Tag: Divorce

Divorce Capital of the World

Posted by Ron Kauffman on

London has become known as the ‘divorce capital of the world’, proving that where you file your divorce can be of extreme importance. File in the wrong jurisdiction, like Afghanistan, and your divorce can be deemed a nullity. But file in the right jurisdiction, and you could get a windfall.

Divorce Capital

London Calling

Russian tycoon Vladimir Potanin, is currently making a legal challenge in the UK Supreme Court next week over a $6b marital settlement sought by his ex-wife, Natalia Potanina, which helped to make London’s reputation as the “divorce capital” of the world.

The couple married in 1983 in Russia. During the 1990s, Potanin had a reputed $20bn fortune, including shares in companies or other business entities that were not registered in his name – though Potanin was their beneficial owner, according to information contained in a 2021 Court of Appeal ruling.

Potanina was initially awarded roughly $41.5mn in 2014 by Russia’s courts but has claimed she is entitled to a far larger share of her husband’s fortune.

Potanina, who is Russian but who also has had a home in England since 2014, is now seeking half of the assets beneficially owned by her former husband. The case has prompted what one recent Court of Appeal ruling described as a “blizzard of litigation”.

In 2019, Potanina turned to the High Court in London, citing Part III of the Matrimonial and Family Proceedings Act 1984, legislation that gives the English courts the power to make financial orders if a marriage has been annulled outside the UK.

Potanina alleged in proceedings at the High Court that she had “made exhaustive efforts to obtain justice in Russia” but that the sum awarded in Moscow “does not even begin to meet my reasonable needs”. Her attempt to bring a claim in England was initially blocked by the High Court in 2019 on the grounds that the couple had little connection with Britain.

In the 2019 ruling, Mr Justice Jonathan Cohen said that if her claim went ahead, “there is effectively no limit to divorce tourism”. However, the Court of Appeal reversed the decision in 2021 paving the way for Potanina to bring the action in England.

Potanin is seeking to overturn that Court of Appeal ruling at the Supreme Court in a two-day hearing this month. If he loses the appeal, the battle is expected to move to the family courts.

Florida Divorce Jurisdiction

International divorces often bring up the issue of jurisdiction. Who sues whom, how do you sue for divorce, and in what country are problems in an international divorce case. The answers are more difficult than people think as I have written before.

A British divorce might give more money because British courts can disregard prenuptial agreements, and the cost of living is high in London. However, in Florida, the outcome could be different still.

Rules about children and hiding assets is a problem in every divorce, especially in international cases. The problem of discovery of hidden wealth is even bigger in an international divorce because multiple countries, and multiple rules on discovery, can be involved. The problems in an international divorce are more complicated because hiding assets from a spouse is much easier in some countries than in others.

Florida, at one extreme, requires complete disclosure of assets and liabilities. In fact, in Florida certain financial disclosure is mandatory. At the other extreme, there are countries which require very little disclosure from people going through divorce.

Choosing possible countries to file your divorce in can be construed as “forum shopping”. The European Union introduced a reform which tried to prevent “forum shopping”, with a rule that the first court to be approached decides the divorce. But the stakes are high: ending up in the wrong legal system, or with the wrong approach, may mean not just poverty but misery.

Residency for divorce is a very important jurisdictional requirement in every case. Generally, the non-filing party need not be a resident in the state in order for the court to divorce the parties under the divisible divorce doctrine. The court’s personal jurisdiction over the non-filing spouse is necessary only if the court enters personal orders regarding the spouse.

The durational domicile or residency requirement goes to the heart of the court’s ability to divorce the parties, because the residency of a party to a divorce creates a relationship with the state to justify its exercise of power over the marriage.

Rudie Can’t Fail

Potanin’s appeal of the order granting permission for Potanina to bring her claim in England, could become one of the biggest settlement cases recorded in the country. Potanin, who was hit with sanctions by the British government in 2022 because of his support for the Kremlin after Russian president Vladimir Putin ordered the full-scale invasion of Ukraine, is due to begin on October 31st.

