Tag Archive for: property division

Jamie McCourt would like to force sale of Dodgers

Jamie McCourt is requesting an immediate sale of the Dodgers to avoid a takeover by Major League Baseball. During a divorce with the team’s owner, Frank McCourt, the Jamie was fired, and she now claims that the team is severely mismanaged. Jamie petitioned Superior Court Judge Scott Gordon to order an immediate sale in hopes of obtaining the maximum amount of value for the franchise.

The team is the couple’s largest asset and the subject of an ongoing marital property division dispute, despite the fact that their divorce is already official. Jamie McCourt believes that the sale would be a positive change for the team and its fans, as it would bring in a new owner with differing business strategies than those of her ex-husband.

Judge Gordon has scheduled a hearing on the issue for June 22, during which he will consider arguments for and against the forced sale of the team. The hearing will also cover Jamie’s request to obtain her ex-husband’s financial records. This follows a ruling in December, when the judge set aside a controversial post-nuptial agreement. That decision has caused considerable tension for the franchise itself, as Frank had previously argued that 2004 post-nuptial agreement granted him exclusive ownership over the team.

The commissioner of Major League Baseball has launched an investigation into the failing finances of the Dodgers, suggesting that MLB might have to take over the team if the current management is unable to resolve the situation.

As the divorce between Frank and Jamie McCourt demonstrates, complex property division can be one of the most difficult issues to resolve in a divorce that involves substantial assets. While just about any divorce has the potential to become a hotly contested divorce, achieving a settlement can be quite a challenge when there are significant assets at stake. If you have questions about marital property division in Wisconsin, an experienced divorce attorney can help.

Source: Thomson Reuters News and Insight, “Jamie McCourt seeks immediate sale of the Dodgers,” Mark Lamport-Stokes, 5/19/2011

Husband solves a community property puzzle

The Wheel of Fortune spun and a divorced husband and wife are going to share the prize. Scott Dole will need to share the $51,600 jackpot he won on the popular game show with his ex-wife Carrie Dole.

The question before family court Judge James Rulli involved whether or not Scott’s Wheel of Fortune winnings constituted community property that needed to be shared equally between husband and wife or if the money belonged solely to Scott. Like Wisconsin, the law of the Doles’ home state provides for an equal distribution of assets in a divorce.

Carrie Dole had filed for divorce long before the game show appearance by her husband, but the couple had reconciled their differences at the time the show was filmed. Carrie Dole was living with her husband as a married couple and even traveled with him, staying in the same hotel room during the Wheel of Fortune taping.

Judge Rulli found that the prize money was community property subject to the 50-50 community property law and ordered the winnings to be split equally between the two, saying that it appeared the couple really wanted to be together before and after the prize was won.

At the trial, Scott Dole insisted that he should be allowed to keep the entire jackpot because his wife owed him for her share of an inheritance left to Scott by his late father. The money eventually went toward the purchase of a home.

A film segment showed the couple hugging enthusiastically on camera after the winning appearance. At the time, Carrie Dole testified that she had requested her attorney withdraw the divorce petition.

The $46,988 after-tax final amount was placed in an escrow account pending the outcome of the judge’s decision.

Source: The Seattle Times, “‘Wheel of Fortune’ jackpot split 50-50 in divorce,” Laura McVicker, 5/26/2011

Don’t lose everything when divorcing after 50

Divorce later in life is becoming more and more common. As Baby Boomers in Wisconsin are nearing retirement, many are finding that divorce is an unplanned part of their golden years. In fact, the divorce rate for people over the age of 50 has doubled, according to the National Center for Family and Marriage Research at Bowling Green State University.

Yet, divorcing after 50 can have a devastating impact on your quality of life if you are not careful with your assets. Many of the assets of those in the over-50 crowd are in retirement funds. These, if they are tax deferred, may drop in value when withdrawals are made because taxes will be taken out. Splitting the assets is challenging because of the need to consider these types of issues.

There are some ways to protect yourself from potentially devastating financial decisions. First, you need to be sure that you have legal representation and the advice of a financial planner during your divorce. Both of these will be an asset.

Next, avoid cashing in your retirement accounts during the divorce, if you can. If you make an early withdrawal, you will likely have to pay a hefty penalty. If there is some way you can divide your assets so that the retirement account stays intact, then you may be able to avoid these penalties.

Additionally, make sure you divide your debts in a fair way after your divorce. Pull a credit report on your spouse to ensure you know about all existing debts, even those who might be secret from you. After a lifetime together, it is only fair for the debts to be shared.

