Tag: Equitable Distribution

Property Division is Not Half Bad

Posted by Ron Kauffman on

They say a guy knows he’s in love when he loses interest in his car. A Kansas man is showing the reverse is also true. Alternatively, that would explain why the Kansas man still clings to his half-of-a-car long after his love ended. At the very least,his half-a-car is physical proof that a property division means equal halves.

The Better Half

According to the Kansas City Star, the late-Edgerton Mayor, Ray Braun, used to own the gas station where the front half of his 1987 Chevrolet Citation is parked, a testament to a successful property division.

On the side of the car is a sign which reads:

“Divorced. She got ½.”

The former mayor is the culprit who put his half of the equitable distribution – the half-car – in front of the gas station.

Some view his half a car as a landmark. If you go to Kansas City, or anywhere around, and ask about this town, they have no clue where it’s at. But if you ask them, ‘You remember that little half-car that’s off 56?’ ‘Yeah!’ ‘Well, that’s that little town.

But at a special morning meeting, the three council members in attendance decided unanimously for the city attorney to draft a resolution to finally be rid of the half car.

Florida Property Division

I’ve written about property division in Florida many times 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 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.
  • The intentional dissipation, waste, depletion, or destruction of marital assets after the filing of the petition or within 2 years prior to the filing of the petition.
  • 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 distribute property. 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.

You Don’t Know the Half of It

Braun fitted his half-car with rear caster wheels and used to drive it in parades. But City Council President Clay Longanecker says the car has become “an eyesore” and the Edgerton codes department has ruled it has to be disposed of.

To some Edgerton residents however, the half-car has for years been seen as a welcoming post, a kind of unofficial eyesore monument. and some may fight to keep it.

The biggest joke of all? Braun was never divorced.

The Kansas City Star article is here.

 

Injunctions: Property Division on Ice

Posted by Ron Kauffman on

Rapper Vanilla Ice’s divorce is getting hot! His wife’s lawyers filed court papers trying to stop him from selling marital property by asking for a court injunction. You can’t have a property division if your spouse gets rid of the assets first. Here’s how to protect yourself.

Ice Ice Baby

According to TMZ, Vanilla Ice’s Wife wants to prevent a fire sale in the wake of their impending divorce, which has already gotten underway with him allegedly unloading their jet skis.

He’s a gentleman, he’s not hiding anything”

said a source in Ice’s entourage who asked to remain anonymous because there’s a gag order in the case.

Vanilla Ice’s estranged wife, Laura Van Winkle, filed a motion for an injunction to prevent her husband from selling marital property earlier this month to stop any more sales.

Freezing Assets

I’ve written about property division before, but a property division does you no good if the assets are long gone. How exactly do you avoid getting frozen out of your fair share of the property if your spouse is getting rid of it before a court can divide it? One way is an injunction.

Our divorce statute has a provision which specifically allows a court to freeze assets when either party is about to remove his or her property out of the state, or fraudulently convey or conceal it.

Florida courts can enter an injunction against the party or the property and make such orders as will secure alimony or support to the party who should receive it. A temporary injunction is an extraordinary remedy which are granted sparingly. The requirement to even be entitled to a temporary injunction, are tough.

In conclusion, Mrs. Ice must show that she will suffer irreparable harm unless the status quo is maintained; she has no adequate remedy at law; she has a clear legal right to the relief requested; and, the temporary injunction will serve the public interest.

There are plenty of examples of injunctions being used to prevent the waste of property. For example, they can be used to prevent both the sale of a home and prohibit you from going into further debt through a mortgage or line of credit.

Jet Skis on Ice

According to the article, Mrs. Ice claims Vanilla is in possession of nearly all of the couple’s marital assets, and she can’t stop him from doing what he wants with their property without a court injunction.

Mrs. Ice filed her original divorce petition in 2016. She asked to be allowed to stay in the family house, child support for the ice, ice baby, alimony, and attorney’s fees.

The TMZ article is here.

 

Ocean’s 492 Million: Divorce Fraud

Posted by Ron Kauffman on

A London court ordered the seizure of a $492 million yacht in Dubai, to enforce one of the largest divorce property divisions in history. The reason for the large payout? The family law judge found that the husband tried to hide his assets.