London’s reputation as the “divorce capital of the world” was earned because of a perception that courts there were awarding large financial settlements to financially weaker spouses.

The ruling on appeal is expected to have significant ramifications for other cases, particularly in relation to whether ex-partners can turn to the English courts to obtain a more favorable payouts.

The Financial Times article is here.

Three Men Family Law Case Update 2023

Posted by Ron Kauffman on

The Three Men and a Family Law Case Update is back. Many of the changes to timesharing and alimony would cause some to say 2023 has been an “active” year in Florida  family law. So, for anyone interested in discussing the latest developments in Florida family law, and hasn’t already registered, I will be speaking at the Three Men and a Family Law Case Update 2023 on Thursday, October 19, 2023 starting at 12:00 PM to 1:30 PM

Case Law Update

Join me and fellow Florida Bar Board Certified Marital & Family Law attorneys, Reuben Doupé and Cash A. Eaton, for an interactive discussion on some of the major Florida marital and family law changes that have redrawn the family law landscape in 2023.

The course is an online webinar, and we will be reviewing many of the most important recent appellate opinions within Florida Marital and Family Law. Reuben, Cash and I will cover a wide range of topics from Florida’s newest family law cases.

Sponsored by the Florida Bar Family Law Section, attendees will be eligible for 1.5 CLE credits.

Registration is still open so register here.

Divorce, Family Law and Constitutional Rights

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Today is September 17th: Constitution Day. For anyone involved in divorce and family law cases, your Constitutional rights are always at risk. In New Jersey that was recently proved when a family judge restrained a woman from posting a video about her husband’s refusal to give her a religious divorce.

Divorce Constitution

Gotta Get a Get

On September 17, 1787, the delegates to the Constitutional Convention met for the last time to sign the document they created. Written 236 years ago, the U.S. Constitution is still the country’s most important legal instrument – even impacting people going through a simple divorce today.

For many Americans, religion plays an important part of finalizing their divorce. All three major monotheistic religions require a religious divorce to remarry within the faith. Without a religious divorce, a second marriage will not be recognized.

Agunot refers to Jewish women who are separated from their husbands but unable to obtain a legal Jewish divorce, leaving them barred from remarriage under Judaism’s adultery laws. One New Jersey woman denied a “Get” – a jewish divorce – decided to take matters into her own hands. She posted a video accusing her estranged husband of improperly withholding a get, and asking community members to “press” her husband to give the get.

After the video was made, the husband obtained a restraining order based on a domestic violence complaint alleging harassment. He testified that he received numerous phone calls from unknown numbers, a photograph of himself identifying him as a “get refuser” and calling on others to “tell him to free his wife.” Additionally, he was adamant that he was not a get refuser.

The trial judge found that the communication was “invasive” of the husband’s privacy, holding:

“one cannot hide behind the First Amendment when that communication is invasive of the recipient’s privacy.”

The trial judge entered a temporary restraining order against the Wife’s video and she appealed.

Florida and Constitutional Rights

I’ve written about the intersection of the U.S. Constitution and divorce cases before. This Constitution Day it is important to understand that family courts have a lot of power which can impact your constitutional rights.

Unlike the U.S. Constitution, the Florida Constitution has an express right of privacy clause in it. Florida courts have interpreted the Florida Constitution to afford even greater privacy rights than those in the U.S. Constitution.

Accordingly, Florida courts have to carefully balance a parent’s constitutional right against the state’s interests. When the matter involves religious beliefs, family courts generally do not make decisions in favor of a specific religion over the objection of the other parent. The court should also avoid interference with the right of a parent to practice their own religion and avoid imposing an obligation to enforce the religious beliefs of the other parent.

