CEO Divorces: Do you have to disclose divorces to shareholders?

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On behalf of Ronald H. Kauffman, P.A. posted in Divorce on Monday, October 28, 2013.

divorced impacts everyone: the rich and poor alike. When a spouse is also the CEO of a company, are there more risks? When the CEO of Continental Resources was getting divorced, shares of his company dropped 2.9%. Conversely, when Rupert Murdoch announced his divorce, shares of News Corp gained 1.4%. Why?

In the Continental Resources case, shareholders learned that the CEO didn’t have a prenuptial agreement, and some investors feared control of his shares was at stake.

But in Rupert Murdoch’s case, the divorce announcement stressed the parties’ prenuptial agreement, that there would be no spin-offs, and a divorce would have “zero impact” on the company

A new study from Stanford Graduate School of Business has examined three potential ways in which a CEO divorce might impact the business and shareholders.

1. Loss of control or influence. A CEO might be forced to sell or transfer a portion of his or her shares as part of equitable distribution, lump sum alimony or by agreement. Selling shares can reduce a CEO’s influence and impact decisions regarding corporate strategy, asset ownership, and board composition. Shareholder reaction to loss of control will vary.

2. Divorce impacts productivity, concentration, and energy levels. Divorce is stress. Generally, it is well known that employee divorces impact their productivity. In extreme cases, the distraction of divorce can lead to premature retirement.

3. Divorce can change appetite for risk. A sudden change in wealth – through loss of equity in the company they are running or other investments outside the firm -can alter an executive’s risk appetite, and impact decision making

Is divorce still a private matter? For most people it is. But if you are the CEO of a publicly traded company, perhaps in the future your divorce might be a matter which has to be disclosed to shareholders.

The Stanford Graduate School of Business article can be read here.

Gray Divorces: Divorcing after 50

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On behalf of Ronald H. Kauffman, P.A. posted in Divorce on Thursday, October 24, 2013.

So much for “till death do us part.” While the overall divorce rate has gone down, it’s doubled for couples over age 50. For the first time, more Americans 50 and older are divorced rather than widowed. Sociologists call them gray divorces.

In 1990, less than 3% of Americans older than 50 were divorced. By 2000, about 12% were. According to the latest Census Bureau’s estimate in the American Community Survey, in 2011 over 15% were divorced, while 13.5% were widowed.

In 1990, 1 in 10 persons who divorced was 50 or older. By 2011, according to the American Community Survey, more than 28 percent (more than 1 in 4) who said they divorced in the previous 12 months were 50 or older.

As the New York Times reports:

Researchers at Bowling Green warn that the rising divorce rate among older Americans has serious implications that go well beyond the couples themselves. Like widowhood, divorce can contribute to economic strain and poor health, placing a larger burden on children and, given shrinking family size, on institutional support from government and other sources.

“Staying together until death do us part is a bigger challenge than it used to be because we expect so much more of marriage than we did in the past, and we have so many more options when a marriage doesn’t live up to those expectations.

Think about it from this perspective:

“If you are a healthy 65, you can expect another pretty healthy 20 years. So with the kids gone, it seems more burdensome to stay in a bad relationship, or even one that has grown stale.”

Are women to blame:

Women have long been more sensitive to – or less tolerant of – a mediocre relationship than men and so another big factor is that with their increased work experience and greater sense of their own possibilities, they are less willing to just ‘wait it out.

What about the men?:

“Viagra is another reason – men are able to satisfy younger women. And people are living longer and they can get out and still have a life.”

Several other factors may be to blame, including:

  • Societal acceptance of divorce
  • Increased economic autonomy of women
  • Lengthening life expectancies
  • Less education is big risk factor
  • Shorter marriages less than 10 years.

Nonetheless, they say that if the rate remains constant, we can expect a 25 percent increase in the number of people that will experience divorce among Americans 50 and older.

Do you carry the Divorce Gene?

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On behalf of Ronald H. Kauffman, P.A. posted in Divorce on Wednesday, October 16, 2013.

Florida is a no-fault state when it comes to divorce. This means that you do not need grounds – like “mental cruelty” or “adultery” – to file for divorce. But scientists are finding that there may be fault for broken marriages, and the fault resides in our genetic code.

One gene involved in the regulation of serotonin can predict how much our emotions affect our relationships. The study was conducted at UC Berkeley:

An enduring mystery is, what makes one spouse so attuned to the emotional climate in a marriage, and another so oblivious?” . . . “With these new genetic findings, we now understand much more about what determines just how important emotions are for different people.”

Researchers found a link between relationship fulfillment and a gene variant, or “allele,” known as 5-HTTLPR. All humans inherit a copy of this gene variant from each parent.

Study participants with two short 5-HTTLPR alleles were found to be most unhappy in their marriages when there was anger and contempt. They were most happy when there was humor and affection.

