Tag Archive for: property division

Property division tips for Wisconsin divorces

Where divorce is concerned, one of the most pressing property division concerns often has to do with real estate property, especially the marital residence. Both parties will have claim to this property, but one party will invariably get the house. The other party must be bought out in some way in order to release his or her claim on the property. Likewise, where mortgage loans are concerned, one party may bear the burden of a hefty loan even if he or she doesn’t live in the house, which may be a problem for future home purchases.

There are a number of options available for Wisconsin divorcees to address property division. Chief among these is refinancing to buy out an ex-spouse. If an ex-spouse contributed a certain amount of money or non-monetary benefits, a refinance could enable the staying spouse to cash out the dollar amount contributed by the ex-spouse and then directly pay the leaving spouse.

If this sort of agreement is not possible due to being underwater on a mortgage, it is also an option to receive gift money from a blood relative or immediate family member in order to buy out the leaving spouse. This can also help to offset any present gains in the home’s value that funds from a refinance would not be able to cover.

A divorce lawyer may be a valued partner in divorce proceedings where property division is a major issue. A lawyer may give advice regarding strategy before, during and after divorce proceedings. There are also several different types of agreements that may be negotiated to avoid having to refinance or sell a house, but these largely depend on airtight contracts. A lawyer may help to draft a divorce agreement that will stand up in court and is beneficial to a client’s financial future.

Source: Credit.com, “How to Divide Your House in a Divorce“, Scott Sheldon, December 04, 2014

Divorce rate may be lower than previous estimates

Wisconsin residents may have heard that the divorce rate in the United States is as high as 50 percent. However, statisticians have noted in recent years that the rate of divorce is not as high as popular media suggests and that it may actually be dropping. Couples who got married in the 1990s reached their 15th anniversaries at a rate of about 70 percent, a landmark that only 65 percent of couples who married in the 1970s and 1980s reached. A New York Times report identified several possible reasons for the declining divorce rate.

Economists cited in the report suggested that the women’s movement of the 1970s changed the circumstances under which people marry, which may have had an effect on the divorce rate. Reasons for marrying now typically include love and common interests and passions. Many households have two incomes, and couples frequently share housekeeping and childcare duties. This is a shift from earlier decades when people more frequently married for economic reasons, and women typically did not work outside the home.

Today, the median ages at which people get married are 26 for women and 27 for men. In the 1950s, the median ages were 20 for women and 23 for men. This delay in marriage often allows couples to complete their educations and become more financially stable individually.

Though the divorce rate seems to be on a decline, many couples still seek divorces. The fact that both partners in many marriages contribute to their households financially means that couples tend to have more assets than couples in previous decades. Property division may be difficult if both people involved in a divorce have a stake in homes, vehicles and other assets. Family law attorneys may be able to help people come to equitable solutions regarding the division of assets during their divorces.

Source: The Huffington Post, “The Truth About The Divorce Rate Is Surprisingly Optimistic“, Brittany Wong, December 08, 2014

Keeping the costs of a divorce down

Divorce can be an expensive endeavor for many Wisconsin couples whose marriages are ending, but there are ways to keep the costs under control. While individuals often do not have much control over their attorney’s average hourly rates, they can control how much work they ask the attorney to do. Keeping the billable hours down will result in a more affordable divorce. The key is learning what to have the lawyer handle and when to let things go.

One of the biggest mistakes made by individuals is getting caught up in the tiny details and trying to micromanage the parenting decisions made by the ex-spouse. Arguing over minor details like exact soccer time practices will only lead to a higher divorce bill. When a couple is able to come to agreements on these minor details on their own, then the overall cost will fall.

As individuals treat other with honesty and fairness, the amount of items that must be discussed in court and reviewed by attorneys decreases. In one reported case, a man’s attempt to avoid paying his wife spousal support resulted in roughly $300,000 in legal fees, and the wife was still eventually granted alimony. Agreeing to spousal support from the outset could have saved the man a great deal of time and money.

When dealing with such matters as property division, child custody and support arrangements, an attorney can help a client in negotiating an agreement with which both parties are in accord. Legal counsel can provide valuable guidance throughout the process and help clients avoid mistakes. The clients can in turn keep costs down by being more flexible and reasonable when working through the divorce process.

Source: CNBC, “How to get divorced without breaking the bank”, Susan Caminiti, Feb. 9, 2015

The factors that influence spousal maintenance in divorce

In many divorces, spousal maintenance is a major issue. Very often, one spouse has greater financial stability and earning capacity than the other spouse. In those instances, a court may find that it’s appropriate for the wealthier spouse to make regular maintenance payments to the other spouse. These payments can be either indefinite or for a limited period of time. In Wisconsin, there’s no standard formula for calculating spousal maintenance. Rather, there a number of factors that a court can consider.

