Tag: Breast surgery equitable distribution

The Ultrawealthy Divorce Differently and there’s more Good News on Coronavirus

Locked out of your $88 million Manhattan condo? The rich are different when it comes to equitable distribution. As the Wall Street Journal reports, how ultrawealthy couples divorce is becoming much harder as financial portfolios become more complex. There’s also good news on the coronavirus.

Ultrawealthy Divorce

Enter the Badlands

Many ultrawealthy people in a divorce are having trouble finding assets, like the front door keys to their $22 million Hawaii home. A big reason for the complexity is the widespread use of trusts. Trusts can play a big role in divorce depending on your circumstances.

Setting up a trust may allow you to safely transfer ownership of your non-marital property into a separate trust. If you divorce, a trust like this may make the entire property, and its appreciation, out of equitable distribution.

South Dakota is becoming a hotspot for trusts, holding almost a trillion dollars in trust assets because state laws have made South Dakota more favorable for trusts. Generally, trust assets are managed by a Trustee for the benefit of beneficiaries.

A trust can be drafted with a variety of different provisions in order to accomplish a variety of different goals. In every trust, the Trustee must account to the beneficiaries about its actions, and it must be fair and prudent in dealing with the trust and beneficiaries.

So, what happens if one spouse is named as the beneficiary of a trust, and that spouse benefits from the trust during the marriage? The answer to questions like this is not always straightforward in every state.

Florida Equitable Distribution

I have written about Florida equitable distribution during divorce before. In Florida, the legislature has created a statutory scheme to guide family courts in the equitable distribution of assets upon dissolution of a marriage.

Under Florida’s equitable distribution statute, marital assets include assets acquired during the marriage, individually by either spouse or jointly by them. Nonmarital assets include assets acquired by either party prior to the marriage, and assets acquired in exchange for such assets.

The equitable distribution statute also creates a rebuttable presumption that assets acquired by either spouse during the marriage are presumed to be marital assets: “All assets acquired … by either spouse subsequent to the date of the marriage and not specifically established as nonmarital assets … are presumed to be marital assets …. Such presumption is overcome by a showing that the assets … are nonmarital assets ….”

That’s where trusts come in. Although your home became a marital asset when you purchased the home and jointly titled it in you and your spouse’s names, the home can cease in character to be a marital asset upon its transfer into a trust.

At that point, the home can become part of the assets of the Trust, an entity distinct from either a Husband and Wife. Transferring a home into a Trust has the possibility to place the home beyond a family court’s reach for purposes of equitable distribution in a divorce.

In South Dakota We Trust?

As the Wall Street Journal reports, Texas financier Wilbur Bosarge and his wife of 22 years, Marie Bosarge, conducted business affairs through various trusts. For instance, they used a trust to buy a $45 million dollar flat in London’s “Billionaire Square.”

After Marie flew back and forth between Texas and London decorating and hand selecting furnishings for the new London flat, she never got to see it finished.

By the time it was complete, her husband left her for a 20-something Russian mistress who moved into the flat instead.

Owning the flat through a complex network of trusts and limited liability companies, the husband is using the ownership structure to eliminate her stake in the property. The wife may be stuck, because a family court may not be able to decide property rights of a nonparty to a divorce, like a trust or limited liability company.

Good News on Coronavirus

Let’s face it, the media has a tendency to give extra coverage to bad news, because readers find negative stories more eye-catching.

But, from lower toxic fumes to more time spent with family, there is always good news to report during the high point of the novel coronavirus pandemic.

  • First, there are tentative signs of infection curves flattening. Concentrate on statistics about the tendency of curve flattening – not the rising death rates – as an early harbinger of the turning point.
  • Second, a major model has lowered its prediction for the death toll in the United States. The model predicts that some states will start to see fewer deaths from COVID-19 each day and some states may have even passed their peak.
  • Third, pharmaceutical firm Abbott Labs said it was launching a test for the SARS-COV-2 virus that could take as little as five minutes and “be run on a portable machine the size of a toaster”. German technology company Bosch says it has done the same. Johnson & Johnson said it had identified a vaccine candidate and the US government was investing $1 billion in its development.
  • Fourth, other groups are investigating ways to start human trials for vaccine candidates early, and are using brave and willing volunteers, who haven’t been at all hard to find.

The Wall Street Journal article is here.

