Month: May 2021

Mr. and Mrs. Smith and Child Testimony

Posted by Ron Kauffman on

The tumultuous marriage and ugly divorce of Mr. and Mrs. Smith, aka Angelina Jolie and Brad Pitt, has taken a turn for the worse, if that’s possible. Angelina is requesting to have their children testify against their father which raises the issue in family law cases of when children can be used as witnesses.

Child Testimony

Once Upon a Time in Hollywood

Jolie, who has sought to disqualify Judge John Ouderkirk from the divorce case, said in the filing Monday that he declined to hear evidence she says is relevant to the children’s safety and well-being before issuing a tentative ruling. The documents don’t elaborate on what that evidence may be.

“Judge Ouderkirk denied Ms. Jolie a fair trial, improperly excluding her evidence relevant to the children’s health, safety, and welfare, evidence critical to making her case,” according to the filing in California’s Second District Court of Appeal.

The actress also said the judge “has failed to adequately consider” a section of the California courts code, which says it is detrimental to the best interest of the child if custody is awarded to a person with a history of domestic violence. Her filing did not give details about what it was referring to, but her lawyers submitted a document under seal in March that purportedly offers additional information.

Jolie sought a divorce in 2016, days after a disagreement broke out on private flight ferrying the actors and their children from France to Los Angeles. Pitt was accused of being abusive toward his then-15-year-old son during the flight, but investigations by child welfare officials and the FBI were closed with no charges being filed against the actor. Jolie’s attorney said at the time that she sought a divorce “for the health of the family.”

Her new filing says the judge has “refused to hear the minor teenagers’ input as to their experiences, needs, or wishes as to their custody fate,” citing a California code that says a child 14 or over should be allowed to testify if they want to.

Three of Jolie and Pitt’s six children are teenagers, a 17-year-old, 16-year-old, and 14-year-old. The oldest is 19 and not subject to the custody decision. They also have 12-year-old twins.

Florida Child Testimony

The issue of putting your child on the stand to testify in a divorce or family law proceeding comes up a lot. I’ve written and spoken publicly about family law issues such as expert testimony and evidence before.

Florida courts take child testimony extremely seriously. The goal, in the minds of judges, is to prevent children from being too involved with or exposed to the stress of a divorce or custody proceeding to the extent possible.

In Florida, unless otherwise provided by law or another rule of procedure, children who are witnesses, potential witnesses, or related to a family law case, are prohibited from being deposed or brought to a deposition, from being subpoenaed to appear at any family law proceeding, or from attending any family law proceedings without prior order of the court based on good cause shown.

Accordingly, before being required to testify in court, a Florida judge must determine that a child’s testimony is both relevant and necessary to resolve the issues before the court.

Fight Club

In response to Jolie’s request to have their children testify, Pitt’s attorneys said, “Ouderkirk has conducted an extensive proceeding over the past six months in a thorough, fair manner and reached a tentative ruling and order after hearing from experts and percipient witnesses.”

Pitt’s filing said the judge found Jolie’s testimony “lacked credibility in many important areas, and the existing custody order between the parties must be modified, per Mr. Pitt’s request, in the best interests of the children.”

It says Jolie’s objections and further delays in reaching an arrangement would “work grave harm upon the children, who will be further denied permanence and stability.”

It’s not clear what the current custody arrangement is because the court seals most files. When the divorce process began, Pitt sought joint custody and Jolie sought primary physical custody — meaning the children would live more than half the time with her. But changes have been made that have not been made public.

Peter Harvey, a lawyer for Jolie who is close to the case but not directly involved, said the actress “supports joint custody” but the situation is complicated and he can’t go into detail because the court proceedings are under seal.

Divorce lawyers for both sides declined to comment on the new filings. Harvey told The Associated Press that Jolie’s family struggles have prompted her to take a more active role in changing the law’s approach to custody issues.

“Ms. Jolie has been working privately for four and a half years to both heal her family and to fight for improvements to the system to ensure that other families do not experience what hers has endured,” said Harvey, a former attorney general of New Jersey who has been working with Jolie on policy issues.

Jolie has sought to disqualify Ouderkirk, a private judge she and Pitt chose to maintain their privacy, arguing that he has an improper business relationship with one of Pitt’s attorneys.

