Tag: Property Division

Transforming Nonmarital Property Into Marital Property

Posted by Ron Kauffman on

For many clients going through divorce, there is a concern that their nonmarital property can transform into marital property, and then get distributed by a court. Believe it or not, divorce lawyers know that in certain cases, it is easy for your nonmarital asset to be transformed into a marital one. One couple in north Florida found out how courts look at whether your nonmarital property has been transformed into a marital property during a divorce.

marital property

Defining Marital and Nonmarital Property

Understanding a little about Florida’s equitable distribution statute will help you protect your premarital assets from being wrongly divided. In Florida marital assets and liabilities include assets acquired and liabilities incurred during the marriage, individually by either spouse or jointly by them.

Many people forget that marital assets also include the enhancement in value and appreciation of nonmarital assets resulting either from the efforts of either party during the marriage or from the contribution to or expenditure thereon of marital funds or other forms of marital assets, or both.

Another area of transforming nonmarital assets into marital one is by gifts. Under Florida law, marital assets include gifts between spouses during the marriage.

Conversely, nonmarital assets and liabilities include things like assets acquired and liabilities incurred before the marriage, and assets acquired separately by either party by non-interspousal gift, bequest, devise, or descent. For example, an inheritance may initially be considered nonmarital property absent anything else.

Before a court will classify your assets as either marital or nonmarital, the court will consider numerous factors. One of the factors a court will look at is the title of the property. A court will also consider whether you commingled your marital funds with your nonmarital funds. Were there any increases in the value of your nonmarital stock accounts because of marital efforts, or control of the funds? If so, a court may consider that too. They will also look at the length of the marriage, and your intent concerning the marital or nonmarital status.

Transforming Marital Property

In a recent case in Florida’s panhandle, a husband and wife divorced. During the trial, the family judge added to the equitable distribution schedule one of the husband’s Certificate of Deposit accounts. However, there was no evidence that the CD account, which was acquired ten years before the marriage, had transformed into a marital asset.

On appeal, the appellate court reversed the decision. The appellate court found that there was no evidence at the trial that there was any enhancement of the CD account through the husband’s efforts. The court also noted that there was no evidence that the husband commingled his nonmarital funds with marital funds. Lastly, there was no evidence that he had given to his wife the CD account as a gift.

Gifts between spouses are an important and frequent way in which a nonmarital asset becomes a marital asset. Believe it or not, there are even cases in Florida where spouses accidentally gifted non-marital homes to their spouse by birthday card, not realizing they would be found to have the proper donative intent.

Florida’s New Anti-Gift Law

This year the law changed in Florida. The revised equitable distribution statute now prohibits interspousal gifts of real estate unless there is written documentation that complies with the provisions for conveyance of real property under the statute governing deeds to property.

The mere inference of a gift of real property will now not meet the threshold required for an interspousal gift unless there was written documentation for a conveyance.

The new law in Florida also makes it clear that when a spouse merely signs a deed for the sole purpose of conveying a homestead property – other than the other spouse or both spouses jointly – the deed does not change the character of the real property from nonmarital property to marital property.

Finally, the new amendment to the equitable distribution statute changes the definition of nonmarital assets and liabilities so that real property acquired separately through non-interspousal gift, bequest, devise, or descent and in which legal title has not been transferred to both parties as tenants in the entireties, remains non-marital property.

The appellate decision is here.

Big Update to Florida’s Property Division Law

Posted by Ron Kauffman on

There have been big updates to Florida’s property division law after Governor Ron DeSantis signed an important House Bill this month. Many divorce lawyers will be interested in the changes to the equitable distribution statute this bill makes and it can impact your divorce right now.

Property Division Law

Dividing up property in divorce

In every divorce case, courts have to equitably distribute of assets and liabilities between the parties. In order to do that, the court first has to evaluate what assets and liabilities exist, then determine which are “marital” and which are “non-marital.” A new law makes some interesting changes to what are marital and non-marital assets, and how to distribute them.

Marital assets include things like, any assets and debts acquired during the marriage, the enhancement of value and appreciation of non-marital assets due to the efforts of either spouse or the contribution of marital funds or other marital assets; interspousal gifts during the marriage; retirement, pension, profit-sharing, and other similar funds during the marriage

A court always starts with the premise that a distribution of marital assets and liabilities should be equal, unless there is justification for an unequal distribution based on certain factors.

