Divorce Checklist: Planning For A Divorce

As you know, we are Augusta, Georgia divorce attorneys.  This is a continuing series on the topic of how do you plan for a divorce.  In other words, what are some of the practical things you should consider when planning for a divorce?  In earlier posts in this series, we have suggested that you should gather your financial records, e.g. pertaining to income and retirement accounts.  We have also suggested that you should plan a budget and decide what you want to do with your marital home.  Of course, you should discuss each of these issues with your own divorce lawyer. 

Today, I want to talk a little bit about another idea for you to consider when planning for a divorce:

4.  MAKE A LIST OF PERSONAL PROPERTY YOU WANT TO KEEP:

In many uncontested divorces, the parties can and will agree on how to divide all personal property.  In such cases, neither party may be required to prepare a list of personal property which he or she wants to keep.  But if you want the security of knowing that you, and not your worthless spouse, "Sluggo," will be able to keep your granny's old sewing machine, then you might consider preparing a list of property you get, and then ask your divorce attorney to make the list a part of your settlement agreement.  This may help reduce, or eliminate, mistake or confusion later, about who gets what personal property, if Sluggo decides to break bad on you!

Of course, you probably do not need to put on any checklist that Sluggo gets to keep your mother-in-law!  Some things just go without saying, even in divorce law!

Douglas is being sued by his ex-wife, Diandra Douglas, who is claiming that she is entitled to 50 percent of his earnings from the upcoming 'Wall Street: Money Never Sleeps' as part of her divorce settlement from the actor, according to the New York Post. Michael and Diandra divorced in 2000, and he is currently married to actress Catherine Zeta-Jones, with whom he has two children, Dylan, 9, and Carys, 7.

If it seems strange that Diandra would be seeking her share of her ex-husband's salary for a movie he made a decade after their divorce was finalized ... well, it is. The suit appears to hinge on a clause in Michael and Diandra's divorce settlement that entitles her to 50 percent of any earnings Michael receives from any movies he did -- including residuals, merchandising and ancillary rights -- during their 23-year marriage. According to Diandra's lawyers, that provision includes any "spinoffs" of Douglas' movies.

The 1987 smash 'Wall Street' -- for which Michael won the Best Actor Oscar for his classic turn as Gordon Gekko -- was released during their marriage, and with the sequel set to hit theaters in September, Diandra is ramping up her case. "It's the same character, the same title, just years later," her lawyer, Nancy Chemtob, told Manhattan Supreme Court Justice Matthew Cooper at a hearing last Wednesday.Marilyn Chinitz, Michael's lawyer, however, simply thinks this is a case of life imitating art, with Diandra taking the famed Gordon Gekko line "greed is good" to heart.

"He doesn't want her to be an albatross around his neck forever," Chinitz said.

Michael and Diandra's divorce remains one of the costliest in Hollywood history. The pair's split was bitter, to say the least, with Diandra accusing Michael of sex and alcohol addiction and multiple infidelities. In 2007, Forbes magazine compiled a list of the 10 most expensive celebrity divorces and listed the Douglases' at number eight. Diandra walked away with an estimated $45 million and the couple's homes in Beverly Hills and Majorca.

Michael's legal team is seeking to have the case dismissed, arguing that the suit should never have been filed in New York in the first place, as the couple's divorce was finalized in California, and that the case has no merit because 'Wall Street: Money Never Sleeps' is a sequel, not a "spinoff." "They're not the same thing," Chinitz said in court.

Diandra's lawyer told the judge she filed the suit in New York because both she and Michael currently reside in the city, and noted that there's no legal reason the case can be heard only in California. Justice Cooper has delayed ruling while he considers whether he should keep the case or send it back to a California court; however, he revealed that he believes there is indeed a difference between a spinoff and a sequel.Michael and Diandra recently came together to support their son, Cameron, who was sentenced to five years in prison for his role in dealing methamphetamine and cocaine in New York City. During Cameron's April sentencing, Michael, who along with Diandra, Zeta-Jones and Kirk Douglas asked the judge for leniency, took a swipe at his ex-wife in a letter to the judge, describing Diandra as "a young mother without any parenting skills handed down from her own parents."