She said in Monday’s filing that if the tentative custody decision is made final by Ouderkirk, she will appeal it. Jolie, 45, and Pitt, 57, were among Hollywood’s most prominent couples for 12 years. They had been married for two years when Jolie filed for divorce.

The couple was declared divorced in April 2019, after their lawyers asked for a judgment that allowed a married couple to be declared single while other issues remained, including finances and child custody.

The AP article is here.

 

 

Biden’s Tax Plan and Divorce

Posted by Ron Kauffman on

President Joe Biden’s latest tax proposal may require any couple thinking about filing for divorce to do some planning. Biden wants higher taxes on the wealthiest 1% to help fund education, paid leave, childcare and other social programs, and there are other other changes which may impact your divorce.

Divorce taxes

Taxes and Doughnuts

In 2017, President Trump signed the the Tax Cut and Jobs Act (TCJA) into law. The TCJA generally reduced tax rates overall, and reduced the highest individual income tax rate from 39.6% to 37%. Almost all of the individual tax cuts expire at the end of 2025 unless Congress extends them.

However, there is a new president, a new Congress, and there is little doubt president Biden’s proposal will increase your taxes and impact your divorce. For instance, the Biden Plan would revert the top individual income tax rate for taxable incomes above $400,000 to 39.6%.

Even still, the proposal could still affect people earning under $400,000 too. There’s also social security taxes. Right now, a Social Security tax is imposed on wages up to $142,800. Wages above the $142,800 ‘wage cap’ are not subject to Social Security tax.

But Biden is proposing a shrinking doughnut hole for Social Security. Earnings between $142,800 and $400,000 wouldn’t be taxed, but that doughnut hole would shrink each year as the $142,800 wage cap increases.

The Biden Plan also taxes long-term capital gains and qualified dividends at the ordinary income tax rate of 39.6 percent on income above $1 million instead of at the current top capital gain rate of 20%.

Itemized deductions are also impacted under the Biden Plan. His plan caps the tax benefit of itemized deductions to 28 percent of value for those earning more than $400,000, and restores the Pease limitation on itemized deductions. The Pease limitation capped how much you could deduct.  The Pease limitation was repealed under TCJA.

Divorce and Tax

I’ve written about divorce and tax changes before. The impact president Trump’s TCJA changes took on divorce was huge. Most notably, Trump’s tax changes eliminated the alimony deduction. People become less willing to pay as much in alimony because of the loss of the deduction.

That change, it was claimed, disproportionately hurt women who tend to earn less and are more likely to be on the receiving end of alimony payments.

On the other hand, the alimony deduction itself has also been criticized. For example, the government argues the deduction is a burden on the IRS because, if the alimony amounts ex-spouses report paying and receiving don’t match, it can force the agency to audit two people who may already be feuding.

Divorce Taxes and Child Credits

The Biden Plan also includes two significant proposals concerning tax credits related to children. These proposals, if passed, could cause couples to spend more time arguing over who will claim the children to maximize tax benefits.

Under the TCJA, the dependency exemption was eliminated altogether, and was replaced by an expanded Child Tax Credit. If you have kids under the age of 17, you likely qualify for the CTC.  The CTC provides a tax credit of up to $2,000 per child under age 17. The CTC begins to phase out for single taxpayers with an adjusted gross income over $200,000 and married taxpayers over $400,000.

The Biden Plan increases the CTC from a maximum credit of $2,000 to $3,000 for children ages 6 to 17, and $3,600 for children under age The CTC would also be made fully refundable, removing the $2,500 reimbursement threshold and 15 percent phase-in rate.

In the corporate world, the TCJA reduced corporate tax rates from a maximum rate of 35% to a flat 21% tax rate on taxable income. The Biden Plan would increase the corporate income tax rate from 21% to 28%.

At this point, no one knows what part of President Biden’s tax proposals will become law, or what the final law would look like. But any couples considering divorce should keep an eye on these proposals and how they could impact your after-tax income and assets after separation.

The CNBC article is here.

 

Divorce and Will Power

Posted by Ron Kauffman on

There is a new law in Florida dealing with divorce and the power of your will. The new law tries to correct the situation where you create a will giving your property to your fiancée, then marry, but divorce without changing your will. Many families discovered a will had no power to exclude an ex-spouse due to a loophole. The Florida legislature just addressed the situation.