The new bill tries to clarify different aspects of the equitable distribution process. For example, the bill clarifies what sort of circumstances justify an temporary partial distribution during a divorce, and even provides a list of factors for the court to use in making a determination on whether there is good cause to make a temporary partial distribution.

Can you give your house away as a gift?

Believe it or not, there were cases in Florida where spouses accidentally gifted non-marital homes to their spouse by Valentine’s Day card or birthdays cards not knowing they would be found to have the proper donative intent.

The new law now prohibits interspousal gifts of real estate unless there is written documentation that complies with the provisions for conveyance of real property under the statute governing deeds to property. The mere inference of a gift of real property will now not meet the threshold required for an interspousal gift unless there was written documentation for a conveyance.

The bill also makes it clear that when a spouse merely signs a deed for the sole purpose of conveying a homestead property – other than the other spouse or both spouses jointly – does not change the character of the real property.

Finally, the new law changes the definition of non-marital assets and liabilities so that real property acquired separately through non-interspousal gift, bequest, devise, or descent and in which legal title has not been transferred to both parties as tenants in the entireties, remains non-marital property.

How do you value the family business

Your small business can be a marital asset, and difficult to value. That’s  because of the concept of “goodwill.” Goodwill is that intangible value of your business above and beyond the value of its physical assets. Things like, your company’s brand, reputation, amount of loyal customers, employee relations, and proprietary technology are aspects of goodwill.

One kind of goodwill is called “enterprise goodwill”, the value that exists separate and apart from the reputation or continued presence of the spouse who owns the business. Enterprise goodwill is a marital asset equitably distributed in a divorce. On the other hand, “personal goodwill” is the goodwill attributable to the spouse, not to the business itself, and is not a marital asset. That begs the questions, what is and isn’t personal goodwill?

Under the new law, courts have to consider evidence that a non-compete clause or a similar restrictive covenant may be required upon the sale of the business. The law clarifies that the mere existence of a non-compete provision is not dispositive as to whether the goodwill is considered enterprise goodwill. So, even if the valuation of a business is based on the requirement for a non-compete contract, the court can still determine whether the goodwill is enterprise or personal and subject to equitable distribution.

The new law becomes effective July 1, 2024 and is available here.

Changing Property Division Law in the UK

Posted by Ron Kauffman on

With the Florida legislative season underway, it is important to keep an eye on what other legislatures are doing for family law. This is especially true with news that the UK is set to explore changing the law of property division during a divorce in England and Wales.

Property Division Law

A spanner in the works

The current property division law in the United Kingdom, the Matrimonial Causes Act 1973, has recently been criticized by people as being uncertain and unpredictable. Many argue spouses are left to turning to costly litigation due to a lack of clear guidance on how wealth should be divided.

The Law Commission, the independent agency which reviews legislation, may examine whether the act needs updating with further announcements expected “very soon”.

London has developed a reputation as a magnet for wealthy couples seeking a divorce in recent decades because of the generosity of financial awards given to ex-wives by the courts in the capital.

The English legal system tends to split the combined wealth of divorcing spouses equally even if one partner is the breadwinner. This is similar to the United States, but is in contrast to many European countries, where financial awards are far less generous and maintenance is only given for a limited number of years.

Under the current law, spouses who go to court can spend thousands on legal fees because legal aid is no longer available for most types of family law, and the drawn-out court battles can be detrimental to children.

Florida Property Division

I’ve written about the subject of property division in Florida many times before. Property division, or equitable distribution as it is called in Florida, is governed by Florida Statutes as interpreted by 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 has the authority to award an unequal distribution of marital assets.

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 things such as a spouse’s intentional dissipation, waste, depletion or destruction of marital assets.

Parliamentary Chinwag

The status of prenuptial agreements in the UK may also be considered. Prenuptial agreements in the UK are legal documents specifying how assets are to be divided when the marriage ends. Prenuptial agreements are now recognized by UK courts following a seminal 2010 Supreme Court involving a German paper industry heiress.

But legal experts believe prenuptial agreements in the UK should be put on to a more formal, statutory footing and enshrined in law. Others complain the legislation, which has been subsequently developed by judge-made case law, allows judges to use their discretion to assess each case and make different awards, creating uncertainty.

