TAX CUTS AND JOBS ACT (TCJA) OF 2017 COMPLICATES POTENTIAL SETTLEMENT OF DIVORCE CASES

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The Tax Cuts and Jobs Act of 2017 (TCJA) enacted dramatic changes to several tax issues that directly impact how divorces are settled. If you are a high wage earner, or you’re married to one and you’re contemplating getting a divorce, there’s almost a sense of urgency toward you understanding the financial aspects of your divorce and when to file your marital settlement agreement, should you and your spouse reach one.

Heather L. Locus, an owner and wealth manager at Balasa Dinverno Foltz LLC in Chicago, defines on her Website why this could be important to you. “Many high-net-worth couples may want to move quickly in order to preserve some important financial options,” Locus writes. “Couples who finalize their divorce agreements this year have many more options since the most significant rules impacting divorce go into effect on New Year’s Day 2019.”

In a previous blog we dissected how the Tax Cuts and Jobs Act of 2017 dramatically affects spousal support payments. After January 1st, 2019, all payments between former spouses in executed divorce agreements will be treated in much the same way as shared income was during their marriage. In other words, spousal support and unallocated support payments of any kind will no longer be tax deductible by the payor spouse nor will they be taxable to the recipient spouse. It is similar to how child support payments have always been dealt with in family law. No deductions permitted.

An article written for familylawyermagazine.com entitled, New Tax Law Helps & Hurts High-Net-Worth Divorce Cases, Locus, CPA, CFP, CDFA, reminds us that there are other changes to the new tax laws and how they will impact the way divorces are settled, and they should be kept in mind when negotiating a divorce settlement. They are:

  • The Personal Exemption. It was reduced to $0 for all taxpayers this year but may return to a $4,000 exemption in 2026 unless laws change again.
  • State and Local Taxes. Deductions for state income and property taxes above $10,000 combined are gone. However, this results in fewer taxpayers being subject to the AMT.
  • Moving Expenses. Unless one of the divorcing spouses is a member of the Armed Forces, expenses incurred separating one marital household into two are no longer deductible.
  • Legal and Professional Service Fees. Tax preparation, investment advisory fees, and your legal fees incurred for tax planning and to obtain taxable alimony are also gone. Some other changes — such as the raising of estate values subject to inheritance taxes — may indirectly impact high-net worth divorce negotiations as the need for advance estate planning vehicles such as Life Insurance Trusts and Grantor Retained Annuity Trusts (GRATs) are reduced.

PERSONAL EXEMPTIONS HAVE BEEN ELIMINATED

As Locus stated above, the new tax laws eliminate personal exemptions for the tax years beginning after December 31, 2017, and ending December 31, 2025. During this eight-year period, divorcing parents will not be able to utilize the personal exemption for dependent children, which means there will be no more negotiating which parent will be eligible to take it.

Before this year, tax filers received a deduction from income for their personal exemptions, including themselves, their spouse, and their children. In divorce and separation agreements it was common for parents with children to negotiate who could use the personal exemption deduction for income and in which year, but not anymore.

CHILD TAX CREDIT INCREASES

Even with the changes in the tax laws divorcing parents will still be able to negotiate which parent will be allowed to claim the “Child Tax Credit”, and which parent will not. Similar to negotiating for personal exemptions, someone involved in a divorce would want to negotiate which spouse gets to claim the “Child Tax Credit”. An income deduction merely reduces taxable income. A “Child Tax Credit” provides a dollar-for-dollar reduction of tax owed. It is an important negotiating tool, and the TCJA doubles the “Child Tax Credit” from $1,000 to $2,000 for children under the age of 17.

Possibly of more importance, $1,400 of the $2,000 credit is refundable to the filing spouse, whereas in prior years the “Child Tax Credit” was not refundable. The “Child Tax Credit” might now be more useful than ever in divorce settlement negotiations because it immediately reduces taxes owed and it is partially refundable.