Moral of the story: SETTLEMENT AGREEMENTS ARE BINDING! Make sure you clarify property settlements.

Marriage and Business Don't Mix

Why Spouses Make Lousy Business Partners
By Stephen J. Dunn, Forbes.comToday

Last month I wrote a column for Forbes about the tax reasons that spouses make lousy business partners. First, business-related tax problems could threaten both spouses' assets and credit if they're partners. Second, if the marriage sours, one spouse might call in the Internal Revenue Service to investigate the other.

Now, from my own practice comes a case that makes my point. Ron, a longtime client, has given me permission to tell his story, provided he's not identified, as a warning to others. Ron called a few months ago. He said that he had found some correspondence indicating that his wife was having an affair. In the correspondence Ron's wife said that she was going to leave Ron in June of this year. In June they would have been married five years, and she would have, at that point, been entitled to a share of Ron's property under their prenuptial agreement. (She is Ron's second wife.)

At about the same time Ron began noting that key financial documentation of his business was missing. A flash drive containing sales and cash receipts data was missing. Ron's wife worked as the bookkeeper of his business. I asked Ron whether he had been reporting all of his business income on his tax returns. Ron said that he had not reported some income that he had been paid in cash.

I told Ron that it was a scenario I had seen all too many times in the past. She was going to divorce him and use his tax exposure to leverage a better financial settlement for herself in the divorce, and possibly report Ron to the IRS Criminal Investigation Division.

I advised Ron to see a divorce attorney. Ron was reluctant. He wondered if the facts really meant what they so clearly did mean (to all the world except Ron). He talked about reconciling with his wife.

I also advised Ron to do a voluntary disclosure with the IRS. This was an agonizing decision for Ron, as it would cost him dearly in additional tax and interest, and possibly penalties, as well as legal and accounting fees. But it would prevent Ron from being prosecuted for having failed to report some of his income.

Ron followed my advice. His divorce is nearly final. The IRS notified Ron two weeks ago that his voluntary disclosure had been accepted, meaning he isn't at risk of being prosecuted.

Last week a divorce attorney representing Ron's wife called Ron's divorce attorney and, not surprisingly, mentioned the income that had been omitted from Ron's tax returns.

Yesterday Ron received a text message from his soon-to-be ex-wife. In the message she acknowledged that she would not receive any of Ron's property because he "had all of his ducks lined up." She specifically mentioned Ron's voluntary disclosure to the IRS. Neither Ron, his divorce attorney nor I had mentioned the voluntary disclosure to Ron's wife or to her attorney. How do you suppose she learned of it? Is it possible she herself had gone to the IRS in search of an informant's reward? (For more on IRS and informants, click here.)

Stephen J. Dunn is a tax attorney in Birmingham, Mich., adjunct lecturer in the University of Michigan-Dearborn College of Business and author. Write to him at steve@demolaw.com.

Date of Separation and Why It Matters in California

DATE OF SEPARATION: WHY DOES IT MATTER?

So why does it matter? Short answer: California is a community property state. In California, the date of separation determines the end of the community.

The date of separation matters in division of property and in spousal support.

PROPERTY DIVISION

For example, John and Jane Smith marry 1/1/2000. They separate 12/31/2000.

Jane wins the lottery on 12/31/00. John wins the lottery on 1/1/01.

According to Family Code section 771, which states, "a) The earnings and accumulations of a spouse and the minor children living with, or in the custody of, the spouse, while living
separate and apart from the other spouse, are the separate property of the spouse. "

SO...Jane's lotto winnings are community, and John's are NOT.

SPOUSAL SUPPORT

For example, John and Jane Smith marry 1/1/00. John moves out 12/31/07, into his own apartment with his girlfriend and remained living with his girlfriend up through the date of trial.

