Tag Archive for: Equitable Distribution

“Me, Too” Divorces: A Case Study

/in , , /by

Whenever we hear about a case of sexual harassment in the news, there is often a divorce happening in the background. The divorce part is just not the centerpiece of the story. I’ve had several situations where the wife’s husband was accused of sexual harassment at the office, and it became a major consideration in our strategy. 

For example, I had a case where the husband was a charming, easy-to-love guy. The wife was successful in her own right, and he pulled out all the stops for her. She ended up relocating for him — and a few years later he was asked to resign from his job due to multiple sexual harassment claims.

He ended up going from a high salary to $30,000 a year scraping together various consulting gigs. The wife went from being the less-monied spouse to being the monied spouse. When the marriage broke down, having a financially ruined husband became an urgent problem. His reputation had been tarnished within his industry so much that it was unlikely he would ever get another high-paying position. 

My client abhorred the idea of paying support to someone whose career came crashing down because of his own actions. Despite what was morally right, it appeared that the black and white letter of the law was on the husband’s side. According to the statutory maintenance guideline calculations, my client would have had to pay a sizable maintenance to him. The wayward husband’s attorney requested this relief to shake up my client and put her on the defense; he picked up on my client’s (understandable) particular revulsion to paying support — and liked to bring it up to unnerve her. He requested the relief in his pleadings, audaciously filed a motion for support, and sent barrages of correspondences on the subject. 

Despite the guidelines, I advised my client that the judge would not rule in the husband’s favor.

That’s because judges look at the “whole package” and exercise several factors afforded to them to deviate from the statute as they deem fit towards a fair and judicious outcome. I expected the judge would be sympathetic to my client because her story was so indicative of the moral character of the husband. Ultimately, we prevailed, obtaining a judgment that freed my client and that she felt great peace about. 

One of the judges I’ve admired in my career always emphasized the importance of providing a “whole picture” to the judge. The relevant laws allow for a degree of discretion to the judges, which makes it possible to do things like bypass spousal support guidelines in the interest of fairness. In this case, the whole picture showed a cloud of bad behavior that obscured the one issue that seemed in the husband’s favor. 

As ludicrous as it might sound for a wife in this instance to have to pay her husband support, it’s not so simple, for example, the courts typically prefer that a former spouse pay support than that the befallen spouse become a ward on the state. Further, as mentioned, the statutory notice of guideline maintenance, in its most literal form, favors the husband, and seeking maintenance is also often used as a strategic scare and intimidation tactic of the husband’s legal counsel to get the wife to settle on other terms, such as equitable distribution.  

Join me next time when I discuss another “Me, Too” divorce, and feel free to send me your story to cheryl@cherylsteinesq.com.

Until next time…… 

Cheryl Stein, Esq.
The Law and Mediation Offices of Cheryl Stein
745 Fifth Avenue, Suite 500
New York, NY 10151
Phone: (646) 884-2324
E-mail: cheryl@cherylsteinesq.com

Good Samaritan Divorce

/in , /by

Is there a price tag to being a Good Samaritan in Divorce? 

“A Good Samaritan — a charitable or helpful person.” 

There are infinite ways of exercising kindness to one’s spouse during a divorce, but we will focus on the timing of divorce here.  

Sometimes, in a divorce, one party needs more time while the other wants the divorce finalized immediately. The one that wants the immediate resolution will try to exercise grace, extend the other party significant latitude, and give them more time, sometimes years to ease the blow and transition for the party having a harder time with the concept of the divorce and disentanglement. What can happen is that two, three, or even more years go by before the divorce process is underway. 

Due to that wait time, the spouse that has exercised patience can end up having to pay much more than if the divorce had been commenced earlier, because of the equitable distribution cut-off date being postponed and the maintenance entitlement, as a correlation to the length of the marriage, being longer. 

For example, wages/income earned, bonus payments, retirement accruals would be subject to equitable distribution, so you have cases where parties have been living separate and apart and want half of the other’s bonus payments and funds in separately titled accounts that income has gone into, in addition, to support payments.  

The cut-off date for equitable distribution is demarcated by the filing of a summons for divorce or the parties entering into an agreement, such as a postnuptial or separation agreement specifying the equitable distribution cut-off date. 

On the maintenance end, the formula states that for a marriage up to 15 years, maintenance is 15-30% of the length of the marriage; at 15-20 years of marriage, maintenance is payable for 30-40% of the marriage; and for a marriage over 20 years, it’s payable for 35-50% the length of the marriage. So, the longer you’re technically attached to someone, the longer you’re paying them. 

In one extreme case, a well-off husband, who worked for 5 years trying to negotiate an agreement but never filing a summons or doing anything to cut off equitable distribution, ended up being obligated to pay his wife a lot more due to the patience he extended to her during that 5 year period when they were still married, although living apart. 

In this situation, the more monied spouse exercised kindness and allowed the other spouse more time, which in turn cost him more than it needed to. Both spouses knew the marriage was over, and the spouse who needed more time was totally unsympathetic in the final divorce. 