FAMILY RESIDENCE BECOMES MORE EXPENSIVE

The new limits on deductions imposed by the Tax Cuts and Jobs Act of 2017 will make the prospects of being able to afford to keep the family residence a more challenging proposition. If you took out a home mortgage to acquire your home after December 15, 2017, the TCJA now requires mortgage interest deduction to only be available for interest paid on up to $750,000 of debt on first and second homes combined. However, if your loans for first and second homes combined was created prior to December 15, 2017, you are grandfathered in. This means you have a $1 million limit for interest deductions.

The 2017 tax laws also affect how divorcing spouses will deduct their home mortgage interest payments. According to the IRS the new law suspends from 2018 until 2026 the deduction for interest paid on home equity loans and lines of credit, unless they are used to buy, build or substantially improve the taxpayer’s home that secures the loan.

This means the deduction for home equity indebtedness has been repealed, unless the home equity indebtedness qualifies as “acquisition indebtedness” — ie. it was used to acquire, build, or improve a primary or secondary residence. As written, the repeal of the home equity interest deduction does not have a grandfather provision. This means all equity loan interest, regardless of when the loan was originated, will no longer be deductible if the proceeds of the equity line were not used to buy, build, or improve the primary or secondary residence.

THE WINDOW IS CLOSING

Due to the many changes in the tax laws suffused with much confusion that surrounds the new rules, your ability as a divorcing spouse to tailor your divorce agreements to suit your particular financial needs will disappear in 2019. That’s why you might want to seek guidance from a family law specialist now. Please be warned that many otherwise competent divorce lawyers are not up to speed on many of the new tax changes. So don’t assume that just any family law attorney is capable of guiding you to the best tax results in your divorce. Contact a specialist in family law who is up to date on the latest tax changes that might affect you.

 

 

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TIL DIVORCE DO US PART: AMERICANS BORROW RECORD $3.5 BILLION FOR WEDDINGS IN 2017

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Alright the stats are in, and they’re mind-boggling. American adults never cease to amaze me in this kind of stuff. Here, more than one million borrowed money last year to pull off their dream wedding. The average amount borrowed to cover the costs was $3,082. To put this into greater perspective, out of 126 million American adults, last year more than one million (1.13 million to be exact) got married. And they borrowed a lot of debt to do it.

U.S. couples borrowed $3.48 billion for weddings in 2017. Most of the couples turned to credit cards or personal loans to finance their nuptials, an article on Finder.com says. Additionally, one in five (21.4%) U.S. adults borrowed cash from family and friends over the past year in order to see their wedding dreams fulfilled.

DON’T BORROW MONEY TO GET DIVORCED

Why bother? is what I ask. Family and friends are cash strapped as well. You don’t need to create the personal stress on a good relationship. Odds are you’re going to end up coming to see us for a divorce sooner or later anyway, so save your friends, your family, and your money for a rainy day. Invest in gold coins. Don’t go into debt over something unless there’s a greater return and a positive cash flow.

I’ve been telling clients for years that all marriages end up in either divorce or death, so what was your rush in this down-turning economy? “Fifty percent of those who get married end up in divorce,” I would say.

Well, I was told I was wrong on that one. I did the research, and okay, maybe I was a off by a few percentage points. It appears the divorce rate may actually be on the decline, but there could be many factors attributable to that like maybe the fact that the marriage rate is declining as well. However, considering all factors, I believe what Bella DePaulo, Ph.D., author, and expert on single people, says regarding the chances that a marriage will end in divorce. According to DePaulo, the divorce expectation rate for those of us who are presently married is probably somewhere between 42 and 45 percent.

In PsychologyToday.com DePaulo cites a 2014 New York Times article reviewing the national divorce rate. “It is no longer true that the divorce rate is rising, or that half of all marriages end in divorce,” Claire Cain Miller wrote in that article. “It has not been for some time.”

BUT AGAIN, WHY BORROW AT A 55% TO 58% CHANCE OF SUCCESS?

Might as well just flip a coin then. Will we stay married … or won’t we? Heads you win, tails I lose. Do the math. Is it worth getting yourself in deeper debt to contractually bind you to a legal relationship that will end at some point anyway? Death or divorce, choose your weapon.