John filed for divorce 1/1/2010.

Although John did not sleep in the family residence, he maintained continual and frequent contacts with Jane and children, including dinner every night in 2008 and 2009. John also maintained his mailing address at the family residence. John also took Jane on 2 trips in 2008. John also took Jane to social functions, friends’ homes, dinners for professional and academic groups, etc. in 2008 and 2009. John also sent Jane numerous Christmas, birthday and anniversary cards, including at least one card, in which John said he loved Jane. John and Jane continued to file joint tax returns and John paid all the household bills. John even brought his laundry home every week and Jane would wash and iron it. John and Jane did not have sex after 12/31/07. At all times during the period of physical separation prior to filing the Petition, Jane maintained she “desired” a reconciliation.

When was the date of separation?

Those are the exact facts of the case of In Re Marriage of Baragry (1977), 73 Cal.App.3d 444. The Court held that the date of separation was 1/1/10, the date of the filing of divorce.

TWO-PRONG TEST

The critical inquiry is whether the parties' conduct evidences a complete and final break in the marriage relationship.

For this, the Court uses a two-prong test to determine the date of separation: Objective and Subjective.

1. Objective Test
To answer the objective test, the court will determine when you started living apart from each other. That usually happens when one of you moves out of the family home. In today’s tough economic times, however, that is no longer an option for some, because it often is too expensive to maintain two separate residences. Even if spouses are still living in the same home, there are ways to ensure physical separation.

As California Courts put it, “Our conclusion does not necessarily rule out the possibility of some spouses living apart physically while still occupying the same dwelling. In such cases, however, the evidence would need to demonstrate unambiguous, objectively ascertainable conduct amounting to a physical separation under the same roof. (Marriage of Norviel) If this is a concern for you, you should always consult an attorney for more information.


2. Subjective Test
Physical separation is not enough to show that you separated. Some people are living separate from each other for extended periods but do not intend to end their marriage. That intent is the subjective part the court will consider. At what point did one or both of you think that the marriage was over? When did you decide that you no longer wanted to stay married? In essence, the court will look at your conduct toward each other to see when the marriage “ended.”

Please note: Marriage counseling is usually a good indicator that you are NOT intending to separate.

Is Adultery Illegal in California?

I am proud to announce that I decided to partake in the making of a documentary entitled American Marriage: The Movie.

The two intuitive and brilliant filmmakers came over to my office, and my home, and posed some interesting questions - one of which prompted this blog entry.

Is adultery illegal?

Shockingly, I have learned that it still is against the law to cheat in twenty-two (22) states!

What about California?

My research unveiled the unfortunate answer of NO. However, it USED to be.

In 1872, the California Penal Code read,

§ 269a. Adultery. Every person who lives in a state of cohabitation and adultery is guilty of a misdemeanor and punishable by a fine not exceeding one thousand dollars, or by imprisonment in the county jail not exceeding one year, or by both.

§ 269b. Adultery of married persons. If two persons, each being married to another, live together in a state of cohabitation and adultery, each is guilty of a felony, and punishable by imprisonment in the state prison not exceeding five years. A recorded certificate of marriage or a certified copy thereof, there being no decree of divorce, proves the marriage of a person for the purpose of this action. [Amendment approved 1911; Stats. 1911, p. 426.]

Unfortunately, both of these laws were repealed long ago as unconstitutional. These days, it is NOT against the law in California to commit adultery.

HOWEVER, California Family Code section 720 clearly states that in a marriage, "Husband and wife contract toward each other obligations of mutual respect, fidelity, and support."

Meaning, marriage is a contract consisting of FIDELITY, and cheating would be breach of contract for which, presumably, there may exist a civil remedy.

THIS LEADS TO EVERYONE'S BIGGEST QUESTION: ARE THERE ANY CONSEQUENCES TO ADULTERY?

