Category: Asset Division

Assets and Debts Are Divided in Divorce

Many people get married, and around forty percent of the ones who do get divorced. Very few of those people go into a marriage understanding how assets, and debts, will be treated in a property division if the marriage is terminated.

In most cases, individual assets that people had before a marriage remain theirs even in a divorce, as long as they were kept separate in the original holder’s name. The same is true for inherited property or inherited money that were received during the marriage.

Some assets are not so simple, though. If you owned a business before marriage and it grew in value during the marriage, an ex-spouse could claim that they contributed to the increase in value and claim some of it.

Even money kept in separate accounts could be considered marital property if the funds were used primarily for ongoing household expenses, like a mortgage. For anyone really concerned about protecting money from a future divorce, it would be best to keep separate accounts as separate as possible, and not use those accounts for shared expenses.

Any assets acquired during the marriage will generally be considered shared property in a property division.

Florida divorce attorneys point out that Florida is an “equitable distribution” state. Unlike other equitable distribution states, though, a court in Florida will begin with the assumption that it will make a half-and-half split of all assets. From there, the court will consider other factors, and may reach a conclusion that is far from a 50-50 split. The other factors include the length of the marriage, the incomes of each spouse, financial behavior during the marriage and after, and other considerations.

When it comes to debts, spouses keep pre-marital debts too. If a spouse came to the marriage with credit card debt and student loans, they won’t generally become the other spouse’s problem.

At least not directly. The creditors on those debts could still pursue payment from shared assets that the two spouses have together. If a potential spouse has bad spending habits, it may be worth a second thought about marrying them, or at least worth some practical planning for a worst-case scenario.

Lottery winner may be forced to share with estranged husband

Countless people dream of winning the lottery. A big win could enable people to retire early, spend more quality time with their children, enjoy luxurious vacations and take up expensive hobbies. However, winning the lottery when you plan to get divorced but have not yet done so can present serious property division problems.

This is an issue that an Irishwoman who works at a bar in Long Island has found out the hard way. While her case is playing out in New York, it could just as easily be happening in Ohio or any other state.

A 40-year-old woman whose husband left her a year ago for another woman was planning to travel to Ireland to spend Christmas with her family. When the major snowstorm hit over the holidays, she was unable to fly out of New York. She decided to play the lottery and ended up winning $21.5 million.

She claimed her prize in mid-January and chose to receive a one-time lump sum payment totaling $7.9 million after withholdings. After the win was announced, her estranged husband decided he was entitled to a portion of the winnings and began divorce proceedings. At this point, he has legally restrained her from spending any of the lottery money until the marital property is distributed.

Property and asset division laws vary from state to state. In New York, divorce laws call for the equitable distribution of assets between the two parties. How much the husband has supported the lottery winner and their three children after moving out could influence the court’s decision regarding what is equitable.

According to news reports, although the man and woman share custody of the three boys, the children live with the woman, who provides a majority of the financial support. We will likely see more about this story in the weeks and months to come.

 

 

Ponzi scheme victim seeks to revisit divorce asset division

In our previous post we discussed divorce asset division issues in New Jersey and compared New Jersey’s equitable distribution system to another state’s community property system. Another important part of the asset division process is the valuation of property.

Property valuation is an important step in the property division process because an improper valuation of any major asset can place the financial security of one spouse jeopardy. High net worth couples must be especially careful to make sure that businesses, real estate and investments are properly valuated.

One New York attorney wants to revisit the property division process in his 2006 divorce. He and his wife were high net worth individuals who divided up an Upper East Side apartment and a Scarsdale home among other things during their divorce. Much of the attorney’s assets were invested with Bernie Madoff’s Ponzi schemes and he lost millions of dollars when the Ponzi schemes collapsed in 2008.

The attorney’s wife had no interest in investing with Mr. Madoff, so she was unaffected by the Ponzi scheme scandal. The attorney sued his wife to revisit the divorce property division under the legal doctrine of “mutual mistake” which could void the divorce contract.

This lawsuit raises important questions that could affect courts in other states such as New Jersey. Although the attorney may have a strong argument to void the divorce contract under the doctrine of mutual mistake, the attorney’s lawsuit also undermines a strong judicial interest in maintaining the finality of divorces and preventing a wave of post-divorce litigation. At least Madoff victim has already filed a substantially similar lawsuit against his ex-wife.

Game show winnings part of divorce division of assets

Many New Jersey couples know that asset division is a difficult part of a divorce. The division of a couple’s property, finances, and debts is a very complex area of New Jersey divorce law. An experienced family law attorney can help guide New Jersey couples through this complex legal area with care and skill to make sure that a fair property division outcome is reached.

New Jersey courts use a principle called “equitable distribution” to determine how property will be divided during a divorce. In equitable distribution, property acquired during the marriage can be divided based on the length of the marriage, the nature of the assets, and some other factors. The factors that go into the equitable distribution analysis mean that the division of property should be fair, but not necessarily “equal.”

There are other states called “community property” states which demand equal division of assets. One jackpot winner on the hit TV-show ‘Wheel of Fortune’ recently had his $51,600 prize divided in half under Washington’s community property laws.

The Wheel of Fortune contestant’s wife filed for divorce well before the show but the couple reconciled and appeared together on the show. The relationship soured about a month later and the wife renewed her divorce proceedings against the contestant.

The contestant believes that his wife was indebted to him for using a large gift from his father to buy their marital home, but a judge decided last week that the Wheel of Fortune money is to be divided down the middle. The contestant will receive $25,800, which he intends to give to charity.

Woman arrested in Tupperware property division dispute

After child custody, property division is one of the most hotly debated issues in a divorce. Both parties want to make sure that they get their fair share of the marital property as they begin the next chapter of their lives. However, when they do not agree on what is fair, even an amicable divorce can turn ugly.

A few weeks ago, a news source in Middletown, Rhode Island, reported that a divorcing couple attempting to divide marital property was arguing over who would get to keep a Tupperware container. According to reports, the woman tried to force her way into her estranged husband’s bedroom to retrieve a Tupperware cake container that she insisted belonged to her.

The dispute eventually turned physical, involving pushing and thumb-twisting. It escalated to the point that the police were called to the home. Ultimately, law enforcement officials charged the woman with domestic assault and battery.

While a Tupperware container hardly seems worth a criminal record, it is not unusual for couples going through the divorce process to find themselves in heated arguments when dividing their marital property. Divorcing couples all over the county are having these types of disputes, though admittedly most do not end up in an arrest. It seems as though emotions that people have tried to keep in check up until this point often boil over.

A family law attorney can significantly reduce the stress involved in property division, ensuring marital property is shared in a fair manner. Since Ohio is an equitable distribution state, any property accumulated during a marriage is usually split 50/50 between the parties. If that sort of division would not be equitable for some reason, the court may divide the property differently. Through it all, a lawyer will help protect your interests.