Right now the financial experts are telling us that the financial system is reaching crisis proportion. We’re being told to save as best as we can and to invest in real assets. We’re being told that the U.S. dollar as a paper currency is going to disappear; that we’re turning into a digital currency society. Experts predict, and financial trends indicate, we’re going to experience a severe credit freeze with banks. On top of all that, some of us are thinking of borrowing money to get married? Are we crazy? Are we American?

Good luck.

For those who must do it now, before it’s too late, there are sympathetic ears and advice. Blair Donovan writes for brides.com, giving some ideas about borrowing money for your wedding.

“First, assess the average loan period you are capable of in order to repay your debt on time,” Donovan writes. “Next, evaluate what the most reasonable interest rate might be. A higher interest rate may seem less daunting if your payoff period is short, as in the case of payday loans. However, if you need several months or years to pay back what you owe then a lesser interest rate may be the most sensible option to cover your wedding day expenses.” Or….

You can get married without borrowing. Have the wedding in a national forest with three witnesses, a minister, and a portable hot tub. Much less expensive without the bar tab and no room for in-laws in the tub. Or …

Forget about getting married, save the money, invest it wisely in undervalued assets, and just be friends. Dutch Treat worked great in the 90s, and it’d work just fine for the two of you heading into the Roaring 20s.

 

MARRIED WOMEN SHOULD UNDERSTAND THEIR FAMILY FINANCES BEFORE DEATH OR DIVORCE PART THEM FROM THEIR MONEY

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I recently read a timely article at bloomberg.com, talking about the difficulties many post divorce women face financially, due to them not having participated in the handling of family finances while they were married.  Back then, their spouses handled the finances, who turned out to be better equipped in dealing with family related financial issues after the divorce was completed. Now, as newly single women, many wives who had left the money matters to the men, wish they hadn’t.

In Rise of ‘Gray’ Divorce Forces Financial Reckoning After 50, Suzanne Woolley writes of how “too many women” let their husbands make the long-term financial decisions, which has left them vulnerable when separation or death strikes.  That’s why it’s so important for any woman, married or not, young or old, to take the time to learn about the finances that affect them and their families, before death or divorce throw ungodly financial surprises upon you.  This is a regular instance with many family law clients. Many women, looking deer-lost in headlights, not having really any clear idea of the true nature of their family finances, seek legal advice related to family financial matters.  Surprise and shock are common responses when discussing the issues surrounding the division of community property. Issues related to income, expenses, assets, and debts might be clouded, personal property and community property commingled, or assets going unaccounted for.

By developing understanding of your financial affairs you will be better prepared to make the big financial decisions that you might have let your spouses make when you were still married.  Understanding family finances better helps to avoid the “nasty surprises” at the end, that your divorce lawyer will have to help you clean up.

Woolley notes some interesting facts relating to women and their investing, citing statistics from a survey found in a report called, “Own Your Worth,” which was released by UBS Global Wealth Management.

  • 56 percent of married women still leave major investing and financial planning decisions to their spouse.  
  • 61 percent of millennial women said they leave investment decisions to their husbands.
  • 54 percent of baby boomer women leave investment decisions to their husbands.
  • Twice as many men as women in the UBS survey said they were highly knowledgeable about investing.
  • Three-quarters of the women surveyed said they don’t know much about investing.

Woolley’s article also cites a stark difference between married women and women who were divorced or widowed regarding the “making (of) major financial decisions” during their marriage  She cites, for example, that:

  • 59 percent of widows and divorcees regret not taking part in long-term financial planning when they were a couple.
  • 85 percent of married women who weren’t active in making long-term financial decisions said their spouse knows more about financial issues than they do.
  • Eighty percent of women said they were content with how financial responsibilities were handled in their marriage.

The report concluded that a majority of married women are still handing over to their spouses important financial decisions that will profoundly affect their futures.  Women and divorcees who now find themselves alone wish they had been more involved in finances while they were married, says the UBS Global Wealth Management Report. Nearly all of them advise other women to get more involved early on and “break the cycle of financial abdication.”

WOMEN SHOULD BREAK THE CYCLE OF FINANCIAL ABDICATION

The UBS report cites “eight out of 10” divorced or widowed women who remarried as finding themselves to be “more active in the financial decision-making in their current relationship.”  Ninety-four percent of widows and divorcees surveyed insist on complete financial transparency with their spouse.