 

Big British Property Division Case

A British woman who “sacrificed” her career as a lawyer so she could be a stay-home mum and raise her children has won an unequal property division on top of an equal share of the family’s wealth after her divorce. This case proves that the interruption of your career can impact your divorce.

Merry in England

A woman who “sacrificed” her career as a solicitor so she could look after her children has won compensation on top of an equal share of the family’s wealth after her divorce.

The ruling could have implications for other divorce cases in which one partner has stepped back from their career for the good of the family, a lawyer said. The Cambridge graduate was embroiled in a fight over cash with her millionaire husband, who is also a solicitor, after the breakdown of their marriage.

A judge has decided the pair, who were married for about a decade and have two children, should split assets of nearly £10 million equally but that the woman should get another £400,000 in compensation for curtailing her legal career.

Mr. Justice Moor said there had been “relationship-generated disadvantage” as the husband was still able to enjoy a “stellar” career.

[The woman] viewed herself as the parent who would take primary responsibility for the children. The husband’s career took precedence. I accept that it is unusual to find significant relationship-generated disadvantage that may lead to a claim for compensation but I am clear that this is one such case. I have come to the conclusion that an appropriate sum to award for relationship-generated disadvantage, over and above her half share of the assets, is the sum of £400,000.

As a talented lawyer, our client sacrificed a potentially lucrative career for her family and to care for the children. Although Mr. Justice Moor has made clear this decision should not open the floodgates to a raft of relationship-generated disadvantage claims, the judgment affirms that in truly exceptional circumstances the principle of compensation still exists in family law, and rightly so.

Florida Property Division and Careers

I have written about property division before. Florida’s equitable distribution statute begins with the premise that the distribution should be equal, but the trial court may make an unequal distribution when proper justification is demonstrated.

The equitable distribution statute lists several factors for a trial court to consider in making this determination, and the court must support its equitable distribution scheme with specific factual findings.

As in the recent England case, a Florida trial court follows several factors to support an unequal distribution, including: what were the contributions to the marriage by each spouse, the economic circumstances of the parties, the duration of the marriage, and the interruption of personal careers.

Generally, the fact that one spouse is the primary bread winner won’t support an unequal distribution in Florida.

Stiff Upper Lip

In another British case, a businesswoman who left behind her career in order to become a “stay at home mum” while her husband continued with his high-flying career has been awarded virtually all of the family fortune by a divorce judge.

Jane Morris, 52, had been criticized by her former husband for not bringing more money in after they split, having quit her career as a recruitment consultant to keep house for him and their three children for 20 years.

However, it emerged that she was awarded half a million pounds while husband, Peter Morris, the managing director of a software company with a seven-figure turnover, was left with just £66,000.

Details of the case came out as he launched a challenge in the court of appeal against the financial outcome of the divorce and a six-week prison sentence which is hanging over his head after it was imposed on a suspended basis for non-payment of alimony and support.

The court heard that the 51-year-old businessman “took credit” for the “high standard of living” the couple enjoyed in their £1.2m cottage in the Chiltern Hills.

However, the couple’s “extravagant” spending, both during their marriage and after their “bitterly contested” break-up in 2013, brought them “to the brink of financial disaster”, reducing multi-million-pound family assets to just £560,000.

Awarding 90% of the family assets to her, the judge had said that she “needs adequate maintenance” because sacrificing her career had left her with a “low earning capacity… in her middle fifties with rusty skills.”

Morris had hit out at his wife’s own expenditure and criticized her for not earning more, having re-entered the labor market since they separated. But she was ruled to be “a sensible woman” who was “probably in need of emotional and psychological comfort” during her own spending sprees.

The Guardian article is here.

 

A Strange New World of Equitable Distribution

Divorce typically involves dividing up the marital property. Every case can be different in what there is for equitable distribution. Houses and retirement accounts are pretty common, and collectible cards and dolls are rarer, but actor William Shatner’s divorce involved something truly strange: horse semen.

Equitable Distrib Horse Semen

To Seek Out New Life

Actor, William Shatner, famous for his role as captain of the Star Trek Enterprise, was recently awarded horse breeding equipment in his divorce settlement with ex-wife Elizabeth Shatner.

The actor’s divorce was settled in Los Angeles Superior Court Tuesday, according to court records. They separated from one another in February 2019.

But the most interesting part of the former “Star Trek” actor’s divorce is what he wanted as equitable distribution. Shatner, who is a horse breeder, will get “all horse semen” as a part of the settlement.

