Tag: nonmarital property

Divorce and the Engagement Ring

Posted by Ron Kauffman on

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

engagement ring

Keeping Up with the Kardashians

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

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

Florida Engagement Rings

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

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

As one court poetically noted:

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

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

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

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

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

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

Reality TV

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

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

The Huffington Post article is here.

 

The Art of Property Division

Posted by Ron Kauffman on

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

property division

Who Needs Nine Marilyn Monroes?

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

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

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

Florida Property Division

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

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

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

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

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

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

The Nose Knows

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

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

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

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

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

The Bloomberg article is here.

 

Property Division is not Nirvana

Posted by Ron Kauffman on

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

About a Girl

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

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

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

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

Florida Property Division

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

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

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

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

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

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

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

Smells Like Teen Spirit

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

The People article is here.

 

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.

 

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.