Again, for all women who are trying to make it work financially, you have one financial bottom line, and that is if you haven’t already — get involved now!  Wake up to the economic realities we all face right now in trying to move our families forward in a healthy and prosperous way. When the divorce comes about, you will be prepared in important aspects.  Remember that subsequent marriages have a higher rate of dissolving than do first marriages. So understand the income, expenses, assets and debts formula your family operates under now.

If you are a married woman, be involved with your husband when making all financial decisions.  You’re signature and / or consent is going to be required for most family related financial instruments, so you might as well understand what you are signing, and why.  If a divorcing woman understands her finances, and she can communicate rationally and intelligently with her spouse, come time for the divorce, she can conceivably steer the mediation of the division of the community property and in the long run save her and her family a lot of money and emotional expense.  If she needs an attorney or divorce mediator to help her with the process, she can always hire a family law specialist.

HOW DO YOU PREPARE YOUR FAMILY FOR A FINANCIAL RESET?

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Does anybody who’s ever tried keeping their family’s heads above treacherous financial waters have any idea what in the world is going on right now?  Overseas, we’ve got accusations of chemical attacks and fake chemical attacks simultaneously coming out of Syria and England.  We’ve got threats of a major trade war between the United States and China.

Domestically, we’ve got a U.S. dollar that is worth four cents on the dollar, with the value declining as I write this.  The U.S. bond market and stock market, both pegged to the U.S. dollar, are filled with too high prices and too much risk, so they no longer provide a guaranteed safe haven to protect our assets from the declining U.S. dollar.

We have President Trump with his tax cuts, and Central Banks that are talking about raising the interest rates.  Our economy has been stretched to the max.  This last series of programs that were put into action by the Federal Reserve Bank since our last crash in 2008 have failed.  And all of this is happening at the exact same time.  It’s a recipe for disaster, and now someone is talking about a complete financial “reset,” and we have to wonder how that will affect our ability to feed and clothe our families during difficult days to come.

Why is all of this happening right now?  According to Lynette Zang, Chief Marketing Analyst at ITM Trading, ten years of American Central Bank failures means that all of the fiat money assets that were targeted for “‘reflation’ have created tremendous bubbles, and now they’re trying to undo the experiments with our economy.”  They’re trying to undo what?

Zang, who has worked in commercial banking since 1986, says what we have witnessed is a Central Bank rally followed by what appears to be a Central Bank crash — with whatever is to follow.

“The Fed is going to start tapering their stimulus,” the former stock broker and investment banker says.  In other words, print, print, print money is all we know, and now the scant part of that flow that came down to us is being cut off.

Zang says what fuels this whole financial system, which is called a “fiat currency system”, is the constantly compounding debt.  “And interest rates are the tools that they use to speed that up or slow that down,” she says.

Our problem is the world has been anchored at zero percent interest for too long.  “That means they’re out of the tools that they typically would use to do that,” Zang says, “which is why they’re trying to unwind and normalize something that isn’t normal to begin with.”

Our money system is not normal to begin with because it is based on debt.  The best we can do in our present day financial reality is borrow more, of what the Federal Reserve “prints”, so we can buy what we can afford to borrow — at a price, that compounds daily with interest.  And now the Federal Reserve Bank has no more tools to keep it going.  The American financial house of cards is rapidly crashing, and what exactly that means to us, the average person struggling to make a living and raise a family of four, will be up to us.

According to Zang, “they’ve” been calling for a “reset” since 2013, and “they’ve” run out of options.  There’s no purchasing power left in the U.S. dollar.  All the currencies in the world that are tied to the U.S. dollar have eroded over time due to inflation, to near worthlessness.  And that’s what all of our family law community assets are tied into.  It’s all going down the tubes.

“They’re talking about a financial reset,” Zang says, “but it looks more like a planned demolition.”  The Central Banks are in huge trouble.

We, here, in the real world, have no choice but to get our heads around this concept of a new financial reset.  We need to understand what’s going on.  Big changes are happening to us and we’re not being told about it straight forward.  We need to find answers to tough questions.  We need to ask those tough questions.  We need to understand how this financial crisis that is happening, and is apparently going to get much worse, is going to affect us if we’re an average family of four who just happens to be going through the biggest crisis of our lives, and it’s called divorce.