First Amendment Gets Going

On appeal, the New Jersey Superior Court Appellate Division held that the wife’s video was constitutionally protected speech. The appellate court vacated the temporary restraining order holding: a “general history” of violence was insufficient to vitiate First Amendment protections.

The video, whether viewed on its own or in the context in which it was disseminated, does not fall outside the First Amendment’s protection. Recall that the trial judge had concluded that the video was not protected by the First Amendment because members of the Jewish community would respond violently to plaintiff being identified as a get refuser.

However, the trial judge’s reliance on an unspecified general history of violent treatment to which get refusers were subjected was insufficient to render the wife’s video a true threat or an imminent danger to satisfy the incitement requirement.

To qualify as incitement and lose First Amendment protection a communication must be both “directed to inciting or producing imminent lawless action and . . . likely to incite or produce such action.”

The New Jersey Superior Court Appellate Division opinion is here.

Beautiful No Fault Divorce

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Divorce lawyers hear many reasons for filing for divorce. “My spouse is too beautiful”, however, is a new one. But it does not matter as most states abolished fault as a ground for divorce. But in some state legislatures there is an effort to overturn our system of no-fault divorce.

beauty no fault divorce

In the eye of the beholder

A prominent right-wing commentator, Steven Crowder, is making waves this month after he complained his ex-wife started the divorce process on her own. Crowder emphasized the divorce was against his will, and is blaming the no-fault system of divorce:

“Since 2021, I’ve been living through what has become a horrendous divorce. . . This was not my choice. My then wife decided she didn’t want to be married anymore. And, in the state of Texas, that is completely permitted.”

Crowder’s comments come on the back of recent proposals by state legislatures to overturn no-fault divorce laws on the books in Texas, Nebraska, and Louisiana. The repeal of no-fault divorce would hit Zambian husband, Arnold Masuka, hard.

Masuka has taken the extraordinary step of seeking the dissolution of his marriage because his wife is exceptionally beautiful.

This surprising revelation left officials and witnesses in awe at a local court in the Zambian capital city of Lusaka. The newspaper, Zambian Observer, reported that during the divorce proceedings, Masuka shocked those present in court when he candidly expressed to the judge that his wife, Hilda Muleya, possessed a beauty that had caused him countless sleepless nights.

The sheer allure of his wife had become an overwhelming source of anxiety for him, leading him to make this unconventional request. Masuka explained to the court that he lived in a state of perpetual fear, constantly worried about the possibility of losing his wife to another man.

Florida No-Fault Divorce

The official term for divorce in Florida is “dissolution of marriage”, and you don’t need fault as a ground for divorce. Florida abolished fault as a ground for divorce. Interestingly, given the recent attack on no-fault divorce, it was former Governor Ronald Reagan of California who signed the nation’s first no-fault divorce bill.

The no fault divorce law eliminated the need for couples to fabricate spousal wrongdoing in pursuit of a divorce; indeed, one likely reason for Reagan’s decision to sign the bill was that his first wife, Jane Wyman, had unfairly accused him of “mental cruelty” to obtain a divorce in 1948.

I’ve written about divorce and infidelity issues before. The no-fault concept in Florida means you no longer have to prove a reason for the divorce, like your wife’s exceptional beauty. Instead, you just need to state under oath that your marriage is “irretrievably broken.”

Before the no-fault divorce era, people who wanted to get divorce either had to reach agreement in advance with the other spouse that the marriage was over or throw mud at each other and prove wrongdoing like adultery or abuse.

No-fault laws were the result of trying to change the way divorces played out in court. No fault laws have reduced the number of feuding couples who felt the need to resort to distorted facts, lies, and the need to focus the trial on who did what to whom.

Lost in Lusaka

Masuka’s increasing fear of his wife’s beauty had grown so intense, that he found himself hesitating to leave his wife Hilda unattended. He stopped going to work, and was totally consumed by the nagging thought that his wife might be lured away by other suitors.