Wine, pets, antique rifles, baseball cards, sports memorabilia are some of the more unique “assets” many of my cases involved. Like any important asset, horses can be a challenging asset to divide.

Valuation of horses can requires knowing their training, winnings, and earnings. Horse ownership also requires knowing the horse’s board, routine maintenance, insurance costs, breeding rights, showing rights, and cash earnings from breed organizations.

Interestingly, the horse’s frozen semen is often extremely valuable and must be spelled out in any divorce order or agreement along with rights to any potential offspring.

That’s because a horse’s DNA and cloning are big topics in the horse industry. The issue of equitable distribution is also complicated by the fact that it is not just the rights to a horse but also the rights to the horse’s DNA, and the rights to any cloning of the horse.

Florida Equitable Distribution

Does a family court have to distribute horse semen? I have written about property division, called “equitable distribution” in Florida, before. Florida is an equitable distribution state when it comes to dividing business assets in divorce.

That means that in a proceeding for dissolution of marriage, in addition to all other remedies available to a court to do equity between the parties, a court must set apart to each spouse that spouse’s non-marital assets and liabilities.

When distributing the marital assets between spouses, a family court must begin with the premise that the distribution should be equal, unless there is a justification for an unequal distribution based on all relevant factors.

Boldly Going Where Few Men Have Gone Before

As additional equitable distribution, the Shatners divided their four horses between them. The captain will get “Renaissance Man’s Medici” and “Powder River Shirley”, while his ex-wife will get “Belle Reve’s So Photogenic” and “Pebbles”.

This is not the first horse semen rodeo for Shatner. He was sued in 2003 by ex-wife Marcy Lafferty Shatner, who claimed he violated the equitable distribution settlement in their 1995 divorce that allowed her one breeding privilege per calendar year with their American saddlebred stallions.

William and Elizabeth Shatner also divided their homes, including a home in Versailles, Kentucky that Elizabeth will get. In 2018, Shatner tweeted that he only visits his Kentucky home “once or twice a year.” But perhaps now it’s his old Kentucky home.

William and Elizabeth Shatner raised and trained American saddlebreds at their Versailles farm. He had homes in Kentucky, including Lexington, since the mid-1980s.

The couple will not receive any financial support from one another as a part of the settlement. They were married for 18 years.

The Lexington Herald Leader article is here.

 

Divorce and the Engagement Ring

Kim Kardashian reportedly refused to give back her engagement ring to estranged husband, former basketball player, Kris Humphries. Is a spouse obligated to return an engagement ring after a divorce has been filed – whether the ring is worth $2mm or not?

engagement ring

Keeping Up with the Kardashians

A source close to the Kardashian situation reports that her husband Kris contends that the marriage was a total sham and that Kim only wed him for publicity so therefore she has no right to keep such an expensive gift.

This is the latest battle in the drawn-out Kardashian-Humphries divorce proceedings. The reality star filed for divorce from Humphries in October 2011 after just 72-days of marriage. He responded a month later by filing for an annulment on the basis of fraud and a legal separation.

Florida Engagement Rings

I’ve written about some of the history and law about engagement rings before. Until the 1930s, a woman jilted by her fiancé could sue for financial compensation for “damage” to her reputation under what was known as the “Breach of Promise to Marry” action.

As courts began to abolish such actions, diamond ring sales rose in response to a need for a symbol of financial commitment from the groom. Florida abolished the appropriately termed “heart balm statutes”. Heart balm statutes were laws allowing couples to sue each other to recover money for the alienation of affections and breaches of contract to marry.

As one court poetically noted:

[A] gift given by a man to a woman on condition that she embark on the sea of matrimony with him is no different from a gift based on the condition that the donee sail on any other sea. If, after receiving the provisional gift, the donee refuses to leave the harbor – if the anchor of contractual performance sticks in the sands of irresolution and procrastination – the gift must be restored to the donor. A fortiori would this be true when the donee not only refuses to sail with the donor, but, on the contrary, walks up the gangplank of another ship arm in arm with the donor’s rival?

After an engagement ring is given, and if the couple doesn’t marry, in New York the law deems a broken engagement as no one’s fault. Accordingly, the ring should be given back to the giver, with few exceptions. Most states have adopted that approach.

This is true in Florida. Lawsuits to recover an engagement ring by disappointed donors usually are resolved by courts looking to see if the engagement was terminated by the donee or by mutual consent of the parties. The rationale is that rings are given on the implied condition that a marriage ensue.

