Category: Divorce

Don’t Invest When a Fund Manager is Divorcing

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By The Law Offices of Ronald H. Kauffman of Ronald H. Kauffman, P.A. posted in Divorce on Monday, March 30, 2015.

Have you ever wondered if your stock market investments are impacted by your broker’s divorce? A recent study from the University of Florida shows that divorce can have an impact on a funds stock market performance.

Knowing if someone is going through a divorce can be an investment decision. A hedge fund’s alpha – the measure of how much it beats the market – has been shown to fall by an annualized 7.39 percent during a divorce.

Busy fund managers, who manage larger funds and engage in high tempo investment strategies, are more affected by marriage.

The study also found that fund managers who depend on interpersonal relationships in their investment strategies are more affected by divorce. Behavioral biases may partially explain the connection between inattention and performance deterioration.

An even more surprising result is that marriage actually does more damage to a fund manager’s performance, according Dr. Sugata Ray, one of the paper’s authors.

I’ve written before about the impact that a divorce can have on stock performance by comparing the stock performance during Rupert Murdoch’s divorce and the divorce of Harold Hamm.

Divorce has always been a red flag for savvy investors. Hedge fund manager Paul Tudor Jones II, said he withdraws his money from a fund when a manager’s marriage breaks up.

“You can automatically subtract 10% to 20% from any manager when he is going through a divorce,” he told a conference in 2013.

(Jones also famously noted at that same conference that women who have children can’t be great traders, so perhaps we’ll take his opinion with a grain of salt.)

Younger fund managers tend to have more performance problems around a divorce. The annualized alpha of younger fund managers fell by 15.7% when they got divorced, while older managers only lost 4.1%.

One hedge fund manager, Ken Griffin, hasn’t been affected (yet) by marital strife. He is in the middle of one of the most public and nasty divorces in recent memory. Despite that, his company’s three big funds have continued to outperform the market.

Another big factor is whether a fund manager has partners to help steer the ship during a crisis. Managers that work alone “get clobbered when they go through marriages and divorces,” said Ray. “They start to fall prey to behavioral biases, like selling their gains and holding on to their losses longer than they should.”

The findings were based on data collected from 1994 to 2012, tracking 786 managers who went through 857 marriages and 251 divorces.

The CNN article is available here.

Cohabitation & Divorce

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By The Law Offices of Ronald H. Kauffman of Ronald H. Kauffman, P.A. posted in Divorce on Wednesday, March 4, 2015.

If you live together (cohabitate) before marriage, are you more likely to divorce? Put another way, what are the odds you’d be in your relationship if you hadn’t been living with your boyfriend or girlfriend first? The answer is: You wouldn’t be.

In a recent survey, respondents who had a firm commitment to marry before moving in together didn’t experience the low levels of commitment to the relationship. They were “deciding, not sliding.”

Scott Stanley, the co-director of Center for Marital and Family Studies, created a video which describes the joy-inducing chemicals released into the body at the start of a relationship – from dopamine to oxytocin – and how they can actually cloud our decisions.

Sexual activity increases the production of these chemicals, but even just going out to dinner with someone you’re falling for can have this effect. Under the “influence” of these drugs, the video explains, we start doing things that “lock us in” to a relationship. We get a joint cellphone plan, we co-sign a car loan, we adopt a dog together.

But after a few months, things may look different. Suddenly you wake up and realize that you don’t really want to be with this person. “You acted on the belief that you had a timeless love, but in reality you had a time-limited chemical high.” Yet you’ve made it extremely hard to disentangle yourself.

But it’s much more that keeps people in relationships past their expiration dates – including social restraints. People don’t assume the way they once did that shacking up is a step on the way to marriage, but most of your friends will still figure that living with a guy is a step closer to walking down the aisle.

For many women, that’s the point: Talk the guy into living with you, and you’re halfway to a ring. Many men aren’t thinking that. But, according to Stanley’s research, even the ones who do wind up proposing may have more regrets after the fact.