One of the biggest factors is the length of the marriage. Generally, the longer the marriage, the more likely it is that maintenance may be appropriate. The age and physical health of both spouses is also considered. Specifically, a court may look at whether each spouse is physically able to work and generate income. Another important factor is the property division under the divorce agreement. If the less financially secure spouse is receiving a substantial amount of assets, that may mitigate the need for further maintenance.

Finally, the court will consider a number of factors to determine whether a spouse is capable of producing income and, if so, when he or she may be able to do so. The court may look at whether a spouse sacrificed his or her career for the benefit of the other spouse. An example would be a spouse who stayed at home to watch children so the other spouse could work. Another example may be a spouse who sacrificed his or her own education for the benefit of the other’s education or career.

In many cases, a couple can reach an agreement on maintenance before the issue even makes it to court. In other situations, though, a couple may need a court to decide on the issue. In either scenario, an individual may benefit from consulting with an experienced divorce attorney.

Source: Wisconsin State Legislature, “CHAPTER 767: ACTIONS AFFECTING THE FAMILY”, accessed on Feb. 17, 2015

Avoiding credit mistakes in a divorce

Couples in Wisconsin who are divorcing may want to know how they can make sure their credit is protected. There are several steps that can be taken prior to and during divorce that will help.

It is important for those who are considering divorce to have a good understanding of their finances and their obligations. This includes knowing which accounts are joint and what kinds of debts they may share. Opening an individual account for depositing paychecks is a good idea if a divorce is likely. Many people may not realize that regardless of what a divorce decree says, they are responsible for any accounts that their name is on. That means that if the other spouse agrees to take on a debt but the debt remains in the name of both individuals, there may be an impact on both of their credit reports if the debt is unpaid. Collections agencies may also pursue either or both parties for jointly-held debts.

In addition to opening up a bank account, those who are contemplating a divorce should also consider obtaining their own credit cards. This will allow them to begin establishing credit in their own name. They should also make sure their information is kept confidential. This may include changing PINs and passwords.

Even if spouses go into a divorce with good intentions, there may be conflicts over money and debt. Protecting assets in these ways can help secure the financial situation for each spouse before moving ahead with negotiations. A lawyer may be able to help individuals understand their financial picture and how issues like property division might be resolved. Divorcing couples should also keep in mind that ensuring that the credit of both spouses remains healthy is in everyone’s best interests going forward.

Source: NerdWallet, “4 Ways to Protect Your Credit During and After a Divorce”, Anisha Sekar, Feb. 13, 2015

Valuing art as part of marital assets in divorce

Wisconsin artists who are getting a divorce should be aware that artwork created during the marriage counts as a joint marital asset. This could apply to writers and filmmakers as well as visual artists, as copyright is included in this assessment. Attempting to conceal these assets may lead to the other spouse being awarded anywhere from half to the full value of the art.

However, as with all marital assets, negotiation might be possible. One solution may be to work out arrangements that allow the artist to retain rights or decrease their payments to the other spouse over time. For example, one spouse could attempt to keep ownership of their work while giving their spouse a half-interest in royalties. Another example is giving one’s spouse a percentage of revenue and decreasing this percentage over time.

Unsold artwork may largely have speculative values, and in some cases, these pieces might have a higher value for the artist than for the artist’s spouse. In such a case, the other spouse could agree to exchange other assets for the artwork. For example, an aspiring artist who has only sold a few paintings and was only married for two years might be able to keep all rights to the work in exchange for the jointly owned car. On the other hand, a filmmaker married for a decade with children and a large body of work may have to deal with more complexities.

Artists and their spouses might want to work with attorneys to negotiate property distribution. There may be a great deal of variation in how this is handled, depending on the artist’s career and the length of the relationship. An attorney can examine a couple’s specific case and advise their client on the best course of action to take regarding property division and other divorce-related issues.

Source: The Huffington Post, “ For Artists, Divorce Means Splitting Up the (Art) Assets ,” Daniel Grant, March 3, 2015

Pet custody issues in a divorce

For many Wisconsin couples, pets are part of the family. When a divorce happens, the couple may see the pets as family members that should be subject to custody agreements. However, the law sees pets as property rather than as members of the family, like children. Therefore, different rules apply to pet ownership after divorce than are used to determine child custody.

The determination of the post-divorce ownership of a couple’s pets is normally seen by courts as part of the property division process. In most cases, a court will only award pets to one spouse or another. Having the pets travel weekly from one home to another, as children often do under custody agreements, is not usually an option. Instead, the court will have to decide, in the absence of an agreement, which partner retains ownership of the pet.

Before the court makes this decision, the judge will consider the circumstances in which the pet came to be owned by the couple. This can be important if one of the spouses owned the pet prior to the marriage, as state laws usually provide that any property belonging to one spouse before the marriage is considered to be separately owned and therefore not subject to division.

While most judges will adhere to the property division approach when dealing with pet ownership, courts in some jurisdictions have begun to consider the best interests of the pet and the wishes of the owners in making a decision on these matters. For those who are facing these and other divorce legal issues, the advice of a family law attorney is often valuable.