In Masuka’s eyes, Hilda, originally from Gokwe, Zimbabwe, was the epitome of beauty. Among all the women he had encountered in his life, none had captivated him quite like her. This powerful attraction had become both a blessing and a burden, fueling his insecurity and prompting him to take this unusual legal recourse.

As the court listened attentively to Masuka’s heartfelt plea, it became evident that his intentions were driven by genuine concern for his wife’s well-being. However, whether the dissolution of their marriage was a viable solution remained to be seen.

Ultimately, the fate of Arnold Masuka’s marriage rests in the hands of the court, which will consider the implications of his request for dissolution.

The Nigeria World article is here.

AAML, Trusts & Divorce

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I was honored to be invited to speak at the American Academy of Matrimonial Lawyers (AAML) Florida Chapter’s 45th Institute on Family Law on the topic of trusts and divorce. I spoke with co-presenters: AAML Fellow, J.J. Dahl, and estate and trust attorneys, S. Dresden Brunner, and Sarah Butters. The AAML Institute is the premier, advanced continuing education opportunity for family law in Florida.

Trusts and divorce 2

Trust Basics

Divorces typically involve the equitable distribution of marital property, the payment of spousal support, maintenance and alimony to a spouse, and child support for the children. Worryingly, trusts have increasingly become a problem in divorce proceedings.

Estate planners love to use acronyms to describe their estate planning tools: ILIT, QTIP, QPRT, SLAT, and of course, APT (asset protection trusts). An asset protection trust is just that, a trust designed to protect a donor-spouse’s assets from creditors, while still allowing some discretionary access to the assets for the donor.

By design, APTs don’t allow the donor-spouse to have complete access to the funds, and decision making about paying distributions is usually in the hands of an independent trustee.

Florida does not permit asset protection trusts. However, Florida residents create them in other states, most notably Nevada, and even in other countries.

Trusts can raise several issues when divorcing. Some types of trusts are created by third party grantors, while others are self-settled trusts. In divorces, one of the two spouses is the beneficiary, and may have other roles. The assets in third party trusts belong to the trust, not the spouse. These types of trusts are not usually subject to equitable distribution, but the income may be calculated for determining support. There is also the possibility that assets may be subjected to attachment by the court.

Trusts may be revocable and irrevocable. Irrevocable trusts are generally created by one of the spouses and may be marital unless solely separate funds were used to fund it. A key distinction of revocable trusts is that the grantor keeps control over the assets, and in a divorce, a court can order trust assets to be distributed.

Untrustworthy

Irrevocable trusts are not themselves marital assets subject to distribution, even if a spouse intentionally funds it with marital property. Trusts are governed by the probate code, and there is no corresponding ability to ‘pierce the veil’ in trust law as there is for corporations.

Trusts may also be an obstacle when trying to recover unpaid alimony and child support. This is where the different public policies supporting probate law and family law clash. People create trusts legally, for the purpose of protecting property and income for the beneficiary. Some trusts are created to protect beneficiaries from themselves. During a divorce, Family law seeks an equitable distribution of marital assets, not asset protection.

Trusts typically have spendthrift clauses to protect beneficiaries. A spendthrift clause prevents a creditor who is owed money by a beneficiary from forcing the trustee to pay over the beneficiary’s share of the trust.

In essence, as long as the trust assets are still held by the trustee, they are out of reach of the creditor. If not for spendthrift clauses, trust beneficiaries who owe creditors money could see their trust benefits attached by a court when trust funds are distributed.

Spendthrift clauses, which are an essential part of trusts, can be a huge problem in divorce. Former spouses may be owed alimony and child support by a trust beneficiary. In those cases, former spouses are considered creditors of the beneficiary who is obligated to pay. When alimony and child support are owed by a trust beneficiary, many factors will impact whether a court will be able to order alimony and child support to be paid from trust assets.