Judges have flexibility when it comes to allocating settlements but the variation in judgment, said lawyers, made it difficult to advise clients about the likely outcome of their case.

Critics of the current property division system believe obscurities in the legislation should be tackled. Lawyers highlighted regional variations in how divorces are settled. Many critics complain that London courts tend to award more generously, while many courts outside the capital prefer to give “time-limited” maintenance to financially weaker spouses.

Some argue that the law also fails to reflect the way British society has changed in the past 50 years — with women more financially independent and with dual earning couples becoming the norm.

The Financial Times article is here.

Adultery and Property Division at the Yellowstone

Posted by Ron Kauffman on

Is it 1883 at the Yellowstone Ranch? Recently, a Montana legislator proposed a new bill that would turn the clock back on no-fault divorce by allowing family courts to consider adultery when deciding on a property division. The bill would also allow the court to award attorneys’ fees and costs of a divorce in cases of adultery.

Adultery Property Divorce

Dividing the ‘Oro y Plata’

The bill says in considering how to divide up assets and property during a couple’s divorce, a court “shall” consider “physical abuse or adultery that substantially contributed to the irretrievable breakdown of the marriage” along with a host of other things, like how long they were married, their income levels, health and more.

Under House Bill 237, which saw its first hearing Friday, if a court finds the abuse or cheating “substantially” contributed to the deterioration of the marriage, it “may” order the abuser or cheater to pay “a reasonable amount” of the other spouse’s attorney’s fees.

The bill further adds that “physical abuse or adultery alone” could allow the court to split the couple’s assets disproportionately. The measure would also apply to orders in which one spouse has to cover ongoing living costs for the other.

Current law says courts have to make that decision “without regard to marital misconduct.” Under the new bill proposed:

In a case in which the court finds physical abuse or adultery substantially contributed to the irretrievable breakdown of the marriage, the court may order the offending party to pay a reasonable amount for the cost to the other party of maintaining and defending any proceeding under this chapter and for professional fees, including sums for legal and professional services rendered and costs incurred prior to the commencement of the proceedings or after entry of judgment. The court may order that the amount be paid directly to the professional, who may enforce the order in the professional’s name.

One of the proponents who testified was a woman who said she ran a domestic violence program on the Hi-Line. She said perhaps adultery and physical abuse needed to be defined, though she said she believed physical abuse included adultery.

The sponsor said he was open to a possible amendment defining each.

Florida Adultery and Property Division

I’ve written about property and adultery before. Adultery can be the cause of a divorce, but can it impact the outcome? Since Florida became a no-fault state, the fact that Beth may have cheated on Rip would not be a drama played out in court.

Interestingly, while anyone can file for divorce in Florida without proving grounds, there is still a Florida statutory basis for adultery to be an issue in your divorce proceedings. But not in the way most people think.

Florida is an equitable distribution state, and it is presumed that property should be evenly divided. This presumption may be overcome by proof that one spouse intentionally wasted marital assets. This waste is sometimes known as dissipation. Paying for expensive jewelry, foreign trips, rent, car payments, and dinners for girlfriends and boyfriends is considered wasting marital assets. The court has the power to reduce an adulterer’s equitable distribution to credit the marital estate for waste.

Adultery alone would not really be grounds for an unequal distribution if there was no dissipation. The rationale is that dealing with allegations of marital misconduct, such as adultery, would be a step back to 1923: before our no-fault system was enacted.

Big Problems in Big Sky Country

Many are opposing the bill: “This bill is giving abusive partners a legal tool to use allegations of adultery in a public forum against their spouse to harass, humiliate and intimidate them into staying in a violent relationship,” said a Missoula family law attorney who testified in opposition to House Bill 237.

An attorney who said 90% of their caseload involves survivors of domestic violence, told the House Judiciary Committee the bill, if passed, “would be devastating for survivors.”

Abusers often accuse their spouses of adultery to “exercise power and control” over them and the bill would help them utilize the justice system to continue the cycle.

The attorney also said the measure would encourage parties to litigate who is at fault for the breakdown of the marriage, which would exacerbate already costly divorce proceedings. It would also further overburden courts where half of the cases involved family law\.

