New York Divorce Report

New York Maintenance Laws To Change: How Will Post Divorce Maintenance Be Determined?

Daniel Clement — Thu, 23 May 2013 09:00:55 -0500

The laws governing spousal maintenance in New York may be soon be changing.

The Law Revision Commission issued a recommendation that New York adopt a formula to determine not only temporary maintenance, but post divorce maintenance as well.

Presently, New York courts only use a formula to award temporary maintenance. Post divorce maintenance is generally based on consideration of a number of statutory factors.

According to the recommendation, the maintenance formula would apply to the first $136,000 of income. Courts would have discretion to vary from the guidelines if the award was unjust, inequitable or when the combined income exceeds $136,000.

In addition to announcing the maintenance formula, the Law Revision Committee suggested:

Abandoning the theory of “enhanced earning capacity” which enabled a spouse make a claim for equitable distribution whenever the other obtained a professional license or educational degree. New York is the only state that allows distributes an enhanced earning capacity.
Limiting the duration of temporary maintenance awards so that maintenance awards do not exceed the length of the marriage.
Fixing the duration of any post divorce maintenance award so as to be based on the length of the marriage, the time required for the non-monied spouse to acquire sufficient education or training to find appropriate employment, and the age of the non-monied spouse.

We will have to wait to see what provisions, if any, of the committee’s recommendations are enacted into law. Stay tuned!

10 Things NOT To Do in a Divorce

Daniel Clement — Thu, 02 May 2013 13:55:42 -0500

Bob was always claiming poverty during his divorce. In order to cut his expenses, without a word to me or his wife, he cancelled the collision insurance on his wife’s car. Of course, Bob had no luck - as soon as the insurance was cancelled, his wife had an accident.

Everyone, including me, tells you what you should do as you prepare for divorce. Seldom are you told about the things that you should not do until after you have done something wrong when hear something like: “I wish you had told me you were going to do that. I would have advised you not to.”

Ben Stevens and Dick Price have assembled a great list of 10 Things Not to Do When Starting a Divorce Case to which I add my thoughts.

1. Don’t destroy records, including emails and other electronic information.

Papers trails continue to exist even if you destroy your copies. Banks, financial institutions and even social networks keep records. If you posted something that is unfavorable, chances are spouse has a screenshot or a printout of it already. Destroying your copies of the records just makes it harder for you to get your hands on them.

2. Don’t clean out all the bank accounts.

Attempting to cut off your spouse of financially by closing out the bank accounts only ensures you will be in court sooner rather than later. As soon court hears that you emptied the accounts there will be an order restraining you from you from using the funds

3. Don’t hide assets.

See numbers 1 and 2.

4. Don’t cancel insurance, change beneficiary designations or run up debts.

In New York, there are specific prohibitions from doing so. Regardless, as illustrated in the above example, unilaterally making changes often backfires and ends up exposing you to greater liability and expense.

5. Don’t blow up and get angry with your spouse or make threats.

Aggressive behavior only leads to more conflict. Anger and threats don’t lead to compromise and reasonableness. Fighting costs more money.

6. Don’t hire the meanest lawyer in town.

Hiring an overly aggressive and litigious attorney only ensures that you will spend a lot of money contesting the divorce and depleting the marital estate. Impoverishing your spouse through needless litigation makes your attorney, not you, richer. The cost is not purely economic; your aggression will likely cause an aggressive response.

7. Don’t try to represent yourself.

Divorce in New York is complicated. There is no “one size fits all” divorce. If you are emotionally involved it is impossible to be mindful of strategy or to objectively set realistic goals. It is true, “Only a fool hires himself for an attorney.” Failing to retain an attorney can cost you dearly if you give up an asset or a right that you didn’t need to.

8. Don’t lie to your lawyer.

Facts that are damaging or embarrassing to you are going to come out in the divorce. It is certainly better that I hear them from you in the privacy of my office then in court.

