New York Divorce Lawyer & Attorney : Clement Law Firm : Family Law Serving Manhattan, Westchester County, Brooklyn, Queens, Bronx, New York City

While I took a short break from writing this blog, the Appellate Divisions have been very active, having decided several matrimonial cases of interest. In the next couple of posts, I will try to catch-up and discuss some of these recently decided cases.

In Graev v. Graev, the First Department, sought to answer the question, when does an ex-spouse’s cohabitation with another adult result in a forfeiture of maintenance payments?

Domestic Relations Law § 248 allows the court to eliminate maintenance upon proof that the wife is habitually living with another man and holding herself out as his wife. What happens when the parties have an agreement that merely provides that maintenance is to stop when the recipient of the spousal maintenance cohabitates with someone for some period of time?

In Graev, the parties had a settlement agreement which provided that maintenance would terminate upon “the cohabitation of the Wife with an unrelated adult for a period of sixty (60) consecutive days.”

The Court in a 3-2 decision, certain to appealed to the New York’s highest court, the Court of Appeals, ruled that the merely living together is not cohabitation sufficient to terminate maintenance. In order to terminate the maintenance, the Court ruled there must an economic component to the cohabitation.

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A divorce could easily stretch out for a year or more. For this reason, it is not uncommon for a spouse, dependent on the other, to make a motion for temporary maintenance (alimony or spousal support in New York) to be paid during the divorce.

Sometimes, for either strategic or economic reasons, no motion is made for temporary support. However, the failure to make the motion for pendente lite maintenance does not necessarily result in a windfall to the economically advantaged spouse. To the contrary, after trial, the advantaged spouse could be found to be arrears in maintenance and owe the other spouse a large sum of money.

As pointed out by the Appellate Division, First Division in King v. Geovanis:

"A final order of maintenance or child support shall be effective as of the date of the application therefor (Domestic Relations Law § 236[B][6][a]; [7][a])'" (Burns v Burns, 84 NY2d 369, 377 [1994]). The service of a summons with notice containing a request for maintenance or child support constitutes an application therefor (id.). Thus, since plaintiff requested maintenance and child support in her summons with notice, the filing of which commenced this action on May 14, 2003, the child support and maintenance awards should have been made retroactive to May 14, 2003.

In King v. Geovanis, maintenance was awarded retroactive to the commencement to the action for divorce, three years earlier.

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Postings in two divorce and family law blogs highlight a growing conflict between the states on how to deal with a parties continuing obligation to pay alimony or maintenance, as it called in New York, if the former spouse enters into a domestic partnership.

To frame the issue, what happens if you are obligated to pay maintenance to your ex, but your ex rather than  re-marrying, enters into a domestic partnership? A number of states have enacted civil union or domestic partnership statutes which grant same sex couples some, but not all, of the rights and privileges of marriage. Maintenance or alimony typically terminates when the receiving spouse remarries.

The New Jersey Law Blog provides an excellent survey of the issue, contrasting a case from Virginia, which held as a result of the domestic partnership alimony should terminate, and one from Oregon, which held that the support obligation should continue.

The Florida Divorce Blog reports on a California decision in which the court ruled that a domestic partnership “is mere cohabitation and not a marriage.” Therefore, the alimony payments were ordered to continue.

To avoid uncertainty and litigation, this issue must be addressed in a settlement agreement at the time of divorce. If it is the parties’ intention that maintenance should terminate in the event of a cohabitation (same sex or opposite sex), the entry into marriage or a domestic partnership or civil union, the settlement agreement should make special provision. The failure to address t his issue exposes the parties to an unknown and presently unpredictable future determination.

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The Oklahoma Family Law Blog highlights some of the basic tax concerns that need be considered in connection with divorce.  

• Alimony is taxable and deductible. The person who provides alimony can claim the payments as a deduction, while the person who receives it can avoid a large end-of-year tax bill by paying estimated taxes during the year. Unlike alimony, child support is not deductible or taxable.
• Who claims the children? The parent who has custody of a child usually can claim the child as a dependent. However, with the custodial parent’s consent, the parent without custody can claim the child. (The custodial parent may still be able to claim certain tax benefits related to the child, including head of household filing status, the Earned Income Tax Credit, and the child-care credit.)
• Who is a head of household? There are several factors for determining the head of a household. A few include being considered “unmarried” on the last day of the year, having children or other dependents who live with you, and paying more than half the cost of providing a home for dependents. Taxpayers should consult with a tax professional to determine if they qualify for head of household status.
• Divorce, annulment and legal separation are considered the same by the IRS for tax purposes. The way a tax return is affected by the situation depends on how the decree is worded, and in cases where state and federal law differ, the IRS will side with the federal government.

