Tag: dividing property

A Strange New World of Equitable Distribution

Posted by Ron Kauffman on

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.

 

A Slice of Equitable Distribution and Alimony

Posted by Ron Kauffman on

The wife of Papa John’s founder John Schnatter filed for divorce, claiming her marriage with the unemployed pizza executive is “irretrievably broken,” according to court papers filed in Kentucky. If there is no prenuptial agreement, how big a slice of equitable distribution of the stock and any alimony is Annette entitled to?

Slice of Equitable Distribution

When the Moon Hits Your Eye

Papa John’s is an American pizza restaurant franchise. It runs the fourth largest pizza delivery restaurant chain in the United States, with headquarters in Jeffersontown, Kentucky, a suburb of Louisville.

Papa John’s was founded in 1984 when “Papa” John Schnatter knocked out a broom closet in the back of his father’s tavern, Mick’s Lounge, in Jeffersonville, Indiana. He then sold his 1971 Camaro Z28 to purchase US$1,600 worth of used pizza equipment and began selling pizzas to the tavern’s customers out of the converted closet.

John’s pizzas became so popular he moved into the adjoining space. The company went public in 1993 and a year later it had 500 stores. By 1997 it had 1,500 stores. And in 2009, John got his Camaro Z28 back after offering a $250,000 reward.

Schnatter and Annette Cox, 59, had been married since April 11, 1987, and separated on April 1 of this year, the wife’s attorney Melanie Straw-Boone writer in papers filed in Oldham Circuit Court. Cox called Schnatter a 57-year-old Louisville resident who “is not employed,” according to the boilerplate, three-page petition.

“The marriage between petitioner and respondent is irretrievably broken”.

The couple have two children and share unspecified real estate holdings, the filing said. Schnatter stepped down as CEO in late 2017 after reports surfaced that he uttered a racial slur during a conference call.

Alimony, Equitable Distribution, and the Length of Marriage

In Florida, the duration of marriage is an important topping in divorce cases. I’ve written about the types of alimony awards available in Florida before. For instance, Florida Statutes dealing with alimony specifically limit the type of alimony awards based on the duration of the marriage.

So, for determining alimony, there is a rebuttable presumption that a short-term marriage is a marriage less than 7-years, a moderate-term marriage is greater than 7-years but less than 17-years, and long-term marriage is 17-years or greater.

Florida defines the duration of marriage as the period of time from the date of marriage until the date of filing of an action for dissolution of marriage.

The duration of marriage can also be a large slice of the property division. When a court distributes the marital assets and liabilities between the parties, the court begins with the premise of an equal split.

However, there are times and cases which justify an unequal distribution based on several relevant factors. One of the factors a court can consider is the duration of marriage, in addition to other factors.

Dividing assets between spouses – especially large companies such as Papa John’s – is not as simple as taking a pizza cutter to a hot pie; even with agreements. Very often assets have appreciated over the course of several years. The longer the marriage is, the more a business interest can appreciate. When property appreciates, you need to distinguish between passive and active appreciation. A passive asset could be an investment account which is never traded.

A business, on the other hand, is an active investment, and the percentage a spouse is entitled to may depend on different things. Even with the most sophisticated couples, such as the Schnatter/Cox family, unless you clairvoyant, issues will arise that no one considered in earlier agreements, and are prime for negotiation.

Pizza Ready?

Separate from the divorce case, Schnatter filed a lawsuit Thursday against an advertising firm which was at the center of the racial slur incident.

Schnatter allegedly uttered the slur during a call with advertising firm Laundry Service, which the pizza executive accused of recording him without his consent. The lawsuit claims that Laundry Service leaked excerpts of the conference call, which broke a nondisclosure agreement.

Two weeks ago, Schnatter accused his former company of making substandard pizza. He said his former company has failed in keeping up with its long-time slogan: “Better Ingredients, Better Pizza.”

“I’ve had over 40 pizzas in the last 30 days, and it’s not the same pizza,” Schnatter told WDRB, a Fox affiliate in Louisville, Kentucky. “It’s not the same product. It just doesn’t taste as good.

The NBC News article is here.

 

Enforcing a Gusher of an Equitable Distribution Award

Posted by Ron Kauffman on

After his divorce, Todd Kozel, a former oil executive, was ordered by a family court to transfer 23 million shares from his oil company to his wife as equitable distribution. When he didn’t, a $38 million judgment was entered against him. Why was that enforcement order overturned?