So what is a financial “reset”?  Is it getting rid of the debt, a new currency?  What?
“Transitioning us into the new financial system,” Zang says cryptically.  “Establishing the new financial system they have in mind, which ties into cryptocurrencies and cyberspace.”

If what Zang says is true, then the situation we find ourselves in appears clear enough.  We are going from a debt based financial system to one that is centered around crypto currencies, cyberspace, and digital money controlled by a central governing process.

If we’ve gone to the grocery store lately or tried to buy movie tickets we know our dollar is buying less.  Everything we own seems to be going down in value while everything we need gets too expensive to buy.  We’re forced to settle for less and make difficult choices as to how we’re going to spend our precious remaining financial resources.

The old financial system that started under U.S. President Richard Nixon in 1971 was based on debt.  That debt, and all the compounded interest that has accrued on it, stands today as not payable.  And the interest on that debt continues to add up.

Zang says a “reset” to the financial system begins with a reset of the debt.  She says we have been dealing with nothing but compounding interest, which is “what creates money in the system, and we’re never going to get out of debt.”  It’s the way the system was built and they are going to have to “reset” the debt, so we will be able to continue to function economically as individuals and a nation.  But at what price?

Our currency, the U.S. dollars we spend to buy food, gas, and clothing, are merely debt instruments that don’t pay interest.  Our financial system is based on the foundation of never ending debt.  We’ve reached the end of the line.  Compounding interest will never be paid off.  “It has to reset.”  “The system doesn’t work anymore.”  “It died in 2008.”  “It’s a zombie system.”  “The entire system will crash.”  These are Lynette Zang’s words, not mine.

And the question remains.  What do families have to do to have a chance to survive in a rapidly changing world like this?  The answer is they have to learn the truth of the world that swirls by them while they’re busy making plans, or playing with their cell phones.  Heads of families have to take the time to learn to understand what is truly going on in the economic realm in which they live.  Right now, we in America are living on borrowed time, financially, and most of us don’t even realize it.  We might be aware that something is going on, that bills are becoming difficult to pay, but we don’t really pay attention to finding solution to our ever increasing financial difficulties.

That’s why we’ve got to deal with the true nature of today’s realities, financially and otherwise.  We’ve got to do our homework.  We’ve got to weed out the lies in information we receive and determine who’s telling the truth.  We’ve got to understand that, financially, our dollar may be about to disappear.  That there most probably is some kind of major change coming to our financial system and the currency we will use to live on.  That we’re going to have to understand what that is all about, how it will affect us, so we can figure out how to preserve what assets we have left.  We must learn to understand how a financial “reset” will affect the future of our families.

Where does your family stand on this?

 

PROPERTY DIVISION IN DIVORCE IS ABOUT ASSET PRESERVATION

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One of the primary issues a family law specialist deals with in divorce is helping his or her clients resolve their financial issues.  An experienced family law attorney can help you not only divide your property and assets, but your debt and liabilities as well.  A divorce attorney will utilize the best methods to put your entire family in the best financial position possible as you move forward into unfamiliar post-divorce territory.

Sometimes the community possesses complicated financial assets, like investment and retirement accounts or stock options, and a forensic accountant might be brought in to help analyze, value, and divide your property.  A forensic accountant can help unravel the essential financial formulas that might affect not only the division of community assets, but also child support and spousal support.  Forensic accountants can be expensive, however, and they’re not right for all divorces.  In a divorce case, a little common sense can go a long way when it comes to dividing community property.  The key is to think about how you’re going to preserve what you have in this dramatically volatile economic environment we live in.

My belief is that we are in the middle of the greatest economic free fall that we’ve ever experienced in this country during my lifetime.  The United States Congress says that the U.S. dollar has lost 96% percent of its value since its inception in 1913.  Some economists say that we are in the middle of witnessing 90% percent of the global wealth changing hands of ownership.  Whose hands are your wealth going into?  Will you and your family have anything left?