In a random-sample study published in the Journal of Marriage and Family in 2010, 20% of people who married before living together had divorced; the divorce rate was notably higher, 28 percent, for those who cohabited before even getting engaged.

The video suggests that people beginning a relationship keep their own apartments, cars and cellphone plans. Instead of a dog, maybe jointly adopt a goldfish.

The more you can get to know your possible life-mate without locking yourself in, the better chance you have of breaking up with the wrong person and finding the right one. This used to be called “dating.”

The New York Post article on the survey is here.

Facebook & Divorce

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By The Law Offices of Ronald H. Kauffman of Ronald H. Kauffman, P.A. posted in Divorce on Sunday, February 8, 2015.

Facebook has revolutionized the way we form and keep relationships. However, Facebook envy could actually ruin a relationship and lead to divorce. This is especially true for new marriages, and new research may prove it. There is no doubt Facebook evidence pops up in more trials.

Facebook users were asked to describe how often they used Facebook and how conflict arose as a result of Facebook use. The results found high levels of Facebook use significantly predicted Facebook-related conflict, which then significantly predicted cheating, breakups, and divorce.

“Previous research has shown that the more a person in a romantic relationship uses Facebook, the more likely they are to monitor their partner’s Facebook activity more stringently, which can lead to feelings of jealousy”.

The study also found that excessive Facebook users are more likely to connect or reconnect with other Facebook users, including previous partners, which may lead to emotional and physical cheating.

“These findings held only for couples who had been in relationships of three years or less“. “This suggests that Facebook may be a threat to relationships that are not fully matured. On the other hand, participants who have been in relationships for longer than three years may not use Facebook as often, or may have more matured relationships, and therefore Facebook use may not be a threat or concern.

I recently published an article about Facebook evidence and divorce. I wrote about the benefits and obstacles in gathering and using Facebook evidence at trial.

After all, the evidence can be very helpful:

Husband . . . [posts] his single, childless status while seeking primary custody of said nonexistent children.

Mom denies in court that she smokes marijuana but posts partying, pot-smoking photos of herself on Facebook

Remember, the next time you log in, what you do in the digital world could have a very impact in the real world.

The University of Missouri study can be read here.

Chris Rock, Divorce and Privacy

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By The Law Offices of Ronald H. Kauffman of Ronald H. Kauffman, P.A. posted in Divorce on Thursday, January 15, 2015.

Comedian Chris Rock filed for divorce. E! News obtained papers alleging his wife has kept his two daughters away from him! Celebrities, professionals and the wealthy have a hard time keeping their court papers private.

As a recent Forbes magazine article notes, for celebrities and wealthy clients, protecting children in divorce often means preserving the family’s good name and legacy for future generations.

“Celebrity clients nearly always arrive at a settlement rather than going to trial. After legal costs, privacy concerns are probably the biggest reason why”

In New York, there is an expectation of privacy in court filings. New York and other states grant document access to court filings only to litigants and counsel.

But this create a false sense of confidence. There is a thriving market for salacious information on high-profile families which makes it difficult to prevent leaks.

I’ve written before about Florida’s policy regarding the privacy and confidentiality of court records. Court records don’t just mean the contents of the court file. They also include transcripts, exhibits, videotapes and stenographic deposition tapes.

In an effort to protect privacy and prevent identity theft, Florida adopted a confidentiality rule to better protect social security and bank account numbers for instance. But Florida court filings are not private.

Privacy – and confidentiality of court filings – are easily overlooked issues when filing for divorce, and something you should be aware of.

For the past ten years, there has been a lot of effort put into developing safeguards, policies, and infrastructure needed to authorize public access to non-confidential electronic court records.

For instance, the Florida Supreme Court adopted a rule to define confidential court records and limit the public’s access to them. At the same time, there are divorce rules which require you to identify confidential information in court papers.

Even when documents are supposed to be confidential though, private information has a pesky way of becoming public.

Tort claims are often added to divorce complaints. These can include allegations of assault or sexually transmitted diseases.

Even if unfounded these accusations can be harmful to your personal and professional relationships. In filing for divorce, you have to understand the expectation in your jurisdiction regarding how the filings are kept private.