A domestic violence prosecutor for the City of Billings, said he was concerned judges might believe:

“The question we always get is why doesn’t she just leave? Well, this bill will help answer that question if it passes.”

The prosecutor also explained how domestic abusers – who are usually men, he said – see their wives as property and expendable resources and themselves “almost always (as) the victim.” He said the bill treats violence and adultery as the “exact same thing. Leveling accusations of domestic violence requires some sort of proof, and remember, one of these things is illegal; the other is not.”

The Daily Montanan article is here.

Equitable Distribution of Sports Memorabilia in Divorce

Posted by Ron Kauffman on

The Chicago Cubs’ Ben “Zorilla” Zobrist and his wife, singer Julianna Zobrist, are finally starting their divorce trial this week in Tennessee, and the equitable distribution of his sports memorabilia – jerseys, trophies, and rings – is taking center field.

Equitable Distribution Sports Memorabilia

Play Ball

On August 9th, proceedings will begin in the highly publicized divorce trial, and how the marital estate is to be distributed. For months, the duo’s fallout has captured national attention, with shocking details in the news.

Julianna wants an even split of all assets and primary custody of the children, with child support. But interestingly, she also wants an additional $4 million – essentially, the “amount of money he failed to preserve by abruptly and intentionally failing to satisfy his baseball contract.”

The return netted Ben $4.5m of his $12.5 million salary. In April, she was awarded $1.72m from the sale of the couple’s house in Chicago, as well as an additional $772,500 to “purchase a new home as her separate property.”

On the other hand, Ben alleges Julianna overspent from their marital estate— a court order limited her to spending $30,000 per month for living expenses due to exorbitant spending — he’s seeking 60% of the couple’s assets, and believes his sports memorabilia should not be part of the equitable distribution because it’s his separate property.

Worse, Ben argues Julianna’s motive in hiding her affair with their pastor/marriage counselor, was to trick him back into playing baseball so there would be more money for them to divide.

“One would be hard pressed to concoct a more deceitful, sinister, and otherwise inappropriate scheme than wife has devised in this divorce matter“

According to the Tribune, Ben estimates their marital estate is worth $24 million, while Julianna estimates it’s worth nearly $31 million

Florida Equitable Distribution

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 include things such as assets acquired before the marriage; assets acquired separately by either party by will or by devise, income from nonmarital assets, and assets excluded as marital in a valid written agreement. Importantly for this baseball player’s divorce, non-marital assets would include sports memorabilia acquired separately by non-interspousal gift.

Foul Ball

The duo filed for divorce after Ben found out Julianna was cheating on him with their pastor Byron Yawn, who was also Ben’s business partner . . . and apparently their marriage counselor!

Ben filed a lawsuit claiming Yawn, who at the time was senior pastor and elder at Community Bible Church in Nashville, provided counseling to the couple before and during their marriage. He is seeking $6 million in damages from Yawn.

Julianna hired a sports memorabilia expert to assess the monetary value of many of the items Ben accumulated during his 14-year Major League Baseball career. The memorabilia includes uniforms, which were given to him by different teams, bats, balls and gloves, some of which were used in games, his World Series and All-Star Game rings, World Series trophies, and a 2016 World Series MVP Camaro gifted to him by General Motors.

The replica World Series trophies are valued at $2,000 each. The Camaro is valued at $30,000. Other items include gifts from teammates and friends such as a Roger Clemens-autographed baseball and a Ted Williams-signed bat.

The issue comes down to whether those items legally should be considered Ben’s “separate property” or part of the marital estate.

Zobrist does not consider sports memorabilia “marital assets” for a few reasons. First, he claims none of his contracts with major-league teams discussed baseball hats, gloves, jerseys, trophies or rings as being part of his compensation and because he has no intention of selling them or doing anything but keeping them as mementos for himself and his family.

He also argues that sports memorabilia are gifted keepsakes from other players during his baseball career. This is a customary practice in baseball and gifts are specifically set out as separate property under Tennessee code.

The Chicago Tribune article is here.

Settling Britain’s Largest Property Division Award

Posted by Ron Kauffman on

Billionaire Farkhad Akhmedov and his ex-wife Tatiana Akhmedova are settling Britain’s largest property division award of 450 million pounds. He will be paying her around 135 million pounds in cash and other assets to settle. The announcement ends the largest financial dispute that Britain’s divorce courts have ever seen.

