Whether you have a modest marital estate or a complex property division, one good rule of thumb is to remember that it is never "worth it" to spend more money fighting over an asset than it is worth. This may sound simple, but in the incendiary environment of some high-conflict divorces, the parties may adopt a scorched earth policy, where winning is everything, no matter how pyrrhic the victory.
]]> We recommend against this. While a divorce proceeding is emotionally charged, it is at its very core, a contract. This means you, with the help of your attorney, need to step back and consider your finances as you would in a business transaction. Is the time and expense pursuing a particular asset or goal worth it?Spending thousands of dollars of your attorney's time to secure particular asset that is intrinsically only valued at a few hundred dollars is not cost effective. If you can replace it for far less, let it go.
While an aggressive litigation stance may be emotionally satisfying in the short-run, will the costs mean you may not be able to afford to send your children to college or that you will have to forgo a vacation with your children? Moreover, is that what you want your children to remember, 10 or 15 years in the future?
Source: FoxBusiness.com, "How to Make Your Divorce Cheaper," Andrea Murad, May 16, 2013
]]>A piece of federal legislation known as the Indian Child Welfare Act (ICWA) is at the center of this dispute. The dispute gives families and tribes of Native American children special considerations when it comes to the child custody and adoption of their children.
]]> The reason it's at the nation's highest court is because a 2-year old Cherokee girl was returned to her biological father. This occurred though the girl had never met her father. Apparently the father had even texted the girl's mother claiming that he was giving up all parental rights to the child because he was unable to support her. He had also previously provided written approval that the child could be put up for adoption.
The mother at some point met with a couple and wrote up an agreement to allow this couple to adopt the young girl. The adoption was also said to have been approved by the Cherokee nation.
The adoption was later halted when the attorney for the father sent an objection. The attorney alleged the father did not understand the waiver he had signed, and that he had only formally approved of giving up his parental rights to the child's mother - not to any adoptive parents. Because the state ordered the child be returned to the biological father, this matter is not going to the U.S. Supreme Court.
Sadly, most family court matters become extremely contentious. The amount of contention can only be reduced when parents understand that every family law decision involving children should be based primarily on what is best for that child. No law, procedure or technicality of the court should ever defeat that purpose.
From what we know of the facts of this case, it's difficult to know what the best interest of the young child would really be. This is based on a number of considerations including the health, education, and general well-being of the child. The process should also be as little disruptive to the child's life as is possible.
We hope the justices can come to the right decision in this case.
Source: KNAU Arizona, “Adoption Case Brings Rare Family Law Dispute to High Court,” by Nina Totenberg, April 16, 2013
]]>For example, among the couple's assets were a home in Centerville and four vehicles, three Cadillacs and one Toyota Prius. Under the terms of the agreement, Turner's wife, a business executive, will keep the house and Rep. Turner would make his residence in Washington, D.C. The distribution of the vehicles is not mentioned in an article about the divorce.
]]> The couple, who married in 1987, has two daughters. The spouses agreed not to seek spousal support and said in the petition that they would pay equal shares of their daughters' college educations. Normally, there would be a child custody plan, but since both of their daughters are adults, a custody plan was not necessary.The petition included a gag order in which both spouses agreed not to talk publicly about their divorce "due to the public nature of this case." Rep. Turner, a Republican, has represented Ohio's 10th congressional district since 2003 and is the former mayor of Dayton.
Many high-asset divorces become contentious when the spouses are unable to agree on a divison of property they both can accept. It is good that it was apparently not the case here.
Source: Dayton Daily News, "Congressman Turner's divorce finalized," Lynn Hulsey, May 2, 2013
]]>While other parts of a divorce settlement can be modified at a later time, such as child or spousal support or the terms of a custody agreement, if there has been a significant change in the circumstance of the parties, such as illness or permanent job loss, the division of marital property is much more difficult to modify. If you made a mistake or failed to understand the tax consequences of accepting a type of property or selling real property, the court will not fix your error in a property division.
]]> To obtain a modification of a property settlement, you generally need to show fraud by your former spouse. This means that your former spouse intentionally misrepresented some material part of the agreement. This rarely happens and may be difficult to prove in court.Nevertheless, it does happen. The former owner of the Los Angeles Dodgers, Frank McCourt is back in court because his wife alleges he fraudulently persuaded her that he was only worth $300 million during their divorce. She agreed to $131 million as her share of the property settlement.
Two months after the divorce was finalized, he sold the Dodgers for $2.1 billion. Jamie McCourt is suing for at least $770 million, as she wants a total share of $900 million. We suspect he might have had some inkling that he was going to be worth somewhat more than $300 million when he signed his divorce settlement. Lucky Jamie.
Source: CBS Los Angeles, "Frank, Jamie McCourt Headed Back To Court Over Bigger Divorce Settlement," April 17, 2013
]]>For a wife who earns more, the prospect of divorce may be no less stressful. She may not need to worry if she will receive a sufficient alimony payment or how she will obtain adequate training to successfully reenter the world of work, but a woman in a high asset divorce with a substantial income, a professional practice or personal assets will have her own unique set of concerns.
]]> She will want to protect those assets, especially if she owns or is a partner in a professional medical or legal practice, owns a business of her own, or has received substantial assets as part of an inheritance. Before marriage, a prenuptial agreement can help clarify the lines of demarcation, and ensure if there is a divorce separate property remains separate.If you are already married, keeping separate bank or investment accounts, and ensuring that assets received via inheritance are not comingled in joint bank accounts or as part a of down payment on family home. This type of mixing of funds can cause previously separate assets to lose their separate characterization and become part of the marital estate, which would be subject to an equitable division during a driver.
Even if you are not thinking of a divorce, a divorce attorney is a good resource to discuss these matters, and help you develop a clear plan for your financial situation.