Even if records are protected, there has to be the “reality” check of whether in fact the information can and will remain private.

“Chris Rock has filed for divorce from his wife, Malaak,” the actor’s rep told E! News Monday. “This is a personal matter and Chris requests privacy as he and Malaak work through this process and focus on their family.”

Good luck with that Chris. The Forbes article can be read here.

Divorce and College Tuition

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By The Law Offices of Ronald H. Kauffman of Ronald H. Kauffman, P.A. posted in Divorce on Monday, December 29, 2014.

Can you be forced to pay for your child’s college tuition? Two divorced New Jersey parents recently found out they have to pay for their adult daughter’s tuition at Temple University. Why?

As the New York Daily News reports, Temple University junior Caitlyn Ricci sued her parents for tuition money in 2013. Last week, a New Jersey judge ordered the divorced couple to pay $16,000 every year the 21-year-old is enrolled in classes.

The judge relied on Newburgh v. Arrigo. In that landmark case, the New Jersey Supreme Court ruled divorced parents may be responsible for providing for their child’s “necessary education.”

In New Jersey, the law presumes that the privilege of parenthood carries with it the duty to assure a necessary education for children. Necessary education is a flexible concept, can vary in different circumstances, and may include college tuition.

The Ricci parents reportedly are estranged, and threw Caitlyn out of their house because she refused to accept house rules like doing chores and a curfew.

They tried reaching out to her after she moved to her grandparents’ in by sending cards, pictures, and poems, but got no response. The only time the parents have seen Caitlyn Ricci is in court.

Caitlyn sued her parents in 2013 soon after she moved out of her mother’s house. A New Jersey judge ordered the parents to help with tuition so long as she applied for all possible loans and scholarships. Her parents claimed she didn’t apply, so they refused to pay.

Last summer, she transferred to Temple University in Philadelphia. When she brought the case back to court, the tuition bills were a lot higher. The judge set the parents’ annual payment at $16,000.

The parents said they will only pay the tuition bill if their daughter makes an effort to reconcile the broken relationship. She still refuses to return messages and won’t look at them even in court.

Florida law does not follow New Jersey’s “necessary education” concept. In Florida, a parent’s duty to pay an adult child’s college expenses is moral rather than legal.

When parents in a divorce agree to educate their child after the child reaches 18, the agreement may be enforced. However, the obligation is not viewed as child support in Florida, but a contractual duty arising from the marital settlement agreement.

The New York Daily News article is here.

Stress Separation and Divorce

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By The Law Offices of Ronald H. Kauffman of Ronald H. Kauffman, P.A. posted in Divorce on Monday, December 1, 2014.

Divorce is consistently ranked as one of the most stressful life events. But a new study is showing that dissolving a marriage is not the most stressful, being separated is.

As the Huffington Post reports, a new poll was conducted for the Gallup-Healthways Well-Being Index. The researchers found that those who are separated experienced significantly more daily stress than those who were married or divorced.

According to the study 51% of separated Americans reported feeling stressed the day prior to taking the survey, while only 38.6% of married Americans and 44.1% of divorced Americans claimed to feel the same way.

Dan Witters, author of the Gallup study, reported that divorcees may have boosted well-being levels because they’re not going through the uncertainty and anxiety that come with being separated.

“At least when you get divorced, there’s closure,” Witters said. “You can both move on with your lives, and you can start digging yourself out of that well-being hole that you found yourself in during the during the separation process.”

Separated women, in particular, seem to be the most stressed. They were more stressed than married women by 16% — separated men, on the other hand, were only more stressed than married men by 10.5%. This could be because women usually take a harder financial hit when a marriage dissolves.

Witters also said that, if there are children involved, the kids often suffer as they see their parents splitting up, moving houses or even just struggling to make their marriage work.

“The effects of parenting are going to be pronounced inside of a separated environment,” Witters said. “The kids are typically going to suffer in that kind of environment — how can that not affect the emotional health of the parents going through it?”

