The New Hampshire Supreme Court recently issued a ruling in a divorce case that has significant implications for how annuity payments are divided in divorce settlements. The case, titled In the Matter of Whitehead & Whitehead (Docket No. 2024-0155), involved Kerri Whitehead and Michael Whitehead. The court's decision affects how couples may handle structured settlement annuities during divorce proceedings and sets important precedents for future cases.
The ruling came after Michael Whitehead appealed a final divorce decree issued by the Circuit Court. He contested the court's decision to award a portion of his structured settlement annuity payments to his ex-wife, Kerri Whitehead, and he also challenged the denial of his request for alimony. This case is particularly important as it addresses the intersection of divorce law and financial settlements in New Hampshire.
The background of the case reveals that Michael Whitehead suffered a serious spinal cord injury in a car accident in Ontario, Canada, in 1999, which left him partially quadriplegic. He later settled two lawsuits related to this injury, receiving structured settlement annuities instead of lump sum payments. The couple married in 2004 and moved to New Hampshire in 2014. Kerri Whitehead initiated divorce proceedings in 2021, seeking an equitable share of the annuities. The dispute centered around whether the annuities were considered divisible property under New Hampshire law or Ontario law, which would have affected the outcome of the divorce settlement.
The Supreme Court ruled that the trial court correctly applied New Hampshire law, determining that Michael Whitehead's annuity payments were divisible property. The court stated, "We conclude that the trial court properly applied New Hampshire, rather than Ontario, law in ruling that Husband’s annuity payments were divisible property." However, the court also found that the trial court erred in denying Michael Whitehead alimony without considering the impact of the annuity division on both parties' incomes and Michael's health needs. The court noted, "the court erred when it denied Husband alimony by failing to consider the effect of the annuity’s division on the parties’ income or the impact that Husband’s health needs may have on his earning capacity."
This ruling has significant implications for future divorce cases in New Hampshire, particularly those involving structured settlements and annuities. By affirming the trial court's decision to classify the second annuity as divisible property, the court reinforced the principle that personal injury settlements can be divided in divorce, regardless of their intended purpose. This sets a precedent that may influence how future courts handle similar cases.
The court's decision to vacate the denial of alimony also highlights the importance of considering both parties' financial situations in divorce proceedings. It emphasizes that courts must take into account the division of assets and the health needs of the parties when determining alimony awards. This could lead to more equitable outcomes for individuals who may have health issues impacting their earning potential.
Looking ahead, the ruling opens the door for potential appeals or further legal action. While the court has provided a clear framework for how annuities should be treated in divorce cases, the specifics of alimony calculations may still be contested in future hearings. The court's decision allows for the possibility of a reevaluation of alimony based on the newly considered factors, including the impact of the annuity division and the health needs of the parties.
In conclusion, the New Hampshire Supreme Court's ruling in In the Matter of Whitehead & Whitehead marks an important development in divorce law, particularly regarding the division of structured settlement annuities and alimony determinations. The decision not only clarifies the legal standing of such financial instruments in divorce proceedings but also emphasizes the need for courts to consider the broader financial context and health implications when making alimony awards.