A recent Nebraska Court of Appeals decision, Storm v. Cornutt, is a reminder that financial problems do not always end when a divorce decree is signed.
In Storm, the wife was awarded several pieces of real estate as part of the divorce settlement. After the divorce was final, she attempted to sell one of the properties and discovered that IRS tax liens totaling nearly $2 million had attached to the property because of her former husband’s unpaid taxes.
The liens prevented her from selling the property and using the equity to support herself as the parties had anticipated when they negotiated their settlement. As a result, the district court extended her alimony payments by an additional 30 months, and the Nebraska Court of Appeals upheld that decision.
Why Did the Court Extend Alimony?
Nebraska law allows alimony to be modified when there has been a material and substantial change in circumstances that was not contemplated when the divorce was entered.
In Storm, the Court concluded that the IRS liens created exactly that type of change.
Although both spouses knew there had been tax issues during the marriage, the court found that the liens themselves became an additional encumbrance on the property after the divorce. Because the wife could no longer sell the property and access the equity she had been awarded, her financial circumstances were significantly different than what existed when the decree was entered.
What Does This Mean for Someone Going Through Divorce?
Take the time to investigate potential debts before signing a settlement agreement. Tax liabilities, business obligations, and other financial issues can have long-term consequences that are not immediately obvious. Spending additional time gathering financial information during the divorce can prevent expensive problems later.
The Bottom Line
Storm v. Cornutt shows that when an unexpected financial event fundamentally changes the assumptions on which the divorce settlement was based, a Nebraska court may modify spousal support if the legal requirements are met.
If your divorce involves complicated finances, business interests, or potential tax liabilities, careful financial investigation before the decree is entered can make a significant difference. Schedule a confidential consultation with Koenig|Dunne today and take the first step toward clarity and peace of mind.
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