© A.Savin, Wikimedia Commons

Cruisin’ for a Bruisin’

The British court ruled that Farkhad Akhmedov should transfer ownership of the 380-foot boat MV Luna, currently impounded in a dry dock in Dubai, to his wife, Tatiana Akhmedova. The judge granted the order to uphold his earlier $646 million judgment.

Judge Charles Haddon-Cave said that Akhmedov tried to hide his ownership of the Luna behind a group of companies and moved the ship to Dubai on the belief that it was “well beyond the reach of an English court judgment.”

Fraud and Unequal Distribution

I’ve written about property division in Florida many times 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 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, as in the Akhmedov divorce, the court has the authority.

However, the court must base an unequal distribution on certain factors, including: the contribution to the marriage by each spouse; the economic circumstances of the parties, the duration of the marriage, or any interrupting of personal careers or education.

It has been a long-standing rule in Florida that an unequal distribution of marital assets may be justified to compensate for one spouse’s “intentional dissipation, waste, depletion or destruction of marital assets after filing of the petition….” For example, hiding your $492m yacht in the Middle East.

High Seas Adventure

In the final days of the divorce, the billionaire changed his ownership of the yacht to another of his companies. The transactions form part of the billionaire’s “continuing campaign to defeat Akhmedova by concealing his assets in a web of offshore companies.

The Luna, which boasts a 20-meter outdoor swimming pool and eight smaller boats, also has a mini-submarine.

Akhmedov said he had supported his wife after their marriage was dissolved in Russia. He blamed cynical lawyers for later filing for divorce in London, and U.K. politics for the court’s decision.

The couple met in 1989, marrying four years later and moved to London where the wife has lived with the children ever since. The marriage ended in late 2014.

Akhmedov, who refused to take part in the U.K. trial and moved back to Russia, has allegedly moved his substantial modern art collection, valued at 90.5 million pounds, to Lichtenstein, his wife said in the court documents in January.

The judge said that they needed to move quickly to enforce the order over the boat. Akhmedov “has over the past 18 months repeatedly demonstrated a willingness to take rapid and multifarious steps to evade enforcement at every turn.”

The Bloomberg article is here.

 

Divorce Auction

Posted by Ron Kauffman on

Russell Crowe sold dozens of items this past weekend at a Sotheby’s auction to help him fund his divorce from ex-wife Danielle Spencer. The auction appears to have worked better than expected.

The Art of Divorce

Crowe titled the event “The Art of Divorce,” the divorce auction took place in Sydney on his 54th birthday and featured more than 200 items, including movie memorabilia, antique treasures, artwork and a collection of instruments.

A replica Roman chariot from the same movie in which Crowe played the general-turned-gladiator Maximus, thought to be worth up to AU$10,000, was sold for AU$65,000.

Sotheby’s had estimated the sale would bring in up to AU$3.7m (more than $2.8 million in U.S. dollars), but many items sold for more than their original pricing.

Florida Property Division

In Florida, courts distribute marital assets and liabilities between the parties with the premise that the distribution should be equal unless there is a justification for an unequal distribution. Although it may seem like it, equitable distribution is not an auction.

I’ve written about various aspects of property division before, including Russell Crowe’s proposed auction when it was first announced.

Marital assets are properties acquired and debts incurred during the marriage, individually by either spouse or jointly by them.

Marital assets and liabilities also include the enhancement in value and appreciation of non-marital assets resulting either from the efforts of either party during the marriage.

Dissipation and Waste

One of the relevant factors courts look to in property division is whether one of the parties intentionally dissipated, wasted, depleted, or destroyed any of the marital assets after the filing of the petition.

Spouses can dissipate assets by giving away money irresponsibly, spending money on girlfriends, gambling losses, and drug usage. Some people would rather lose the money outright than split it with their spouses.

If the dissipation of an asset resulted from misconduct, the question is whether a spouse used marital funds for his own benefit unrelated to the marriage at a time when the marriage was undergoing an irreconcilable breakdown.

Misconduct is not mismanagement or even a simple squandering of marital assets in a manner of which the other spouse disapproves. There is no report that the Crowe auction was a waste of assets.

Instead, there has to be evidence of the spending spouse’s intentional dissipation or destruction of the asset. Where marital misconduct results in a depletion or dissipation of marital assets, it can serve as a basis for unequal division.

Alternatively, courts can look at the misconduct, and can assign to the spending spouse as part of their equitable distribution, the misconduct losses.

Battle for the Jockstrap?

