake I see is an error in your financial affidavit. And if you have alimony or child support issues in your case, that's going to be a really important document. As we mentioned earlier, the financial affidavit is the document that lists all of your income, all of your deductions, all of your expenses, all of your assets, all of your debts. And so making a mistake on that is going to be seen by the court, probably as a credibility issue. For example, if you leave off a disability payment or an SSD payment, the court may feel that you are not being honest about your income. And if you're not being honest about your income could be dishonest about a lot of other things. Additionally, there needs to be a specific amount of detail in the financial affidavit because that's where your alimony and child support calculations are going to come from. So you want to make sure that if you are receiving income and you are earning wages, that you list your wages, but also that your deductions are computed correctly. And a lot of times what we see is people are paid every two weeks, but the financial affidavit looks at information on a monthly basis. And so a big mistake we sometimes see is we're not calculating monthly mounts correctly. And so I always say, if you are paid twice a month, you are paid on the same day, the same calendar day every month. So that's the first and the 15th or the 15th and the 30th or something like that. But you're always getting your paychecks on that same calendar day. If that's the case, then you're receiving 24 paychecks a year on the flip side. If you're getting paid every two weeks, then you're probably getting paid every other Friday. And if that's the case, you're getting 26 paychecks a year. So the calculation as to how to change the 26 payments a year into a monthly amount for your financial affidavit can sometimes be a challenging math problem. So those are the common mistakes that we see on the financial affidavit.

Nancy L. Cavey:

Um, I have that issue all the time. That's hard work 0.3 . Um, so I'm often asked how can I maintain my group health insurance or my life insurance as part of the divorce, because I'm struggling obviously to maintain those benefits because of my disability. And at some point I may lose those from my employer. So I'm going to be looking to my spouse to provide those benefits, or I've already lost them. And my spouse is providing those benefits to me. But the question is, how do I maintain those insurance benefits that I desperately need as part of a divorce?

Divorce Attorney Kristina Feher:

Sure. So there are two things that kind of come to play when we're addressing that question. The first is that during the divorce process, the court looks to keep kind of an established quid pro quo, whatever was happening before the divorce filed, that should happen during the pendency of the divorce. So if one spouse was providing health insurance for the other spouse, that should continue through the course of the divorce. A lot of times we see people are either vengeful and remove a spouse from health insurance, which could cause a lot of problems or sometimes people just don't know. So there isn't necessarily a bad intent, but they say, Hey, we're getting divorced. So let me take you off my health insurance while the divorce is pending, you can remain on the health insurance of your spouse, or if you're the one who's carrying the insurance, but your spouse can stay on it until the divorce is finalized. And so when is the divorce finalize is kind of the second part of that. Your divorce is finalized and you are no longer married as of the date. The judge signs your final judgment of divorce. And so that's usually either the day that you have your trial, cause your judge is making the decision on how to deal with everything in your case or two , you've come to an agreement with your spouse. And now you have a final hearing in which the judge is just rubber stamping, the agreement you and your spouse came to. So what you're looking for is the date. The judge signs, the final judgment and Pinellas. We're very lucky. Most of my final judgments are signed the day that the hearing is held. So there's not a long delay, but there could be. So you want to make sure that until the judge signs, the paperwork, everything stays the same for the spouse. Who's receiving benefits. The date of divorce is actually considered an event that no longer entitles you to your spouse's benefits. And so if you're the one who is going to be losing those benefits, you really want to make sure that you're planning or considering what that's going to look like in the future for you. And so that may consider if you're having an alimony claim, you want to consider that your going to need additional funds to cover your own health insurance, which could be more expensive than what you were paying or receiving as part of your spouses health insurance. So sometimes we see that a spouse now has to pay $600 per month out of pocket to receive the same care. That's something you could include in your alimony claim. So you want to make sure if you're going to be losing those benefits, that you have an idea of when that date of divorce is going to be so that you can accurately plan for and prepare for that change. A health insurance company is not going to allow you to remain on your spouses , health insurance once you're no longer their spouse. So a lot of people ask me, well, Kristina, can't, I just stay on after the divorce is done. And the answer is no for purposes of the health insurance company. And it has nothing to do with the divorce. Once you are no longer a spouse, you're no longer entitled to be eligible for the health insurance benefits of your now former spouse. So can you Cobra? So Cobra is only eligible for the employee and then their dependents and or spouse. So if the spouse is still working at that company, you most likely will not be eligible for Cobra because you're divorced. Decree has broken that bond, and you're no longer that spouse. So, and also Cobra while an option is usually not a feasible option for many people getting divorced, not only are you going from one household to two and the additional expenses, their Cobra can often be very expensive and very cost prohibitive for someone who is starting that new life, you've already had to pay first month security last month, moving costs, moving costs, all those additional things, maybe get new furniture, change your DMV registration. There's a lot of ancillary costs in a divorce to then have an increasingly high Cobra payment. Just isn't something that people can make work when they're getting divorced.