Sometimes, the waiting spouse is acting from pure altruism — out of empathy and compassion towards their spouse; often, there is also an interlaced self-serving quality, as the waiting party thinks their spouse will be cooperative and less aggressive in their demands when they finally come around. 

Sometimes, this works in the reverse, where the non-monied spouse gives the other party latitude and by the time they are ready to proceed, there is a lot less money to divide, as assets have dwindled. 

The “feel good” concept we’ve all heard: “You attract the energy you put out” simply does not always unfold as such; far too often, the party putting out gracious energy gets taken advantage of, as cynical as it sounds.  

Unfortunately, being a Good Samaritan can get a divorcing party taken advantage of and leave them feeling beaten down and resentful.  

There are practical solutions to stop-gap this, including but not limited to, stop the clock agreements; equitable distribution cut off agreements; postnuptial agreements and interim agreements; filing a summons but holding off on filing a request for judicial intervention while the agreement is being negotiated.  

Feel free to contact us to discuss the various containment methods and best strategy approach where these Good Samaritan dynamics operate in the shadows.

Cheryl Stein, Esq.
The Law and Mediation Offices of Cheryl Stein
745 Fifth Avenue, Suite 500
New York, NY 10151
Phone: (646) 884-2324
E-mail: cheryl@cherylsteinesq.com

When Love and Marriage Don’t Go Together like a Horse and Carriage….What’s Left?

/in , /by

Marriage is inherently deemed an economic partnership, according to the law, and upon its dissolution, the accumulated assets and interests are to be distributed on the basis of the economic needs and circumstances of the parties.

Equitable distribution in New York is fact specific, and not a 50/50 split, like it is in the community property states, such as California, Arizona, Nevada, and Alaska. (There are 9 community property states in total.) Much is left to judicial discretion in this neck of the woods. Both parties contributions as spouse, parent, wage earner or homemaker are accounted for. The court possesses flexibility and elasticity to mold an appropriate decree, because what is fair and just in one circumstance may not be so in another.

With regards to equitable distribution, we look closely at that economic partnership, splitting interests when there are both direct and indirect contributions made to the titled spouse by the non-titled spouse. These details will oftentimes determine how much is allocated between the parties. If there were many direct or indirect contributions made by the non-titled spouse, that could give a lot of weight to how much is paid to the non-titled spouse in the equitable distribution payout.

Marriage is like being on the clock. It is “marriage time,” like punching in and out of work, with the punch-in time being the date of marriage and the punch-out time being the date of commencement of a divorce action for active assets, and date of trial for passive assets. When you sign up for marriage, your financial actions are accounted for, and there is to be a reckoning with your spouse. A large part of the marriage (contract) is a financial contract with your spouse, and whether or not you understand the provisions and their ramifications when you take those marriage vows, you are bound by them. All time you spend during the marriage may be accounted for and “billed,” so to speak, in the final pay-out equitable distribution awards.

Arguably, this result may be inherently unfair from the get-go if you consider that most people don’t read the Domestic Relations Law, Family Court Act, General Obligations Laws, enter into a prenuptial agreement, or consult with a matrimonial attorney prior to marriage, so they are clueless as to the full breadth of the financial picture and often make erroneous presumptions. For example, many people presume that money they put in their separate titled accounts during marriage is separate property, which is incorrect. All income earned during marriage is marital income, so if spouses put their incomes into separate titled accounts, rather than keeping that money separate, they are commingling their separate account and presumptively turning everything in that account into marital property – the exact opposite result they intended.

Another counterintuitive consequence and irony is that many people’s performance tanks during a bad marriage. A non-titled spouse may be requesting and entitled to equitable distribution for their contributions when the titled spouse may feel that all their spouse did during the phases of a distant or rocky marriage is hamper their performance and growth, and that their growth would have been exponentially greater without their spouse and his/her claimed contributions.

The hoi polloi are entering into marriage contracts without understanding the basic principles of the contract, and later claiming that they did not understand the contract is not a valid defense. If you are old enough to get married, you are supposedly mature and responsible enough to avail yourself of this information and plan your finances accordingly.

It would be a leap to evoke the phrase “The Follies of the Masses,” but as matrimonial attorneys and mediators, we urge people to educate themselves about managing their finances prior to marriage, and if that time has passed, much may still be salvaged. I have married people asking for consultations all the time to realign their finances and understand the financial blueprint, for example, prior to one spouse opening a business, assuming a large debt, receiving an inheritance or personal injury award or liquidating untainted premarital property towards purchasing a jointly titled home, all of which are opportune times.

Feel free to contact The Law & Mediation Offices of Cheryl Stein with any questions.

Cheryl Stein, Esq.
The Law and Mediation Offices of Cheryl Stein
745 Fifth Avenue, Suite 500
New York, NY 10151
Phone: (646) 884-2324
E-mail: cheryl@cherylsteinesq.com