Those who are separated were also more likely to turn to drugs or prescription medication, according to the survey. About 29% of separated Americans said they use drugs or other medications, compared to 17% of married Americans — so clearly, all of this emotional stress is taking a toll on the physical health of those going through a split.

“Don’t fall into that trap of thinking that you’re in it alone or what you’re experiencing is unique,” he said. “I think that there can be a comfort in knowing that this is pretty normal and that this is something that most people go through.”

The Huffington Post report can be found here.

Divorce Rates Rising . . . in Iran

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By The Law Offices of Ronald H. Kauffman of Ronald H. Kauffman, P.A. posted in Divorce on Wednesday, November 26, 2014.

Around the world couples are splurging on divorce parties. It is a sign of an undeniable trend: divorce rates are rising. This angers clerics in Iran. So what’s behind the increase over there?

As Reuters recently reported, Mustafa Pour Mohammadi, the current justice minister, said that 14 million divorce cases within the judiciary is “not befitting of an Islamic system”.

Some of the causes for divorce in Iran, like Florida, include economic problems, adultery, drug addiction or physical abuse. But the increase in the divorce rate has also been linked to a growth in individualism.

Women are more educated and have increased financial empowerment. It used to be that a woman would marry and she would just have to get along. Now if she’s not happy, she’ll separate. It’s not taboo.

In Iran, the government doesn’t like divorce to come from the side of women. Marital law in Iran traditionally favors husbands, who have the right to ask for a divorce.

In the cases where the husband refuses to divorce, the wife must legally prove that the husband is abusive, has psychological problems or is somehow unable to uphold his marriage responsibilities in order to separate.

Another alternative is to enforce the Mahr agreement. I’ve written about Mahr agreements before.

Mahr agreements are common in Iran, are negotiated before the marriage and have two parts: a premarital payment in exchange for marriage vows, and a post-nuptial payment made if the marriage ends in divorce or death. Mahr agreements in Iran are usually based on gold coins.

The rise in the divorce rate worries government officials in Iran because it comes as the birth rate is plunging. Last year, parliament’s social affairs committee proposed that $1.1 billion be dedicated to facilitating marriages but the motion did not pass in parliament.

A more controversial proposal has been to create a Ministry of Marriage and Divorce, which some officials have criticized on the grounds that a new ministry would create more bureaucracy rather than address the overall issue of rising divorce.

The Reuters report can be read here.

A New Order Impacts Every Dade County Divorce

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On behalf of Ronald H. Kauffman, P.A. posted in Divorce on Thursday, October 23, 2014.

A Florida Congressman’s messy divorce is a lot messier. His wife claims he’s not paying for home repairs and cut off her credit cards. Will the new Miami Administrative Order make vengeful tactics a thing of the past?

Dirty tricks, such as cutting off health insurance, chopping up credit cards, and turning off vital utilities, are common events in a divorce.

The Florida Congressman’s wife has been a stay-at-home mother, and has no financial resources to maintain the home. The Congressman’s attorney says:

“If she is a poor housekeeper, that’s her issue, not his.”

In August 2014, the Chief Judge of the 11th Judicial Circuit in Miami-Dade County entered an administrative order impacting every divorce in Miami.

The order imposes new rules which may impact every single new divorce in Miami include the following:

  • Neither party can permanently remove children from their current county of residence.
  • If you have children, the parent with whom the children are not residing should make voluntary payments of child support before entry of an order requiring child support.
  • Parents are ordered to abide by the shared parental responsibility statute.
  • Everyone is required to attend mediation before a final hearing.
  • Everyone is now ordered to refrain from physical, verbal, or any other form of harassment, including by telephone, email, or text messaging at their house or at work.
  • No one in a divorce can conceal, damage, or dispose of any asset, except by written consent of the parties or an order of court.
  • Neither party can cancel telephone, electric, or water and sewer services.
  • Neither party can destroy family records, business records, or any records of income or debts.
  • No one in a divorce can incur any unreasonable debts binding the other spouse.

The new Administrative order is now in effect. It was designed to promote the stability of families going through a divorce, and reduce the number of “emergency” hearings.