International Divorce Rates

From Russia with Love

Tatiana Akhmedova, who is originally from Russia, decided to accept the cash and art settlement, which represents about one-third of the property division award she obtained in 2016. The parties’ settlement agreement ends a very bitter and long-running legal dispute.

The fight for assets has spanned at least nine jurisdictions since a London judge awarded Tatiana some 450 million pounds — amounting to 41% of Farkhad’s assets — in 2016. The Former Wife’s litigation budget in pursuing her settlement was expensive too. According to reports she had to borrow fund from a litigation finance group called Burford Capital Ltd., which stated it will receive $103 million.

“I will burn this moneys rather then will give her”

Farkhad said in a WhatsApp message to his son in March that year.

Florida Property Division

I’ve written about this case in the past along with the subject of 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….”

Champagne Wishes and Caviar Dreams

The couple met in 1989, marrying four years later and moved to London. The marriage formally ended in late 2014.

A spokesman for her ex-husband Farkhad Akhmedov said:

The intervention in a case over which the English Court should have had no jurisdiction and the involvement of Burford ultimately achieved nothing for Tatiana. Burford and she spent years and millions of pounds on a costly global tour of various jurisdictions in their attempts to seize Luna. Every one of them failed and the yacht remains and will remain in the ownership of Farkhad and the family trusts. Tatiana has ended up with not a penny more than she was offered by her ex-husband six years ago. Farkhad has provided no payment to Burford. Those monies will have to be paid by Tatiana, thus reducing further to her the benefit of a settlement she could have had before the lawyers and financiers got involved.

The Former Wife was awarded a 41.5% share of her ex-husband’s £1 billion-plus fortune in late 2016. But he did not pay and she has spent years in courts in Britain and abroad in a bid to trace and seize his assets.

At one point she hired a team to try to secure her ex-husband’s enormous yacht, Luna, from a Dubai dock, led by former members of the British Special Boat Service – the naval version of the SAS.
Assets separately seized had included the yacht’s private £5million Eurocopter and its £1.5million Torpedo speed boat, customized with a 1965 Ferrari GTO steering wheel. A £40million global express jet had also been taken.

The Luna was sold to Farkhad in 2014 for £225million, has nine decks, space for 52 crew, two helipads, a vast swimming pool and a mini submarine. They are capable of acting as VIP transport and being lifeboats at the same time. Luna also has one of only two multipurpose custom made lifeboat-limousines in the world at a cost of over £2.8m each.

The Daily Mail article is here.

A Fast and Furious Divorce Property Division

Posted by Ron Kauffman on

Jordana Brewster’s divorce got expensive. The Fast and Furious star’s property division comes at a steep price as she has to buy out her ex-husband from their Los Angeles former marital home.

Fast & Furious 5,000,000

According to news reports, Brewster, 41, agreed to pay her ex-husband, Andrew Form, $5 million as part of their divorce settlement, The figure represents his half of their marital home in Los Angeles, which she will keep.

Additional details of the divorce settlement include that any income Brewster makes from the latest “Fast and Furious” movie is her separate, non-community property.

Her producer ex-husband also agreed that any income either earns “as a result of their personal and professional effort” from May 13, 2020 and beyond “shall be the separate property of the earning party.”

Neither Brewster nor Form will receive or pay spousal support. While a judge still needs to sign off on their agreement, Brewster and Form are legally single and co-parenting their two sons.

Florida Divorce and Property Division

I’ve written about houses and property divisions before. California is a community property state, but Florida is an equitable distribution state. In Florida, every divorce requires the court has to set apart nonmarital property, and distribute the marital property.

Florida judges always begin with the premise that the property distribution should be equal, unless there is a reason for an unequal distribution based on several factors.

One of the factors the court has to consider is the desirability of keeping the home for the kids or a spouse, if it’s equitable to do so, if it’s in the best interest of the child, and financially feasible.

Some spouses decide to sell but schedule the sale months or years into the future. This happens when a couple has kids, and both parents agree that the house shouldn’t be sold to preserve the school district or allow for easier timesharing.

There are other problems in a keeping a house in which your name is still on title. In the even that your ex-spouse does not pay the mortgage timely, your own credit will suffer the late notices.

