Hiding Assets? Not So Fast….

Somebody going through a contentious divorce can be very unpredictable. A person with a combative and calculating personality can make a divorce proceeding extremely unpleasant and difficult for all involved, including the courts. It is not uncommon for somebody like this to file orders of protection without merit, relocate children without consent, hide assets and underreport income. Liquid assets are often placed in foreign bank accounts, put into questionable investments or squandered. Once these funds are gone, they are unavailable for consideration during equitable distribution.

Hidden assets and income affect the victim spouse when a court is deciding an appropriate property division, maintenance and child support.  If a spouse hides or wastes income and assets, the victim spouse will not have the entire marital pot available for division by the court.  Instead, the victim spouse can only receive an equitable share of the diminished pot.  When this occurs, how can a court provide a remedy to a victim spouse?

In equitable distribution, the court maintains discretion over the degree and nature of the penalty imposed for failure to comply with disclosure orders. In some cases, after it has been determined that income and assets were hidden or wasted in contemplation of divorce, the court can decide that unequal distribution of marital assets is warranted by the egregious economic misconduct. Although this method provides the victim spouse with some redress, the victim spouse is never truly whole, since the award is being apportioned from a distorted marital pot.

Moreover, it has to be established that assets and income have been secreted and concealed for a court to order unequal distribution.  … <Read More>

Long Delays for Divorces

Massive budget cuts and layoffs in the NYC court system are causing long delays in granting of uncontested divorces. Divorce cases are taking longer to resolve in most counties, with Richmond County and Kings County judges taking up to 10 months to sign uncontested divorce judgments.

William J. Leininger, a veteran matrimonial attorney, said “the wait to obtain a signed judgment finalizing a divorce is now nine months or more after both sides agree to terms. The finalization process used to take three or four months.” And that, he says, is “on top of the time typically required —  from a few months to two years — to reach the divorce settlement.”

These delays are hindrance to remarriage by the parties and, far more importantly, to payment of needed alimony and child support, because settlements incorporating them are unenforceable without the signed judgment. This can place some parties in financial hardship as they wait around for the final judgment, without which they cannot collect the promised sums they need to continue to support their families. Under New York’s no-fault amendments, parties may seek pendente lite support, but that, too, takes time and burdens the system, and meanwhile they are without needed support. Pendente lite support is often used to provide support to the lower income spouse while the divorce process is pending.

According to the New York City Bar Association, the state judiciary, in 2010, was subjected to a $170 million budget cut. About 8 percent of its workforce, or 1,300 employees, left the courts due to early retirements and layoffs.… <Read More>

Problems still exist in New York’s temporary maintenance law

It has been over a year since unilateral no-fault divorce was adopted in New York. No-fault divorce, which now exists in all states, permits one spouse to receive a divorce by swearing that the marriage has been irretrievably broken for six months or more.

Ever since the law’s passage, it has had critics and supporters. The law, which includes a small provision about temporary spousal support (also known as alimony and maintenance), is currently being analyzed by the state’s independent Law Revision Commissions:  According to a Wall Street Journal article by Sophia Hollander, there are “troubling aspects” of the strict formula for awarding temporary spousal support. A report is due in April.

Temporary maintenance is awarded when the income of the “less-monied” spouse is less than two thirds the income of the spouse with the higher income. The formula calls for maintenance to be the lesser of a) 30% of the payor’s income minus 20% of the non-payor’s income or b) 40% of the combined income minus the non-payor’s income. Income for calculation of temporary maintenance is to be capped at $500,000, and judges are free to adjust amounts when the income exceeds $500,000.

The law aimed to protect the low-income spouse, but ended up hurting the affluent spouse by shifting income unfairly. At times, it even transformed the richer spouse into the poorer one.

The movement is to make the law less binding on judges and more advisory; however, the fear is that it will lose its effect.

Westchester Assemblywoman Amy Paulin, the primary sponsor of the alimony law, said, “[The 2010 law is] better for women.<Read More>

What is Fair Alimony in the 21st Century?

What is fair alimony in the 21st century? Alimony was originally designed to protect a woman and family from falling into poverty after a divorce. It originated during a time when women were mainly at home caregivers  where many lacked proper educations allowing for sufficient employment. However, in recent times the majority of women work and nearly a third have college degrees.

Florida lawmakers are pushing to overhaul the state’s alimony law in a bid to better reflect today’s marriages and make the system less burdensome for the alimony payer. Florida joins a growing number of states that seek to rewrite alimony laws by curbing lifelong alimony and alleviate the financial stress that some payers — still mostly men — say they are forced to take on.

“It can strangle the person that is paying it,” said Alan Frisher, the founder of Florida Alimony Reform, an organization of 2,000 members, several of whom testified recently at legislative committee hearings. “Oftentimes, we can’t afford to pay that amount of alimony. It can provide a disincentive for the receiver to ever go back to work, to make more money or remarry. I don’t think anybody should have to be an indentured servant for the rest of their lives.”

The legislature in Massachusetts, which had some of the country’s most antiquated alimony laws, passed without opposition a measure to rewrite the laws and make them more equitable.

Commissions in other states have been set up to collect data and stories about the hardships of long-term alimony payments and presenting them to lawmakers to hopefully make the necessary changes to bring the alimony laws to the 21st Century and to take into account current household dynamics. … <Read More>

No Prenup? Pay up!

To get a prenup or not to get a prenup, that is the question.

Asking for a prenup is a question that a future groom or bride will contemplate when thinking about marriage. Asking for a prenup could lay the seeds of distrust. However, not obtaining a prenup could put a person’s acquired property upon divorce in jeopardy. When is a prenup truly appropriate?

Usually, courts will uphold a prenup unless it is found to be unconscionable, obtained under duress or fraudulent. States differ on what is conscionable, duress and fraud. States such as New Jersey, require full and complete financial disclosure, while others, like California and New York, only require reasonable financial disclosure.

In California, for example, when a couple does not have a prenup and has been married for more than ten years, a court may award a spouse half of the community property in addition to spousal and child support. In other states such as New York, the courts  employ equitable division when dividing property. Courts that use equitable division look at different factors such as length of marriage, lifestyle during the marriage, and assets brought into the marriage by each spouse when determining the division of property. A prenup could potentially protect a person’s property and limit the amount of spousal support awarded. Courts will not, however, uphold a prenup stipulating child support, custody and visitation.

In the pending divorce of Kobe and Vanessa Bryant, Vanessa could receive up to half of Kobe’s reported $150 million dollar empire.… <Read More>