The State Bar Association of North Dakota Fall 2013 Gavel Magazine | Page 19

ternity may be signed before the birth of the
child, may be signed by a minor, and takes
effect upon the birth of the child or the filing
of the documents with the state department
of health, whichever occurs later. N.D.C.C.
§14-20-14. A signatory may rescind an acknowledgment of paternity by commencing
a proceeding to rescind before the earlier of
sixty days after the effective date of the acknowledgment or the date of the first hearing in a proceeding to which the signatory is
a party before a court to adjudicate an issue
relating to the child, including a proceeding to establish child support. N.D.C.C. §
14-20-17. Since Dick’s acknowledgment of
paternity became effective when the hospital
filed it with the state department of health
on the day of the child’s birth, and more
than sixty days have passed, it is too late for
Dick to commence an action to rescind his
acknowledgment. Under N.D.C.C. § 14-2018, however, after the period for rescission
has expired, Dick may bring an action to
challenge the acknowledgment on the basis
of fraud, duress, or material mistake of fact
as long as he does it within two years after
his acknowledgment was filed with the state
department of health. Dick would have the
burden of proof.
13. Kate and Mark are married but having
been living apart for five years. Kate wishes
to remain married to Mark because she
is covered on his health insurance and
has a serious, chronic health condition.
Kate agrees to a legal separation on the
grounds of irreconcilable differences and
a Judgment of Legal Separation is entered
dividing all of Kate and Mark’s property
and debt. Neither party is ordered to pay
spousal support but Kate does not waive
the issue. In the fall of 2013, Mark informs
Kate that since her pre-existing conditions
will not prevent her from purchasing her
own health insurance under the Affordable
Care Act, he intends to ask the court to
revoke the legal separation and grant him
a divorce on the grounds of irreconcilable
differences. What do you tell Kate?
a. If Bill can prove that there are irreconcilable differences in his marriage, his
request for a divorce will be granted.
b. The court may order Bill to pay spousal support.

The Gavel Fall 2013

c. The court can revisit the property division in the judgment of legal separation
if either party failed to disclose or comply
with the court’s order distributing property and debts.
d. All of the above
ANSWER: d. N.D.C.C. § 14-05-29 provides
that any time after a decree for separation
has been granted, the court may revoke
the decree and “if it appears to the court
that reconciliation between the parties to
the marriage is improbable, the court shall
revoke the separation decree and in lieu of
the decree shall render a decree divorcing the
parties.” N.D.C.C. § 14-05-29 provides that
in a proceeding to revoke a legal separation
and grant a divorce, “if the court has not
previously done so” it “may provide for the
payment of support to either party by the
other.” N.D.C.C. § 14-05-27 provides in relevant part that “subject to section 14-05-24”
a decree of legal separation “may provide for
the equitable division of the property and
debts of the parties.” N.D.C.C. §14-05-24
provides that a court may redistribute property and debt in a post judgment proceeding if a party has failed to disclose or failed
to comply with a court order distributing
property and debt.
14. In their divorce, Liz received $50,000
from Richard’s IRA. Richard established
his IRA account after he left his job at
Walmart and rolled over his 401(k) into
a new Fidelity IRA. What is needed in
order to transfer the money to Liz with no
adverse tax consequences?

incident to such a decree.
15. During their divorce negotiations, Liz
and Richard recognized that Liz would
need $1,000 per month in permanent
spousal maintenance. Liz also received
the marital home in the divorce, on which
there is a mortgage payment of $1,000 per
month. Bob was concerned about Liz’s
financial management skills and the parties
agree that as spousal maintenance Richard
would be required to pay Liz’s monthly
mortgage payment until the mortgage was
fully paid off. The judgment also requires
Richard to maintain sufficient life insurance on his life to pay off the mortgage in
the event he dies before the mortgage is
paid in full. Is this payment deductible to
Bob and taxable in Liz’s income as spousal
maintenance?
a. Yes.
b. No, because maintenance must be paid
directly to the obligee.
c. No, because the maintenance does not
terminate with Richard’s death.
d. No, because you can’t pay the obligee’s
bills in lieu of maintenance.
ANSWER: c. To be tax deductible, spousal
maintenance must satisfy the requirements
of I.R.C. §71. Under that section, the liability for payments, or for making other payments as substitution for those payments,
must cease upon the death of the payee.
I.R.C. §71(b)(1)(D).

a. Just a Qualified Domestic Relations
Order
b. Simply a letter directing that the
money be transferred.
c. QDRO and certified copy of the divorce judgment.
d. A copy of the divorce judgment.
ANSWER: d. Individual retirement accounts are not qualified plans governed
by ERISA but instead are governed by the
provisions of I.R.C. § 408. Thus, to transfer fund tax free form an IRA to a spouse
or former spouse, even if it is a rollover
IRA from a qualified plan, a QDRO is not
required and the QDRO rules to not apply.
Instead, all that is needed is a judgment or
decree of divorce or a written instrument

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