Source: Bakersfield.com, “Divorce misstep after 50 can be catastrophic,” Steven Van Metre, 5/13/2011

Baby boomer divorce rates are climbing

A recent study completed by the National Center for Family and Marriage Research shows that divorce rates are climbing up among the baby boom generation in Wisconsin and across the nation.

While most divorce numbers have declined over the past 20 years, the study shows that the divorce rate among people aged 50 and over has doubled.

Some experts suggest that the causes for the increase can be found within the attitudes and abilities of the generation itself. Baby boomers are more likely to have enough money to manage after a divorce. There tends to be less squabbling over dividing the assets because there is usually more than enough to go around. On the other side of the coin, financially strapped marriages can bring about tension that can lead to a divorce.

Infidelity has been identified as a reason that pushes couples apart. Some research suggests that infidelity is the catalyst that pushes marriages to the end in nearly two-thirds of cases.

Children getting older and leaving home also tends to be a major driving factor behind older couples divorcing.

Some experts believe the trend will continue to rise among adults in the 40 to 65-year-old range. Rates, however, are expected to decline as boomers get older.

Baby boomers considering divorce need to evaluate what is going to happen with their assets. Once the assets have had a value placed on them, decisions on marital property division can take place. If you have questions about divorce or property division in Wisconsin, an experienced family law attorney can help.

Source: Fox Business, “Why So Many Baby Boomers are Getting Divorced,” Casey Dowd, 6/23/2011

Credit Suisse chief executive pegged with bloated interest bill

In a high asset divorce, the financial stakes are enormous and a few words in a settlement agreement can have a large impact. Recently, news broke that a forgetful moment coupled with a few words in a settlement agreement will cost Credit Suisse’s chief executive more than $750,000.

Brady W. Dougan, of the Swiss financial services company, missed the deadline for a divorce settlement payment by 12 days in 2006. An appeals court has now ruled that he will have to pay a whopping $750,000 in interest for being 12 days late. How did a 12-day late payment result in $750,000 in interest?

As part of Dougan’s 2005 divorce, Dougan needed to pay his ex-wife, Tomoko Hamada Dougan, a total of about $15.3 in two installments. Although Dougan made the first payment on time, he was late on the second $7.5 million payment by 12 days. Their divorce settlement agreement called for interest on any late payments, but the Dougans did not agree on the length of time the interest accrued.

Dougan and his legal team argued that he should only have tallied 12 days worth of interest, which equals the length of time he was late on the payment. After reviewing the exact language of the divorce settlement, the court determined Dougan was responsible for interest accumulated from the date of the settlement, not the date the second payment was due.

Because of the court’s ruling, Dougan is on the hook for one year and 12 days worth of interest, which came out just over the $750,000 mark. The court did not go easy on Dougan, who has degrees from the University of Chicago, saying that both he and his team were financially savvy enough to have recognized the consequences of a late payment.

Source: DealBook, “Credit Suisse Chief Penalized $750,000 in Divorce Case,” Kevin Roose, 27 June 2011

The economy and timing affect financial goals in divorce

One of the primary steps in divorce negotiation is marital property division, and one of the main assets that typically needs to be divided is the marital home. If you have to sell your house during a divorce, the real estate market will determine whether you make or lose money by selling. During a down real estate market, like the one we’ve been seeing in Milwaukee, you could lose most of the equity you have built in the house. To avoid all of this, one party can keep the house and the other can take other assets in exchange for the value of the equity.

The state of the overall economy definitely has an effect on how a divorce can affect you financially. You may have to move, apply for more credit, or even get a new job as a result of a divorce. All of these things are easier to do in a good economy.

If a couple has children under the age of 18, child custody and child support can complicate financial matters. If custody of the children is split between both parents, each one will have to pay living costs for each household, instead of combining their incomes for one household. If one parent has custody, it may become more stressful for the other parent who has to pay child support.

Getting a divorce during bad economic times requires careful consideration and planning. Thankfully, people faced with divorce in Wisconsin do not need to go through the process alone. Experienced family law attorneys are available to help people protect their financial interests through the course of the divorce process.

Source: MSNBC, “The best and worst times (financially) to get divorced?,” Angie Mohr, Aug. 8, 2011

Danica Patrick announces divorce on Facebook

Celebrity NASCAR driver Danica Patrick recently announced on Facebook that she was divorcing her husband of seven years. While she said in her announcement that the split was amicable, Patrick — the most successful woman in American racing history — could still potentially face many of the challenges typical of a high asset divorce.