Equitable Distribution Oil

Striking Oil

Todd and Ashley married in 1992, and she filed for divorce in 2010. Todd is the chief executive officer of Gulf Keystone Petroleum, Ltd., an oil and gas exploration company.

When the parties divorced, much of their shared wealth consisted of Gulf Keystone stock, which is publicly traded in London. The parties settled after he agreed to transfer Gulf Keystone stock to Ashley as equitable distribution.

Under their Settlement Agreement, the husband was obligated to transfer twenty-three million shares of Gulf Keystone stock to his wife as equitable distribution on or before January 27, 2012. Upon delivery, the former wife would then be free to sell her stock to anyone at any time.

But Todd didn’t deliver his twenty-three-million shares by January 27, 2012. Instead, he transferred the stock to her in four batches at later dates: (1) 2,034,447 shares on January 30, 2012; (2) 3,798,886 shares on February 3, 2012; (3) 5,666,667 shares on February 21, 2012; and (4) 11,600,000 shares on March 1, 2012.

Invoking the trial court’s continuing jurisdiction to enforce the agreement, Ashley filed papers with the family court. Although her filings were styled as petitions to enforce the agreement, they alleged what amounted to claims for money damages for alleged breaches of their agreement.

After granting partial summary judgment on liability and holding a trial on damages, the family court found Todd in breach and awarded her: $34,611,702 as damages for his failure to deliver the stock on time and another $3,850,500 as damages for the breach to provide tax information.

Florida Equitable Distribution

Why was Ashley awarded so much of Todd’s Gulf Keystone stock? I have written about equitable distribution before. Florida is an equitable distribution state when it comes to dividing business assets in divorce.

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.

When the Oil Runs Out

While Todd was in default for his failure to timely deliver the Gulf Keystone stock, he made all of the additional equitable distribution payments required. On November 28, 2012 — eight months after the final transfer of stock — Ashley argued that Todd’s breach of the agreement caused her to suffer substantial damages because it denied her an opportunity to sell the stock at a time when market conditions were favorable.

But Todd argued that a family court lacks jurisdiction to consider Ashley’s claim because what she was asking for amounted to a claim for general damages for breach of contract.

So, Ashley amended her petition, styling it as one to “enforce” the agreement. She alleged that the court had jurisdiction to enforce the agreement through an award of damages for losses that she allegedly incurred as a result of the failure to deliver the stock timely.

The family judge awarded her $34,611,702 and another for the tax basis dispute $3,850,500, to be placed in escrow (presumably pending the outcome of a refund request to the IRS).

The question in a case like this is whether and to what extent a family court’s continuing jurisdiction to enforce a final judgment extends to claims for money damages for breaches of a settlement agreement.

When a court orders compliance with the terms of a settlement agreement – when it requires a party to perform an obligation in the agreement — it is engaged in proper post-judgment enforcement over which it has continuing jurisdiction. But when a court awards damages as a substitute for a party’s performance, it is not engaging in legitimate post-judgment enforcement but a separate claim for breach.

The former wife sought and the family court awarded general, benefit-of-the-bargain damages for the breach of the agreement that was not specified in the agreement. In reversing the judgement, the appellate court ruled that “couching these remedies as “enforcement” of the [agreement] does not change what their substance is: general damages for breach.”

The opinion is here.

 

Divorce and Business Property Division

Posted by Ron Kauffman on

When one of Zach Hendrix’s three business partners said he was getting divorced, sympathy turned into shock as everyone realized that a soon-to-be ex-wife could become a co-owner. Understanding the law around business and property division in a divorce is the first step to protecting yourself.

business property divisions

Open for Business

When a small business owner divorces, the company can become part of a property fight; the battle can end with owners losing all or part of their businesses. Or, they or the company may be forced to take on debt to prevent an ex from sharing ownership.

Even when ownership isn’t at stake, the rancor and uncertainty around a divorce can take a toll on a company — owners may be distracted and unable to focus on what the business needs.

Hendrix and two of his co-owners had to borrow a combined $250,000 to buy out their partner in 2017 after he announced his divorce plans. A startup, and not in a position to get that much credit, the three had to personally guarantee the loans. They were able to repay the debt in a year and a half out of their profits.

The divorce was a learning experience for the partners. When they started, they hadn’t written what’s known as a buy-sell agreement that creates a process and sets a price for buying out a partner.

Florida Business Property Division

I have written about property division recently. Florida is an equitable distribution state when it comes to dividing businesses in divorce.