Divorce and Will

Where There’s a Will There’s a Way?

One of the many consequences of divorce is that it is supposed to be the end of the marriage, and the benefits of being married. But that is not always the case. For example, one of the financial benefits of marriage is inheriting from your deceased spouse. However, an ex-spouse usually can’t inherit from their ex-spouse. Usually.

The problem is that many people who divorce forget to change the terms of their wills, trusts, or other financial instruments, and forget to omit their now Ex-Spouse from inheriting. As a result, the Ex-Spouse can become a beneficiary.

This common omission has led to unexpected windfalls for ex-spouses’ years after divorce, to the detriment of a current spouse, children, parents, and other family members who expected to be heirs of an estate.

A law protected these expected heirs from this oversight. The law protected new spouses and children by creating the legal fiction that, for purposes of inheritance, revocable trusts, and certain beneficiary designations, a past divorce is treated in the distribution as if the surviving former spouse had died on the date of divorce.

But this legal fiction does not apply where the divorce judgment specifically requires that the Ex-spouse remain as a beneficiary of the will, trust, or other financial instrument, or where the beneficiary designation is reaffirmed after divorce.

A Florida case exposed a loophole in this area. Ron Priever executed a will devising property to his then fiancée, Ms. Gordon. Some two years later, Mr. Priever and Ms. Gordon married. They divorced in July 2013. Mr. Priever died two years later. He left no children or spouse.

In April 2015, the guardian asked to treat Mr. Priever’s estate as an intestate estate as if there were no will. Allegedly, Mr. Priever told several of his family members that he destroyed or revoked his will because of a premarital agreement and subsequent divorce from Ms. Gordon.

The guardian asked the court for an order determining beneficiaries. He argued that, under Florida law, the will was to be construed under a legal fiction: as if Ms. Gordon had died before Mr. Priever.

But Ms. Gordon objected. First, she argued that she was very much alive. Second, that Florida law did not apply in her case because she was not married to Mr. Priever when he signed his will – she was only engaged. The trial court disagreed with her and she appealed.

Florida Divorce

The official term for divorce in Florida is “dissolution of marriage”. I’ve written about divorce many times before. There are a lot of issues concerning divorce when a death of a spouse or former spouse occurs.

In divorce, the issue of benefits if you survive your spouse or ex-spouse is a frequent question. For example, eligibility for social security benefits. If you are 62 or older, have a previous marriage that lasted at least 10 years and have not remarried, you may be eligible to collect Social Security benefits based on your former spouse’s earnings record.

If you are considering divorce, or just starting the process, you should review your estate plan to make sure it reflects your divorce plans. That is because it doesn’t matter how far along the divorce case is taking, or how long you are separated, you are legally married until the judge signs the final judgment in.

If you die or become disabled before the final decree of divorce, your estranged spouse may still have legal control over you and your estate and may be entitled to most, if not all, of your estate. This may not be what you intended.

Through proper estate planning documents, you can provide that someone other than your former spouse will have control over you and your estate, and you can limit your estranged spouse’s rights as a beneficiary of your estate.

Willpower

The appellate court found the plain and unambiguous language of Florida law revokes provisions of a will executed by a “married person” and therefore it did not apply in Mr. Priever’s case.

The legislature has finally closed this loophole for divorced people whose will leaves everything behind to their ex-spouses.

The bill amends the Probate Code to provide that a former spouse is considered, for estate purposes, to have died on the date of the divorce. Once the law becomes effective, the date a will was signed will not affect this legal fiction.

The new bill amends the Trust Code to clarify the same result applies to a revocable trust. These changes apply to estates and trusts of decedents who die on or after the effective date of the bill, regardless of when the trust or will was signed.

The effective date of the bill for purposes of the changes to these two sections is upon becoming law.

The Senate Bill is here.

 

Street Smarts: Divorce and Addiction

Posted by Ron Kauffman on

Comedian John Mulaney is famous for his “street smarts”, “horse in a hospital” and other great bits. What is not funny is his announcement that he and his wife of six years, Anna Marie Tendler, are divorcing, they made the announcement after Mulaney was released from rehab for cocaine and alcohol addiction.

addiction divorce

A Horse Loose in a Hospital

According to Page Six, Mulaney checked himself into rehab late last year after struggling with alcohol and drug abuse. A spokesman for Mulaney confirmed the divorce to Page Six and added, “John will not have any further comment as he continues to focus on his recovery and getting back to work.”

