Tag: Divorce Agreements

Voiding a Marital Settlement Agreement

Empire star, Terrence Howard, claimed he was forced into signing his marital settlement agreement, and got a trial judge to throw it out. His wife, Michelle Ghent, appealed and the appeals court reversed! When can you get out of a marital settlement agreement?

Divorce Empire

The ruling by the California appeals court, which reinstated the marital settlement agreement, could allow Michelle Ghent to claim some of Howard’s lucrative earnings from the hit Fox television series “Empire.”

The marital settlement agreement called for Howard to pay Ghent monthly support of $5,800, and as much as $4 million a year, depending on his earnings, including potential income from his role in the Fox series “Empire”.

Terrence claimed that Michelle blackmailed him, and threatened to publicly release private recordings of a sensitive, intimate and sexual nature that would be embarrassing and could damage his career.

As a result, Terrence claims he agreed, under duress, to a marital settlement agreement that obligated him to pay spousal support far in excess of what he would otherwise have been required to pay based on the parties’ year–long marriage.

The trial court found that Terrence presented credible evidence that Terrence felt frightened and forced into signing the marital settlement agreement, which he would not have signed but for Michelle’s threatening and coercive behavior.

Michelle appealed.

Florida Marital Settlement Agreements

I’ve written about marital settlement agreements before. You can set aside an agreement in Florida in a similar way as in the Howard case, by establishing that it was reached under fraud, deceit, duress, coercion, misrepresentation, or overreaching.

There is another ground to vacate a marital settlement agreement in Florida, and it has a few elements. First, you have to show that the agreement makes unfair or unreasonable provision, given the circumstances of the parties.

Once you have shown the agreement is unreasonable, a presumption arises that there was either concealment by the defending spouse or a presumed lack of knowledge of the finances at the time the agreement was reached.

The burden then shifts to the spouse defending the agreement, who may rebut these presumptions.

The Empire Strikes Back

The appellate court in California deferred to the trial judge’s factual findings, but nevertheless conclude that the facts did not prove duress as a matter of law. The three-justice panel of the 2nd District Court of Appeal in Los Angeles ruled unanimously to reinstate the judgment.

The court found three reasons for reversing the trial judge. First, and importantly, Terrence failed to show that Michelle’s threats and coercion utterly destroyed his free will.

Second, Terrence and Michelle had a tumultuous relationship, which included such significant physical abuse by Terrence that Michelle had to obtain multiple protective orders against him.

Third, too much time elapsed between the threat and the contract’s signing. The threats made by Michelle were in September 2011, but he executed the final settlement agreement in September 2012, an agreement virtually identical to one he had signed four months before.

The California 2nd DCA opinion is available here.

 

A Playboy Prenup

An “ironclad” prenuptial agreement could block Hugh Hefner’s wife, Crystal Harris, from inheriting anything from his estimated $43 million fortune. Are prenups only necessary for Playboys, or are they something everyone marrying should consider?

The Playboy Prenup

Playboy founder, Hugh Hefner passed away peacefully in his home, surrounded by loved ones, on Sept. 27. He was 91 years old.

The model and the late media tycoon tied the knot on New Year’s Eve in 2012, and soon after. According to Us Weekly, Harris purportedly signed a prenuptial agreement, and was not added to Hefner’s will.

At the time of the report, Hefner’s fortune was promised to “his children, the University of Southern California film school and a variety of charities,” according to a source, who added that Harris would be “taken care of.”

Florida Prenups

Many think prenuptial agreements are for Playboys like Hugh Hefner. But, you don’t always enter a marriage with the Playboy Mansion, or guarantees that the bliss will last. It might not be a bad idea to have a plan in place.

Prenuptial agreements, or “prenups,” are contracts entered into before marriage that outline the division of assets in case of divorce or death.

They resolve things like alimony, ownership of businesses, title of properties, and even each spouse’s financial responsibilities during the marriage.

There are many other concerns that can be addressed in the prenup:

  • Caring for a parent
  • Going back to school;
  • Shopping habits
  • Credit card debt;
  • Tax liabilities;
  • Alimony and child support from previous relationships; and
  • Death or disability.

I’ve written about the need for prenups before. There are times when a prenup is a “must-have”:

  • When one person enters the marriage with significantly more money or assets than the other;
  • When one or both future spouses have family money or inheritances;
  • When you want to keep parts of your finances separate: such as separate bank accounts, and a joint account for paying household bills.

One of the points of a prenup, is that if money in the bank becomes mixed, accounting for any increase or loss becomes very difficult to trace and unwind if you end up in divorce court.