More about the AAML Florida Chapter and the Institute is available here

 

 

Divorce Waiting Period

Posted by Ron Kauffman on

Many U.S. states, including Florida, have a waiting period before you can divorce your spouse. In India, the Supreme Court just ruled that it can enter a divorce without a waiting period in cases of irretrievable breakdown of marriage.

Divorce Waiting Period

India Divorce Waiting Period

The Supreme Court’s judgment relates to a 2014 case filed in the top court, titled Shilpa Sailesh vs. Varun Sreenivasan, where the parties sought a divorce under Article 142 of the Indian Constitution.

The procedure to obtain a divorce by mutual consent is laid down in Indian law, which states that both parties can file a petition for dissolution of their marriage by presenting a decree of divorce to the district court, on the grounds that they have been living separately for a year or more or that they have not been able to live together or have mutually agreed to dissolve their marriage.

However, both parties seeking divorce have to wait between 6 to 18 months from the date on which they presented their petition to obtain the divorce decree. The waiting period for divorce is given so that the parties have ample time to withdraw their plea.

After the passage of the mandated period and hearing both parties, if the court is satisfied, it may conduct an inquiry and pass a decree of divorce, dissolving the marriage with effect from the date of the decree. However, these provisions apply when at least one year has elapsed since the marriage took place.

Additionally, divorce can be sought by either spouse on grounds like adultery, cruelty, desertion, religious conversion, insanity, leprosy, venereal disease, renunciation, and presumption of death. In circumstances of exceptional hardship or depravity, a divorce petition may be allowed under Section 14, even before the lapse of one year since marriage.

Florida Divorce Waiting Period

I’ve written about divorce waiting periods, and your rights in divorce before. Like India and other states, Florida also has a divorce waiting period of sorts. Although it’s not as long as other states  or India’s six to 18 month policy. In Florida, no final judgment of dissolution of marriage may be entered until at least 20 days have elapsed from the date of filing the original petition for dissolution of marriage.

The thinking behind waiting periods in Florida reflects the protective regard Florida holds toward the preservation of marriage and a public policy that marriage is the foundation of home and family.

In some cases the waiting period is longer. For instance, no dissolutions in Florida are allowed in cases of an incapacitated spouse unless the party alleged to be incapacitated has been adjudged incapacitated for a preceding period of at least 3 years. However, the court, on a showing that injustice would result from this delay, may enter a final judgment of dissolution of marriage at an earlier date.

Patience is a virtue, impatience a vice

In India, the mandatory six-month waiting period under can also be waived by filing an exemption application before a family court in a motion for the court to pass a decree of divorce. The high court has ruled:

“Where there is a chance of reconciliation, however slight, the cooling period of six months from the date of filing of the divorce petition should be enforced. However, if there is no possibility of reconciliation, it would be meaningless to prolong the agony of the parties to the marriage.”

Accordingly, if a marriage has broken down irretrievably, the spouses have been living apart for a long time unable to reconcile their differences, and then they mutually decided to part, it is better to end the marriage to enable both spouses to move on with their lives, the court said.

While the parties can approach the family courts for initiation of divorce proceedings, this process is often time-consuming and lengthy, owing to a large number of similar cases pending before such courts. If the parties wish to opt for a divorce more expeditiously, they can approach the Supreme Court for the dissolution of their marriage.

The Indian Supreme Court also aims to clarify whether the application of its powers would extend to all divorce cases; and whether it could be used in cases where one of the parties is not consenting to the divorce. For this, the court appointed senior advocates for assistance in the case.

The Indian Express article is here.

Divorce and the Seven Year Itch

Posted by Ron Kauffman on

A recent study is shedding some light on the notion of a ‘seven year itch’ leading to divorce. According to the Census Bureau, the average length of first marriages for divorcing couples is around seven years. The recent study answers the question why a seven year itch and not a 15 year one.

7 year itch

Seven Year Itch

We are constantly changing over time. Researchers have found that we in fact have six to ten years of stability in a relationship. Then, the stability phase is followed by two to three years of restlessness and transition before settling into the next stage.