9. Don’t lie to the judge.

If the judge finds that you lied or you are not credible on one issue, he/she may be inclined to not to believe anything you say. Not only will use lose, you may face criminal penalties for perjury.

10. Don’t engage the children in the divorce.

Your children are not parties to the divorce; keep them out of it. Children should not be brought into the discussions about the divorce and should never be allowed to read any of the papers filed in court. Your children are not divorcing your spouse- you are. They should be encouraged to love both of their parents.

In short, if you are in doubt about doing something, you probably should not do it, at least, until you speak with your attorney.

New York Pre- Nuptial Agreement Upheld: How Would You Rule?

Daniel Clement — Tue, 16 Apr 2013 10:29:33 -0500

New York divorce courts will uphold unambiguous terms of a pre-nuptial agreement even if enforcing the agreement seems harsh.

How would you decide this case if you were the judge? (I will try and hide the genders of the parties so you can impartially rule.)

In a recent case, decided by a New York Appellate Court, a couple executed a pre-nuptial agreement that defined marital property as:

(a) any property that is jointly owned by the parties, and (b) all household furniture and furnishings owned by either party, whether heretofore or hereafter acquired and regardless of the form in which title is held.

Everything else was defined as separate property, including:

real property purchased by either party during the marriage using their own separate property, as well as the appreciation of such property during the marriage "whether caused by the efforts of a party or a third party, or by inflation, or by any other cause or stimulus.

After the parties wed, B purchased what became the marital residence for $295,000, making $150,000 down payment using from the proceeds of separate property. C took out a mortgage for the balance. Title to the home was in B’s name. (I do not how the mortgage was in C’s name, if C did not have title.)

B was not employed after the parties were married so C paid the mortgage and all the carrying costs for the house.

The parties divorced. What should the court do with the house?

The prenuptial agreement defined marital property as any property that is jointly owned. Here, title to the property was solely held by B, who purchased it using separate property. C’s payment of the mortgage and carrying costs did not “convert” the property from separate to marital.

The home is separate property and not subject to equitable distribution.

Now is The Time for Same Sex Couples to File Protective Claims for Refunds: The Deadline Approaching

Daniel Clement — Thu, 11 Apr 2013 10:59:55 -0500

With the United States Supreme Court determining the fate of the Defense of Marriage Act (DOMA), same sex married couples should file protective claims for federal tax refunds with the Internal Revenue Service now.

As I earlier discussed here,

If same sex marriage is recognized by the federal government, same sex couples may be eligible to file an amended return to change their filing status. The problem is, however, that taxpayers are only permitted to amend their returns for the prior three tax years or two years since paying the tax. For any tax returns filed outside of the limitation period, the tax payers may just be out of luck.

The deadline for filing protective claims for 2009 refunds, the deadline is April 15, 2013.

Now is The Time for Same Sex Couples to File Protective Claims for Refunds: The Deadline Is Approaching

Daniel Clement — Thu, 11 Apr 2013 10:20:12 -0500

As I earlier discussed here,

If same sex marriage is recognized by the federal government, same sex couples may be eligible to file an amended return to change their filing status. The problem is, however, that taxpayers are only permitted to amend their returns for the prior three tax years or two years since paying the tax. For any tax returns filed outside of the limitation period, the tax payers may just be out of luck.

The deadline for filing protective claims for 2009 refunds is April 15, 2013.

A Change of Economic Circumstances: When a Party Hits the Lottery

Daniel Clement — Wed, 10 Apr 2013 09:46:05 -0500

After a divorce is filed it is not uncommon for one of the parties to claim that they are no longer self supporting and have suddenly become indigent. It is a much rarer issue when one of the parties suddenly becomes rich.

Two recent cases illustrate what happens when one party wins the lottery. Prior awards of maintenance, child support and even attorneys’ fees have to be re-evaluated.

In New York, after receiving an award of temporary maintenance, pendente lite attorneys’ fees and a disproportionate share of the statutory add-ons to child support, the wife/mother “discovered” she had won a lump sum payment of $623,000 in the lottery. As a result of the sudden change in circumstances, the husband moved to vacate the court’s prior support order.