By contrast, those with one or two long alleles were far less bothered by the emotional tenor of their marriages.

“We are always trying to understand the recipe for a good relationship, and emotion keeps coming up as an important ingredient,” said Levenson, who heads up a longitudinal study that has tracked over 150 married couples for more than 20 years.

The new findings don’t mean that couples with different variations of 5-HTTLPR are incompatible, but couples with two short alleles are likelier to thrive in a good relationship and suffer in a bad one.

“Individuals with two short alleles . . . may be like hothouse flowers, blossoming in a marriage when the emotional climate is good and withering when it is bad.”

“Conversely, people with one or two long alleles are less sensitive to the emotional climate.”

Participants in the study consisted of a group of 156 middle-aged and older couples whose relationships were followed for over 20 years.

For spouses with two short 5-HTTLPR alleles (17% of the spouses studied), researchers found a strong correlation between the emotional tone of their conversations and how they felt about their marriage.

For the 83% of spouses with one or two long alleles, on the other hand, the emotional quality of their discussions bore little or no relation to their marital satisfaction over the next decade.

While we won’t argue genetic fault in divorce papers any time soon, it is interesting how the study of the human genome shows how our DNA plays a greater role in our actions than we ever thought. News about the UC Berkley study is here.

Same Sex Divorce: The Future is Nearer

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On behalf of Ronald H. Kauffman, P.A. posted in Same sex/GLBTA on Wednesday, October 9, 2013.

Florida prohibits same sex marriages and same sex divorce – even if the marriage was entered in a state in which such marriages are legal. What happens if you are a Floridian who married in a state where same sex marriages are legal, but now want to divorce?

As the New York Times reports, a taste of what a Florida same sex divorce will look like may be found in Mississippi of all places. A woman is asking a Mississippi court to dismiss a divorce petition filed by the wife she married in California. Her argument:

Mississippi can’t grant the divorce because it doesn’t recognize same-sex marriages.

The couple, Lauren Beth Czekala-Chatham and Dana Ann Melancon, went to California to marry in 2008 while living together in Mississippi. Czekala-Chatham still lives in Mississippi, but Melancon moved to Arkansas.

Czekala-Chatham filed for divorce in north Mississippi’s DeSoto County Chancery Court on September 11, 2013, and wants Mississippi to recognize her marriage so she can get a divorce there.

Melancon filed a motion to dismiss her divorce petition based on Mississippi law, which like Florida, prohibits same sex marriages:

Any marriage between persons of the same gender is prohibited and null and void from the beginning. Any marriage between persons of the same gender that is valid in another jurisdiction does not constitute a legal or valid marriage in Mississippi.

Even though the parties were legally married in California, the State of Mississippi lacks any legal basis to grant the Plaintiff a divorce because there is no marriage to dissolve under the laws of this state.

What can Czekala-Chatham do if she wants a divorce? One thing is she can file for divorce in California:

Same-sex married couples who got married in California but do not live in California and live in a state (or states) that will not dissolve a same-sex marriage, can file to end their same-sex marriage in California, regardless of these residency requirements.

However, the lack of residency may stop a California court from deciding property ownership, alimony and children’s issues.

The Texas Supreme Court recently said it will consider whether it has jurisdiction over same-sex divorce cases and scheduled oral arguments for Nov. 5. At least two same-sex couples have filed for divorce in the state, which does not permit gay marriage.

Floridians in same sex marriages, who have wondered what their options are in the event of divorce, should keep an eye out on what is happening right now in Mississippi and Texas. That could be our future.

Are Stay at Home Dads Overhyped?

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On behalf of Ronald H. Kauffman, P.A. posted in Timesharing/Visitation on Tuesday, October 1, 2013.

With the new alimony reform bill percolating in Tallahassee, there is talk of creating a legal presumption that child custody with children should be equal between moms and dads. There is a common perception that more dads are choosing childcare over careers. But is this a trend, a bubble, or drop in the pan?

According to the Census, the number of stay-at-home dads has more than doubled over the last decade and a half, from about 76,000 in 1994 to 189,000 as of last year.

So does that mean stay at home dads is a significant change?

Not really. Among all married couples with children under 15, only 0.8 percent includes a stay-at-home dad. And as the Atlantic reports, even that small percentage overstates the importance of the stay at home dad phenomena:

First, we’re living in the age of the single parent. More than half of births to women under 30 happen out of wedlock, and women disproportionately end up taking care of those children.

Second, even among two-parent households where women work, the percentage of men acting as the primary caregiver has actually declined slightly.

Third, as the Pew Survey notes, women in dual earner households spend 12 hours a week on childcare on average, compared to just 7 for men.

The rise of stay-at-home dads sounds good, but it may be a lot of hype:

A decade ago, you could pack every stay-at-home dad into the University of Michigan’s football stadium. Now, you’d just need Michigan and Ohio State’s.