Sometimes we focus on work and career, and other times it is about aging, long-term plans, working through childhood and our relationships with our parents. But sometimes it’s about our intimate relationships.

Under this theory, when you first fall in love, you need something in your life to get away from your parents to have stability, to feel important, and cared for. While often never directly talked about, the other person in the relationship provides this support.

Then around seven years, one or both partners starts to get restless. The life they’ve built with its rules and routines is no longer working or fits. Why? Because your partner did a great job filling those early needs, but now everyone’s needs have changed. The solid, steady, grounding partner now seems rigid and controlling, and the spontaneous, fun-loving partner is overly dramatic.

Florida Divorce

I’ve written about the causes of divorce before. The no-fault concept in Florida means you no longer have to prove a reason for the divorce, like you have reached the seven year mark and can tap out. Instead, you just need to state under oath that your marriage is “irretrievably broken.”

The official term for divorce in Florida is “dissolution of marriage”, and you don’t need fault as a ground for divorce. Florida abolished fault as a ground for divorce. So, whether your husband is overly controlling or your wife is a drama queen, you don’t need to allege those traits as grounds for divorce.

Before the no-fault divorce era, people who wanted to get divorced either had to reach agreement in advance with the other spouse that the marriage was over, or throw mud at each other and prove wrongdoing like adultery or abuse.

No-fault laws were the result of trying to change the way divorces played out in court. No fault laws have reduced the number of feuding couples who felt the need to resort to distorted facts, lies, and the need to focus the trial on who did what to whom.

Florida abolished fault as grounds for filing a divorce. The only ground you need to file for divorce in Florida is to prove your marriage is “irretrievably broken.” Additionally, the mental incapacity of one of the parties, where the party was adjudged incapacitated for the prior three year, is another avenue.

Practical Advice

Around seven-year mark, couples start arguing or pulling away from each other. Or sometimes, instead of arguing, they don’t. Couples avoid all emotions and embrace life’s distractions: focusing on kids, downshifting from being a couple to being simply a parent. Or they focus on jobs and careers, working 80 hours a week, or they get distracted with something else.

Some have advised that instead of divorce or distractions, pay attention to your restlessness and emotions. Decide what you each need to change. And if you need help sorting out what you need, or can’t have these conversations easily on your own, get support from a therapist, a minister, or someone you trust.

The Psychology Today article is here.

Dissipation and Soccer

Posted by Ron Kauffman on

Hiba Abouk, the wife of Moroccan soccer star Achraf Hakimi, filed for divorce only to discover she may be the victim of a massive dissipation of marital assets. Many are wondering if Abouk will walk away empty-handed after her husband passed all of his assets to his mom.

Dissipation Divorce

Red Card?

Hiba Abouk was born in Madrid, and is the youngest of four children. She is also a successful actress, and has amassed a small fortune throughout her career in television. The 36-year-old Spanish model is approximately worth $3 million.

Achraf Hakimi is one of the highest paid Moroccan professional soccer players, and is currently playing for Paris Saint-Germain and the Morocco national team. He began playing for Real Madrid Castilla in 2016, then signed with Inter Milan, and after helping the club win the 2020–21 Serie A title – their first in 11 years – signed with Paris Saint-Germain. Hakimi’s wealth is estimated to be around $70 million, as per media reports

The pair started dating in 2018 and got married in 2020. Together, they have two boys. But then in March 2023, a 24-year-old woman filed a complaint against Hakimi accusing him of raping her in his house in Paris while his wife and two sons were away on holiday.

French prosecutors indicted Hakimi on rape charges after he was questioned by investigators. Hakimi’s mother has claimed that the charges against her son are false, and she is confident that her son is innocent.

Abouk filed for divorce after returning in March 2023, but to her shock, her husband had no properties or money in the bank in his own name. According to reports Hakimi had registered all of his assets in his mother’s name and may even have assigned to his mother most of his salary.