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.

There are several factors to know whether a business interest is marital. First, you will need to look at the date of marriage and the date the business interest was acquired.

Additionally, you should look to the source of funds used to start the business, and also if there were money and labor contributions to the business given by either spouse during the marriage. In distributing the marital assets and liabilities between the parties, the court must begin with the premise that the distribution should be equal, unless there is a justification for an unequal distribution.

Whenever an agreement cannot be made between the spouses, the court’s distribution of marital assets or marital liabilities must be supported by factual findings and be based on competent evidence.

Once you have determined whether an interest in a business is marital, how do you actually determine what that interest is worth?

There are three approaches to value a business interest: (1) the asset approach; (2) the income approach; and (3) the market approach.  Each approach has inherent strengths and weaknesses.

Any valuation expert should consider all three approaches; however, it is often the case that all three approaches cannot be applied.

Back in business

The emotional fallout from a divorce can affect co-owners and employees. In his settlement with his wife, Jeffrey Deckman agreed to pay her $100,000 over four years; that amount was half what his telecommunications business was valued at.

Deckman borrowed money to make the payments, but having that debt hanging over him created stress that spilled over to his company.

“I started getting edgy, short-tempered, pushing hard for (sales) numbers that I never pushed so hard for before.”

He began fighting with his two business partners, and the discord affected everyone who worked there. It took six months for Deckman to realize what he was doing. “It showed me on a certain level that I hadn’t accepted responsibility for the deal I made,” he says.

But by the time Deckman understood that “I was making people pay,” he had damaged his relationship with his partners and staffers. In 2005, two years after the divorce, he realized that he needed to withdraw from working in the company, and in 2008 he sold his stake. Deckman, who now does consulting for small and mid-sized companies, believes despite losing his share of the business that he did the right thing in his divorce settlement.

He says of his ex-wife: “Today, years later, we are great friends and our children benefit greatly because of it.”

The Detroit News story is here.

 

The Art of Divorce

Posted by Ron Kauffman on

Dividing assets in a divorce is not only a requirement, it can be a difficult aspect of a divorce. If so, valuing an art collection is singularly one of the most disputed parts of a divorce. Not only is valuation a problem, but people are emotionally attached to their artwork as one billionaire couple in New York has found out.

art of divorce

Billionaire’s Row

The ex-husband is Harry Macklowe, a real estate developer. The ex-wife is Linda Macklowe, an honorary trustee of the Metropolitan Museum of Art, who is passionate about collecting modern art.

Together they have accumulated a $72 million apartment, so large it runs the full length of one side of the Plaza Hotel, with windows overlooking Central Park. A second Manhattan apartment is high up in one of the tallest buildings in the Western Hemisphere, along the so-called Billionaires’ Row.

Their $19 million house in the Hamptons on Long Island has neighbors with boldface names, including Martha Stewart and Steven Spielberg. The $23.5 million yacht is a 150-foot-long prizewinner.

And then there is the art collection, an enormous trove of masterpieces that the judge presiding over the divorce described as “extraordinary” and “internationally renowned” and that has become the latest chapter in the exes’ rancorous unraveling. Among the more than 150 pieces are multiple works by Pablo Picasso, Jeff Koons, Willem de Kooning and Mark Rothko.

The exes’ lawyers have fought about what most of them were worth — one rare moment of agreement came when two art experts hired separately by the exes both valued an Andy Warhol creation filled with images of Marilyn Monroe at $50 million — and who should get them.

Florida Property Division

I have written about property division before. Florida is an equitable distribution state when it comes to dividing art in divorce. 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 nonmarital assets and liabilities.

In distributing the marital assets and liabilities between the parties, the court must begin with the premise that the distribution should be equal, unless there is a justification for an unequal distribution.

Whenever an agreement cannot be made between the spouses, the court’s distribution of marital assets or marital liabilities must be supported by factual findings and be based on competent evidence. Whether the court distributes artwork equally or not, the court must make specific written findings of fact as to each marital asset and the individual valuation of significant assets, and designation of which spouse shall be entitled to each asset.

Because an effective valuation is important, most attorneys will hire an expert appraiser to provide the appropriate report and testimony to the court.

It’s Up to You New York, New York

The Macklowes’ divorce comes with the twist of an impressive art collection that has been valued at as much as nearly $1 billion. In 2016, Mr. Macklowe told Ms. Macklowe that the marriage was over. By the end of last year, the Macklowes’ divorce had been granted. Mr. Macklowe then put giant images of himself and Patricia Landeau, his new wife, on the side of a luxury condominium building in Manhattan that he built.

