Tag Archive for: property division

Dodgers Divorce Closer to Resolution: Part II

In our last post, we discussed the Frank and Jamie McCourt divorce. Unless they can reach a settlement, the judge in the McCourt’s divorce case will determine the ownership of the Los Angeles Dodgers. Ownership of the Dodgers will depend on the validity of the McCourts’ post-nuptial agreement and an interpretation of California’s system of community property law- a system similar to Wisconsin law.

While their divorce case is pending, the McCourts have also participated in mediation in an attempt to reach a compromise. Last week, the judge overseeing the mediation met with each of the McCourts separately and advised them of how he believes they should divide ownership of the Dodgers.

While the mediator ordered that the parties not publicly discuss the mediation, reports indicate they have until the end of the month to accept or reject the mediator’s recommendation. Reports also indicate that the mediator’s opinion would give Jamie an interest in the Dodgers. Although the details of the mediator’s opinion are presently confidential, past settlement and mediation discussions do shed some light on what is being discussed.

The McCourts have attempted to reach a settlement many times, both with and without a mediator. In the past, discussions between the McCourts have established that Jamie would give up her interest in the Dodgers and Frank would compensate her. However, the parties have been unable to come to terms on how much should be paid. If the McCourts cannot settle this issue, it will be up to Los Angeles Superior Court Judge Scott Gordon to make a ruling on the post-nuptial agreement and the ownership of the Dodgers. Judge Gordon has until December 29 to rule in the case.

Almost any divorce has the potential to have very complex issues that can be difficult to resolve. The McCourt divorce demonstrates that when there are significant assets in dispute, property division issues can be difficult to settle by compromise alone. The McCourts have made several attempts at reaching a negotiated compromise, but if they cannot reach a compromise then this case will be in the hands of a judge.

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)

Jamie McCourt wins Ruling in Dodgers Divorce

Previously, we posted about the divorce between Frank and Jamie McCourt that will determine who owns the Los Angeles Dodgers. Frank and Jamie participated in mediation in an attempt to reach a property division settlement, however their mediation failed. Without a settlement in place, it was up to Judge Scott Gordon to rule on the issue of who owns the Dodgers and whether a post-nuptial agreement between the McCourts was binding.

If valid, the agreement would give Frank McCourt sole ownership of the Dodgers. Tuesday, Judge Gordon threw out the post-nuptial property division agreement, a decision that could make Jamie McCourt part owner of the team and could result in protracted property division litigation.

Judge Gordon found the post-nuptial agreement invalid based on errors occurring when the McCourts signed the agreement. During the trial, the attorneys for both sides reviewed the documents and found that the McCourts signed six copies of the agreement. Three of the copies listed the Dodgers as Frank’s sole property, but three copies did not.

Frank McCourt could decide to appeal Judge Gordon’s ruling, but he is already employing another legal strategy. Frank has informed the court that he is claiming sole ownership of the Dodgers on the theory he bought the franchise using the assets of a company he established before he married Jamie.

The parties disagree on how long it would take to resolve this new claim. Frank’s attorneys believe this new property division claim could be resolved in a one-day trial based upon evidence that has already been introduced into the record. Jamie’s attorneys believe the trial could require up to 60 days and months to collect new evidence.

As an alternative to further court proceedings, this ruling may bring the McCourts back to the negotiation table to settle their property division contest. Past negotiations focused on Jamie giving up her interest in the Dodgers and Frank compensating her, but they could never come to terms on a deal. During the past negotiations, the post-nuptial agreement was an unknown variable. Now that there has been a ruling on the issue, the McCourts may now feel they have a better understanding of their rights and be able to reach a compromise.

Source: Los Angeles Times, “Dodgers’ ownership in limbo after judge throws out McCourt property agreement,” Bill Shaikin and Carla Hall, 12/7/2010

Millions More Demanded in Kelsey Grammer Divorce

Kelsey Grammer, the actor best known for his portrayal of Dr. Frasier Crane, has had a tremendously successful career in television. He played the role of Frasier Crane for 20 years, 11 of which were on the NBC sitcom “Frasier.” At the peak of his earning power on “Frasier,” Grammer earned $700,000 per episode. “Frasier” ran from 1993 to 2004 and Grammer married his third wife, Camille Donatacci in 1997.