As reported in Divorce: New York, the sizable lottery prize “was a change of circumstances warranting modification and vacatur of the order for temporary maintenance.” Therefore, the court terminated the maintenance payments, retroactively. The court gave the husband a credit for all payments made after he made his motion.

In addition, since the wife was no longer the “less monied” spouse, the prior counsel fee award to the wife was vacated. In fact, had the husband made a proper request for fees (his motion was deficient), the court may have ordered the wife to pay counsel fees to the husband.

Though New York’s child support law provides that the Court may allocate a proportion of non recurring payments from extraordinary sources, including lottery winnings, to child support, the Court noted that it “has discretion to exclude non-recurring payments from a party's gross income for child support purposes.” Instead of reducing the basic child support payment, the court reduced the father’s portion of the statutory add-ons from 77% to 50%.

The Huffington Post details another case where the winner of the $338,000,000 power ball jackpot was in arrears in paying child support. By law, the child support arrears will be satisfied before the lottery winnings are paid out.

Realistically, the $29,000 in arrears will be a drop in the bucket considering the lump sum prize payout will be $152,000,000 after taxes.

Expect the child’s mother to seek an upward modification based upon the winner’s drastically changed circumstances

Should I Consider a Prenup: The Debate After New York Court Invalidates A Pre-Nuptial Agreement

Daniel Clement — Tue, 26 Mar 2013 08:23:04 -0500

I did not recall a New York divorce case garnering so much discussion as the one I wrote about last week. In Cioffi-Petrakis v. Petrakis, the Appellate Division invalidated a pre-nuptial agreement because it found that the wife was coerced into signing the pre nup as a result of the husband’s misrepresentations, which were, of course, not incorporated within the agreement.

Virtually all the blogs and articles, I read were critical of the decision, which found the court’s opinion to be unprecedented and, potentially, opening the floodgates to litigation challenging the validity of every agreement.

The decision seems to have spurred debate about every facet of pre nuptial agreements. Some writers urge pre nuptial agreements that are helpful for all, but necessary for some, while others argue that they have a disastrous effect on marriages.

In PreNups for Some, Money Talk for All, Kathleen Miller, urges, as I do, that prenuptial agreements are particularly well suited for those who have sizeable wealth, own a business or are entering into a second marriage with significant personal assets. More importantly, she suggests that the couple use the pre nuptial negotiation to:

negotiate the financial terms of their marriage and each partner’s role before saying their vows. Financial issues to discuss should include bill paying, earnings, career goals, short- and long-term financial goals, estate planning in the event of death, divorce or disability; how income taxes are to be paid; how a pension will be shared; who will pay to defend a tax audit; and who will pay for expenses in the case of a divorce.

Lauie Israel, on the other hand, suggests that Pre-Nuptial Agreements Are Bad for Marital Health. She argues the negotiation "changes the entire connection and contract of a marriage by taking away one of its major pillars: building a secure financial future together." She argues that the negotiations leading up to the pre-nup are corrosive.

Eric Newton, points out that in the absence of a formal agreement, You Already Have A Pre-Nuptial Agreement; you default to your state’s laws covering divorce and the division of property.

W. Bradford Wilcox, director of the National Marriage Project, argues that If You Want A Prenup, You Don't Want Marriage:

My research suggests that couples who embrace a generous orientation toward their marriage, as well as those who take a dim view of divorce, are significantly more likely to be happy in their marriages. A National Center for Family and Marriage Research study finds that couples who share joint bank accounts are less likely to get divorced. In fact, married couples who do not pool their income are 145 percent more likely to end up in divorce court, compared to couples who share a bank account.

So, the kind of partners who wish to hold something back from their spouse in a marriage — emotionally, practically and financially — and to look out for No. 1 instead are more likely to end up unhappy and divorced.

