Experts, Divorce and the New Rule Change

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On behalf of Ronald H. Kauffman, P.A. posted in Divorce on Monday, May 12, 2014.

We increasingly rely on experts in divorce trials. Most of my cases involve accountants, psychologists, or some other expert. Few people realize the expert witness rule dramatically changed recently.

I blogged about this rule change before, and have an article in the Florida Bar Commentator which deals with the issues in depth. One big question has to do with the way the rule was amended.

Under our constitution, the legislature can enact substantive law, but can’t pass procedural laws for the courtroom, or a separation of powers violation occurs. Many people have said the new expert rule change violates the Constitution.

For instance, the Florida Supreme Court recently refused to adopt the legislative changes to the newly created section 766.102(12), Florida Statutes, to the extent the high court saw them as procedural.

However, the Third District Court of Appeals just approved of the new statute in a case. A child, through his mother, sued her employer for her son’s premature birth and related health problems due to workplace stress.

The mother’s expert witness said that workplace stress caused the early delivery of her son with medical consequences, but the trial judge struck the expert’s testimony.

The Third District Court of Appeals upheld the Miami judge’s decision. The court noted that the statutory change requires all Florida courts to apply the new rule to all expert testimony, to apply it retroactively in pending cases, but did not discuss the possible constitutional controversy.

The Third District now joins the First District Court of Appeals in applying the new expert witness rule in pending cases.

The Third District Case can be read here.

Can You Marry Your Computer in Florida?

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On behalf of Ronald H. Kauffman, P.A. posted in Same Sex Marriage & Divorce on Wednesday, May 7, 2014.

Hey, I like my computer as much as the next guy, but I don’t want to marry or divorce it. Not everyone feels the same about their PCs and Macs. Channeling Joaquin Phoenix in “Her”, a Florida man tried to intervene in the pending gay marriage federal case in Tallahassee.

The Federal judge didn’t take too kindly to the motion:

Chris Sevier has moved to intervene, apparently asserting he wishes to marry his computer. Perhaps the motion is satirical. Or perhaps it is only removed from reality. Either way, the motion has no place in this lawsuit. Mr. Sevier has alleged nothing that would support intervention.

As Fortune magazine reports:

What he’s trying to say is that same-sex marriage is the first step down a slippery slope. Let a man marry a man, and pretty soon people will start wanting to marry anything that turns them on.

He wrote in his motion:

Recently I purchased an Apple computer. The computer was sold to me without filters to block out pornography. I was not provided with any warning by Apple that pornography was highly addictive and could alter my reward cycle by the manufacturer. Over time, I began preferring sex with my computer over sex with real women. Naturally, I ‘fell in love’ with my computer and preferred having sex with it over all other persons or things, as a result of classic conditioning upon orgasm.

Fortune also notes that a “Chris Sevier” sued Apple because it sold him a computer without telling him about the evils of porn, and A&E after it fired Duck Dynasty’s Phil Robertson after he was caught spewing antigay talk. And just recently, a Chris Sevier tried to butt his way into Utah’s gay marriage legal case .

Forget about marrying your computer, Florida is in the increasingly minority of states in which marriages between persons of the same sex entered into in any jurisdiction, are not recognized for any purpose in this state. Since we don’t recognize legal gay marriage in Florida, it’ll be a long time before Florida will allow Theodore from “Her” to marry his OS.

Divorce is Contagious

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On behalf of Ronald H. Kauffman, P.A. posted in Divorce on Monday, May 5, 2014.

A Brown University study shows that the divorceof a friend can increase your own chances of getting divorced. Facebook keeps you in touch, but also brings people’s problems to you, and could be impacting divorce rates. Should you start planning for your divorce if your friend just filed?

The Brown University study, conducted in Framingham, MA, found that:

75% of participants were more likely to get divorced if a friend was divorced,

55% were more likely to get a divorce than someone who works with all married coworkers,

33% were more likely to end their marriage even if a friend of a friend got divorced.

22% of participants were more likely to divorce if they had a divorced sibling.

So, with divorce rates inching up recently, is there a virus floating around? Not really. Divorce dissolves your social ties. The Brown University study suggests that divorce is a “social contagion” – the spread of information, attitudes and behaviors through friends, family and social networks. In that regard, Facebook and Twitter are carriers!

“The key is that the effects are not so much geographical, but that you are emotionally or psychologically close to someone who gets divorced.”