Many people credit Donatacci with helping Grammer turn his acting earnings into an even larger fortune through strategic investments in real estate and establishing Grammnet, a television production company, which has produced several television shows including NBC’s “Medium.” It is estimated that Grammer’s net worth has expanded to between $100 and $120 million.

Grammer and Donatacci married in 1997 and have two children together. However, due to reports of an extra-marital affair, Donatacci filed for divorce from Grammer in July 2010. The couple did not sign a prenuptial agreement, which may prove very costly for Grammer.

Grammer is interested in settling this divorce quickly because he wishes to remarry as soon as he can. However, the issue of marital property division is proving to be an obstacle to settlement. Grammer had offered a settlement of $30 million.

Just before Christmas, Ms. Donatacci rejected that settlement offer because she believes community property law entitles her to $50 million of the estimated $100 million he earned during their 13-year marriage and that she is entitled to her fair share as a cofounder of Grammnet Productions. Additionally, Donatacci is requesting child support and spousal maintenance, which Grammer’s offer reportedly did not include.

Sources:

Huffington Post, “Camille Grammer Demands $50 Million In Divorce Settlement: Report,” 12/30/2010

The Telegraph, “Kelsey Grammer facing large divorce pay out,” Nick Allen, 12/29/2010

Survey Indicates Financial Dishonesty Common Among Married People

There are many reasons why a marriage might fall apart, but many causes of divorce share the common theme of dishonesty. Trust in a marriage is important, and dishonesty can deeply damage the trust shared between spouses. A new survey by Forbes.com and the National Endowment for Financial Education has found that dishonesty about finances is becoming increasingly common among married people, with more than 30 percent of respondents indicating some form of “financial infidelity.”

The survey question 2,019 adult respondents and found that 31 percent of American couples who have combined finances were not always truthful about financial issues. The most common financial lie involved hiding cash or assets, followed by hiding a minor purchase, hiding a bill, hiding a major purchase, hiding a bank account and distorting debt or earnings.

When it occurred, the effects of financial dishonesty were very pronounced. Of those respondents who indicated they had experienced financial dishonesty in their marriage, 16 percent said the dishonesty led to a divorce, 11 percent said it caused a separation, 67 percent said it led to an argument and 42 percent believed it lead to a loss of trust in a relationship.

When divorce does result from financial dishonesty, marital property division will often be an important contested aspect of the divorce. In order to have a fair division of marital assets, it is important to have a clear picture of a family’s financial situation. Having a clear understanding of the marital debts and assets can be complicated when a spouse is hiding assets. Experienced divorce attorneys understand the importance of a thorough investigation into marital assets and will often collaborate with financial professionals, including forensic accountants, when it appears one spouse may be concealing marital property.

Source: Reuters, “Three in 10 Americans commit financial infidelity?,” Daniel Trotta, 1/13/2011

Kelsey and Camille Grammer settle divorce dispute

In January, we wrote that Kelsey Grammer was having difficulties finalizing his divorce. According to celebrity news outlet TMZ, Kelsey Grammer’s divorce from his wife Camille Grammer is currently being finalized. The news comes only days after reports that the two had struck a preliminary deal ending their marriage.

Although the precise details of the deal have yet to be revealed, it is widely believed that Kelsey and Camille’s disagreements regarding the divorce were mainly related to property division. Camille reportedly demanded $50 million, and Kelsey originally offered $30 million. The pair had not signed a prenuptial agreement when they were first married.

Kelsey and Camille Grammer’s divorce has been heavily publicized for months, primarily through interviews, released court documents and Camille’s appearances on the reality TV show “The Real Housewives of Beverly Hills.” During these appearances, Camille revealed that the pair had had difficulties with intimacy and that she begged Kelsey not to leave.

As for the divorcing couple’s future plans, Camille has announced that she never plans to remarry. Kelsey, however, will only be single for two weeks. He plans to marry Kayte Walsh, a former flight attendant, on February 25 in New York City in a lavish wedding celebration. Camille was invited to the wedding but she has declined to attend. Kayte and Camille met previously in a situation that Camille described as “uncomfortable.”