And, if someone invited to your old home is hurt, that person will sue the record title owners for their damages. If your name is on title as an owner, that’s you! Making sure you have decent insurance on the house may be in order.

Many communities are experiencing a red hot real estate market. If you can’t wait for years, and need to sell immediately, there’s a silver lining in addition to this being a seller’s market. A fresh start and new beginning after a complete division of all of the assets tying you together with your Ex is the best way to go forward for some people.

However, there’s a cost of sale. When you sell your house, you pay a commission, and other expenses, like taxes, title expenses, repairs which can average about 10 percent of the sale price.

The California Marriage Massacre

Brewster and Form met while working on “The Texas Chainsaw Massacre: The Beginning.” Form was a producer on the film.

“We started dating in secret — you know, hanging out in my trailer — because it would have been unprofessional otherwise,” she previously told InStyle Weddings (via People). “But every day, Andrew wore these work boots to the set, and if I was lying down in the shot or there was equipment in the way, I’d look for his shoes. It was comfortable just to know he was nearby.”

They called it quits after 13 years of marriage in June 2020, and the actress filed for divorce the following month. In a deeply personal essay she wrote for Glamour, Jordana says she was compelled to divorce Andrew due to their vastly different schedules.

‘Most of why my marriage didn’t work was not my ex-husband’s fault,’ she said. ‘He loves work. He loves being on set, on location. I knew this from ages 27 to 32, but it became a problem for me once the kids were older. I wanted a partner.’

‘So, toward the beginning of the pandemic, Andrew and I decided to separate. The combination of being apart for most of the year for many years and growing apart emotionally took its toll.’

Just days after their separation, Jordana would reconnect with her current boyfriend Mason Morfit, whom she first met a few years earlier when they were both still married to other people.

‘Four days after I separated from Andrew, I was on a plane to San Francisco to visit this man I had met only once but who had stayed on my mind. I knew he’d been separated for two years. I wanted to see him, to confirm whether the image I’d built up in my mind matched reality. What I got was far more than I expected.’

During a time when the world avoided all contact, when it was mandated that everyone stay six feet apart, Mason and I blended into each other.’

The couple shared a five-minute long embrace and a kiss when they reunited at the airport. As far as Andrew, the movie producer has since moved on with actress Alexandra Daddario, who debuted their romance in May 2021 with a kissing snap.

‘I love you . . . and even that is an understatement,’ she captioned the photo.

The Fox News article is here.

Property Division and Embryos

Posted by Ron Kauffman on

Property division of a couple’s embryos is back in the news again, and will increasingly be an important part of any divorce case, as more couples seek In Vitro fertilization and other assisted reproductive technology.

property division embryo

Modern Family

Many people recall that Modern Family actress Sofia Vergara was in a dispute with her former partner Nick Loeb over frozen embryos. They ended their engagement in May 2014, the year after they underwent in vitro fertilization treatment together, and he tried to gain full custody of the fertilized eggs to have them implanted in a surrogate.

In February a court granted Sofia a permanent injunction which would stop her former partner from being able to use the fertilized eggs to “create a child without the explicit written permission of the other person”.

Do agreements matter? When Peter Goldin, a 44-year-old communications director, and his husband decided to start a family through in vitro fertilization, they faced mounds of paperwork at the fertility clinic deciding what should happen to any remaining embryos in the case of divorce or separation?

The couple, who used one embryo to have a daughter, decided that if they broke up, Mr. Goldin would be the one who decided what to do with their one remaining embryo, since it was created with his sperm and a donor egg.

But Mr. Goldin said that when he and his husband separated last year, his husband no longer wanted him to have sole authority to determine what would happen to the embryo. “He had forgotten what he had signed at the clinic,” said Mr. Goldin, who, with the help of a lawyer, ultimately gained custody after a month of back and forth.

Florida Property Division

I’ve written about the Vergara case and the subject of 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.

Anyone who has been divorced knows the painful process well: disentangling finances, dividing possessions and mapping out custody arrangements for any children. And in recent years, with the use of artificial reproductive technologies on the rise, more couples have been confronting the even stickier question of what to do with frozen embryos.

In some states, consent agreements signed in fertility clinics, which can provide that embryos would be destroyed if the couple were to divorce have been determined to valid and enforceable contracts.