The purchasing power of the U.S. dollar, which is what we live and eat on, is down to an all time low, so low, in fact, that the U.S. Congress is contemplating bringing back the gold standard to back it.  At this time, more than ever, income, expenses, assets, debts, savings, and investments, should all be at the forefront of the minds of family law attorneys helping you divide your community assets in a divorce.  If you as a divorcing spouse aren’t considering your personal state of financial affairs, as it relates to your family’s future financial reality, and the value of the assets that you can take with you in your split, you could be in for some major surprises and disappointment.

TRUE INVESTMENT CAPITAL ONLY COMES FROM SAVINGS

Unemployment in this country is at an all time high.  Even if you have a job, inflation affecting everything you buy probably keeps you from being able to actually save money.  One of the greatest issues for family law attorneys in dealing with divorce is financial disagreement between the spouses, which is compounded by the fact spouses just aren’t saving enough in real value, so they end up fighting each other tooth-and-nail to squeeze every ounce of wealth they can out of whatever community asset they have left.  So be it for inflated assets.  Sets of silverware are being split down the middle because divorcing spouses have not been saving.  They’ve barely considered the true valuation of their assets up to this point in their lives.

Savings are important because they form the cash cushion that gets us through difficult economic times.  We get the best value out of our assets by saving for them first.  A lack of savings is one of the major problems we face not only as individuals but as a country during these economically challenging times.  Economic researcher Chris Martenson, PhD, MBA, says that savings are important nationally because they are utilized for the formation of investment capital; that is, the property, plant and equipment that create actual future wealth.

Same thing applies to spouses in a marriage.  If you are going to want to be able to invest in the “property, plant and equipment” of your future, so you  have some future wealth to be able to preserve for your family, without having a giant debt load attached to it, you’re going to have to save for it first.  True investment capital can only come from savings.

INDIVIDUAL’S SAVINGS RATES AT ALL TIME LOW

According to Martenson, savings rates have plunged to historic lows, “levels last associated with the Great Depression.”  Martenson says the personal American savings rate has steadily declined in America since 1985 to the present.  The decline we have experienced as a country and as individuals has resulted from “a culmination of a multi-decade erosion of savings as a cultural attribute of American citizens,” Martenson says.  Now, many of you are realizing this in your own lives, where you’re having problems making ends meet on a week-to-week basis, with nary the time nor thought given toward investing in yours or your children’s futures.  The truth is, you can barely deal with financing the now.  And you’ve probably got a lot of debt to go with it.

Martenson, a futurist and co-founder at PeakProsperity.com, believes that what a history of persistently declining savings tells us is that there is an “implicit assumption” by the majority of people in this country that unlimited credit will be available in the future, and so we don’t need to save now.  We have assumed a lifestyle where we have largely substituted a “save and spend” mentality, with “a buy it now on credit” mentality.

All debt across all sectors in this country, and personal savings of individuals, shifted in opposite directions in 1985, with the gap widening dramatically ever since.  “Our national tolerance of debt shifted drastically upwards beginning in 1985 right as our national approach to savings was beginning its long decline towards zero,” Martenson says.

The marketing of our financial system has created in us a belief that in order to have a grander and brighter future, we are going to need more money, which equates to greater debt, so we can buy things.  We have become a country of mass consumers fueled by credit availability.  Everything is about beating the Joneses, now, the future be damned, and the Joneses have a lot of credit at their disposal.  The idea has been ingrained in us that low savings plus high debt equals prosperity, or what Chris Martenson calls, “at least a perpetual feature of our future economic landscape.”

THE BOTTOM LINE FOR DIVORCING COUPLES

The bottom line for most Americans has become that of low savings rate and high debt, which is a major problem because it means that most divorcing spouses have a very thin safety cushion to ride out the economic hardship we are experiencing at this time.  This equates to the fact that most people have failed to invest in their families’ futures.  Dealing with the present while preparing for the future has posed a difficult task for most Americans, and, as a result, divorcing spouses have little left to divide.  They’re not alone in this.  A lack of savings is a nationwide problem.