We all know California is a "no-fault" state. (To read a full explanation on the "no-fault" system, go to my previous blog entry here.)

Does it affect child custody and visitation?

Cheating alone would probably not affect custody. Sad but true, we all know a couple of cheaters here and there that are still decent parents. Arguably, they cannot provide the moral background children deserve and need in this day and age...but neither does Grand Theft Auto and/or Facebook, and there are non-cheating parents that allow their children access to such!

Child custody and visitation is always determined strictly by the "best interests of the children". It is PRESUMED that children benefit the most from "frequent and continuing contact" with both mother and father.

I personally believe there must be boundaries when introducing children to a new girlfriend/boyfriend. Children are incredibly sensitive and delicate, and the sincere damage to them in being improperly exposed to a new girlfriend/boyfriend is irreparable. Parents should take their personal feelings and emotions OUT of the equation. No matter how you feel about your spouse, it is NOT ok to expose your children.

THINK BEFORE YOU ACT.

Does it affect support?

It does NOT affect child support.

However, it CAN affeect spousal support. California Family Code section 4323 states, "There is a rebuttable presumption, affecting the burden of proof, of decreased need for spousal support if the supported party is cohabiting with a person of the opposite sex."

Does it affect property division?

California is a community property state. All property (NOT inheritance or gift) acquired during the marriage, before the date of separation, is community property.

This means specifically, if the cheating spouse is spending his or her salary acquired during the marriage OUTSIDE the marriage on someone else, they are spending community property and should be required to reimburse the community, sometimes with added interest.

I once had a case where I represented the spouse being cheated on. The "cheater" spouse spend close to 200,000 on extravagant trips, Cartier jewelry, Louis Vuitton handbags, lingerie, and other sundries. My deposition of the mistress revealed several thousands of other property.

Interestingly enough, this former mistress (she has long since been replaced, several times over), felt sincere regret and apologized on record and became friends with my client; thereby liberally disclosing all the information I needed to secure settlement within the HOUR.

Moral of the story: Don't cheat.

Madonna Divorce Settlement - It'll Be A Big "Payout" to Guy Ritchie

News was just released of the Madonna divorce settlement, under which Guy Ritchie will take around $76 Million as his part of the couple's marital assets division. For more, see the Guardian's report, Madonna divorce deal 'worth £50m' to husband Guy Ritchie | guardian.co.uk, and look at People Magazine's web story, Rep: Madonna to Pay Guy Ritchie $76 Million in Divorce Settlement -

YouTube Divorce - A Failed Strategy

To follow up on the YouTube Divorce of Tricia Walsh-Smith, which I discussed here this past April (after which Tricia continued her tirades and crazy antics on YouTube, all of which I ignored), it appears that Tricia's adventurous approach to fighting her contested divorce has not helped her one bit. Back in April, I thought Tricia had the craziness out of her system, as she appeared to have

Christie Brinkley Divorce - Winner Takes All?

The Christie Brinkley divorce case has just been settled, and Christie will walk away with sole custody of the children and all but $2 million in cash, from assets estimated to be worth around $60 million, including 18 properties in the Hamptons, all of which she will keep. For more see the latest stories from People Magazine, and The New York Post.Looks like Christie won big, after choosing to

Divorcing, But Still Living Together, in a Bad Housing Market

There's a great article in today's Boston Globe Sunday Magazine, by Lisa Prevost, about the effect of the declining housing market, and the credit squeeze, on divorcing couples, many of whom are now forced to stay together longer than they may have wanted or intended: Two Exes, One Roof - The Boston Globe ("Two Exes, One Roof - What happens when a divorcing couple meet a slow housing market?