His estranged wife, Tendler, is an artist who works across many mediums and is a master’s candidate in NYU’s Costume Studies program — and added through her spokesperson:

“I am heartbroken that John has decided to end our marriage. “I wish him support and success as he continues his recovery.”

In December, Mulaney entered a rehab facility in Pennsylvania for 60 days for treatment for cocaine and alcohol addiction.  In February, he exited the program and entered outpatient care. Mulaney has been vocal about his struggle with substances in the past. He often discussed his sobriety and the issues that led up to it in his stand-up sets and interviews.

In a 2019 interview, Mulaney revealed he began drinking at age 13. “I drank for attention,” he said. “I was really outgoing, and then at 12, I wasn’t. I didn’t know how to act. And then I was drinking, and I was hilarious again.”

Addiction & Divorce

I’ve written about the intersection of addiction and divorce before. Ironically, scientists at the University of Buffalo’s Research Institute on Addictions found that couples where only one spouse was a heavy drinker had a much higher divorce rate than other couples.

However, when both spouses were heavy drinkers, the divorce rate was the same as for couples who were not heavy drinkers at all. And that’s the surprising outcome:

50% of couples in which one partner was imbibing significantly more than their spouse ended up divorcing. However, that number dropped to 30% for couples who possessed similar drinking habits, regardless of if they were heavy or light drinkers.

What researchers have concluded is that heavy drinking spouses may be more tolerant of negative experiences related to alcohol due to their own drinking habits.

While alcohol is legal, and certain type of drugs are becoming legal in many states, they can have a big impact in your custody or divorce trial, because drugs and alcohol impacts how the court crafts a parenting plan, including the time-sharing with children.

Generally, for purposes of establishing or modifying any kind of parenting plan – which governs each parent’s relationship with his or her child and the relationship between each parent – courts look to the best interest of the child as the primary consideration.

However, what does the “best interest” test for child custody mean when discussing drug or alcohol abuse?

A determination of the best interests is made by evaluating a number of statutory factors affecting the welfare and interests of the child and the family, including, the parents’ ability to maintain a substance abuse free environment for the child.

One Black Coffee

“I wasn’t a good athlete, so maybe it was some young male thing of ‘This is the physical feat I can do. Three Vicodin and a tequila and I’m still standing,’” he said. “Who’s the athlete now?”

Mulaney struggled during the pandemic. In December, he revealed that he took a job as a staff writer on Seth Meyers’ “Late Night” show to help his mental health.

Prior to that, he appeared in a strange “Late Night With Seth Meyers” segment, where he made a rambling speech about the royal family, punctuated by long pauses.

His decision to go into rehab was met with a wave of support from fans and fellow comedians. However, some fans noticed that, around the same time, Tendler went silent on social media. Her Instagram account now solely focuses on her art.

Mulaney and Tendler — whom the star has often fondly referenced in his stand-up shows — reportedly met in the late 2000s during a group trip to Martha’s Vineyard. They were married in July 2014 in Boiceville, New York, by friend and comedian Dan Levy and the wedding had a 1920s and woodland-deco theme.

Mulaney shared photos on his Instagram and has written:

“Happy Valentines Day to a woman who is a cross between Joan Didion and Erika Jayne. Anna, you might as well be the Sea Org, because I’d sign a Billion Year Contract to be with you…Life would be so stupid without you”.

The Page Six article is here.

 

Ctrl+Alt+Del: Reasons for the Bill Gates Divorce

Posted by Ron Kauffman on

Ctrl+Alt+Del is not only how you end a Windows session or unfreeze a stuck screen, it just may be how to end a marriage. The Wall Street Journal is reporting on a possible new reason for the Bill Gates divorce, and the DOS command line is c:\Epstein.

Bill Gates Divorce

Start

We are learning the separation between Bill and Melinda Gates, announced on twitter last week, has actually been in the works for years. Ms. Gates consulted with divorce lawyers roughly two years before she filed for divorce from Mr. Gates, saying their marriage was “irretrievably broken,” according to people familiar with the matter and documents reviewed by The Wall Street Journal.