I’ve written about some other facts about rising divorce rates before. The Brown University study though, had some other interesting results:

– Popular people are less likely to get divorced;

– Divorcées have denser social networks, and are much more likely to remarry other divorcées;

– The presence of children does not influence the likelihood of divorce;

– Each child reduces the susceptibility to being influenced by peers who get divorced.

– Attending to the health of a friend’s marriages supports your own.

Divorce itself is not contagious, but emotions can be. An abstract of the study can be found here.

Divorce & Lottery Winnings: How to Keep Most of It

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On behalf of Ronald H. Kauffman, P.A. posted in Equitable Distribution on Thursday, May 1, 2014.

Jose is one lucky guy. He won $2 million in an Indiana scratch off lottery game. Equitable distribution requires he split half the winnings with his wife in a divorce. Last week a judge ordered him to give her less than 3%. Why?

Jose and his wife Maria were married for about 4 years – they married in 2002 and separated in 2006. They never divorced, and over the next six years he moved out, they barely spoke, had separate bank accounts, and lived as single people.

Five years later, in 2011, Jose won $2 million in a scratch-off game. He quickly filed for divorce. In the divorce proceedings, Maria asked the court to give her 70% of Jose’s winnings, about $1.4 million.

Maria thought she was entitled to a 70/30 split because Jose admitted that giving her 70% of the cash was a “fair and equitable distribution.” She argued that this admission conclusively establishes how the court should divide the money. The judge said no.

Because Jose and Maria were legally married at the time, courts presume a 50-50 split. But the Indiana court ruled Maria shouldn’t even get her half. Why? Because of the extended separation, the lack of comingling, and each person living as individuals.

I’ve written before about the risks of long separations:

* You have less control of assets,

* Spouses have an opportunity to hide assets,

* Circumstances change, jobs are lost, and people get ill or retire,

* Relocation with children may become harder over time, and

* Alimony reform is changing laws all over the country.

Jose’s case is one in which a long separation was actually very helpful, but that’s not always true. Jose just got really lucky . . . twice!

You’re not Jose. Don’t base your divorce planning on dumb luck.

Avoiding the Biggest Divorce Financial Mistakes

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On behalf of Ronald H. Kauffman, P.A. posted in Divorce on Monday, April 28, 2014.

Perhaps my favorite newspaper is the Wall Street Journal. Last week the WSJ ran a discussion about the biggest financial mistakes in divorcefrom expert financial consultants I wanted to share. Here’s what they had to say:

Ted Jenkin is a co-CEO and founder of oXYGen Financial, a financial advisory firm. Ed finds the number 1 mistake among divorcing couples is their lack of consideration around liquidity of assets.

It’s pretty common after a separation that one spouse will end up with the primary residence. While the math may show a true 50/50 split, the reality is that one of the spouses will be stuck with a paper asset that could be tough to dispose of.

For Charles Rotblu, vice president with the American Association of Individual Investors, the biggest financial mistake divorcing couples make is not settling quickly.

My first job in finance was with a firm specializing in the valuation of closely held businesses. We were hired to give an expert assessment of what a business was worth. A few cases dragged on because one or both spouses were more concerned with inflicting financial pain than moving on. All this served to do was to drive up the legal costs of the divorce.

Eleanor Blayney is consumer advocate of the Certified Financial Planner Board of Standards. She worries that when strong emotions are put in the same cauldron as financial decisions, you have a recipe for disaster.

When spouses see money as the way to exact emotional revenge, the costs of divorce can be devastating. Find ways to separate the fury from the finances can protect both partners’ financial futures.

For George Papadopoulos, a wealth manager:

Getting a qualified divorce attorney to be on your side and look out for your own best interests is a must.

Michelle Perry Higgins is a financial planner and principal at California Financial Advisors.

You want to avoid making decisions on the basis of sentiments like “He can have everything, I just want this over” or “She can have the house, since the divorce was my fault.” To avoid this outcome, don’t rush through the divorce proceedings, organize your financial, estate and personal affairs and put all the information in one location, and then meet with your financial planner and divorce attorney to discuss your options.

I’ve blogged sound advice from other experts before. This advice is sound: (1) don’t fall into the liquidity trap, (2) proceed quickly to avoid running up legal fees, (3) Don’t let emotions cloud your judgment and (4) Get an expert divorce attorney.

Cheating and Divorce

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On behalf of Ronald H. Kauffman, P.A. posted in Divorce on Monday, April 21, 2014.

Cheating on your spouse isn’t only a crime in the eyes of your spouse, in Florida, it’s a crime punishable by a fine or even jail time. Can it impact your divorce?