Among the most popular items at the auction was the breastplate he wore in “Gladiator” when his character Maximus (spoiler alert) bites the dust. The piece sold for $125,000 while matching leather wrist cuffs scored $32,000.

Crowe also sold items from movies like “Master and Commander,” “The Silver Brumby” and “Proof,” though the Royal Navy dress blues from “Master” proved extremely popular, bringing in a $115,000 haul.

One of the more curious items was the leather jockstrap Crowe wore in the 2005 film “Cinderella Man.” The protective piece went for $7,000 to one lucky bidder.

“I put it in the collection as a piece of whimsy and a bit of a gag. Funny enough, it’s garnered a lot of attention,”.

He and Spencer wed in 2003, and news broke of their split in 2012. The divorce is just about finalized, and the ex-couple share two children.

The auction raised money for the A.C.M.F. charity, which provides free music education and instruments to disadvantaged and indigenous children and youth at risk in Sydney.

The New York Times article is here.

 

Jump Street

Posted by Ron Kauffman on

So much for The Vow. Channing Tatum and his wife came out Fighting, announcing their divorce. The appreciation of their properties and investment makes their property division quite The Dilemma – even if they don’t become Public Enemies.

This is the End

The former couple, Channing Tatum and Jenna Dewan, both 37, announced their separation on Monday after almost nine years of marriage and after welcoming their daughter in 2013.

We have lovingly chosen to separate…love is a beautiful adventure that is taking us on different paths for now [who writes these? ed.].

According to People, it’s estimated that Tatum made $60 million in 2013 for movies like The Vow, 21 Jump Street, Magic Mike and G.I. Joe: Retaliation. He also launched his own vodka line during the marriage.

Property Division

I’ve written extensively about property divisions. Equitable distribution, as property division is called in Florida, requires courts to set aside each spouse’s non-marital assets and debts, and then distribute the marital assets and debts.

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

Marital property then, could include Tatum’s vodka business and other valuable assets purchased during the marriage.

Step Up

Complicating matters is that Tatum was not as well-known when he married. After their marriage both of their careers grew, the stock market rebounded, and home values rocketed.

The Tatum divorce shows how stakes can rise during a marriage, and how improvements to marital – and even non-marital or premarital assets – can come into play.

Florida recently amended a law dealing with whether there is a marital portion of a nonmarital house with a mortgage paid down by marital money, and if so, how to divide the marital portion.

The issue of the appreciation of non-marital property paid with marital funds includes two components:

  1.  a portion of the enhanced value of the marital asset resulting from the contributions of the nonowner spouse and
  2.  a portion of the value of the passive appreciation of that asset that accrued during the marriage.

The new law amends our statute, and establishes a new statutory formula.

Haywire

The best way to avoid the process of an expensive property division case is to have a prenuptial agreement and a post-nuptial agreement to discuss these issues before the divorce.

Alternatively, the issues can be taken care of in a private mediation. As a last resort, they will have to fight the case in court, and have a judge decide the issues.

As a general rule, divorce litigation is something that should be avoided because things go haywire. Court battles are long, painful and expensive.

One of the other Side Effects, is that divorce also bleeds into every aspect of a person’s professional and personal life.

The People article is here.

 

New Property Division Law

Posted by Ron Kauffman on

Kaaa! That’s not a scream, it’s a Hawaiian name pronounced “Ka-ah-ah”. Florida divorce lawyers know Kaaa as a famous Florida Supreme Court case which changed equitable distribution here. Kaaa had its faults, but recently the Governor signed a bill to fix it.

Florida Property Divisions

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 of a nonmarital asset, a house for example, encumbered with a mortgage paid down with marital funds, may be a marital asset the court must equitably distribute.

Can You Split Nonmarital Property?

Passive appreciation of a house without a mortgage, for example, is not subject to division in a divorce. But what about the passive appreciation of a house with a mortgage, where the principal balance of the mortgage has been paid with marital funds?

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 Kaaa court recognized that the marital portion of nonmarital house encumbered by a mortgage paid down with marital funds includes two components:

(1) a portion of the enhanced value of the marital asset resulting from the contributions of the nonowner spouse and

(2) a portion of the value of the passive appreciation of that asset that accrued during the marriage.

The Kaaa Problem

The 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 Kaaa 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 Kaaa case required a nonowner spouse to have made contributions to the property as a prerequisite to sharing in the passive appreciation of the property.