Worse, over the last 15 years, men have collectively stopped taking on more child care giving responsibilities, not take on more of them.

Alimony Reform . . . Again

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On behalf of Ronald H. Kauffman, P.A. posted in Alimony on Tuesday, September 24, 2013.

Way, way, back in May of ’13, the Florida Legislature passed a major alimony overhaul bill, which was surprisingly vetoed by Governor Scott in a midnight session. Once again, the threat is returning. Another attempt is being made by Florida legislators to rewrite the state’s comprehensive divorce law.

Some other key changes being considered are:

  • Seeking a reduction in payments when divorcees retire.
  • Automatic payment cuts if an ex-spouse loses a job or takes a salary reduction.
  • Changing the way child custody is awarded.
  • How to calculate alimony.

As the Sun Sentinel reports

Though there have been minor changes over the years, critics say Florida law is antiquated and based on a time when most women stayed home to care for the family, giving up their earning potential. That has left some ex-spouses paying alimony for years and made it difficult for people to move on with their lives, plan for retirement and possibly re-marry.

The old and new bills addressed alimony and child custody:

In April, the Legislature passed legislation that would have ended permanent alimony, capped awards based on a person’s income and the length of the marriage, and let the ex-spouse petition to terminate or lower alimony payments upon retirement.

However, that bill had a crazy provision which allowed it to be applied retroactively to all prior judgments and agreements in Florida. While the law would have given relief for ex-spouses paying alimony – by allowing them to re-open their cases – every single contract and court order involving alimony could have been renegotiated or re-tried.

It would have been utter chaos.

Governor Scott vetoed that bill, saying the retroactivity provision “tampers with the settled economic expectations of many Floridians who have experienced divorce” and “could result in unfair, unanticipated results.”

This time around, legislators are removing the retroactivity clause from a revised bill that they expect lawmakers to consider in 2014:

while specifics are still being worked out, many of the vetoed bill’s other provisions to cap and otherwise limit future alimony payments likely will remain.

Last Spring’s vetoed legislation included language that automatically presumed timesharing would be split 50-50. That was a major problem for child advocates and family law attorneys.

Reformers says their main goals now are to end permanent alimony – basing duration of payments on the length of the marriage – and to make clear that if a paying spouse’s income drops in the years after a divorce settlement, the alimony payment should also be reduced.

Grandparent Visitation and Custody Increase

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On behalf of Ronald H. Kauffman, P.A. posted in Grandparent Rights on Monday, September 23, 2013.

Grandparent child custody and timesharing rights do not exist in Florida. But as American parents deal with the economic recession over the last few years, grandparents have stepped in to help. According to a recent survey, grandparents were the main caregivers for more than 3 million children in 2011 – a 20% increase from 2000, the Pew Research Center found.

As the Los Angeles Times reports:

“The parent gets laid off, or their home is foreclosed upon. They can’t afford the mortgage or rent,” said Susan Smith of the nonprofit Insight Center for Community Economic Development. Often “the quickest solution is, ‘Mom, Dad, can you help out?’ ” With the “jobless recovery,” Smith said, that help is still needed.

But money is just one of many problems that push grandparents into caregiving. Nearly half of parents who lived with their kids but left grandparents in charge were teens when their babies were born, Pew found. Other parents handed off children to grandparents when they went to serve in Iraq or Afghanistan, said Amy Goyer, home and family expert for AARP. Still others lost or relinquished their kids after tangling with drugs or alcoholism, suffering mental illness or landing in prison.

More than a fifth of grandparents who care for grandchildren live under the poverty line, Pew found – more than twice the overall poverty rate among Americans ages 50 and over. The financial challenges appear especially stark for grandparents raising grandchildren alone.

“You may have set aside a retirement for you and your husband – and now you have to spend your savings on feeding and clothing young children,” said Sylvie de Toledo, founder of the nonprofit Grandparents As Parents and author of a survival guide with the same name.

As I mentioned in my Florida Bar Journal article, Florida’s Legislature amended Chapter 751, and now authorizes courts to order concurrent custody to extended family members, such as grandparents, who have physical custody, but lack documentation necessary to consent to a child’s medical treatment, or to enroll a child in school.

However, the statute provides that concurrent custody may not diminish a parent’s custodial rights, and the court must terminate an order for concurrent custody if one of the parents objects.

Are Rising Divorce Rates a Good Thing?

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On behalf of Ronald H. Kauffman, P.A. posted in Divorce on Thursday, September 19, 2013.

With low tax rates, no income tax, and a pleasant climate (outside of hurricane season) Florida attracts a lot of people who settle here, and sometimes they divorce. Florida ranks roughly 8th in divorce rates in the United States.