Florida Dissipation

I’ve written about dissipation of marital assets and unequal distribution of assets before. In a proceeding for dissolution of marriage, 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.

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.

Another important factor 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 two years prior to the filing of the petition.

Dissipation of marital assets, such as spending marital funds on extramarital relationships (buying expensive gifts for a girlfriend) or putting the family home in mom’s name, or excessive gambling are examples which happens a lot. Less common are schemes like transferring all of your assets and assigning 80 percent of your income to a family member. Misconduct may serve as a basis for assigning the dissipated asset to the spending spouse when calculating equitable distribution.

Misconduct, for purposes of dissipation, does not mean mismanagement or simple squandering of marital assets in a manner of which the other spouse disapproves. There has to be evidence of intentional dissipation or destruction.

Dissipation Soccer

A Rat in Rabat?

According to media reports, Abouk filed her divorce claim and demanded half of the World Cup star’s fortune before she discovered the bitter truth: that Hakimi’s mother had it all. Media reported that court officials have told Abouk that her husband legally owned nothing and that all his millions, and even his PSG salary, were registered under his mother’s name.

Morocco World News reported last year that Hakimi was the sixth highest-paid African footballer, earning more than $215,000 a week. However, his wife was astonished when she was told by the court that more than 80 percent of his salary is credited to his mother’s bank account.

He appears to have no properties, cars, or jewelry registered in his name. After the financial disclosure, Hakimi is now entitled to seek half of his ex-wife Hiba Abouk’s net worth, which is rumored to be $3 million.

Hakimi’s lawyer, Fanny Colin, said that her client being indicted was an “obligatory step for any person being accused of rape,” and would allow the footballer to defend himself.

The Morocco World News article is here.

Celebrities and Prenuptial Agreements

Posted by Ron Kauffman on

The news from Nashville is that academy award winning actress, Reese Witherspoon, has initiated divorce proceedings against her husband Jim Toth. The divorce announcement is a reminder that prenuptial agreements are not only for protecting celebrities.

Prenuptial agreements

Not So Clueless

Reese Witherspoon is a very successful actress, and winner of an Academy Award, a British Academy Film Award, a Primetime Emmy Award, and two Golden Globe Awards. She ranks among the world’s highest-paid actresses. Witherspoon also owns Hello Sunshine, a media company she started during the marriage with Strand Equity Founder and Managing Partner Seth Rodsky.

Witherspoon has confirmed the couple’s 11-year marriage is ending in divorce. According to court documents, she has cited irreconcilable differences as the reason behind the divorce. The divorce was filed in a circuit court in Nashville, where the couple live with their 10-year-old son.

Reports indicate that court documents she filed reveal that the couple signed a prenuptial agreement in March 2011. In the court documents, Witherspoon alleges that the prenuptial agreement is valid, and that their prenup will provide “adequate and sufficient provisions” for the distribution of their assets and debts.

Florida Prenuptial Agreements

I’ve written about prenuptial agreements before. Prenuptial agreements are not just for celebrity, academy award winning actresses. They are also about more than just resolving what to do with a successful media company created during a marriage.

Any couple who brings any personal or business assets to their marriage can benefit from a prenuptial agreement. They are important to have in place before a couple starts investing in businesses, properties, and other investments.

But prenups are frequently challenged in court. Florida has both case law and a statute to help lawyers, judges and the parties determine if a prenuptial agreement is enforceable. For example, Florida adopted the Uniform Premarital Agreement Act. The Act requires that all premarital agreements be in writing and signed by both parties. It is enforceable without consideration other than the marriage itself.

Couples wanting to sign a prenuptial agreement can enter into a premarital agreement with respect to their rights and obligations in any of their property. Whenever and wherever property was acquired or where it is located; couples can control their right to buy, sell, use, transfer, or otherwise manage and control their property if they separate, divorce, or die.