But the wrangling continued over how to divide an art collection that David N. Redden, a former vice chairman of Sotheby’s, called “fairly staggering” and “one of the great prizes.” In the Macklowes’ divorce, the former spouses had to unload the art “to sustain their lifestyle. They don’t have the cash.” About 60 to 75 percent of their assets were tied up in the art collection.

As for the value of the art, during the lower-court proceeding, each side hired an expert to appraise the art. Mr. Macklowe’s expert estimated the value at $788 million; Ms. Macklowe’s expert said $625 million.

“If this had been a case with one or two fewer zeros, it would be an ordinary kind of dispute. Because of the prominence of the parties and the amount of money involved, this is a case that attracts natural attention.”

Ms. Macklowe did not want to let anything go. “She stated that she wished to enjoy the collection and sell individual pieces only as necessary to support her standard of living.” That would have posed tax problems for Mr. Macklowe. The wife wanted all the major pieces of art to go to her, and she would decide what to sell and when to sell it. The husband would have to pay taxes on what would be sold, because the value that would be attributed to the works would be the after-tax value. She would keep the art, the art would get sold and he would pay the taxes.

The New York Times article is here.

 

The Art of Property Division

Posted by Ron Kauffman on

Developer Harry Macklowe and his wife, Linda, were ordered to split their “internationally renowned collection” of modern art from the likes of Andy Warhol and Alberto Giacometti in a property division case involving hundreds of millions of dollars.

property division

Who Needs Nine Marilyn Monroes?

A New York court in Manhattan ruled that the Macklowe art trove amassed during 59 years of marriage should be sold and the profits shared.

In a sign of the acrimony that fueled a prolonged legal dispute, the couple couldn’t agree on what the collection was worth — Harry’s expert said $788 million, while Linda’s said $625 million.

Their collection, which encompasses some 165 pieces of art, among them Andy Warhol’s Nine Marilyns which is estimated to be worth $50 million, Le Nez by Alberto Giacometti, worth up to $35 million, Jeff Koons Vest with Aqualung for $10-11 million, and Jackson Pollock, Number 17, valued at up to $35 million..

Florida Property Division

I’ve written about property division in Florida. Property division, or equitable distribution as it is called in Florida, is governed by statute and case law.

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

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

However, if there is a justification for an unequal distribution, the court can give less than equal. When a court orders an unequal distribution, it must base the decision on certain factors, including some of the following:

  • The contribution to the marriage by each spouse.
  • The economic circumstances of the parties.
  • The duration of the marriage.
  • Any interruption of personal careers or educational opportunities.
  • The contribution to the personal career or educational opportunity of the other spouse.
  • The desirability of retaining any asset.
  • intentional dissipation, waste, depletion, or destruction of marital assets.
  • Any other factors necessary to do equity and justice between the parties.

The courts don’t even have to wait for the end of the case to start a property division. Florida law allows courts, if they find good cause that there should be an interim partial distribution during a divorce action, to equitably distribute property sooner.

The Nose Knows

After a 14-week trial last year, the divorce judge determined in a 65-page opinion how to split all the assets held by the 81-year-old developer and his wife, who is on the board of the Metropolitan Museum of Art.

Linda will get to keep $40 million in art but will have to pay half of that to Harry, she’ll get to keep their 14,000-square-foot apartment at the Plaza Hotel valued at $72 million but have to pay her estranged spouse $36 million for his share. Harry will retain ownership of $82 million in commercial real estate — including 737 Park Ave. — but pay Linda $41 million.

The couple will split the $62 million they have in cash, the judge said.

Linda Macklowe gets to keep another $40 million of art — including works by Koons and Picasso, but must pay Harry $20 million in credit, the judge said.

The couple were married Jan. 4, 1959, when he was a 21-year-old ad salesman for Parents Magazine and she was 20, working as a receptionist. They had no prenuptial agreement.

The Bloomberg article is here.

 

Can your Spouse Secretly Sell your House?

Posted by Ron Kauffman on

Real Housewives of New Jersey star Danielle Staub is claiming her estranged husband Marty Caffrey listed their Englewood, N.J. home for sale without telling her. Can that happen in an equitable distribution state?

equitable distribution

Real Listing?