Taxes may even be used to facilitate settlements. For instance, by using the differential in tax rates between spouses, a settlement can be structured so that, in essence, taxes subsidize some maintenance payment.

For this reason I suggest that a settlement proposal be examined by a tax professional or a certified divorce financial planner.

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A bankruptcy filing does not discharge an obligation to pay child support.   To the contrary, since other debts are discharged, funds that might have been paid toward other debts can be freed up to pay child support.

The Child Support Blog cites the recent case of  former NFL wide receiver André Rison to illustrate this point.  A bankruptcy court  ordered Rison into involuntary bankruptcy so that  $105,000 in child support arrears can be paid.

While some unsecured debts can be wiped out or reduced in a bankruptcy, other obligations, like child support, are "nondischargeable." This means that the bankruptcy filing does not wipe them out or reduce them. These debts must be paid regardless of the bankruptcy.

In fact, the 2005 revisions to the Bankruptcy Code made “domestic  support obligations” like alimony and child support a top priority. In order to obtain a discharge under Chapter 13, the debtor must provide for full payment of priority debts, including arrearages in domestic support obligations and certify that all post-petition domestic support obligations have been met.

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Michael Sherman in The Alabama Family Law Blog started an excellent series of articles (seven so far) on preparing for divorce. 

Preparation is essential. Since one of the primary purposes of divorce is to divide the marital assets, you should be knowledgeable about your and your spouse’s income, assets and debts.  

If you are in the dark about your family finances, a good place to start is by reviewing your income tax returns, check stubs and credit card statements.   After you have retained competent counsel, you should provide him/her with copies of your relevant documents.

Look about your home- do you own or rent? Do you own art, antiques, jewelry or collectibles? How were they acquired? Did you or your spouse purchase them or were they a gift? When were they acquired - before or during the marriage?

 Are you and your spouse self supporting? Will you or your spouse require maintenance? What will your post divorce lifestyle be like?  You will need to make a budget to determine your financial needs after divorce.

Do not be discouraged if you cannot make this assessment because documents are missing or you do not understand complex financial statements.   Missing documents can all be “discovered” during the divorce. Experts – lawyers, accountants, appraisers and financial planners- can be retained to make sense of the family finances.

 By preparing, you are yourself and your counsel with the tools necessary to protect and assert your legal rights.

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One product of women earning as much as or even more than men is that more wives are paying alimony (maintenance in New York) to their ex-husbands. Forbes Magazine reports that another by-product is that as men set their sights on women's earnings, women have become more protective of those dollars.

In fact, according to the American Academy of Matrimonial Lawyers, 44% of attorneys included in a recent survey said they've seen an increase in women asking for prenuptial agreements over the last five years, where in previous decades, prenuptial agreements were almost always sought by men.

A lot of women are indignant now that the shoe is increasingly on the other foot, says Carol Ann Wilson, a certified financial divorce practitioner in Boulder, Colo. "There's this sense of, 'What's yours is ours, but what's mine is mine,'" Wilson says. "My first response to that is, 'All these years we have been looking for equality; well, this is what it looks like.' I think women get angrier about having to pay than men do.

Just as some women object to men's request for spousal support, some men are particularly uncomfortable seeking it. Either they find it emasculating to ask, or they find the idea of receiving an allowance from their ex-wives humiliating, according to divorce attorneys.

As a practical reality, I have not seen  many cases where the husband seeks spousal support, though there really should not be a “legal” bar to their being granted support.  After all, the law is supposed to applied in a gender neutral manner.

However, because of systematic basis, the law has not always been applied in a gender neutral manner.  Indeed, until recently, how many men won custody of their children?  It was the conventional wisdom that there really  had to be something  wrong with a mother for her to have lost a custody fight. . 

Moreover, there may be a social stigma to a man seeking support from his wife.  Indeed, Forbes confirms that “Some men avoid the embarrassment by seeking a bigger bite of the marital assets instead of asking for alimony. Not only do lump-sum payments save them the humiliation of accepting monthly support, but they also reduce the ex-husband's taxes, since spousal support payments are taxed, while assets are not.”

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The New York Times spotlights Justice Robert A. Ross, a matrimonial judge on Long Island. Justice Ross has apparently earned a reputation for enforcing court orders and judgments by holding recalcitrant litigants in contempt of court and imprisoning them.

Too often, when a party prevails in a divorce action, winning a judgment against their spouse, the victory is pyrrhic.   The “losing” spouse will not only refuse to honor the judgment, but will deliberately frustrate enforcement.   