We view divorce in Florida as a regrettable part of life. But internationally, divorce is starting to be viewed as a positive sign of social change. As Business Week reports:

A little-noticed trend is spreading in many of the world’s emerging economies: More and more people are getting divorced.

Outside of North America, Europe, and Oceania, two-thirds of the countries for which the United Nations has data saw rising divorce rates from 2007 to 2011.

According to the UN:

  • Mexico: the divorce rate has steadily climbed since the late 1970s.
  • Brazil, divorce was against the law 30 years ago, the divorce rate is now about 1.4 per thousand people.
  • China, Thailand, Iran, and South Korea, have seen more than a roughly fivefold increase in divorces over the past few decades.

What are the Reasons? As Business Week further reports:

The rise of divorce internationally is both an indicator of and force behind social changes that have improved prospects for women, reduced gender inequality, and fueled development. All of which suggests that the more people are able to get out of bad marriages, the better off their societies are likely to be.

So, the more common divorce becomes in a society, the less of a stigma it’s likely to be. Conversely, divorce causes greater unhappiness in societies where it’s rare. The period before a divorce people report low life satisfaction, but the period after it is comparatively satisfactory, especially for women.

In the developing world, increased divorce rates have mirrored improvement in measures of gender equality.

In Brazil, the Rede Globo channel broadcasts a slate of soap operas that feature powerful female leads who work, make investment decisions, and commit infidelities as frequently as their male counterparts. During the 1970s and ’80s, as Rede Globo’s reach expanded across the country, the divorce rate went up while fertility rates went down, according to researchers from the Inter-American Development Bank.

Strange Reasons to Divorce and the No Fault Concept

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On behalf of Ronald H. Kauffman, P.A. posted in Divorce on Monday, September 16, 2013.

The official term for divorce in Florida is “dissolution of marriage”, and you don’t need fault as a grounds for divorce. Florida abolished fault as a ground for divorce. This means you no longer have to prove a reason for the divorce, like infidelity. Instead, you just need to state under oath that your marriage is “irretrievably broken.”

Despite the concept of no-fault divorce, very often people blame others for their marriage ending. Recently, a Rhode Island man, whose marriage ended, filed a federal lawsuit seeking to silence the bells of the Catholic church next door to him.

John Devaney claims the ringing of the bells at St. Thomas More Catholic church contributed to the failure of his marriage and are disrupting the quality of his life.

In China, one man’s snoring was so disruptive it prompted his wife to file for divorce. In the filing, she claimed that she hasn’t gotten a full night’s sleep since they married. She also mentioned that the man’s heavy snoring made her ill and caused her to lose a significant amount of weight.

In Iran, a man filed to divorce his wife because of her snoring; she admitted to drugging him with sleeping pills at the beginning of their marriage so he wouldn’t notice her snoring habit.

One woman got married at age 30 but told her husband she was only 24. Ten years into their marriage, in November 2007, he found out about the lie–and asked for a divorce.

A pet bird started to say things like “divorce” or “be patient” and the bird’s phrases caused one woman to think her husband was cheating on her and filed for divorce.

In Florida, either spouse can file for the dissolution of marriage. You must prove that a marriage exists, one party has been a Florida resident for six months before filing the petition, and the marriage is irretrievably broken.

However, fault may be considered under certain circumstances in the award of alimony, equitable distribution of marital assets and liabilities, and determination of parental responsibility.

A Few Good Divorce Tips

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On behalf of Ronald H. Kauffman, P.A. posted in Divorce on Wednesday, September 4, 2013.

You can get divorce advice all over the place. What you may not know is that no two divorces are the same. What happened to your friend, co-worker or manicurist in their divorce is completely different from what you’re going through.

You can also find advice about divorce all over the internet. Some is good, but most of it is bad. When you are in the business of divorce though, you see the same lessons being learned over and over. And, when I see other professionals offering advice that I think is good, I like to give them the credit they deserve.

Nicole Noonan, executive director of divorce finance company BBL Churchill Group, recently appeared on TV, and had some good advice for anyone suffering through a divorce.

Surprisingly, her first tip is to make sure you hire an attorney who is not too aggressive. This is surprising advice because most people think you will be better served by an over-aggressive lawyer. People learn the hard way that’s not true.

“Your attorney not only represents your interests, they also represent your style, she said on “The Couch” Thursday.” So if you hire a pit-bull attorney, it doesn’t mean you get a better settlement necessarily. You can have a long drawn-out legal battle…and it’s not always the right choice.”

She also advised against a take-it-all mentality in court.

“Pick your battles. Just because you’ve been wronged in the marriage doesn’t mean the court is going to look at that,” she said.

Divorce involves big decisions. You are always better served by identifying ahead of time what is most important to you and your children.

That decision involves knowing you and your spouse’s finances, identifying what you and your children’s needs are, and hiring an attorney who will help you identify and meet your needs.

You can watch the video here.