It is our goal that every divorce can be handled in a professional, honest and forthright manner by staff and clients. However, the client or their spouse may have difficulty in dividing such assets as real property, bank accounts, investments and possessions. This can lead to the temptation to deceive, hide or otherwise mislead the other side.
Postnuptial agreements can serve a variety of purposes. One common use is to sooth tension over a disagreement a couple may have. It can apply to different matters, but couples commonly use it to address disagreements over finances or control of certain assets.
A British couple's highly publicized split in 1997 is still not resolved. With the couple moving separately to the United States in 2009, the bitter battle remained in the English courts. According to a ruling in 2013, banker Yan Assoun should be paying three-times the $132,000 he pays annually, per the original agreement. This is because Assoun now earns in excess of $1 million.
Dividing marital assets is a complicated process that involves itemizing a complete list of bank accounts, real property, and other possessions of value. The list must be as comprehensive as possible with the understanding that some assets (such as stocks) will fluctuate in value. In a perfect world, the couple looks at the list and comes to an equitable agreement with help of their attorneys. However, the temptation to deceive or mislead can prove to be too appealing for some spouses.
Filing for divorce involves a variety of challenges. For some couples it may be a custody issue, while for others it the distribution of marital assets. Marital assets often involve property, businesses and possessions, but also include such assets as pensions, stocks, savings and an Individual Retirement Account (IRA).
Many Americans are well aware of the new tax reforms under the Tax Cuts and Jobs Act. One detail of the law that directly affects family law and divorce is that money paid to alimony or spousal support will be considered taxable income, and those who receive alimony payments will not have it taxed as income.
Each divorce is as unique as the people involved. Some go smoothly with a fair and equitable arrangement, while others are more contentious. The Trafelets made the news recently when an appellate court judge in New York ordered hedge fund manager Remy Trafelet to pay $3.5 million in interim fees to his wife Lara. This is after $600,000 payment in 2017.
Many times we read about the use of forensic accountants in Family Law proceedings, to either establish the marital standard of living, or income available for support or to value the community interest in a business. However, that largely looks into the past for analysis; as counsel, I believe we need to let clients know that we need to look at their financial future, as well.
There are seemingly an endless number of details that need to be addressed during the divorce process and after. One that may slip through the cracks because it didn’t seem immediately pressing is changing the benefactor on a life insurance policy or other non-probate assets. Your will may have been updated, but perhaps non-probate assets like individual retirement accounts, insurance policies, annuities or mutual fund account were not addressed.
Divorce is a difficult chapter in the life of any family. Of course there is the emotional wounds that come when a couple realizes that one or both spouses no longer wish to be married. While this is life changing for both the parents and the children, the financial element of a divorce is also an important part of the new equation.