A lot of people argued that Kaaa conflicted with our equitable distribution statute, which said marital assets include the enhancement in value and appreciation of nonmarital assets resulting from the use of marital funds.

The Fix Bill

The Family Law Section of the Florida Bar helps create legislation, and also monitors proposals in the Florida Legislature. Members of the Section advise legislators and staff and even testify before the Legislature.

Governor Scott signed a bill to fix Kaaa. 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, as required under the Kaaa calculation.

The fix bill 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, and even allows a party to argue that the formula shouldn’t apply.

The new law takes effect July 1, 2018.

The Kaaa fix bill is available here.

 

Dividing the Mommy Makeover: Cosmetic Surgery and Divorce

Posted by Ron Kauffman on

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

Mommy Makeovers

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

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

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

The Great Divide

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

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

The trial judge was not amused:

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

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

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

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

Florida Property Division

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

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

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

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

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

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

Fargo

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

During oral argument, one justice commented:

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

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

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

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

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

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

The North Dakota Supreme Court decision is here.

 

When Gladiators Divorce

Posted by Ron Kauffman on

Actor Russell Crowe has filed for divorce, and will auction off his jewelry, mementos and other property. Will selling his assets before the divorce has ended maximize his property division, or will he be eating crow?

Enter the Coliseum

According to Australian news, Sotheby’s Australia will host an auction titled “The Art of Divorce” in which 227 different items from Russell Crowe’s private life will go up for sale.

The auction will take place on April 7, on what would have been his 15th wedding anniversary.

Rare movie memorabilia will be in the auction including:

  • The armor from Gladiator as Maximus will go under the hammer. The armor is expected to fetch $30,000, while a sword used in the film could sell for $4000.
  • A working chariot from the set of Gladiator will sell for between $5000 and $10,000.
  • A 2001 Mercedes, valued between $15,000 and $25,000, is also in the lot, along with two motorcycles that could command top dollar.

According to Crowe:

Divorce has its way of making you really examine the things that are essential in life — and the things that are not

Through the process I had a look around and realized I had a lot of stuff. Career stuff, stuff I’ve collected, and stuff in general. Boxes and boxes of stuff … so in the spirit of moving forward into fresh air, here’s a portion of that collection of stuff.

Although news reports are unclear whether the auction of the assets are planned in cooperation with his soon to be ex-wife, or his own, generally people should be cautious selling property after filing for divorce.

Florida Property Division

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

Marital assets are properties acquired and debts incurred during the marriage, individually by either spouse or jointly by them.

Marital assets and liabilities also include the enhancement in value and appreciation of non-marital assets resulting either from the efforts of either party during the marriage.

Dissipation and Waste

One of the relevant factors courts look to in property division is whether one of the parties intentionally dissipated, wasted, depleted, or destroyed any of the marital assets after the filing of the petition.

Spouses can dissipate assets by giving away money irresponsibly, spending money on girlfriends, gambling losses, and drug usage. Some people would rather lose the money outright than split it with their spouses.

If the dissipation of an asset resulted from misconduct, the question is whether a spouse used marital funds for his own benefit unrelated to the marriage at a time when the marriage was undergoing an irreconcilable breakdown.

Misconduct is not mismanagement, or even a simple squandering of marital assets in a manner of which the other spouse disapproves.

Instead, there has to be evidence of the spending spouse’s intentional dissipation or destruction of the asset. Where marital misconduct results in a depletion or dissipation of marital assets, it can serve as a basis for unequal division.

Alternatively, courts can look at the misconduct, and can assign to the spending spouse as part of their equitable distribution, the misconduct losses.

As the Crowe Flies

The Crowes separated in 2012, share two sons, and their divorce should be finalized around the time of the auction.

Just as we collaborate on the upbringing of our kids, it’s easy for us to work together on something like this.

There are a lot of unknowns about Crowe’s planned auction, but he is fully embracing his breakup. Crowe’s been Instagramming and tweeting about the auction, even responding to curious fans.

It’s unclear if the earnings will go toward Crowe’s divorce settlement or a charity. A request for comment from his rep wasn’t immediately returned.

The Australian news article is here.

 

Divorce and Cryptocurrency: A Bit of Bitcoin

Posted by Ron Kauffman on

Divorces are increasingly dealing with a new kind of asset: Cryptocurrencies. They are volatile and can be difficult to trace. What is a cryptocurrency, why are they so popular, and how are they a part of a property division in divorce?