Back at the Playboy Mansion

According to reports, Crystal broke off the marriage five days before their planned June 2011 wedding, and ahead of their 2012 wedding, she explained why she got cold feet before the first planned nuptials:

Last time it turned into a a big ordeal, and then it all fell apart, she said at the time. This time around is amazing … I’m very happy, and Hef’s very happy and we’re excited.

There is a good reason for the Playboy founder wanting a prenup. Harris is Hefner’s third wife. He was previously married to Mildred Williams in 1949 before divorcing 10 years later; in 1989, he married Playmate Kimberly Conrad, but the two separated in 1998 and divorced in 2010.

The article is available here.

 

Is the Length of Your Marriage Important?

Meryl Streep and Don Gummer were married in 1978, and they’re still together after 39 years. But, Kim Kardashian and Kris Humphries broke up after 72 days. What is the impact of the duration of your marriage on divorce?

Quickest Hollywood Marriages

After only one month of marriage, Golnes “GG” Gharachedaghi decided to end her marriage because “certain facts have come to GG’s attention that have made her realize her marriage can no longer continue, and, in fact, should never have happened.”

Britney Spears and Jason Alexander lasted for a whopping 55 hours in January 2004.

Drew Barrymore and Jeremy Thomas were married when she was only 19 after only 6 weeks of dating. They filed for divorce after less than two months of marriage.

Florida and Length of Marriage

In Florida, the duration of marriage plays a very important role 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 is also a factor in property divisions. 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.

Celebrity Marriages

Given how important the duration of marriage can be for awarding alimony, and considering an unequal distribution of property, the marriage between Nicolas Cage and Lisa Marie Presley – in which Cage filed for divorce a mere 108 days later – would have a very different result than the marriage between Kevin Bacon & Kyra Sedgwick, which is going on 26-years.

The eonline article is here.

 

Gray Divorce

Yet another magazine is reporting on the rising phenomenon of “gray divorces,” or divorce among couples who are aged 50 or older. There are a few special concerns you should be aware of when divorcing after age 50.

Gray Divorces

First, some facts. Among the baby boom generation, the divorce rate has doubled since the 1990s. In 2015, up to 10 out of every 1,000 people over the age of 50 divorced, according to a report from the Pew Research Center.

Though these rates are still lower than those of younger generations, it is the increase in the number of divorces, not the actual divorce rate, that is generating interest among family law attorneys and experts.

Reasons vary. “Life is short, and once you sort of are aging and start to see a limited number of years left on your life, you start to put your own happiness first and do the things that you would want to do.”

I’ve written about gray divorces before. Like the emotional aspects, the legal nuances of gray divorce can be different than what younger couples might encounter when dealing with a split. Chief among those nuances are financial considerations, which can present unique challenges for spouses who are at or nearing retirement.

Florida Gray Divorces

When couples choose to divorce in their 30s or 40s, they still have time to recover financially, because adults at that age have several years, if not decades, left in their careers.

But when divorce occurs when a couple is in their 50s or later, the so-called “gray divorce”, careers may either be coming to a close or are completed, and spouses are often living on fixed incomes provided through Social Security or retirement benefits.

Here are some things to consider:

Valuing the Marital Estate – By the time a couple enters the golden years, they may have gold to divide, including businesses, retirement funds, and vacation homes. Valuing these assets can be difficult. The value of a business may not be apparent from balance sheets, and the sale or transfer of assets may have tax consequences. As a result, a financial advisor may be an important component in the divorce.

Medical Care – Health insurance is often tied to the employment of one spouse. With aging comes diminishing health, and declining cognitive ability. Courts may need to intervene if one party has dwindling capacity to handle their own affairs.

Long-Term Arrangements – Legal arrangements, such as wills and trusts, need to be reviewed to make sure they reflect post-divorce wishes. The same is true for long-term care, such as medical directives, living wills and trusts.

Retirement Plans – After 20 years of marriage, retirement plans can be substantial . . . and complex. Retirement plans vary in kind, and they all have different restrictions, tax consequences, distribution and vesting rules.

Lifestyle adjustment – Younger couples have time to re-accumulate wealth after divorce, but in Gray Divorces, the spouses have less time to re-establish themselves financially. One or both may be close to or in retirement, and face living on half of what they earmarked for retirement.

There are special concerns involved in a gray divorce, or when an older couple divorces. As always, information is power, so make a point to seek out experts for guidance.

Though a couple may have carefully planned for their futures when they were married, they return to the drawing board when it comes to estate planning after a divorce.

Most gray divorces involve marriages that have lasted for several decades, which makes it difficult to disentangle the spouses from each other. However, couples who divorce after many years together should receive a close-to-even split of assets, legally putting each spouse on an equal playing field for the future.