Tiger Woods to pay $110 Million in Divorce Settlement

The Tiger Woods divorce is in the headlines again. CBS 4 in Miami is reporting that he has agreed to pay Elin Nordegren $110 million as part of a divorce settlement. It is estimated that Tiger Woods is worth close to $500 million in total, and many commentators believe Elin could have demanded even more than what she is reportedly receiving.

Generally when married couples divorce, the property they have must be divided between them. This process is called property division. It can often be very complex even when neither spouse is a millionaire. It works differently from state to state, but we’ll go into some detail on how it works in Wisconsin.

In Wisconsin, the law is presumes that all property of the spouses is marital property and is subject to division during a divorce. Each spouse is considered to have half interest in all marital property. However, not all property will end up being in the marital property category. Some property held by the spouses will be considered to be separate or individual property such as gifts and inherited assets. This separate property is generally not subject to division.

Family law judges do have some discretion in dividing marital property and the factors they may consider are misconduct; the property an individual spouse brought to the marriage; the contributions the spouse made to the marriage; how much separate property the spouses have; and many other factors.

Because property division is so complex, it is sometimes difficult to predict what a judge will decide. When possible, the parties will agree to a marital property settlement which allows them to agree on the division of the marital assets. Given the news reports, it appears Tiger Woods and Elin Nordegren chose this option.

Source: CBS4.com: Tiger Woods Divorce A Multi-Million Dollar Affair; 10/19/10

Prenuptial Agreements Rising in Popularity

In a recent study by the American Academy of Matrimonial Lawyers (AAML), 73 percent of attorneys reported an increase in prenuptial agreements over the past 5 years. Of those surveyed, 52 percent also reported an increase in women requesting the agreements.

Prenuptial agreements, sometimes referred to as antenuptial agreements or as “prenups”, are pre-marriage contracts that specify how property would be divided in the event that the couple divorce. Some may think that these agreements are only for the rich and famous. However, the major increase in prenuptial agreements is coming from everyday people.

One major source of the increase in prenuptial agreements comes from couples entering a second marriage. Many people who have been through a contested divorce want to limit the possibilities of going through a second contested divorce. Having a prenuptial agreement is a good way to avoid extensive property fights in another contested divorce.

However, prenups are not just people entering a second marriage. Over the past 30 years, we have seen a trend towards people marrying later in life. Since 1980, the average age for a man getting married for the first time has gone up two years and is now at 26.8 years of age. For women, the average age has gone up nearly 3 years, and is now at 25.1 years of age.

Many people are no longer getting married right after school and are working for a few years before marriage. This gives people more opportunity to work and therefore people are bringing more assets to a marriage. We are seeing that prenuptial agreements are not just for the very wealthy; rather prenups are for any person who wants to protect the assets he or she brings to a marriage in the event of a divorce.

Source: Minneapolis Star Tribune: More couples saying ‘I do’ to prenups; Jeff Strickler, 10/27/2010

Dodgers Divorce Closer to Resolution: Part I

The Dodgers are one of the most storied franchises in Major League Baseball, and one of baseball’s most valuable teams. The team has been in some turmoil, mainly for off the field reasons. Most importantly, who will own the team for next season depends on the ruling in a divorce case.

Frank McCourt bought the team for approximately $355 million in 2004. This year, Forbes Magazine estimated the team’s value at $727 million including Dodger stadium and other team-owned facilities. Frank McCourt and his wife, Jamie, have been married since 1979 and were both active in owning and managing the team. However, in 2009 Frank McCourt fired Jamie McCourt as chief executive of the team. Shortly thereafter, Jamie filed for divorce from Frank.

Frank is claiming full ownership of the Dodgers based on a post-nuptial agreement they signed after purchasing the team, but before moving from Massachusetts to California. The post-nuptial agreement would give Frank complete ownership of the Dodgers, and Jamie would receive sole ownership of the McCourts’ vast real estate holdings.

Like Wisconsin, California is a community property state. In a community property system, the property of both spouses is considered to be marital property and each spouse has half-interest in all marital property. When a couple divorces, the marital property must be divided between them. Jamie McCourt is arguing that the post-nuptial agreement is invalid under community property law, and therefore she is entitled to a 50 percent share in the Dodgers.

They presently have a divorce case pending in Los Angeles County Superior Court. That case would rule on the validity of the post-nuptial agreement and determine who gets what in the McCourt divorce. While that case is pending, the McCourts are also participating in mediation, a form of dispute resolution that bypasses the courts and gives the parties an opportunity to reach a negotiated compromise. In our next post, we will go into more detail on the McCourts’ mediation and the case that is presently pending in court.

Sources: Los Angeles Times: Mediator gives McCourts settlement proposal; Bill Shaikin, 11/19/2010

Forbes.com: The Business Of Baseball, Los Angeles Dodgers (http://www.forbes.com/lists/2010/33/baseball-valuations-10_Los-Angeles-Dodgers_338671.html)