According to People:

“Danielle did not know her home, where she lives, was listed for sale until she saw a story about it online,” the rep says. “This is yet another example of the blatant disrespect and emotional abuse she has endured in this relationship.”

Caffrey, 66, filed for divorce from the reality star in August—just four months after their wedding, and Staub, 56, has been vocal about how hurt she was by how public their split was.

In July, Caffrey posted a negative rant about Staub on social media. The pair took out restraining orders against each other that same month following a domestic dispute at the New Jersey home that is now on the market. The restraining orders were both later dropped.

The six-bedroom, seven-bathroom house features a gourmet kitchen, high ceilings, a media room, and a sauna. The property is listed for $2.195 million with Frances Aaron and Miriam Finkel of Prominent Properties Sotheby’s International Realty.

When asked about the sale of their home, Caffrey tells People, “Danielle’s version is untrue and other than that I have no comment.”

Real Equitable Distribution

I’ve written about the equitable distribution of houses before. New Jersey, like Florida, is an equitable distribution state. California, and many other western states, are community property states.

In Florida, in every divorce the family court will set apart to each spouse that spouse’s nonmarital assets and liabilities, and in distributing the marital assets and liabilities between the parties, the court must begin with the premise that the distribution should be equal.

All real property held by the parties as tenants by the entireties, whether acquired prior to or during the marriage, is presumed to be a marital asset in Florida. If a spouse makes a claim to the contrary, the burden of proof shall be on the party asserting the claim that the property is nonmarital.

It is unclear whether Staub and Caffrey have joint title to the New Jersey house, or it is titled in one of their names alone, or even a holding company. Generally, it’s a good idea to have all title owners sign a contract, or it may not be enforceable against the owner who did not sign.

Real Troubles

Back in New Jersey, although Staub claims she was unaware of her home being put on the market, she recently told People that she considers herself a “warrior,” and her experience with this divorce has been no different.

Prior to their public problems, the two had trouble agreeing over many things in their relationship, Staub said. Tense dynamics with their blended family (Caffrey has three adult children from a previous relationship) also came into play.

“He doesn’t like me and he doesn’t like my children,” Staub claimed. “My kids have never been anything but respectful and lovely towards him even though he hasn’t been the same towards their mom.

Caffrey, in a statement to People at the time, said, “This is not my world nor do I have any further interest in it. These are manufactured celebrities in manufactured lives who manufacture their own truths. I look forward to getting back to my reality among real people. My loving family and vast amount of friends.”

The People article is here.

 

Divorce and Student Loans

Posted by Ron Kauffman on

According to a recent survey, borrowers with student loans have been found to take on more debt, are more likely to divorce, and that just holding student loans can be a contributing factor in some divorces.

divorce student loans

Recent Study

Money problems are usually an indicator of divorce. Since student debt can constitute a major financial strain, it can impact a marriage. This new survey underscores the importance of minimizing your debt.

The survey showed that:

  • The average Class of 2017 graduate walked away with a diploma and $39,400 in debt; and
  • The 2017 graduate’s debt represents a 6% increase from the previous year; and
  • Americans owe $1.48 trillion in loans.

It’s clearly taking a toll – not just on finances – but on marriages. This new survey reveals that these loans could increase your likelihood of getting divorced. According to a new study, 58% of divorcees with student loans took on debt to help pay for attorney fees and other related costs during their divorce proceedings. Compare that with 48% percent of all divorcees who borrowed money to pay for a divorce.

Couples with student loan debt are more likely to delay divorce because of cost. More than a third of respondents with student loans (35%) delayed their divorce because they couldn’t afford it, compared with 24% of couples without student debt.

Florida Divorce and Student Loans

I’ve written about equitable distribution and divorce debt before. While the initial premise behind an equitable distribution of marital assets and liabilities is equal distribution, if there is a proper justification, a family court judge may make an unequal distribution.

As a general proposition, student loans incurred during the marriage are marital debts. And, unless there is a proper justification supporting an unequal distribution of student loans, they must be equitably distributed between the parties.

Sometimes people argue that a spouse won’t receive any benefit from the other spouse’s law school or medical school degree. However, the benefit of an education is not considered a factor the court should consider when allocating a marital debt for student loans.

Survey Says . . .

The survey also had some other sobering results:

  • 13% of respondents who had student loan debt going into their marriage claim that it eventually led to the end of their marriage.
  • Almost 7 in 10 divorcees have changed how they manage their money after their divorce.
  • 36% of borrowers with student loan report they lied to a partner about money.
  • Roughly one third respondents claimed a decreased sex drive because of their student loans.