The Indiana Lawyer article is here.

 

Marital Settlement Agreements

“Shahs of Sunset” star Golnesa “GG” Gharachedaghi is having an interesting divorce problem. Her pending divorce from her husband, Shalom Yeroushalmi, has run into a serious roadblock: her husband refuses to sign the divorce papers.

According to a Page Six report:

“There are no issues about spousal support, assets or those typical divorce things at all,” the source said. “He is not asking for anything. What he’s basically doing is tormenting her. He’s not signing just to give her a hard time.”

“He just keeps saying he’s going to sign, then he doesn’t sign,” the source added. “He’s trying to drag it out and prevent her from moving on.”

Marital Settlement Agreements

Most family law cases are resolved by agreement, not by trial. A Marital Settlement Agreement is the method to resolving all of the issues, and is the final product of the negotiations.

A marital settlement agreement puts in writing all the aspects of the divorcing parties’ settlement. Topics covered in the Marital Settlement Agreement include the parenting plan and timesharing schedule, the division of the parties’ assets and liabilities (called “equitable distribution”), alimony, child support, payment of attorney’s fees and costs, and any other items to which the parties have agreed.

A marital settlement agreement entered into by the parties and ratified by a final judgment is a contract, subject to the laws of contract. The enforceability of contracts in Florida is a matter of importance in Florida public policy.

Accordingly, because a marital settlement agreement is treated like any other contract, and is subject to interpretation like any other contract, they can be enforced by the court.

Conclusion

If Yeroushalmi signs the marital settlement agreement, the divorce petition can make its way through the system, allowing the former couple to sever all formal ties. However, if he doesn’t, a judge may grant GG a default divorce after a considerable amount of time of inactivity on Yeroushalmi’s behalf.

GG and Yeroushalmi had a whirlwind romance. They secretly tied the knot at the end of January 2017, though GG realized within days she had made a terrible mistake.

“I wanted to throw up, “she said. “I was just thinking, ‘My dad’s going to kill me right now. And my mom is going to wake me up and then kill me again.’”

She filed for a divorce after one month of marriage.

The Page Six article is here.

Silicon Valley Prenups

The billionaire founder of Farmville has found himself in Divorceville. If divorces are tough, Silicon Valley divorces – with sophisticated spouses, high value assets, and hard-to-value assets – can be tougher. There is a reason more people insist on prenuptial agreements.

What are Prenups

I’ve written about prenuptial agreements before. Prenuptial agreements, or “prenups,” are contracts entered into before marriage that outline the division of assets in case of divorce or death.

Prenups, and Post-nups (agreements entered after a marriage) resolve things like alimony, ownership of businesses, title of properties, and even each spouse’s financial responsibilities during the marriage. As the UK Guardian reports, in Silicon Valley, divorces and prenup agreements go hand in hand.

Voiding Prenuptial Agreements

Farmville founder Mark Pincus, who was an early investor in Facebook and Twitter, is worth around $1.28b. Mark is separated from his wife, Alison Gelb Pincus, the co-founder of home decor business One Kings Lane. She also may be trying to get out of her prenup.

The couple married in 2008, a year after his company grew into a $1b company. Mark has a prenup. Unfortunately for him, in filing for divorce, his wife Alison has asked the court to set aside the agreement. Why? Because the value of his company increased so much after the marriage.

Prenuptial agreements are often used in high tech industries, and in Silicon Valley in particular, to protect ideas and future income – not just current salaries and property. This makes perfect sense in an age when intellectual property is so highly valued.

Because of Florida’s policy of enforcing agreements, prenups can be difficult to void – but not impossible. Florida has both case law and a statute to help lawyers, judges and the parties determine if a prenuptial agreement, for example, is enforceable.

In Florida, to test the validity of a prenuptial agreement, courts must consider things such as fraud, duress, coercion, in addition to the unfairness of the agreement, and whether there was any financial disclosure.

The Farmville case is a tough one. The spouse challenging the agreement, Alison, is herself very well off. She is the co-founder of One King’s Lane, which she sold to Bed Bath and Beyond for $30m. She is not exactly a stay-at-home mother who cannot work or lacks assets of her own.

Difficult to Value Assets

In divorce, determining the value of certain assets – businesses, stock options and restricted stock – is more complicated than it seems. As the shareholders of Snap Inc. have learned, startups may see their values skyrocket for their IPO, but later fizzle once earning reports become public.

Generally, anything you own before marriage counts as your separate or non-marital property. However, asset or debts acquired after the marriage is generally considered as marital or community property. In the event of a divorce, the law requires it to be distributed equitably, which usually presumes and equal split between partners.