Our bottom financial line to get through these difficult times has to be pretty straight forward from here.  Save as much as possible, now, and get out of debt.  Many financial forecasters predict that a credit freeze is imminent.  Prepare for it.  Know the truth of what’s really going on in the world, and with our banks.  When possible, move those hard-earned savings into assets that will hold or increase in value during this time of the declining U.S. dollar.  The theory behind hard earned savings, and the investment thereof, should include a ‘smart plan’ on how to preserve those assets for future family needs.

 

 

GUGGENHEIM’S DODGERS ORDERED TO REVEAL SECRET $ ARRANGEMENT IN JAMIE’S DIVORCE WITH FRANK

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Former Los Angeles Dodgers owner Jamie McCourt wants California’s family law courts to throw out her $131-million divorce settlement.  That’s why, according to the Los Angeles Times, the new owners of the Dodgers must reveal their financial arrangements with Jamie’s ex-husband/partner, Frank McCourt.  Got that?  We’re pretty sure Frank does too.

According to the Times article earlier this month, Los Angeles Superior Court Judge Scott Gordon denied the Dodgers request to seal a summary of the team’s deal with Frank McCourt.  The judge ordered the document to be made publicly available June 17, unless Guggenheim Baseball Management succeeds in an appeal before then.

Jamie McCourt’s attorney, Bert Fields, believes the financial summary could reveal that the deal was worth more than the Dodgers publicly announced sales price of $2.15 billion.  “It shows Mr. McCourt got value way beyond $2 billion.”  And that somebody totally got ripped off in their settlement negotiations.

In her request to have Judge Gordon throw out her divorce settlement, Jamie alleged that Frank fraudulently misled her about the value of the Dodgers and their assets.  Frank denies this charge.  And he also denies extraterrestrials run the White House.

Last year, Guggenheim paid $2 billion for the Dodgers, while an affiliated entity financed the purchase of the land surrounding Dodger Stadium for $150 million.  The accompanying financial arrangements Guggenheim attempted to seal include data about how Frank and Guggenheim were to share profits from the joint investment venture, which is the crux of this whole magilla.

In court, Guggenheim argued that financial disclosure would harm the Dodgers ability to lure another sports team to the Dodger Stadium site.  (Guggenheim’s ownership has since admitted that it is indeed in talks with the NFL about building a stadium on the stated site.)

Although Staples Center owner AEG still has plans to bring the NFL to South Park, the NFL has made it abundantly clear it has its tiny, greedy, little heart set on Chavez Ravine.  As a side note, the NFL made no mention of all the profits to be made – by everyone, except I guess poor, hungry Jamie – from the Chavez Ravine site.

ATTORNEY FEES AS SANCTIONS VALID WHEN FIDUCIARY DUTY VIOLATED

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So you’re thinking of leaving the spouse, and you think it might be a good idea to take a cash advance from the joint family credit card, just in case.  And you want to put the money in your own bank account, sacking the community with the debt, and not telling him about it.  And you think this is a good idea.  And, well…

Maybe you should think again.  That’s because California’s appellate courts have ruled that a trial court erred by not awarding attorney fees as sanctions under Family Code §1101(g) despite the fact it found during a dissolution trial that Wife had violated her statutory fiduciary duty by taking a $24,000 cash advance on a credit card before separation and transferring the funds to her personal bank account without informing her Husband.

The facts of Marriage of Fossum (2011) 192 CA4th 336, 121 CR3d 195 were that Wife, before separating from Husband, took a $24,000 cash advance using a credit card and transferred the funds into her personal bank account without informing Husband.  After the trial for the couple’s marital dissolution, the trial court ordered Wife to reimburse Husband for half the amount charged, but found that Husband was not entitled to an award of attorney fees even though she had violated her fiduciary duty under Family Code §721.

The appellate court reversed the judgment.  Regarding attorney fees, the court of appeal held that Husband was entitled to an award of attorney fees under section 1101(g) as a result of Wife’s breach of fiduciary duty.  Family Code §1101(g) states that its remedies “shall include, but not be limited to, an award to the other spouse of 50 percent, or an amount equal to 50 percent, of any asset undisclosed or transferred in breach of the fiduciary duty plus attorney’s fees and court costs.”

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