Once a marriage proposal is extended and accepted — once the promise is made — no matter what day of the year, that ring is no longer considered a gift. It’s a contract to enter into marriage.

The general rule in Florida is that an engagement ring given before the marriage, becomes a non-marital gift if the marriage is completed. If so, the ring becomes the non-marital property of the Wife.

If the engagement ring is viewed by the court as a non-marital asset, it is not subject to equitable distribution in divorce proceedings, and the spouse keeps it as their own.

Reality TV

Relying on real attorneys and not Judge Judy, both sides of the Kardashian case have accused each other in court and in the media of deliberately slowing down the divorce process, which has lasted five times longer than their marriage.

Recently, Kardashian’s attorney told the judge that her client is “handcuffed to Mr. Humphries” because his team is still not ready for trial. The estranged couple is set to return to court in mid-February to determine a trial date.

The Huffington Post article is here.

 

Dividing the Mommy Makeover: Cosmetic Surgery and Divorce

Property Division in divorce can mean complex valuations are brought to court for a decision . . . but not always. Sometimes, breast augmentation surgery becomes a divisive issue. Recently, a state Supreme Court heard such a case. How are breasts equitably distributed?

Mommy Makeovers

Some call it “revenge plastic surgery”. Others call it the “Mommy Makeover”. There has been a long-term trend for women who have had breast augmentation surgery to separate and divorce, as compared to other women. There are now newer trends we’re seeing.

Men are also getting Daddy Makeovers. Men are enlarging their breasts, getting tummy tucks, and liposuction for body contouring for a more attractive physique.

Men and women are increasingly getting their physical enhancements done before filing for divorce. The new trend is for people considering divorce to plan for their divorce financially, emotionally and . . . physically!

The Great Divide

Erik Isaacson and Traci Isaacson were married in 1993, and have three children together. After filing for their divorce, they had to put together a schedule of assets and liabilities for the trial court to divide.

Erik put together his marital property list, and in it he included Traci’s breast implants, and valued the breast implants at $5,500. Traci listed them in her list, but assigned them no value.

The trial judge was not amused:

“[Breast implants are] the most ridiculous thing I’ve ever seen listed on a property and debt listing, next to the cat litter and cat box I had in my very first divorce, is going to be stricken.”

Hoping to avoid a painful distribution, the judge ruled on the cosmetic surgery:

I don’t know how you would expect me to award breast implants. Do you want me to have them cut out and given to Mr. Isaacson. . .? It’s absolutely nonsense. Do not waste the Court’s time with stuff like this.”

Erik appealed, arguing the trial judge improperly excluded the value of breast implants from the marital estate because it allowed Traci to spend marital funds on property she got to keep after the divorce.

Florida Property Division

I’ve written about property division before. Property division, or equitable distribution as it is called in Florida, is governed by statute and case law, but cosmetic surgery has not specifically been dealt with in Florida.

Generally, courts set apart to each spouse their non-marital assets and debts, and then distribute the marital assets and debts between the parties.

Marital assets and liabilities include, in part, assets acquired and liabilities incurred during the marriage, individually by either spouse or jointly by them.

In dividing the marital assets and debts though, the court must begin with the premise that the distribution should be equal.

One reason for an unequal distribution is the intentional dissipation, waste, depletion, or destruction of marital assets.

Cosmetic surgery, and related medical bills, certainly fall into the category of marital liabilities. When a court has to determine which spouse pays for cosmetic surgery and related medical bills, a court may want to consider whether the procedure is medically necessary, or cosmetic, or a dissipation of assets.

Fargo

Erik and Traci took their breast case to the North Dakota Supreme Court. Citing cases from Hawaii, Delaware and Kentucky, Erik asked the Supreme Court to hold Traci’s breasts were a marital asset, the value of which are subject to an equal division of the marital estate.

During oral argument, one justice commented:

“Do we have any lines to be drawn? Is dental work a marital asset? Is a hip replacement a marital asset?”

In the end, the high court found that Erik never argued that the expenditure of funds to obtain the breast implants was a dissipation of marital assets:

nor did he present the district court with any reason why breast implants should be considered a marital asset.

The Supreme Court found the trial judge did not err in excluding the breast implants as a marital asset, and Traci was saved from a very painful property division.

Was Isaacson v. Isaacson the most important decision in matrimonial law? Probably not. But, equitable distribution does raise a number of interesting questions.