Kelsey Grammer is best known for his starring role as Frasier Crane in the hit show “Frasier,” as well as his appearances as the same character in a supporting role on “Cheers.”

Source: Huffington Post, “Kelsey, Camille Grammer Divorced,” 2/10/2011

Divorce and Social Security

Social Security is the main source of income for over 70 percent of retirees, many of whom are unmarried as a result of a divorce. Unfortunately, financial advisors rarely focus on how divorce can negatively affect their clients’ retirement plans.

Communications director for the Social Security Administration, Leslie Walker, encourages divorced individuals to research the rules regarding spousal and survivor benefits. Walker says that many divorced people make errors that can decrease their Social Security benefits.

Generally, you are eligible to receive spousal benefits if you were married to someone for at least 10 years who paid into Social Security. Eligibility is not affected even if you are currently divorced from this individual. If you claim these benefits at your full retirement age, you are generally given 50 percent of your former spouse’s Social Security benefits. If you worked for at least 10 years and also paid into Social Security during that time, you may be able to receive your own benefits.

However, you cannot claim spousal benefits as well as your personal work record benefits, but you are allowed to choose the benefit option that grants you with the largest amount of money. It is important to note that, if you remarry before you turn 60 years old, you are not eligible to claim benefits from a former spouse.

You are entitled to survivor benefits that equal 100 percent of your former spouse’s benefits if he or she died prior to claiming Social Security. If you remarried and divorced after the death of a spouse, you are also eligible for spousal benefits from your second marriage. However, you cannot claim both benefit options, but you can choose the option that provides you with the most money.

Source: Los Angeles Times, “Divorce can complicate Social Security claims,” Kathy M. Kristof, 3/6/2011

Considerations for divorce over the age of 50

Divorce is never an easy thing. There are many issues that must be sorted out, both emotional and financial. Those issues are compounded even further if the parties are divorcing later on in life. Individuals who divorce over the age of 50 can face very complicated issues in their divorces, especially when it comes to the division of marital property in Wisconsin.

A couple divorcing after 50, in all likelihood, has had a long history together and sorting through decades’ worth of mutually owned property can be a daunting task. However, considering some issues common to divorce later in life can help make the process simpler.

The value of retirement funds can be deceptive. Many people might assume that $250,000 in a 401(k) is roughly equivalent to a marital home worth $250,000. That assumption is wrong because the money in the 401(k) is going to be reduced by income taxes when it is withdrawn. It is imperative that both parties fully understand the true value of those retirement funds in order to have an equitable division of assets. If that’s not the case, then there is a chance that one of the parties may get short-changed.

The next mistake that people make during a divorce is putting too much stock in alimony payments and not enough stock in Social Security. Alimony is great while the former spouse is alive and working, however individuals who divorce later on in life are at greater risk of passing away shortly after a divorce, thus depriving the other party of alimony. Some divorcing spouses focus on establishing a life insurance policy with a former spouse and negotiating for their Social Security benefits. That way, when they leave workforce or pass away, they will still have assets that can be assigned.

Finally, many people do not consider their adult children when they divorce. Parties should consider how their divided assets pass down to their adult children. There have been instances of children being accidentally disinherited because divorcing parents did not consider their adult children in the divorce settlement. A solid divorce agreement can ensure that not only mutually owned property will be properly divided, but also that it will be properly inherited.

Divorce and marital property division can be complex issues and the way to best structure a divorce varies on an individual’s circumstances. If you have questions about divorce, an experienced family law attorney can help.

Source: SmartMoney.com, “Divorce Over 50: 3 Mistakes to Avoid,” Catey Hill, 3/23/2011

McCourts continue to work on Dodgers divorce settlement

Opening day has come and gone in Milwaukee, as one of the Brewer’s National League Rivals begins a new baseball season with its ownership in doubt because of a prolonged divorce. Although many couples struggle to properly divide their assets during a divorce, few need to worry about an asset as valuable as a professional baseball team during the property division settlement proceedings. However, Jamie and Frank McCourt, joint owners of the Los Angeles Dodgers, are doing exactly that as the Dodgers themselves enter a second season without settled ownership.