One issue frequently arising in high asset divorces is whether one spouse should be awarded spousal maintenance — generally known as alimony — from the other. Spousal support is designed to provide a non-working or under-employed spouse with assistance until that person becomes self-supporting. It often is a hotly contested issue in divorces, especially if one spouse earns a significant income. In Wisconsin, there are no set black and white rules to determine if, when, or how much spousal maintenance will be awarded. Courts will examine a number of factors when coming to a decision.

Another issue in high asset divorces is property division. In Wisconsin, the marital estate includes property that either spouse acquires during the marriage, with exceptions for gifts and inheritances. In most cases, the court divides the marital estate equally between the parties. In a high asset divorce, it is important to get comprehensive valuations of all marital property to ensure equitable division.

Patrick likely has a team of legal advisers who will help her work through these issues. Many people going through divorce might benefit from an experienced divorce attorney who can assist with these complicated legal issues.

Source: Associated Press, “Danica Patrick divorcing husband after 7 years,” Jenna Fryer, Nov. 20, 2012

Why you need to know about your spouse’s business

Income is a key consideration in any divorce. Under Wisconsin law, both spouses’ incomes are factored into determining how much spousal maintenance or child support one spouse may be required to pay as it is a community property state wherein assets are divided equally. Substantial changes in income may warrant a post-divorce modification in alimony or child support. Given the key role income plays in family law considerations, it is important that anyone going through divorce has a good handle on what his or her spouse earns.

In most cases, a spouse’s income may be ascertained and easily determined by looking at W-2s and pay stubs. Determining income becomes trickier if the spouse is self-employed. When a spouse runs a home cleaning or maintenance business, a lawn service company, or even a bar or restaurant, much of the income will come in the form of cash, which is easily hidden and can be used to purchase a new luxury vehicle, a golf-course condo and other high-end items that significantly increase one’s net worth without ever making its way onto an income statement.

When a spouse runs a cash-based business, questions are likely to arise during divorce about how accurately the income has been reported. If one spouse knows the other spouse had underreported income in the past, there may be a presumption that current income also is being understated. If the other spouse does not have an adequate understanding of how the business operates and where to find the cash flows, the missing income may be hard to track. Options to locate income discrepancies during divorce include a lifestyle analysis tool and a forensic accountant.

An experienced family law attorney can help ensure that all income be accounted for during a divorce, and he or she may also assist in assembling a team of financial experts to track down hidden cash.

Source: Forbes, “What A Divorcing Woman Needs To Know About Her Husband’s Cash-Based Business,” Jeff Landers, Jan. 30, 2013

Wisconsin Supreme Court to Decide Important Divorce Issue

How professional goodwill should be considered by a court when it is calculating spousal maintenance and marital property division is one of the more hotly debated issues in family law. Courts across the nation have come to different conclusions on the issue. Some courts will count professional goodwill only once for either maintenance or property division. However, other courts will use goodwill to determine both property division amounts and again for calculating spousal maintenance (sometimes called alimony.) At least one Wisconsin Court of Appeals has decided that business goodwill can be counted twice.

This last July, the Court of Appeals decided the case of McReath v. McReath, which allowed business goodwill to be counted twice. This month, the Wisconsin Supreme Court accepted review of the McReath case.

This case will have important ramifications for divorcing professionals throughout Wisconsin. Goodwill is a concept that broadly encompasses the intangible assets of a business, including customer loyalty. Even though goodwill is relatively hard to define with precision, Wisconsin courts will include it when dividing marital property.

In the McReath case, the husband is a dentist with an orthodontics practice. The McReaths were married for 20 years, and he had acquired the practice early in their marriage. In the marital property division contest, the trial court accepted the wife’s valuation of the practice at $1.058 million and it granted her half of that amount.

The trial court also awarded the wife $16,000 per month in maintenance for twenty years. The husband argued that this amounted in a double counting of his professional goodwill, and therefore requested that the property division amount be adjusted downward. The court of appeals rejected this argument, but did note that Wisconsin law is somewhat ambiguous on this subject. By accepting the McReath case, the Wisconsin Supreme Court has the opportunity to resolve the uncertainty in Wisconsin property division and maintenance law.

Sources:

State Bar of Wisconsin, “Wisconsin Supreme Court adds eight cases to docket, including high-capacity well dispute,” 12/16/2010

McReath v. McReath, 789 N.W.2d 89 (Wis. App. 2010)