Test Kentucky Divorce Law

Back Dating Stock Options

Many corporations are feeling the heat and have been in the news for back-dating stock options. This Forbes article posits that the issue may have a gnarly impact on such options in the event of divorce. It doesn't suggest solutions, but sometimes the important thing is to be aware that there may be a problem so your expert can make that part of the analysis.

Dirty Tricks in Divorce Proceedings

"As soon as the divorce papers are served, the asset shuffling begins. It's amazing what angry spouses try to do--and what they can get away with" is the distressing title of an article the November 13, 2006 edition of Forbes, published online last week.
A correction to the article: the third edition of Equitable Distribution of Property by Brett R. Turner, was published in 2005 and the dissipation section is now up to 69 pages. It is published by Thomson/West.

No Duty to Disclose Pending Sales Discussions of Property in Divorce Settlement

Oh, dear; this cannot be good public policy. Divorce courts should be requiring no-holds-barred open disclosure. This decision will create or perpetuate a culture of trickery in litigation.
It is beyond comprehension that the sale of business for $225 million could take place in one month. When the seller signed this divorce agreement he had to have known there was a buyer in the wings or a contract pending. Those of us doing divorce work for many years would probably be willing to bet our homes that the deal was really done long before, but pen not put to paper until the divorce was a done deal. How often is the non-owner supposed to do discovery? Must we negotiate a deal, then take a final round of depositions? Sorry to report two poor decisions in the same week.
Here's the entire digest of Kojovic v. Goldman, NY App. Div. October 19, 2006.from the Family Law Prof Blog:
"The New York Court of Appeals dismissed an action to set aside a divorce settlement in a high-dollar divorce between Actress Lora Kojovic and her husband Neal Goldman, who owned a minority share of an Internet information service Capital IQ. Wife signed a divorce settlement agreement in August 2004 that gave her nearly $1.5 million. However, about one month later, Standard & Poor's purchased her husband's company for $225 million, with his share being $18 million. Wife then brought an action to set aside the settlement agreement on the basis of fraud and unconscionability.
Wife argued that husband affirmatively misrepresented the liquidity of the company and the talks that were underway for purchase of the company. However, the court disagreed, finding that husband had disclosed the assets and that it was up to wife to inquire further. However, wife, who had been represented by counsel in negotiating the agreement, had acknowledged that she had the right to inquire

Expected Inheritance: Divorce Relevancy

An Alaska case last month is causing quite a stir.
Krize v. Krize, Alaska Supreme Court, September 29, 2006
"Where the beneficiary remains on generally good terms with the donor, and particularly where the donor is a parent or other close family member, it is a rare case where the expected gift or inheritance will completely fail to yield any benefits at all. The better position, therefore is that the court may consider an expected gift or inheritance as one relevant factor in dividing the marital estate. Of course, the weight of a future gift or inheritance as a division factor should depend heavily upon the degree of likelihood that benefits will actually be received...
We therefore conclude that it is not inherently improper for a court to consider the possibility of inheritance in some cases. Because property divisions cannot be reopened, however, courts must be cautious in using this factor. On remand, the court should permit further discovery on this issue and on the extent to which Robert's interests have vested. Interests that have already vested may be considered as an asset of the beneficiary when the superior court divides the property."

Collusive Divorce

There are two good posts on a new collusive divorce case, one from Updates in Michigan Family Law and the other from the Family Law Prof Blog.

Real Estate Appraisals May Now Be Too High

New Headache For Homeowners: Inflated Appraisals: Rosy Valuations, Common In Boom, Now Haunt Sellers; It's Pay-the-Piper Time is the story by James R. Hagerty and Ruth Simon in the WALL STREET JOURNAL, Weekend Edition
July 22, 2006; Page A1
"As the housing market cools, Americans are confronting a problem that was easy to ignore during the boom: inflated appraisals of home values. Critics inside and outside the appraisal business have long warned that many appraisals are unrealistically high. That's partly because generous appraisals help loan officers and mortgage brokers, who often choose the appraiser, complete more deals. If a home is appraised at less than the buyer offered, the deal is likely to fall through. Inflated appraisals didn't matter much when home prices were rising at double-digit rates, since market values would quickly catch up. Now, however, prices are leveling off in many places and falling in some. Some homeowners are finding that the market value is below what past appraisals led them to believe."
Important information for divorce practitioners.

How Fido Fares in Divorce; Pet Disputes Becoming Common

AAML President-Elect, Guy Ferraro is cited in a Concord Monitor Online article, as American's attachment to their pets filters into the divorce arena. The St. Petersburg Times reports on pending cases that are attempting to test pets being treated merely as divisible marital property.

When Marriages End, Who Gets The Pets?

From the Pittsburg Post-Gazette, When Marriges End, Who Gets The Pets.

Tips To Uncover Income and Missing Assets

Tips to Uncover Unreported Income and Hidden Assets

as reported by Janet Jangjahr, in her Florida Divorce blog.

Divorce Online has published this handy article containing tips on finding Unreported Income and Hidden Assets.

James W. Hart also reported the link on his Florida Family & Divoce Law Blog as well. Nice to see the Florida lawyers supporting each other.

Tax Issues Related to Qualified Domestic Relations Orders

Alan Pearlman, who writes the Chicago Family Law Blog, has a great article on the tax side of dividing retirement assets upon divorce:

Tax Issues Related to Qualified Domestic Relations Orders and Divorce

It is reprinted below. Thanks, Alan.