Whether you are willing to “default” to New York’s laws regarding maintenance and the distribution of assets, or intend to draft a customized pre-nuptial agreement, it would be beneficial to consult with a divorce attorney to understand your marital rights before you wed.

How Easy Is It To Invalidate A Pre-Nuptial Agreement In New York?

Daniel Clement — Tue, 12 Mar 2013 14:48:02 -0500

So, your fiancée insisted that you sign a pre-nuptial agreement before you wed. Even though you did not particularly agree with everything in the agreement, you signed it, thinking you will just contest it if you get divorced. Now, with a divorce pending, you want to invalidate the pre-nuptial agreement. Guess what - you may be out of luck!

New York has a very strong public policy of holding parties to their contractual arrangements. There is a heavy presumption that a deliberately prepared and executed written agreement manifests the true intention of the parties. An agreement between spouses or prospective spouses may be invalidated only if the party challenging the agreement sustains the burden of proof, demonstrating that the agreement was the product of fraud, duress, or it was improperly executed.

To prove coercion or duress, you would have to establish that you were somehow pressured into signing the agreement. The threat that “I will not marry you unless you sign this agreement” is not duress. If both of the parties were independently represented by counsel and the agreement was the product of arm’s length negotiations, it may be difficult to prove that the pre- nuptial agreement was procured by duress.

At the time agreement is negotiated and signed, the parties should disclose their assets, liabilities, and income. Unless, you can prove, for instance, that your spouse deliberately misrepresented the extent of his assets to induce your agreement, it is unlikely you will be able to establish fraud.

Most agreements provide that the parties are only relying on the representations contained in the agreement, more importantly, that they are not relying on promises or representations not contained in the pre-nuptial agreement. That is precisely why the decision reported in the New York Post, is an anomaly.

In this unique New York divorce case, the wife successfully challenged the pre-nup because:

He told me he would rip [the pre-nup] up as soon as we had kids,” Elizabeth, who has since had twin sons and a daughter, told The Post at her Old Brookville mansion.

“But he never did.

Shine details how the wife was coerced her into signing the pre-nup.

She claims he dropped the premarital bomb four days before their wedding day in 1998, leaving her with little time for a contractual dispute. She also told the court the agreement included promises her ex never intended to keep. Among those promises, she said, was that he would add her name to the deed of their Old Brookville home,

The New York Appellate Division found that the issue of the husband’s fraudulent misrepresentations was a question of credibility and declared that the wife’s testimony was "credible," "convincing," "unequivocal and consistent with "additional corroborative evidence," and that any "inconsistencies" in her testimony related to "insignificant" matters. By contrast, the defendant's "credibility was suspect," due in part, to his "patent evasiveness."

Even, the wife’s attorney concedes that “The decision “is unprecedented, vacating a pre-nup on the basis of a verbal promise,” even though a clause in the contract says there were no verbal promises.”

The bottom line, cases where the prenuptial agreement are invalidated are rare. You cannot and should not count on a court to rescue you from the terms of a bad agreement. If you do not understand the agreement or do not agree with the contractual terms, do not sign it. If you are being promised something that is not in the agreement, insist that it be included in the agreement. If your future spouse tells you it is not necessary to put the “promise” in writing, well, maybe you should go into the marriage with your eyes wide open.

Help me Represent You: How to Get The Most Cost Effective Representation in Your Divorce

Daniel Clement — Wed, 27 Feb 2013 09:55:27 -0500

Clients often ask how can I minimize my legal fees during my divorce. While you cannot control how unreasonable your spouse is, how antagonistic your spouse’s attorney is or even how long you wait in court for your case to be called, you do control the flow of relevant information to your attorney. The way you educate your attorney about the facts of your case is directly related to the size of your legal bill.

So, how can you communicate with your attorney to reduce your legal fees during your divorce?

First and foremost, be honest with your attorney. No matter how painful, embarrassing, or abhorrent, it is far better for me to hear the damaging or embarrassing facts directly from you in the privacy of my office, then in court or a conference with a judge. Properly prepared and armed with the facts, a weakness can be re-cast as a strength in the same way that martial artists are taught to channel their opponents’ energy against them. Rest assured, any negative facts about you will come out during your divorce; your spouse will have no problem disclosing facts that discredit you.