In New York, after a husband requested sole custody of the one remaining cryopreserved embryo and revoked his consent to use any of his genetic material, a court has narrowly read consent provisions and found such agreements permitted either party to withdraw consent to participation in the entire IVF process, and that the husband’s broadly worded revocation of consent was effective to revoke his consent to the continuation of the IVF process. The court awarded the remaining embryo to the husband, but only for the purpose of ensuring that NHF disposes of the embryo as provided in the Consent Agreement.

Divorce and Embryos

In the event of divorce, couples are not together anymore, probably don’t like each other, and if one person is going to use the embryo and have the child, that leaves the other person in an awkward spot.

For those who fail to plan for the worst, the results can be devastating. Couples who produce healthy embryos and freeze them for when they would be ready to have children face a problem years later when they want to divorce.

In many cases, judges have upheld agreements couples have signed at the fertility clinic, which say that the embryos could be brought to term only with the consent of both partners.

But as the New York Times reports:

“My state of mind at the time was complicated by cancer, being a newlywed and just this hope and opportunity to have children. It was unfathomable that that’s what would eventually determine that my last chance of having biological children would be taken away from me.”

Laws governing the disposition of frozen embryos vary from state to state. Judges have generally ruled in favor of the person who does not want to develop the embryo, but in Arizona, for example, the custody of disputed embryos goes to the party who wants to bring them to term.

Kathleen Pratt, 36, said that the process of poring over sheafs of legal documents to finalize the use of a surrogate led to several discussions with her husband, William, about what they would do with any remaining embryos if they divorced.

Ms. Pratt said her husband initially told her it made more sense to give her custody of remaining embryos — made with a donor egg and her husband’s sperm — because she was unable to have biological children. Then, Ms. Pratt said, she felt he should get to keep the embryos because they contained his genetic material, not hers.

Eventually they came to a decision: Neither should keep the embryos. Ms. Pratt, who lives in Charleston, S.C., remembers she and her husband saying to each other, “Why would we raise these babies outside of our family? If things go sour, let’s just call it a day.”

They ended up using both embryos to have a daughter in 2019 and a son last year. “I wouldn’t recommend anyone go through this with someone unless your relationship is solid,” she said.

The New York Times article is here.

Enforcing Your Multi-Million Dollar Property Division Award

Posted by Ron Kauffman on

Enforcing your property division award is world news when it arises in the divorce of Russian billionaire Farkhad Akhmedov and Tatiana Akhmedova taking place in a London courtroom. In a twist, Ms. Akhmedova is now suing her son for nearly $100 million in cash and assets to collect.

Property Division

From Russia with Love

Suing her son is a part of Ms. Akhmedova’s ongoing efforts to claim a portion of a $615 million divorce judgment, believed to be the largest in Britain’s history after a trial in 2016.

Her ex-husband has refused to hand over a single ruble and has kept his money, and himself, far away from Britain and the reach of its courts.

A new approach, enforce the award against her son, Temur, the older of the couple’s two sons, who is a U.K. resident who has plenty to seize.

His father gave his son a three-bedroom apartment next to Hyde Park worth about $40 million, when he was still in college, he is also the “registered keeper” of a $460,000 Rolls-Royce S.U.V., and is being sued under a theory that he is helping hide millions into trusts and tax havens around the world to frustrate his mother’s equitable distribution.

Florida Property Division

I’ve written about this case and the subject of 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….”

Moscow on Thames

Since the collapse of the Soviet Union, London has been the place where rich and safety-minded Russians have parked their families, and at least some of their money.

The sons and daughters of these billionaires are now grown up, and Temur is part of a generation known for driving flashy cars and running up big tabs at posh restaurants in Knightsbridge and Mayfair.

In addition to mansions, a private jet, helicopters and masterpieces by artists like Rothko and Warhol, he bought a $500 million yacht, the Luna, from his fellow oligarch Roman Abramovich.

“It is 380 feet of floating luxury, with nine decks, space for 18 guests, a crew of 50 and — just in case — a missile detection system and bombproof doors.”

Allegations of infidelity made by both husband and wife led to divorce, but Mr. Akhmedov refused to even send a lawyer to the 2016 proceedings, arguing that the couple was already divorced. A court in Moscow dissolved the marriage in 2000, he said.