USA Today reports that the New Hampshire legislature voted last week to repeal its anti-adultery law, sending the bill to the governor, who is likely to sign it into law. Last year, Colorado repealed its anti-adultery law.

Anti-adultery laws are rarely enforced, and are properly seen as a vestige of our country’s Puritanical beginnings, says Naomi Cahn, a law professor at the George Washington University Law School.

In Florida, whoever lives in an open state of adultery shall be guilty of a misdemeanor of the second degree. Where either of the parties living in an open state of adultery is married, both parties shall be deemed to be guilty of the offense.

I’ve written about the impact of cheating and divorce before. In practical terms, adultery poses very little threat of prosecution, but it could have other consequences.

Cheating on your spouse can even be grounds for losing your job. This is particularly true in the military, where adultery has a maximum punishment of a dishonorable discharge.

Chapter 61 discusses the “the moral fitness of the parents” as one of the factors the court considers in determining the best interests of a child.

Adultery may impact the division of property. Proof that one spouse intentionally wasted marital assets could be seen as dissipation of assets.

Adultery of either spouse could be a factor in determining the amount of alimony, if any, to be awarded.

Sometimes, evidence of adultery comes into evidence. Sometimes, it doesn’t. In 2003, the Supreme Court ruled in Lawrence v. Texas that sexual activity between consenting adults is legal. Whether Lawrence applies to anti-adultery laws is unknown.

The USA Today article can be read here.

Divorce and Student Loans

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On behalf of Ronald H. Kauffman, P.A. posted in Marital Debt on Thursday, April 17, 2014.

You’re married and your Husband is in medical school. The burden of his school divorce is the farthest thing from your mind. Maybe you thought: “they’re his loans anyway, so I won’t be responsible.” You may be in for a big surprise.

The Wall Street Journal recently reported that college students who took out loans to earn bachelor’s degrees in 2012 graduated with an average $29,400 in educational debt. Worse, those earning advanced degrees borrowed even more. What happens to these loans in divorce court?

There are two misconceptions about dividing student loans in a divorce:

1. Student loans taken out before marriage turn into marital debt after the wedding.

2. That student loans incurred during the marriage are the responsibility of the student earning the degree.

In Florida, educational debts are treated as any other kind of debt. If a debt is incurred before a marriage it is considered the separate property of the debtor. And, unless a prenuptial agreement says otherwise, it stays that way after a divorce.

This comes as a surprise for many people. But as the Wall Street Journal reports, think of it this way:

“It’s generally like roommates,” says June Carbone, an expert in family law at the University of Minnesota Law School. “The roommate doesn’t pick up student debt….It doesn’t matter if you’re sleeping together.”

Debt division can get a little trickier when the student loans are taken out during the marriage. Different states may have different laws, so how educational debt is divided may depend on where you live and who benefits from the loan.

In Florida, as a general proposition, student loans incurred during the marriage are marital liabilities, and must be equitably distributed between spouses.

The fact that the Wife will not receive any benefit from the Husband’s medical degree after the divorce is not really a factor when dividing student loans.

What should you do? A prenuptial agreement can help you spell out how you and your future spouse want to allocate student debts in the event of divorce. At a minimum, discuss your finances with your partner.

Most people think prenuptial agreements are for the very rich, and to preserve expensive assets. Don’t forget that there’s often a lot of debt to consider too, and a prenuptial agreement is a perfect tool for addressing that.

The Wall Street Journal article can be found here.

Custody Evaluation Tips: Education

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On behalf of Ronald H. Kauffman, P.A. posted in Child Custody on Wednesday, April 9, 2014.

Everyone knows parent involvement at school means better grades and test scores. However, this conventional wisdom may be wrong. Yet school involvement is a factor in child custody cases. In light of new research, this factor may no longer be useful.

In developing a parenting plan, courts look to a parent’s knowledge and capacity to be informed about your kid’s teachers, activities, and your ability to provide consistent routines, discipline, and making sure homework and projects are done.

Although this is a routine factor in creating a parenting plan, researchers at the University of Texas and Duke University have found that this hallmark of parental involvement doesn’t affect academic achievement.

Researchers examined about 30 years of surveys, and tracked 63 different measures of parental participation in education. The researchers indexed these measures to children’s academic performance, including test scores in reading and math.

What they found surprised them. Most measurable forms of parental involvement seem to yield few academic dividends for kids, or even to backfire. Worse, evidence shows that in middle school, parental help with homework can bring test scores down!

So what does help?