Requests from both Jamie and Frank’s attorneys resulted in the postponement of a hearing originally scheduled for April 11. Jamie McCourt is asking that Frank be required to provide her with all of the Dodgers’ financial documentation regarding the teams’ business operations.

The new hearing date is scheduled one month later on May 11. The change will give Frank and Jamie additional time to negotiate the complex property division agreement that could finally end their divorce proceedings, which began in late 2009.

In December, Judge Scott Gordon of the Los Angeles Superior Court threw out an agreement that would have given sole team ownership to Frank McCourt. Jamie McCourt took this decision to mean that she was a half-owner of the team.

At that point, Frank McCourt’s attorneys said that he would pursue a second trial to make the Dodgers his separate property, while Jamie McCourt’s attorneys said that she’d create an investment group to purchase Frank’s interest in the Dodgers. As of the present date, neither party has followed through with these stated intentions, and their attorneys have declined to comment on the negotiations since March 2 when the pair met to discuss the settlement.

Source: Los Angeles Times, “Frank and Jamie McCourt working quietly on a settlement,” Bill Shaikin, 3/29/2011

Prenuptial agreements can protect property in Wisconsin

When people divorce in Wisconsin, their property is divided between them according to Wisconsin’s community property law. Wisconsin’s community property law starts off with the presumption that all property and debts of the spouses that were acquired during the marriage are equally owned and therefore will be equally divided in the event of a divorce.

This poses unique problems for people who own a business. In many situations, a spouse of a business owner will be entitled to a share of the business. This can be so even if the business was established well before the marriage. With that in mind, many people would like to do what they can to protect their business interests in the event of a divorce.

Many people use a prenuptial agreement to protect their businesses in the event of a divorce. However, prenuptial agreements are very complex documents and should only be made with the advice of an experienced family law attorney.

Generally, a prenuptial agreement is a contract between two spouses that specifies what the spouses’ property rights would be in the event of a divorce. The contract must be signed by both spouses before the wedding. In order to be binding, a prenuptial agreement must meet several legal requirements.

Prenuptial agreements must be in writing. Verbal prenuptial agreements are generally not enforceable. The agreements must also be the product of both spouses acting freely and there can be no coercion or force involved. These agreements should also provide for a full disclosure of assets and the signing of the prenuptial agreement should be witnessed.

Importantly, prenuptial agreements need to be fair. These requirements may seem straightforward, however many couples inadvertently create a prenuptial agreement that fails to meet these legal requirements. In order to make sure you have a prenuptial agreement that is airtight, it is important to work with an attorney who is both knowledgeable and experienced in Wisconsin family law.

Source: Forbes.com, “Divorce-Proof Your Business, Even If You’re Still Single Or Happily Married!,” Jeff Landers, 4/19/2011

Couple who divided house with makeshift wall officially divorced

Marital property division can be one of the most complex issues in a divorce. Property division can be especially complex when the spouses have been married a long time and have accumulated substantial assets together. A recent high assets divorce provides a rather stark example of how difficult dividing property can be.

The divorce began about six years ago. In 2005, the wife forced her husband out of their marital home. In August 2005, a family court judge ordered that the husband could move back into the house if he divided it into two units. This required constructing a physical wall in the house.

The wife appealed the 2005 court order requiring the wall. About one year later, an appeals court allowed the wall to be constructed. The wall divided their three-story dwelling by separating the first-story living room from the staircase leading upstairs. The wall went up in December 2006, and the couple has been living together, yet apart, since that time.

The divorce was then delayed due to a change in the law and a bankruptcy filing. Now, after five years, a judge gave his final ruling in the divorce case. The judge ordered that the couple sell the now divided house and two other properties and split the profits between the two spouses. In addition, the husband, the former owner of a factory, was ordered to pay the wife a lump sum of about $1.5 million plus $6,000 per month. However, he can keep several other buildings he owns.

The wife has indicated that she will appeal the judge’s ruling, which could delay the sale of the home indefinitely.

Source: NPR, “NYC Couple Who Split House With Wall Get Divorce,” 4/28/2011