Especially when it comes to the increasing trend to undergo cosmetic surgery as a part of divorce planning.

The North Dakota Supreme Court decision is here.

 

Dissipation: Wasting Money in Divorce

Mary J. Blige, has filed for divorce from her estranged husband, Martin “Kendu” Isaacs. In court filings, there are allegations that he spent hundreds of thousands of dollars on his girlfriends. How does this impact the property division?

Mary has won nine Grammy Awards, four American Music Awards, and has recorded eight multi-platinum albums. She is the only artist with Grammy Award wins in R&B, Rap, Gospel, and Pop. However, she is now concerned about dirty tricks in divorce.

Dirty Tricks

Some couples divorce in a business-like, and even a friendly way. They recognize that coming to a fair end as quickly as possible allows them to get on with their lives.

However, there is no shortage of dirty tricks in divorce. One of the most common is to “dissipate,” or intentionally squander money so a spouse can’t get a fair share of it in the divorce.

Mary and her husband Martin married back in 2003. The divorce cited irreconcilable differences as the reason for the split. The couple has no children together. Mary is purportedly asking the judge to deny Martin’s ability to get spousal support.

According to TMZ, in recent filings, Martin is accused of having dissipated $420,000 of the parties’ marital funds. Martin was Mary’s manager. So, it could be that much of the money allegedly spent on himself or a girlfriend can be chalked it up as “travel charges.” However, Mary alleges the $420,000 in expenses were not business-related.

Property Division

In Florida divorces, courts distribute the marital assets and liabilities between the parties with the premise that the distribution should be equal, unless there is a justification for an unequal distribution. I’ve written about various aspects of property division before.

Some of the factors to justify an unequal distribution of the property include things like the financial situation the parties. The length of the marriage, whether someone has interrupted their career or an educational opportunity, or how much one spouse contributed to the other’s career or education.

Dissipation and Waste

One of the relevant factors courts look to is whether one of the parties intentionally dissipated, wasted, depleted, or destroyed any of the marital assets after the filing of the petition or within 2 years prior to the filing of the petition.

Spouses could dissipate assets by spending money on girlfriends, as Mary alleges. Other instances of waste have included gambling losses, and drug usage. Some people would rather lose the money outright than split it with their spouses.

Where this kind of marital misconduct results in a depletion or dissipation of marital assets, it can serve as a basis for unequal division of marital property. Alternatively, the misconduct can also be assigned to the spending spouse as part of that spouse’s equitable distribution.

Martin is purportedly asking for more than $110,000 per month in spousal support, which Mary objects to. Mary is quoted as saying: “I am not responsible for supporting [Martin’s] parents and his children from another relationship which he lists as ongoing monthly expenses.”

The TMZ article is here.

 

Cosmetic Surgery & Divorce: Keeping Abreast of the Law

By The Law Offices of Ronald H. Kauffman of Ronald H. Kauffman, P.A. posted in Equitable Distribution on Friday, October 23, 2015.

Mommy makeovers during a divorce are nothing new. Recent studies shows up to 40% of women with new ‘buns’ and breasts leave their husbands. But can your husband repossess them?

Plastic surgery is now a $10 billion industry, and is increasingly common. For divorce purposes, research shows an increasing connection between plastic surgery and divorce.

One recent study suggested that up to 40% of women who undergo plastic surgery end up leaving their partner who supported (read paid) them through the surgery.

I’ve written on this topic before. When your wife’s new lips, buns and breasts are paid for with marital funds – can they be considered a marital asset subject to division?

While the Florida Supreme Court has never really tackled these big issues, the North Dakota Supreme Court finally ruled on the issue for all of us, and you can read the decision yourself:

“Do we have any lines to be drawn? Is dental work a marital asset? Is a hip replacement a marital asset?” Justice Daniel Crothers asked attorney Christina Sambor during Supreme Court arguments on Thursday.

Citing cases from Hawaii, Delaware and Kentucky, Erik Isaacson invites us to hold that breast implants are a marital asset, the value of which are subject to distribution in the division of the marital estate. We decline . . .

Luckily, Mrs. Isaacson was saved from a very painful property division! Isaacson, and other state court opinions that address cosmetic surgery in divorce, have only done so in cursory manners, without regard to the surgery value as “property.”

There is little case law or statutory guidance on the value of cosmetic surgery enhancements, or their accompanying debt. With the increasing use of cosmetic surgery, the time has come to create some.

The UK Telegraph article is available here.