Nancy L. Cavey:

So are there any questions or considerations that we haven't talked about so far that you think , um, they need to know about?

Divorce Attorney Kristina Feher:

So one of the things that is sometimes often overlooked is when someone is receiving social security, disability income, but they have minor children who are also receiving some type of benefit that benefit to the children can be included when we're looking at the overall cost of what child support is going to be to that parent. So if you're the parent, go ahead. I'm sorry. I'm sorry.

Nancy L. Cavey:

It's considered income. It is

Divorce Attorney Kristina Feher:

Considered income. Yes. And what it is is if the child support amount for your children is $500 and they're receiving $600 from their SSD through you, then you may not actually have to pay out any money. In addition to the benefit they're already receiving from social security, however, if your social security changes or their amount changes, we may need to recalculate all of that to make sure that the numbers are still accurate. So a lot of people aren't considering or taking into account the amount the children are using when we're looking at child support. So that's a really important thing that often gets overlooked.

Nancy L. Cavey:

Great point. So how would somebody go about finding the right divorce attorney for them and their situation? What , what are your suggestions?

Divorce Attorney Kristina Feher:

So I think that divorce is a deeply personal and deeply emotional thing. Even if you have come to terms with an imminent divorce and you're ready to do it, it's still something that kind of touches the core of who people are. And so I think it's really important to find a lawyer. You feel that you can talk with open and honestly, and whether that is a feeling you get, or the impression you get, you want to make sure as an individual that you're interviewing, Boyers just as you would for anything else, you want to feel like they are going to do a good job. You want to feel like you're being heard and you want to feel like you can communicate with that lawyer. Well, and so think about those things. When you're going into your consultation with an attorney, think about asking those questions. How do I get in touch with you? How fast do you think my case will progress? Do you see any issues that can come up a lot of times because we're so overwhelmed with the divorce process, starting the lawyer has a lot to tell the client about what's going to happen. What's going to go on. Don't feel like you can't ask that lawyer questions come prepared with a list of questions. I love clients who come in and they say, here are the things I want to talk about. Here are the issues I'm concerned about, because that helps me identify the client's goals, the client's fears, and maybe some bumps we might find along the road. So just remember it's very much like dating. You have to find someone who's a good fit for you so that you can have those open, raw and real conversations to get that process moving.

Nancy L. Cavey:

So you're suggesting speed dating, interviewing potential divorce lawyers, right ?

Divorce Attorney Kristina Feher:

Speed dating. Let's do it. We'll line up 10 of them and it'll, it'll, it'll go quickly. Yes.

Nancy L. Cavey:

Right ? Right. So how could my clients reach out to you if they're in the Tampa Bay area?

Divorce Attorney Kristina Feher:

Wonderful. So we love to hear from all sorts of clients, we are very easy to find. You can find us on Google. We're at www.Feherlaw.com. We are available by [email protected] feherlaw .com . And you can reach us by phone seven, two seven three five nine zero three six seven. You can follow us on Facebook. You can find me on LinkedIn. We are available. You can contact us in all of those methods.

Nancy L. Cavey:

Great. Thanks for all this fantastic and helpful information. I know you're also a bankruptcy attorney, so I'd love to have you on talk about bankruptcy and disability.

Divorce Attorney Kristina Feher:

That would be wonderful. Thank you, Nancy.