Temur is described in court as his father’s “lieutenant,” but he says he was more of a secretary than a second in command. When he lived and traveled with his father, he typed dictated messages, which he sent to Mr. Akhmedov’s team of advisers, bankers and lawyers. These were often instructions, adamant and profane, on how to evade Ms. Akhmedova and her financial backers.

One of Temur’s texts included a message about a plan to transfer about $100 million worth of art in Mr. Akhmedov’s collection from a storage facility in Liechtenstein to the Luna. The point of moving the works, Temur testified, was to make them readily viewable by his father.

“I don’t want to sound boasting or anything,” Temur replied, “but on a $500 million boat, $100 million paintings isn’t really something crazy. It’s nice to look at the paintings.”

Ms. Akhmedova testified first, and her tone reflected more sorrow than enmity. She’d helped her son decorate that deluxe apartment given to him by his father. But at some point she started to believe that Temur was part of an effort to thwart her pursuit of her divorce settlement.

Temur’s own time on the stand was far more tumultuous, once he actually showed up. On opening day, Dec. 2, he was in Moscow and said in open court, via video call, that he’d been advised that his mother’s lawyers might try to win a restraining order that could strip him of his passport.

Temur denounced his mother as opportunistic and greedy. She filed for divorce, he said, right after her now ex-husband sold Northgas. He said that she’d declined an out-of-court settlement of $100 million offered by his father, a sum the younger Mr. Akhmedov considered exceptionally generous given his mother’s history of infidelity.

The New York Times article is here.

 

Dr. Dre, Divorce, and Dissipation

Posted by Ron Kauffman on

Rapper, Dr. Dre, and his wife Nicole Young’s divorce is in the news again as she is alleging dissipation in court documents, that Dre “secretly” transferred “valuable trademarks” they jointly owned — both the name “Dr. Dre” as well as his hit album The Chronic— after allegedly kicking her out of their home in April.

Dissipation

What’s the Difference?

Some couples divorce amicably, recognizing that a divorce is best concluded when they come to a quick and fair resolution as soon as possible so they can get on with their lives.

For other couples, divorcing is a lot more difficult. In high conflict cases, greed, anger, and spite are overwhelming, and the process can quickly spiral into all-out war fought over every dollar.

A common dirty trick in divorce is to “dissipate,” or waste, marital assets. When a person tries to dissipate assets, it means they are intentionally squandering marital property to prevent his wife from getting her fair share of it in the divorce settlement.

In the lawsuit, Young alleges that shortly after being “forced to leave their family home,” Dre, 55, registered a new holding company and then began transferring “highly valuable trademarks,” misrepresenting himself as the sole owner.

“Andre’s plan all along was to deny Nicole’s ownership rights,” the lawsuit alleges, claiming that the transfers were made before Dre threatened to file for divorce on June 27. Young went on to initiate proceedings two days later, on June 29.

Although Young claims she has “demanded return of the trademarks,” Dre has “failed and refused to do so. It is inequitable and unjust to retain ownership of the trademarks, and the value they hold, without paying Nicole or allowing her to maintain her equal ownership,” the lawsuit alleges.

Young is seeking damages in an amount to be determined at trial and wants the trademarks in question to be transferred to a trust.

Florida Divorce Fraud

I’ve written about various aspects of divorce and fraud before. In Florida, courts distribute the marital assets, such as bank accounts, between parties under the premise that the distribution should be equal, unless there is a justification for an unequal distribution.

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 2 years prior to the filing of the petition.

Dissipation of marital assets, such as taking money from a joint bank account, and transferring money and assets into separate accounts. In both cases, the 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 way the other spouse disapproves. There has to be evidence of intentional dissipation or destruction.

Big Egos

Young, who filed for divorce in June after 24 years of marriage, is asking for nearly $2 million in monthly temporary spousal support and is also seeking $5 million in legal fees, according to court documents previously obtained by People.

Young has claimed that her husband’s “net worth is estimated to be in the ballpark of $1 billion” in the filing, adding that he earned much of that sum during their marriage.

The rapper previously filed a response, revealing that the couple had a prenuptial agreement — despite initial reports that said they did not have one. Young, however, has disputed the validity of that agreement, claiming that she was forced to sign it and that Dre ripped it up, rendering it invalid after they were married.

The People article is here.