A couple of weeks ago, tech analysts were hailing the IPO of Snap Inc. as a triumph. But a day after Snap posted a $2.2bn loss and decelerating user growth in its first earnings report as a public company, the stock’s value crashed.

Messy divorces don’t come cheap. When Elon Musk divorced his first wife Justine the two sides racked up $4m in legal and accounting bills in two years – around $170,000 per month. A prenuptial agreement can limit the costs of a divorce.

The Guardian article is here.

 

International Prenups

Welsh actress, Catherine Zeta-Jones married American actor, Michael Douglas. They reportedly have a prenuptial agreement that states she gets $2.8 million for each year of marriage, and a $5 million bonus if Michael has an affair.

While there are many benefits to prenuptial agreements in American marriages, the benefits of international prenups are multiplied when the spouses are from different countries, or hold foreign assets, or who contemplate living in other countries.

Prenuptial Agreements

A prenuptial agreement, sometimes called an “antenuptial agreement”, and/or “premarital agreement”, are commonly called “prenups.”  A prenup is a legal contract, much like any other legal contract, and it is entered into before a marriage by the couple intending to marry.

The contents of prenuptial agreements can vary widely. However, prenups commonly include clauses that spell out how to divide property accumulated before and after the marriage, and support or alimony in the event of divorce or death.

I’ve written on some of the more extreme clauses people insist be put in the prenups before. For example, prenups can include provisions to cover you in the event your spouse engages in excessive drug use, has extra-marital affairs, becomes an excessive spender, or begins a gambling habit.

International Prenuptial Agreements

A prenuptial agreement for international couples is generally a good idea, but international prenups have their own set of unique problems. For example, a prenup that is valid in Florida, may not be valid in another American state, let alone a different country.

When people live in different countries, hold foreign assets, or are planning to either marry overseas, or live in other countries, they should try to consider the law of all jurisdictions where they contemplate living.

There are many advantages and disadvantages to having an international prenup which states that the law of one country governs your divorce.

Issues with International Prenups

International prenups can involve couples from different countries, or couples from one country who live in different countries, or couples who have assets located overseas.

Since the law of each country can be very different, the choice of law clause in international prenups can take on great importance. Additionally, the language used in prenups can be extremely important for two reasons.

First, legal terms in the United States may have different legal meanings in other countries, or may not be terms recognized under foreign law.

Second, the enforceability of international prenups may just depend on whether it was understood by the signors, and they may not speak the language the agreement was written in sufficiently.

Whether in the United States, or in another county, make the effort to disclose all of the finances, even if financial disclosure may be waived in your country.

Additionally, any prenup should be signed well in advance of the wedding. In an ideal situation, the agreement should be fully signed before the wedding invitations even go out.

The Suggest article on the Zeta-Jones prenup is here.

 

Outlaw Divorce?

Swaziland’s King Mswati III has told leaders that it is against culture to divorce, and instructed them to tell citizens that there will be no pulling out from marriage, once it takes place. So much for no fault divorce in Swaziland.

Swaziland Divorce

King Mswati III of Swaziland is Africa’s last absolute monarch. The 49-year old king who calls himself “the lion,” owns most of the country’s land and rules by decree, appointing all of the government’s top positions. Now he may make Swaziland the first country in Africa to outlaw divorce.

“In our culture, once you marry someone, there is no turning back,” he said  speaking at an Easter ceremony earlier this month, according to a local paper, Times of Swaziland. There is no word for “divorce” in Siswati, the official language of Swaziland, the king added.

Swaziland officials have been quick to clarify that divorce has not been officially banned. The king’s comments, which are not a decree until he officially tables them, run counter to a recently submitted marriage bill by Swaziland’s attorney general that allows for divorce on certain grounds.

Divorce is not permitted under current legislation, but a process called Kumbuyisela ekhaya, which refers to reuniting a married woman with her family, is allowed.

King Mswati III has at least 15 wives, and is entitled to a new one every year, chosen at an eight day festival known as the reed dance. Polygamy is common in Swaziland where women are considered the property of their husbands. Domestic abuse and sexual violence are prevalent. Leaders often criticize ideas of equal rights for women as foreign values that should be subordinated to Swazi culture, according to Human Rights Watch.

Divorce Around the World

The Philippines is the only country in the world where divorce is illegal for most of the country’s population. (Muslims are allowed to divorce and the country’s mostly Catholic population can annul marriages.) In Vatican City, there are also no procedures for divorce.