The 56-year-old philanthropist has been working with lawyers at several firms since at least 2019 to unwind the marriage of more than 25 years, according to these people and the documents. Last Monday, the billionaire couple announced they were ending their marriage. In a joint statement posted on Twitter, they said:

“we no longer believe we can grow together as a couple in this next phase of our lives.”

The couple hasn’t said what prompted the split. One source of concern for Ms. Gates was her husband’s dealings with convicted sex offender Jeffrey Epstein, according to the people and a former employee of their charity, the Bill & Melinda Gates Foundation. Ms. Gates’s concerns about the relationship dated as far back as 2013, the former employee said.

According to the documents reviewed by the Journal, Ms. Gates and her advisers held a number of calls in October 2019 when the New York Times reported that Mr. Gates had met with Mr. Epstein on numerous occasions. Mr. Gates once stayed late into the night at Mr. Epstein’s Manhattan townhouse, the Times reported.

When asked about his relationship with Mr. Epstein in a September 2019 interview with The Wall Street Journal, Mr. Gates said:

“I met him. I didn’t have any business relationship or friendship with him.”

Bridgitt Arnold, a spokeswoman for Mr. Gates, said in 2019 that the software mogul and Mr. Epstein had met multiple times to discuss philanthropy.

Bill Gates regrets ever meeting with Epstein and recognizes it was an error in judgment to do so Ms. Arnold said at the time. Mr. Epstein died in jail in August 2019 awaiting trial on federal charges related to sex trafficking.

Florida Divorce

The official term for divorce in Florida is “dissolution of marriage”, and you don’t need fault as a ground for divorce. Florida abolished fault as a ground for divorce. So, if your spouse is either out logging too much computer time, or late night meetings at Jeffrey Epstein Manhattan apartment, you don’t need to allege those as grounds for divorce.

I’ve written about divorce reasons before. The no-fault concept in Florida means you no longer have to prove a reason for the divorce, like your spouse’s new friends. Instead, you just need to state under oath that your marriage is “irretrievably broken.”

Before the no-fault divorce era, people who wanted to get divorce either had to reach agreement in advance with the other spouse that the marriage was over or throw mud at each other and prove wrongdoing like collaboration or weakening the revolutionary spirit.

No-fault laws were the result of trying to change the way divorces played out in court. No fault laws have reduced the number of feuding couples who felt the need to resort to distorted facts, lies, and the need to focus the trial on who did what to whom.

Florida abolished fault as grounds for filing a divorce. The only ground you need to file for divorce in Florida is to prove your marriage is “irretrievably broken.” Additionally, the mental incapacity of one of the parties, where the party was adjudged incapacitated for the prior three year, is another avenue.

Shut Down or Restart?

The couple negotiated their divorce throughout the Covid-19 pandemic, the documents show. They have three children who are all now 18 years or older, the divorce filing shows. The youngest is a senior in high school.

Ms. Gates, a global advocate for women and girls, had told her husband she was uncomfortable with Mr. Epstein after the couple met him together in 2013, the former employee of the Gates Foundation said. Mr. Gates and some employees of the Gates Foundation continued a relationship with Mr. Epstein despite her concerns, this person said.

A spokeswoman for Mr. Gates, who is 65 years old, said Friday he stands by his 2019 statement to the Journal and declined to comment further. A spokeswoman for Ms. Gates didn’t respond to questions about her reasons for seeking a divorce.

In early 2020, Mr. and Ms. Gates surprised many people when they said they wouldn’t attend the World Economic Forum in Davos, Switzerland, an annual gathering of business and world leaders that the power couple had attended for years. A few months later, on March 13, Mr. Gates said he was resigning from the boards of Microsoft Corp. and Berkshire Hathaway Inc.

The Microsoft co-founder said he planned to focus more on his philanthropic efforts. By that time, the Gateses were already in discussions to divide their vast wealth, according to the people familiar with the matter and the documents. Legal teams from both sides were privately in discussions with a mediator to work out a separation, the documents show.

The May 3 divorce filing says the couple had agreed to a separation contract to divide their assets—a fortune estimated at $130 billion by Forbes. Their assets include a $131 million lakeside compound in Washington state called Xanadu 2.0, a rare Leonardo da Vinci notebook and investments in Microsoft and Four Seasons Hotels.