Large debts and monthly payments can make it difficult to buy a home, save for retirement, or make it from paycheck to paycheck. Worse still, you’re probably stuck with your student loan whether you can afford it or not.

The Survey is here.

 

Today’s Property Division

Posted by Ron Kauffman on

According to People, former Today Show anchor, Matt Lauer, is finalizing his divorce with Annette Roque. The settlement is rumored to involve him paying his wife up to $20 million. The details of the property division however is unknown, but is a reminder that divorce property division laws in Florida recently changed in a big way.

Property Division

Good Morning Property Divisions

According to People, the couple, who wed 20 years ago in 1998, has agreed to share custody of their children. He is rumored to have a lot of guilt and wants to make sure Annette is taken care of.

Reportedly:

They seem happier and their family and friends are thrilled to see they are both moving forward.”

Left unsaid in the article is what happens to the $7 million coop in New York City, the Hamptons beachfront estate he bought for $36 million from actor Richard Gere, his Sag Harbor home, and other properties.

Florida Property Division . . . and Friends

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.

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.

Passive Appreciation and Morning Joe

Passive appreciation of a nonmarital asset may also be a marital asset the court must equitably distribute. For example, Lauer bought his upper East Side apartment for roughly $6 million, but has it listed for over $7 million.

In 2010, the Florida Supreme Court held that “passive appreciation of a nonmarital asset … is properly considered a marital asset where marital funds or the efforts of either party contributed to the appreciation.”

The Florida Supreme Court created a formula for courts to use in determining the value of the passive appreciation of nonmarital real property for equitable distribution.

But the formula was flawed because there is no relationship between the amount of marital funds used to pay down a mortgage during a marriage, and the passive appreciation of the property.

Also, the case requires a nonowner spouse to have made contributions to the property as a prerequisite to sharing in the passive appreciation of the property.

Live with Kaaa

Recently, Governor Scott signed a bill to fix the problem. The bill amends our equitable distribution statute and establishes a statutory formula for courts to use.

The new statutory formula does not require the nonowner spouse to have made contributions to the property, and also bars the marital portion of nonmarital real property from exceeding the total net equity of the property on the valuation date in the divorce action.

The People article is available here.

 

Property Division is not Nirvana

Posted by Ron Kauffman on

Kurt Cobain’s acoustic guitar from the MTV Unplugged concert is legendary. The equitable distribution of Kurt’s iconic guitar was a major property division issue in the divorce between Kurt’s daughter and her husband. The case of Kurt’s guitar is now decided.

About a Girl

The divorce between Kurt Cobain’s daughter Frances Bean Cobain and her Isaiah Silva may be over, but Cobain lost a prized possession to her now Ex-Husband: her father’s famous guitar.

Isaiah claimed he owns Kurt’s former Martin D-18E guitar from the famed MTV performance. The guitar is a very rare; only 300 were made.

For the Cobains however, the guitar’s sentimental value is immeasurable, as it was the last guitar played by Kurt before his suicide.

Silva argued the model had given him the guitar as a present, while she denied ever giving it to him. That was for the judge to decide.

Florida Property Division

I’ve written about equitable distribution and various types of property divisions in Florida before. Let’s assume that the guitar was in fact a wedding gift from Frances to Isaiah.

What happens? In all likelihood, the guitar would be considered marital property, not just Isaiah’s, and would have to be equitably distributed.

In Florida, “Marital assets and liabilities” include interspousal gifts during the marriage. In divorce proceedings, the court must divide the marital assets between the parties.

Courts begin with the premise that the distribution should be equal, unless there is a justification for an unequal distribution based on certain relevant factors.

These factors include things like the contribution to the marriage by each spouse, the economic circumstances of the parties, and any interruption of personal careers or educational opportunities of either party for instance.

So, what are “marital assets and liabilities”? They include things like assets acquired during the marriage, and interspousal gifts during the marriage for instance.

However, “nonmarital assets” include things like assets acquired before the marriage, and assets acquired by non-interspousal gift. This sort of non-interspousal gift argument may have been similar to what Isaiah argued successfully in court.

Smells Like Teen Spirit

Although she lost the iconic guitar in the equitable distribution, Frances did get the house they bought together, and doesn’t have to provide any spousal support; Silva had been asking for $25,000 a month.

The People article is here.