While prenuptial agreements may be challenged in court, we will have to wait and see if Witherspoon’s husband will try to avoid their prenuptial agreement. When ruling on the validity of a prenup, Florida courts must consider things such as fraud, duress, coercion, in addition to the unfairness of the agreement, and whether there was any financial disclosure.

Divorce in Pleasantville

In court documents, in addition to alleging the couple has a prenuptial agreement in place, Witherspoon also asks the court to designate her and Toth as joint custodians of their 10-year-old son. Witherspoon and her CAA talent agent husband announced their divorce in a joint statement, just days before their 12th anniversary.

They announced personal news to share. They also stated it was with a great deal of care and consideration that they have made the difficult decision to divorce. They mentioned they have enjoyed so many wonderful years together and are moving forward with deep love, kindness and mutual respect for everything they have created together.

“Our biggest priority is our son and our entire family as we navigate this next chapter. These matters are never easy and are extremely personal. We truly appreciate everyone’s respect for our family’s privacy at this time.”

The People article is here.

Lottery and Divorce

Posted by Ron Kauffman on

The interplay of winning the lottery and divorce is in the news. That’s because of an interesting new report out of Sweden that is showing married women who win the lottery are more likely to divorce than men who win the lottery.

Divorce Lottery

The Big Payout

The Swedish study, titled “Fortunate Families? The effects of wealth on marriage and fertility”, tried to analyze the short term effects of large, positive wealth shocks on marriage and fertility in a sample of Swedish lottery players up to 10 years after a lottery windfall.

Researchers found that married women who win the lottery are almost twice as likely as married men to file for a divorce in the aftermath of a win compared to male lottery winners.

“When the winning player is a married woman, our estimates suggest that a 1 million-Swedish krona windfall almost doubles the base-line short-run divorce rate”

The study made a point of noting that winning the lottery as a woman doesn’t cause more divorces — it simply accelerates them for women whose dissolution was already underway. The authors also show this divorce effect after women win the lottery fades away in the long-run.

Florida Lottery and Divorce

But how are lottery winnings distributed in a divorce? I have written about equitable distribution in Florida before. 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.

However, 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.

In Florida, nonmarital assets which are not divided include things such as assets acquired before the marriage; assets you acquired separately by non-interspousal gift, and assets excluded as marital in a valid written agreement. Conversely, marital assets which are subject to division generally include things like assets and liabilities acquired during the marriage and the enhancement in value of some nonmarital assets.

Florida is an equitable distribution state, and all assets acquired during the marriage are considered marital property. So, if a spouse wins the lottery while still married to the other, it is generally going to be considered marital property and split equitably in the event of a divorce.

However, this does not mean that the winnings must be split equally. The lottery winnings should be factored into the entire equitable distribution scheme. After adding the lottery millions to the equation, a court can look at the marital debts and take into consideration if the lucky spouse who won the lottery has a gambling addiction and accrued massive debts.

Powerball

Men who win the lottery actually have higher marriage rates, and a reduced divorce risk suggesting, surprisingly, that wealth actually increases men’s attractiveness! According to Swedish researchers:

“Long-term divorce risk goes down when husbands win the lottery.”

In fact, a lottery win for men increases the chance of unmarried men getting married in the five years after they win by 30 percent, while the chances of married men getting divorced is reduced by 40 percent.

There is an impact on fertility by winning the lottery too. The study found that, not only are male winners much more likely to get or stay married, they also end up having more children. This trend in the fertility of lottery winners was consistent regardless of whether the man was married or not.

Apparently, the Swedish study concluded wealth actually makes men seem more appealing to current prospective partners and gives women lottery winners an early out from unsatisfactory relationships.

These results are compatible with previous empirical evidence showing that a higher husband’s income or employment stabilizes marriages, while an increase in wives’ income or employment has the opposite effect.

The Guardian article is here.