Last February, the Matrimonial Commission, a task force convened by the New York State court system, issued a report that called, among other things, for stricter enforcement of divorce-court decrees. The report said that in two years of hearings around the state, dozens of the 100 or so witnesses told of waiting years for orders to be issued, only to find themselves waiting months and years more for them to be obeyed.

“After people have gone through the time and money and exasperation, and they get an order that is not enforced, it’s an injustice,” said Sondra Miller, a recently retired appellate judge who was the commission’s chairwoman. “There were many, many, many complaints about this; that there is a lack of enforcement, a need for sanctions. And jail is certainly a sanction available to the court.”

Sentencing someone to jail for contempt of court was always an option, but one of last resort.    

It is a drastic remedy,” [Justice Ross] said. “But what is to be done when the law is not being complied with? There is an alarming frequency of contempt.” Judge Ross declined to discuss any current case. . . .but said that he would jail only someone who “makes a conscious decision not to comply with a court order.”

Maxine Last, a Long Island divorce lawyer who has struggled for years with cases that drag on for lack of enforcement, said of Judge Ross: “I wish there were many more like him,” adding that besides jail, “unfortunately, there is no incentive for the parties to comply.

Certainly, the “losing” spouse must make a decision, obey court order or lose your freedom. However, as one jailed husband pointed out: “At least while I’m here [in jail], everything’s on hold,” he said, waving a thin arm under the cold, fluorescent light. “She’s not getting richer off me.”

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There is much speculation on the web and in the blogs, for those who really care, that Britney Spears did not pick November 6 as the day to file for divorce from Kevin Federline by accident.

She filed two years and one month from the day of her marriage, on Oct. 6, 2004. Her prenup, according to legal theorists, evidently carried increases for Federline for every year of their marriage. And those deadlines, they say, likely had 30-day grace periods.

Hence, Nov. 6 would have been Britney's last chance to get out of paying a third year of alimony settlement to a basically talentless slacker who was a drain on her finances.

And in the end, money is probably what Spears’ divorce is all about. Since she deliberately showed off a new trim body on David Letterman’s show the other night, Spears is obviously getting ready to go back to work. If a new album and tour are on the boards, Spears obviously doesn't want to share the proceeds with Federline. It was clearly better to get out now, so that K-Fed can lay claim to only half of Spears’ earnings during what has been the most fallow period in her career.

Since celebrity cases oft provide good facts to illustrate how the legal system works, I thought I would offer my two cents.   It is not uncommon for the provisions of a pre-nuptial agreement to make payments (either the amount of money or the duration of payments or both) conditioned on the length of the marriage. 

In Britney's case, divorce became a consideration as a triggering or measurement date in the pre-nup approached.  Britney elected to cut her economic losses. 

Perhaps, her "poor" husband's motive  for contesting the divorce is economic,  too.   If he is successful, then  he may be entitled to whatever rights he would have acquired on the third anniversary of marriage. 

Look for a settlement, soon.

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Whenever playing a childhood game, the loser would inevitably call out as the game ended, “Do over.”  In golf, there are mulligans.  In the “game of divorce,” in most cases, there are no second chances to re-negotiate or litigate fairly negotiated and properly executed marital agreement.

The recently decided case of Kojovic v. Goldman, 2006 NY Slip Op 07595, makes this point abundantly clear. In Kojovic, the parties negotiated a post-nuptial agreement resolving all issues of equitable distribution and spousal maintenance. By the terms of the agreement, the wife was to receive a payment of $1.15 million dollars for her share of a closely held corporation in which the husband possessed a minority interest and was the chief executive officer. 

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The old adage is, “Only a fool has himself for a lawyer.” But every once in awhile a case is reported to prove that it is even more foolish for a lay person to represent himself instead of retaining an attorney.  

   Certainly, this would seem to be the rule in cases in which the parties plan to sign an agreement, whether it be a pre-nuptial, post-nuptial or separation agreement. In order to be enforceable and valid, a marital agreement not only has to be signed and notarized, but “subscribed by the parties, and acknowledged or proven in the manner required to entitle a deed to be recorded. Dom Rel. L. §236(B)(3)(emphasis added).

  The failure to properly acknowledge an agreement will invalidate it, rendering it unenforceable.

  In a recently reported case, the parties signed a handwritten post-nuptial agreement, which provided that a cooperative apartment would be purchased by Wife for $750,000 and would remain her separate property. She, alone, would be solely entitled to all of its income and profits.   The parties signed the one page agreement before a notary. The agreement was, however, not acknowledged. 