Florida, of course is a “no fault” divorce state. I mentioned in an a earlier post that Florida abolished fault as grounds for filing a divorce. The only reason you need to file for divorce in Florida is to prove your marriage is “irretrievably broken.” But many people want to return to the old “fault” system to stem the numbers of divorces.

The King’s directive comes as the kingdom’s attorney-general is drafting a marriage Bill which will make it easier to divorce, particularly for women. The king’s wish is likely to become law, if he formally tables it. This would mostly affect women, whom it says are already oppressed.

“It is not necessarily a decree. However, given the vast powers that the king has it may sound as it is. Remember that he’s also a chairperson of the judiciary commission. I’m just imagining women going there to demand a divorce given that the judge himself will be worried about his job after they had to contradict their boss; in this case the king,” said Lucky Lukhele from the Swaziland Solidarity Network.

The article is available here.

 

Israel’s Divorce Revolution

By The Law Offices of Ronald H. Kauffman of Ronald H. Kauffman, P.A. posted in Agreements on Monday, July 25, 2016.

Israel passed a law that requires divorcing couples to first try to hammer out agreements through mediation before they can file divorce legal proceedings.

The new law is formally referred to as the “Resolution of Family Disputes Law”, and more commonly known as the “Divorce Revolution” and was enacted on Sunday.

Israel’s Justice Minister, Ayelet Shaked, pushed for the resolution, which aims to settle divorce cases in a peaceful and amicable manner. To this end, both parties will be given four mandatory mediation meetings free of charge.

I’ve written about foreign divorce dispute resolution attempts before. Mediation is another of the methods of alternative dispute resolution available to divorcing couples.

Mediation is essentially a negotiation facilitated by a neutral mediator, to resolve disputes. The mediator supervises, helps find common ground, deal with unrealistic expectations, and offer creative solutions.

Under Israel’s proposal, the first meeting will be held in a therapeutic environment without legal representation. The makeup of the remaining three meetings will be decided based on the initial meeting’s general atmosphere, in accordance with the mediation team’s assessment.

As long as the mediation meetings continue to be carried out amicably, the parties’ lawyers will not be asked to join in. If, however, legal matters arise or if either party requests their presence, they will be asked to take part in them. In cases of involving emergency relief, lawyers will be allowed to participate in all the mediation sessions.

Following the law’s enactment, Justice Minister Shaked issued a statement saying that:

“The new situation will offer an efficient alternative to litigation meetings over such sensitive and complex matters as family disputes. I am confident that this is what parents want most. At the end of the day, they continue to be their parents, even if they are no longer a couple.”

In Florida, most divorces are resolved through the mediation process, and it is usually ordered in most cases filed here. In some counties, it is required.

The Ynet article is available here.

Ending Mideast Conflicts: ‘Mediation Before Divorce’ Rule

By The Law Offices of Ronald H. Kauffman of Ronald H. Kauffman, P.A. posted in Divorce on Thursday, May 19, 2016.

The Middle East is an unlikely place for amicable settlements, but Israel just enacted new laws to help couples create divorce agreements by requiring them to mediate before filing in court.

Ynet, an Israeli paper, discusses the regulations. The rules – which include both mediation and educational components – are a part of Israel’s Resolution of Family Disputes Law, and were suggested by Justice Minister Ayelet Shaked.

I’ve written about mediation in the past. Mediation is a process where a neutral, third person – called a mediator – encourages and facilitates resolving your case. Consider it an informal meeting in which the goal is to reach a voluntary agreement.

Under Israel’s new regulations, any married individual approaching divorce – who wishes to file a couple’s dispute claim – will first have to submit a request asking to resolve the conflict.

The request will then be directed to the court’s social services unit, which will invite both parties to participate in 4 mediatory sessions without lawyers.

As part of the mediation, couples will receive information on the mediation process itself and on the legal proceedings that await them in case they do not reach an agreement.

In addition, couples taking part in the mediation will learn about the possible impacts that ongoing disputes can have on any children involved, and are guided to reach an agreement concerning child support, custody and property division.

The meetings will be free of charge, with the mediators being civil servants, most of them lawyers or social workers.

During the mediation period, both parties will not be allowed to file claims against one another, apart from requests for temporary relief aimed at keeping the status quo or requests for emergency relief.

If both parties do not reach an agreement, whichever party had initiated the proceedings will be allowed to submit a claim to the relevant court to discuss the matter further, while being allowed to continue the mediation process if they so choose.

Any additional meetings beyond this point will come at a cost, though it has been agreed upon that it will not be high. The new regulations will be instated for three years, during which their efficiency will be examined.

As the Minister of Justice said:

We need to remember that parental disputes cause damage especially for the children, and that it is our duty to protect them.

The Ynet article can be found here.