– Reading aloud to young kids

– Talking with teenagers about college plans.

– Embedding your children in social settings in which they meet many college-educated adults with interesting careers.

– Communicating the value of education.

– Teaching your children to ask critical questions.

– Getting your kid in the class of a teacher with a good reputation.

Don’t get confused by the new research. Parents involved in schools can be effective at getting Smartboards, better textbooks, new playgrounds, and other “extras” that make a school come to life.

Parental involvement in children’s lives is essential, and is also a factor courts look to in crafting parenting plans and timesharing schedules. This new research is helping parents to learn what works best.

You can read more about the latest research in the Atlantic.

Muslim Divorce Contracts in Florida

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On behalf of Ronald H. Kauffman, P.A. posted in Religious Divorces on Monday, April 7, 2014.

The Florida legislature re-introduced an anti-Sharia law bill this term. It is an effort to limit the applicability of foreign law in property division proceedings, especially contract provisions. However, some religious contract provisions have been enforced in Florida, and with good reason. This bill may stop that.

Consider the case in Kansas I mentioned before. Pursuant to Islamic customs, the Husband transferred over $116,000 in premarital funds to his bride, culminating in a Muslim marriage contract-signing ceremony. Then they traveled to Kansas, where a judge conducted a separate marriage ceremony.

Less than two years later, the Husband filed for divorce. The parties signed a mahr agreement and the Wife contends that because of the divorce, she gets the roughly $677,000 agreed to in the mahr from the husband.

However, Kansas passed a bill (similar to what Florida is considering) prohibiting courts from applying foreign law, legal codes or systems that violate the public policy of Kansas – a bill viewed as preventing courts from applying Shari’a law (although the bill doesn’t mention Sharia by name).

Similar to Florida, Kansas generally allows premarital agreements unless they violate public policy, or fails to provide adequate disclosure and is unconscionable.

However, the Kansas court decided not to enforce the mahr, and instead imposed as a property settlement that the ex-husband retains his premarital property after conferring the equivalent of $116,000 in gifts on the wife before the marriage.

The problems with the Muslim mahr agreement found by the court:

The provisions in the mahr would function as a penalty based on fault – since the mahr provides for fault-based payment – contrary to no-fault divorce principles.

The high amount of the divorce payout could be viewed as encouraging divorce, contrary to Kansas (and Florida) public policy.

The religious origins of the agreement are problematical. Mahr agreements stem from jurisdictions that do not separate church and state, creating a tension with our Constitution.

Mahr agreements can be short on operative details, definitions, and explicit requests to have their terms represent an entire remedy at law in a civil courtroom.

Mahr agreements might not meet the Uniform Premarital Agreement Act’s definition of a prenup.

Currently, in Florida, the issue of whether a Muslim prenuptial agreement is enforceable depends on whether it complies with Florida’s secular contract law. If so, secular terms may be enforceable as any contractual obligation.

The anti-Sharia bill is a hot-button issue again this year. Religiously motivated agreements should be interpreted as secular documents, if a court can use neutral principles without evaluating religious doctrine.

The Kansas case can be read here.

Do You Have to Split Premarital Assets?

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On behalf of Ronald H. Kauffman, P.A. posted in Equitable Distribution on Wednesday, April 2, 2014.

In divorced, marital property is equitably distributed, but non-marital assets – things acquired before the marriage for instance – are not. However, there is a little-known exception when the value of non-marital assets appreciates. For Harold Hamm, the billionaire founder of oil company Continental Resources, that little exception is a big headache.

Hamm ranks #68 on Forbes’ list of Global Billionaires with a net worth estimated at $14.6 billion. The Oklahoma judge presiding over Hamm’s divorce has recently ruled that he will not have to give up his controlling interest in the company because his 122 million shares are pre-marital.

However, the judge also ruled that the value of the pre-marital stock’s appreciation during the 26-year marriage may still be divided as a marital asset.

The court is essentially saying he won’t have to divide his shares. But, the court still has a duty to make an equitable distribution of what we call: enhanced value.

If the increase in value is attributable to marital effort by either party to make it grow, as opposed to market conditions, then the increase may be considered a marital asset and divisible by the court.

In the trial, the judge will determine how much of Continental Resources’s gains were due to market conditions and how much to Harold Hamm’s efforts. Gains credited to the market probably wouldn’t be included among divisible assets.

Given the size of the fortune and the lack of pre-nuptial and post-nuptial agreements, it’s possible this divorce could become one of the largest publicly known divorces.

For more information on the Hamm divorce, click here.