14 Common Financial Mistakes People Make and 14 Rules Most Should Follow Most of the Time

I have handled lots of divorces, reviewed lots of financial statements, and helped clients manage the difficult financial negotiations and restructurings attendant upon marital dissolution. I am often surprised by what I see intelligent people do, or not do, with their money. The following are 14 of the most common financial mistakes I have found that people make. I have had clients who are in

Divorce By YouTube

Wow! Recently we had a disgruntled husband in Vermont airing dirty divorce laundry on his blog (see my posts here and there). Now a disgruntled wife in New York has broadcast her grievances on YouTube (see below). This YouTube video has been widely viewed, and has been widely reported and blogged about already. See Family Lore and New York Divorce Report for some good posts on this.This

First Circuit Court of Appeals Rules on QDROs

For analysis of a recent decision by the U.S. First Circuit Court of Appeals in Boston on qualified domestic relations orders (QDROs), see the recent post Boston ERISA Law Blog: Some Quirks About QDROs. The post mainly discusses the federal appellate court's recent ruling that the state probate courts, not just the federal courts, have jurisdiction to determine whether a particular order is a

Will Heather Mills Need A Dog?

If you still haven't gotten enough of the Paul McCartney-Heather Mills divorce story, or missed the recent news from here (long and short) and elsewhere, there are still more places to explore. (I'm sorry, I'm afflicted with Anglophilia, with a touch of Beatlemania, and Paul was my fave of the Fab Four. I do think this will be my last post on the topic - still, don't hold me to that.)First

Mills McCartney Judgment Now Published in Full

As just reported by the British family law blog Pink Tape (Mills McCartney Award Announced - and Judgment published in full « Pink Tape), the McCartney-Mills divorce judgment has now been published in full, after Heather Mills' application for leave to appeal (in order precisely to prevent the entire judgment from being published) was denied. The entire judgment can be found here. See the video

Heather Mills to Get £24.3 Million in Assets

Heather Mills will get £24.3 million in assets (approximately 50 million U.S. dollars), per judgment in her divorce with Paul McCartney. See Family Lore: Money (That's What I Want), and The Times article of today. This judgment may not be the end of the matter, however. For information about Massachusetts divorce and family law, see the divorce and family law page of my law firm website.

Divorce and Estate Planning

All individuals who happen to be going through divorce should get an estate planning attorney to prepare for the future by helping them to plan and draft some basic estate planning documents, usually at or near the end of the divorce process. In fact, it is best to see an estate planning attorney before the divorce judgment becomes final. For an excellent primer on this issue, please read the

Supreme Court to Hear QDRO Case

The US Supreme Court has accepted a case involving a question regarding Qualified Domestic Relations Orders (QDROs). In the case from the Fifth Circuit Court of Appeals, the Supreme Court granted cert on the following question only: "Was the Fifth Circuit correct in concluding that ERISA’s Qualified Domestic Relations Order provision, 29 U.S.C. § 1056(d)(3)(B)(i), is the only valid way a

Shaq O'Neal Divorce Reveals He's A Big Spender

I just saw this post by Jeffrey Lalloway at the California Divorce and Family Law Blog: Shaq's Expenses Revealed In Divorce Court...$26,560 a month in babysitters??.Miami Heat center Shaq O'Neal, in the middle of a divorce with his wife of five years, Shaunie, has reported expenses of $1.3 million a month, including $26,560 per month just for babysitters (Shaq and Shaunie have four kids together

In Search of the Kinder and Gentler Divorce: Mediation and Collaborative Divorce vs. "Traditional" Divorce

What is the best way to get a divorce? It appears there are more options these days than ever. What used to be called simply "divorce" is now being labeled "traditional divorce" as purportedly new methods of resolving divorce disputes are increasingly being promoted, through marketing efforts which are surfacing throughout the media. Everywhere I turn, I am reading articles about what advocates

No Longer Mere Chattel: The Rising Status of Pets in Family Law

I am surprised it hadn't happened before, but I'm certainly not surprised that it now appears to have finally happened in California: as reported a few days ago by California lawyer John Harding in his post California Divorce Blawg: Power To The Pets, Arnold Schwarzenegger recently signed into law, on September 11, 2007, a California statute that gives pets a status somewhat similar to that of