Source: Forbes, "Divorcing Women: When You Earn More Than Your Husband," Jeff Landers, April 10, 2013
]]>With a high net worth couple, the prenuptial agreement should bring peace of mind to each member of the marriage, as they know in advance that their children cannot be disadvantaged by unfortunate circumstances or clever lawyering by their spouse's attorney.
]]> Prenuptial agreements are essentially contracts, and as such, they must follow all of the rules for drafting valid contracts. In addition to maintaining contract formalities, other special considerations come into play because of the nature of a prenuptial agreement.A recent New York divorce involved a prenuptial agreement that was declared invalid by the court because it was fraudulently induced. She claimed he had promised to tear up the prenuptial agreement as soon as they had children. They had three children, but the agreement was not torn up.
This promise was not written into the agreement, but the trial court found the wife's testimony to be "credible," "convincing," "unequivocal," and consistent with "additional corroborative evidence." On the other hand, the court found the husband's "credibility to be suspect," because of his "patent evasiveness."
Another problem with the prenuptial was that it was presented to the wife four days prior to the wedding. Short notice like this suggests the husband wanted to surprise and pressure the wife into signing.
If you need a prenuptial agreement you need to discuss it well in advance of the wedding, it needs to be reasonable, and both parties need to be represented by their own attorneys.
Source: Business Insider, "How This Woman Managed To Get Her Million-Dollar Prenup Thrown Out," Megan Durisin, April 4, 2013
]]>If you have a high-asset divorce, with a complex finances, you may need guidance from a tax attorney and an accountant experienced with handling sophisticated marital estates. If your spouse owns his or her own business or professional practice, there may be difficult questions of the valuation of assets as part of the division of property.
]]> In some circumstances, you may need a forensic accountant, if you suspect that your spouse may be hiding assets, or have engaged in methods to understate their income or net worth.Because for many, their home is their largest asset during a divorce, the use of a real estate firm that specializes in selling homes involved with a divorce can be valuable. Some buyers may feel that if a couple is selling because of a divorce, they can expect the price to drop.
The New York Times tells of some real estate firms that work with these couples and understand how to deal with the complications that arise from divorces. They are familiar with the inability of some spouses to work together and have experience in dealing with uncooperative partners, some of whom actively try to derail sales.
You divorce will be unique and you need to assemble the specific team that will help you obtain the divorce result you need.
Source: New York Times, "After the Breakup, They Help Sell the House," Elizabeth A. Harris, Apr. 1, 2013
]]>However, in the world of the super rich, they look like the hired help. News of Harold Hamm's divorce indicates that it may be the most expensive divorce ever. He is an Oklahoma oilman, and owns a majority stake in Continental Resources, valued at over $11 billion. He did not have a prenuptial agreement with his wife, so she will potentially receive half of that $11.3 billion in a property division from the divorce.
]]> In addition to just the sheer size of the settlement, there are complexity's that should be considered with any high net worth divorce. While the division of the assets is a tax-free exchange under the tax code, there will be tax consequences.When you purchase a home or stock, your purchase price is the tax basis of the asset. At some point in the future, when you sell the that asset, you pay tax on the appreciation over that basis. This makes basis determinations very important.
If you are awarded a home in a divorce, and it was purchased twenty or more years ago, there may be considerable appreciation on the property and you may owe a substantial tax obligation when you sell it.
These issues should be considered in the property settlement and adjustments may be necessary, to take into account this type of potentially unexpected tax issue.
Source: Forbes, "Tax Bite On Oil Billionaire Harold Hamm's Record $5B Divorce," Robert W. Wood, March 25, 2013
]]>Marriage, overall, is also declining, with many couples choosing to never marry. This means we have a large group of women who live with the fathers of their children for a while, but if their relationship fails, lack any of the protections that married women have under the law via a divorce. For them, there is no marriage, and no divorce, no property settlement, and no custody or visitation agreement.
]]> And these relationships are likely to fail at a rate three times that of married couples. The problem, especially for women, is that there is no process to help them with the following separation. The relationship ends, and if there are children, the man has state mandated child support obligations. But he has no specific obligations towards the woman, and there is no mechanism to formally separate their life.In some cases, where a married woman would be entitled to some alimony or spousal support to enable her to complete some education or obtain some training to reenter the workforce, an unmarried woman has no recourse to the man for any economic support.
In addition to these problems, the lack of any formal process for the couple to divide their lives can lead to a vague ending, where it becomes difficult to determine when "it" has really ended.
Source: Wall Street Journal, "The New Unmarried Moms," Kay Hymowitz, W. Bradford Wilcox and Kelleen Kaye, March 15, 2013
]]>People sometimes think they can help themselves by saving some money by not going to a divorce attorney, and instead using a "Do-it-yourself" divorce kit. It is one of those tempting ideas, where you may think, "Wow, I can save so much money!" The real question is will you? As with many do-it-yourself projects, things have a way of getting out of hand, and property division is much more personal and complex than putting ceramic tile in your kitchen.
]]> Divorce attorneys are professionals, who offer their legal expertise and their experience working with other people going through a divorce. The importance of having a guide, who can walk you through the complexities of family law procedure, cannot be overstated.Think you can understand it? Stop by a library with legal reporters or visit the website of the Ohio Supreme Court or Court of Appeals and read a few family law cases. For non-lawyers, case law discussing court procedure may be as unintelligible as a foreign language. And remember, you have to decipher this material and deal with your emotional outrage with your spouse's latest outrageous proposal.
A divorce attorney can help you understand what is happening at each stage and why it is important so you can make informed decisions regarding your divorce.
Source: The Colorado Springs Gazette, "Do-it-yourself divorce could be cause for regret," Linda Leitz, March 10, 2013
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