The new administrative order is available here.

Lavish Weddings and Divorce

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On behalf of Ronald H. Kauffman, P.A. posted in Divorce on Monday, October 20, 2014.

When Chelsea Clinton married Marc Mezvinsky, it is believed their wedding cost $5 million. Jay Z is rumored to have spent $5 million on Beyonce’s engagement ring. Does spending more on your wedding reduce the risk of divorce?

Ironically, a new study shows that your marriage’s duration is actually inversely associated with how much you spend on the engagement ring and wedding ceremony. Two economics professors at Emory carried out a study on over 3,000 men and women.

The professors found that men who spent between $2,000 and $4,000 on engagement rings were 1.3 times more likely to get divorced than men who spent between $500 and $2,000 on a ring.

But there’s more to the study too. In sum, the professors found that:

There is little evidence that expensive weddings and the duration of marriages are positively related.

High spending on the engagement ring is inversely related with the length of a marriage among males.

High spending on a wedding is inversely related with marriage length among females

Low spending on a wedding is positively associated with duration among both males and females.

High wedding attendance and having a honeymoon (regardless of how much it cost) are generally positively associated with marriage duration.

The wedding industry has grown to a $50 billion industry. The average American wedding cost is $29,858.

“In 1959, Bride’s recommended that couples set aside two months to prepare for their wedding and published a checklist with 22 tasks for them to complete. By the 1990s, the magazine recommended 12 months for wedding preparation and published a checklist with 44 tasks to complete.”

The study suggests that the close relationship between divorce and your spending on a lavish wedding and engagement ring could be due to the stress on couples from the debt of their wedding day and ring purchase.

According to the study, if you are going to have a wedding, invite as many people as possible, and take a honeymoon. The study confirms that a big wedding attendance and any kind of honeymoon – regardless of cost – was positively associated with the length of a marriage.

The study can be read here.

Leaving or Staying in the Marital Home

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On behalf of Ronald H. Kauffman, P.A. posted in Equitable Distribution on Sunday, March 9, 2014.

Should you move out of the house before the divorce is over? One couple was recently ordered to build a wall inside their house to separate them. Many clients wonder if moving out helps or hurts their case. Others wonder if they are losing rights.

Sometimes the arguing gets too intense, and the court must intervene. For one couple in Brooklyn, their arguing resulted in their being ordered to build a wall dividing their home so each could stay in the house peacefully.

This was not just a simple line on the floor as in the 1989 movie: War of the Roses, but an actual wall of plywood and sheetrock through the middle of their house (see picture above). Interestingly, the judge gave the wife the kitchen and the husband the dining room.

The marital home a valuable asset, maybe your most valuable asset, but it is also a place for you to live in . . . with your children – if you have them. Third it is an important, and possibly big part, of the final settlement.

Marital Asset

The home remains a marital asset, which is subject to equitable distribution, regardless of who lives there during the divorce process. If a home is marital then both parties have equal rights to buy – out the other’s share. Both may also be on the hook for liabilities.

Children’s Issues

Until a parenting plan in place, if you are interested in maintaining a meaningful relationship in your child’s life, leaving the home before a timesharing agreement is entered may show a lack of real interest in the child’s daily life. Moving out can create the appearance of a new ‘primary residential parent’ by default. Worse, if the process takes a long time, it creates a new status quo.

Cost

The person leaving may still have to contribute for the expenses of the home while also paying for a new home. It can be costly, and prohibitive expensive when you know that the process will take a long time.

Settlement

Staying in the same home could create an incentive to negotiate a final settlement because living with your soon to be ex-spouse is very uncomfortable. However, if someone moves out, the person remaining in the home is sitting pretty and may be less inclined to settle.

If you Leave

Before moving out, there should be some discussions about maintaining the home and who is paying for which expenses, an inventory should be made of the personal property, artwork, silverware etc., and the boundaries for when the ‘out-spouse’ can use and enjoy the home after vacation

More about the crazy Brooklyn divorce and the separation wall can be read at NBC’s website here.