 Years later, when the parties divorced, the property was valued at $2,300,000. The husband contended that since the agreement was not executed as required by statute, the agreement was not valid. The Court agreed.    

  In an earlier case, the Court of Appeals,   Matisoff v. Dobi. 90 N.Y.2d 127, 659 N.Y.S.2d 209 (1997) explained why the law requiring the agreements to be acknowledged is absolute. 

Primarily, a bright-line rule requiring an acknowledgment in every case is easy to apply and places couples and their legal advisers on clear notice of the prerequisites to a valid nuptial agreement. Consequently, spouses or prospective spouses will not need to speculate as to whether the enforceability of their agreements will be supported by their original motivation or subsequent economic relationship during the marriage. Certainly, consistent and predictable enforcement is desirable with regard to such important marital agreements. . .

Acknowledgment, moreover, serves a valid purpose apart from prevention of fraud. Marital agreements within section 236(B)(3) encompass important personal rights and family interests. As we explained with regard to the similar prerequisites for proper execution of a deed of land:

 "When [the grantor] came to part with his freehold, to transfer his inheritance, the law bade him deliberate. It put in his path formalities to check haste and foster reflection and care. It required him not only to sign, but to seal, and then to acknowledge or procure an attestation, and finally to deliver. Every step of the way he is warned by the requirements of the law not to act hastily, or part with his freehold without deliberation"

(Chamberlain v Spargur, 86 NY [603] at 607, supra).

Here, too, the formality of acknowledgment underscores the weighty personal choices to relinquish significant property or inheritance rights, or to resolve important issues concerning child custody, education and care.

Certainly, had the Wife in the recent case sought the aid of counsel in preparing the marital agreement, the agreement would have been properly acknowledged. The valid agreement would have rendered the wife immune to the husband’s claim of entitlement to her property.   The wife’s two million dollar asset would have been fully protected. I would have to guess that the value of the asset to be protected dwarfed the attorney’s fee “saved” by the wife. 

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The gossip pages will always provide rich material for the divorce and family law blogs. This weekend was no exception.  Nicole Kidman wed this weekend, but before the ceremony, she and her new husband signed a pre-nuptial agreement. 

A pre-nuptial agreement is a good way for parties to protect their assets prior to marriage and long before a divorce is even a consideration. These agreements are not something that only extremely wealthy need consider. I am asked to prepare pre-nuptial agreements by parties considering a second marriage, particularly when children are involved, and in cases where there is disparate wealth. With greater frequency, I am being asked to prepare these agreements where wealth is just a potentiality.  

A prenuptial agreement is a contract made by the prospective spouses before the contemplated marriage. The agreement will commonly provide how property will be divided in the event of divorce or death, but it can cover many other issues in the marriage as well. For instance, pre-nuptial agreements can provide for how property will be acquired during the marriage; how it be will be classified for equitable distribution purposes (marital or separate property) in the event of divorce; how the parties’ estates will be handled if the marriage ends by death, and how (and if) maintenance (alimony) will be paid in the event if the marriage ends in divorce.

In Nicole Kidman’s case, “The papers give Keith just over  $US600,000 a year for every year they're together.”

“There's also a clause that allows Nicole to leave the marriage without giving a cent to Keith - an ex-cocaine addict - if he uses illegal narcotics or drinks excessively.”

In order to ensure that your pre-nuptial agreement will be found to be valid, you and your future spouse should each seek legal representation. One attorney cannot represent the two of you.  An experienced matrimonial attorney will be able guarantee that the agreement will be signed with the necessary formalities.  If your future spouse is also represented you will have some assurance against future claims that the agreement was procured as a result of fraud, undue influence, coercion or duress. In addition, you should be prepared to make full disclosure of your net worth. Lastly, you should not spring the pre-nuptial agreement on your soon to be spouse at the very last minute. Plan on having the agreement signed and in place in advance of the wedding.  

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Paul McCartney announced recently that he was seeking a divorce from his present wife Heather Mills. The question most frequently asked, is why didn’t Paul (since we all seem to familiarly call him by his first name) have a pre-nuptial agreement. Whatever the reason he didn’t we can only speculate.

Regardless, I believe that under New York law, most of his assets would be safe.    Paul acquired most of his wealth prior to his current marriage so that would be his separate property and, therefore, beyond the claims of his current wife. Where Sir Paul has exposure is on the issue of spousal maintenance. Certainly, Heather Mills became accustomed to living the jet set lifestyle enjoyed by one of the richest men in the world.   She has the right to continue to enjoy that lifestyle.  

How it will play out in the English system, and what Paul will have when he turns “64”, only time will tell.” 

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