Bitcoin is a type of cryptocurrency, and they are the latest way to potentially stash money so it can’t be found when it comes to dividing the marital estate.

Due to the supposed anonymity of Bitcoins, it seems practical and logical that people try to hide their cryptocurrencies from their spouses.

Cryptocurrencies are growing in ever larger value, and they are popping up more in divorces as a new class of asset to divide.

The law is familiar with the redistribution of many types of assets, like cash, bank accounts and other investments, but cryptocurrencies may be charting new ground.

Cryptocurrency

Cryptocurrencies are digital currencies not associated with a central government. Bitcoin, the biggest and most well-known, was developed back in 2009.

They are created and controlled by computer programs, or algorithms. Those algorithms lay out how transactions are made and recorded, and how new coins or tokens are found and released.

People and organizations known as “miners” keep records of every transaction, and attempt to solve complex computer problems that, when solved, reward them with new coins.

In effect, users record transactions directly between peers, rather than through banks or other intermediaries. That system is known as a blockchain and the transactions, and even the currencies, are sometimes referred to as “peer-to-peer.”

A major difference between a cryptocurrency and the U.S. Dollar is that, unlike the U.S. Dollar, the total amount that can ever be in circulation is limited. Because the total supply of the currency is restricted, you do not use more coins to pay for goods and services, but less.

Florida Property Division

I’ve written about property division in Florida many times 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. In dividing the marital assets and debts though, the court must begin with the premise that the distribution should be equal.

In Florida, if there is a justification for an unequal distribution, the court can do so, but must base the unequal distribution on certain factors, including: the contribution to the marriage by each spouse; the economic circumstances of the parties, the duration of the marriage, or any interrupting of personal careers or education.

Additionally, courts can consider the intentional dissipation, waste, depletion, or destruction of marital assets after the filing of the petition or within two years prior to the filing of the petition.

A major fight which can take place during mediation is whether a spouse is responsible for the 50 percent drop in value of a cryptocurrency.

Bitcoin Mania

One of the main problems with a cryptocurrency is their high volatility. It is hard to equitably distribute volatile assets which can gain or lose so much value so quickly.

The price of Bitcoin, for instance, the world’s biggest and best-known cryptocurrency, almost halved in value from its peak value in December.

Cryptocurrencies will be a significant feature in a large number of divorces. Although they can be traceable, cryptocurrencies are highly volatile, and they are not going to go away.

The Business Insider article is here.

 

Chinese Property Division

Posted by Ron Kauffman on

China’s Supreme People’s Court just redefined what a marital debt is. Now, Chinese spouses will no longer be on the hook for unreasonable marital debts during the marriage as part of a divorce settlement.

The Supreme People’s Court, in a revision to Article 24, said that debts will be considered marital liabilities only if both partners sign the original paperwork, or if a non-signatory later approves the borrowing.

The change does not apply to spending or borrowing considered reasonable in a marriage, such as payments made for shelter or food, the court said.

Speaking at a press conference, Supreme Court judge Cheng Xinwen said the update to the article was intended to reflect a changing society.

It was considered necessary in view of the rising number of cases of people finding themselves in financial difficulty because of their spouses’ clandestine borrowing, he said.

Florida Property Division

I’ve written about property division in Florida many times 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 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 must base the unequal distribution on certain factors, including: the contribution to the marriage by each spouse; the economic circumstances of the parties, the duration of the marriage, or any interrupting of personal careers or education.

Additionally, courts can consider the contribution of each spouse to the acquisition, enhancement, and production of income or the improvement of, or the incurring of liabilities to, both the marital assets and the nonmarital assets of the parties.

China’s Distribution Solution

The previous version of the Chinese law stated that all debts incurred in a marriage were the joint liability of both partners.

Many people in China are in favor of the new law because of the values behind it.

I see no point in drafting an article to protect a creditor’s interests, as a person who’s able to lend money is always in the dominant position and capable of demanding that both spouses sign the paperwork before lending them money.

There were cases where husbands had sought to cheat their partners by concocting fake loan agreements in collaboration with dubious associates who would then demand repayment from the unsuspecting and legally defenseless wife.

Judge Cheng said that the law was introduced to help maintain market order – and creditors only as a consequence – at a time when there was a growing number of cases of couples trying to evade their debts by faking a divorce.

The South China Morning Post article is here.