Last week, Mr. Gates’s investment firm transferred nearly $2.4 billion worth of public company shares to Ms. Gates, including stakes in car-dealership owner AutoNation Inc., a Mexican broadcaster and a Canadian railroad.

The Gateses have said they would give away most of their wealth and donated more than $36 billion to the Gates Foundation over the years. The couple said they planned to remain co-chairs at the foundation and jointly lead it after their divorce. “We continue to share a belief in that mission,” they said in their Twitter statement.

Ms. Gates signed her divorce petition in Washington, near the family home and the foundation’s headquarters, according to the filing. Mr. Gates signed the papers from California.

The Wall Street Journal article is here.

 

Florida Alimony Reform 2021 is Dead

Posted by Ron Kauffman on

Florida Alimony Reform 2021 is dead after the Legislative Session ended last Friday. The House Speaker and the Senate President stood together in the Capitol rotunda to mark the adjournment of the Legislative Session with the famous dropping of the hanky known as as “sine die”. The alimony reform bill was absent.

Alimony Reform 2021

Alimony Reform 2021

Florida House Bill 1559 would have done several things to reform Florida alimony, and beyond. First, it prohibited permanent alimony unless expressly agreed to by the parties.

The bill required a court to prioritize bridge-the-gap alimony first, followed by rehabilitative and durational alimony, respectively. The bill removes any presumption for alimony based upon how long the marriage was, and placed caps on the length and amount of certain alimony awards.

The also bill created a rebuttable presumption that both parties will have a lower standard of living after divorce than they enjoyed during the marriage. The bill authorized an award of durational alimony to exceed 50 percent of the length of the marriage in certain limited circumstances.

The bill prohibited an award of alimony if the obligor met certain requirements for retirement prior to the date the petition for divorce was filed unless the obligee would otherwise be left in a financially destitute situation. Also, the bill permitted the court to consider the reasonableness of an obligor’s voluntary retirement as a reason to terminate an alimony award.

The bill created a rebuttable presumption that equal time-sharing between parents, commonly referred to as “50/50 time-sharing,” is in the best interest of a child. Of course, this has nothing to do with alimony whatsoever, but under the bill, 50/50 timesharing would have become the default when determining time-sharing of children after divorce.

Finally, the bill allowed expressly provided for bifurcation of a divorce proceeding after 365 days has elapsed since the petition was filed, and authorizes the court to enter temporary orders on substantial issues until such issues can be ultimately decided.

Florida Alimony

I’ve written about subject of alimony in Florida. In every Florida dissolution of marriage case, the court can grant alimony to either party – husband or wife. Not many people realize there are several types of alimony in Florida: bridge-the-gap, rehabilitative, durational, or for the moment, permanent alimony.

Florida courts can also award a combination of alimony types in a divorce. Alimony awards are normally paid in periodic payments, but sometimes the payments can be in a lump sum or both lump sum and periodic payments.

In determining whether to award alimony or not, the court has to first decide as to whether a wife or a husband, has an actual need for alimony, and whether the other party has the ability to pay alimony.

Typically, courts consider any type of earned income or compensation — that is, income resulting from employment or other efforts — along with recurring passive income, such as dividends on your investments, in establishing the amount of support you will be responsible to pay.

In Florida, once a court determines there is a need and the income available to pay alimony – sometimes referred to as the ability to pay alimony – it has to decide the proper type and amount of alimony.
In doing so, the court considers several factors, some of which can include things like: the standard of living established during the marriage; the duration of the marriage, the age and the physical and emotional condition of each party and the financial resources of each party, including the nonmarital and the marital assets and liabilities distributed to each.

Taps

A statewide group of divorced women, known as the First Wives Advocacy Group, once again defeated what has become a perennial proposal to end permanent alimony and mandate an equal-time sharing provision for children caught in divorce.

“We were the stay-at-home moms that gave to our children while our husbands built careers and now that I’m 61 they want to kick me to the curb and leave me penniless”.

Supporters of alimony reform argued that the system was broken and some form of a statewide standard is needed:

“Family court is the biggest casino in the state because we don’t know what is going to happen. There is no uniformity, no consistency, no foreseeable outcome. This will create an alimony formula.”

Former Gov. Rick Scott twice vetoed similar bills in a fight that dates at least to 2012. And this year, alimony reform died once again.

The Florida Politics article is here.