Organize your papers and records. You will need to provide your attorney with copies of your tax returns, bank and investment statements and our relevant financial records. Don’t deliver them lose and thrown in a shopping bag. Remember, in most cases, you are paying your attorney by the hour. It makes little sense to make your attorney waste billable time by sorting through your unorganized papers.

On a related note, don’t write your attorney notes on original copies of the documents. The notes will have to be redacted when used in the litigation. If you make notes, do it on copies of the documents or on post its annexed to the papers.

Communicate with your attorney. Keep your attorney informed about relevant events regarding your case. If your spouse fails to make a support payment, misses his/her parenting time with the children or does something else relevant to the case, tell me about it. I am always shocked that the very client, who repeatedly calls me to just generally gripe about their spouse or to get daily case updates, somehow neglects to tell me about some relevant change in circumstances.

On the other hand, you should not use your attorney as a therapist. Often, clients call their attorney just to let off steam or to vent after a bad encounter with their spouse. Most attorneys are not trained as mental health providers. It would be more beneficial and far more economical to speak with a skilled therapist about your psychological wounds.

Be responsive. Provide your attorney with whatever information is requested of you If your attorney has to call you three or four times to sign an affidavit or to produce a document, you can’t really complain about the multiple time charges on your bill.

By being open, honest, organized and responsive in your communications with your attorney, you can reduce the amount of time your attorney has to spend on working on your case, and, as a result, your minimize legal bill.

Children With Strangers-Is This A Good Idea?

Daniel Clement — Tue, 12 Feb 2013 15:09:27 -0500

Should two people who are physically, emotionally and economically uninvolved biologically parent and raise children together? Abbey Ellin explores this very issue in her New York Times article Making a Child, Minus the Couple.

In her article, Ellin explores the “new breed of online daters, looking not for love but rather a partner with whom to build a decidedly non-nuclear family.” Specifically, these individuals are using social networking web sites, like PollenTree.com, Coparents.com, Co-ParentMatch.com, and and MyAlternativeFamily.com, to have children in a way that is an “alternative to surrogacy, adoption or simple sperm donation.”

This new breed of social networking brings together two relative strangers, each wanting a child to co-parent. Unlike the situation where a decision is made to have a child resulting from an accidental pregnancy, this new “dynamic” is solely premised on creating and raising a child, seemingly without the trappings of a relationship.

The perils seem obvious. Unlike a sperm donation, co-parenting a child binds and forever intertwines the parties’ lives together. The impact of having a child is far reaching and may not seem readily apparent to the prospective parents.

For instance, an oft litigated issue in two household families involves relocation. Suppose one of the co-parents wanted to move with the child from New York cross-country, the other parent could, potentially, prevent the re-location if the move was not found to be in the best interest of the child. This could, in effect, prevent the parent seeking to move from accepting a prospective job or promotion, moving in with a spouse or moving simply to be near other family members.

Put aside the relocation issue, other custody issues need be addressed; what will access schedule to the child be? How will decisions regarding the child’s health, education and religion be made?

The issues could become even more unwieldy if one of the parents has additional children from this untraditional arrangement or if the child has special needs.

Then, there are the economic issues. How will the child be economically supported? In New York, for instance, the “non-custodial parent” is required to pay child support, which is a based on a guideline percent of the parties’ incomes, together with additional sums for child care, unreimbursed medical expenses, extra-curricular activities, private school, college etc. Will these guidelines be applicable? Will life insurance be required to secure the child’s financial future if one of the parents dies? Who will get to take the child as a deduction on income tax returns?

While many married couples fail to consider all these issues before having children, the children are not the product of strangers. There is or, at some point, was a “commonality” or some unifying bond between parents. Most couples do not wed and have children with the expressed expectation of living separate lives.