Georgia Family Law Blog

Wife Sues Husband for Share of Secret $600K Lottery Win

The Miami Herald reports on story of a a secret that surely could not be kept for long, but the husband,Arnim Ramdass, allegedly tried.

According to the stay-at-home wife, Donna Campbell, Mr. Ramdass, an airline mechanic, 52, reportedly disconnected the phone line at home and Ms. Campbell, 48, to watch television. Eventually, however, she learned the truth: Ramdass, along with 16 other mechanics at Miami International Airport, had won a $19 million lottery jackpot. Split among the 17 workers, it amounted to a $600,000 lump-sum payday, before taxes, for each of them, reports the Miami Herald (story reprinted below)

In her suit, Campbell claimed Ramdass fraudulently conspired to conceal the lottery payout from her, and contended she is entitled to a 50 percent share of her husband's take from the winning ticket, because it was purchased with marital assets.

Once the lawsuit is resolved, the newspaper says, she plans to divorce him.

See the lawsuit here.

SOURCE: ABAJournal.com in a story by Martha Neil

Frequently Asked Questions about Marital Separation Agreements in Georgia

What is a Marital Separation and Property Settlement Agreement?

A marital separation agreement, also known as a property settlement agreement, is a written contract dividing your property, spelling out your rights, and settling problems such as alimony and custody. A marital separation agreement may be drawn before or after you have filed for divorce — even while you and your spouse are still living together.

When you initially execute a marital separation agreement you usually do not have to file the separation agreement with the court to be effective.

When and if you begin the divorce proceedings, you will attach the separation agreement to your divorce papers and ask the court to merge, but not incorporate, the agreement into the final judicial decree.  If the marital separation agreement is incorporated into the decree, it becomes a court order and is enforceable by the court.  If you don't incorporate the separation agreement into your decree, it simply becomes a contract or agreement between you and your spouse.

Why is a Marital settlement agreement important?

If you have no marital property, no joint debts, and no children, you probably don't need a marital separation agreement to get a no-fault divorce. However, if you want to provide for the future governance of your relationship, as well as provide additional evidence to the court about the day that you separated, you should have a Marital Settlement Agreement. An agreement leaves no doubt about the details of the ending of your marriage relationship. It is better to have a clearly written agreement, rather than rely on verbal understandings.

In Georgia, if you have a Marital Settlement  Agreement your divorce pleadings will be simpler and less complicated and it will be absolutely clear to the court that you have an uncontested divorce.

Do I have to file a Marital Settlement Agreement with the court?

When you initially execute your Marital Settlement Agreement you do not have to file the Agreement with the Court to be effective. When you begin the divorce proceedings you will attach the Marital Settlement Agreement to the complaint and ask the court to merge, but not incorporate, the Agreement into the final judicial decree. If the Marital Settlement  Agreement is incorporated into the decree, it becomes a court order and is enforceable by the court's contempt powers. If you don't incorporate it into the decree, it simply becomes a contract between you and your spouse, which you later have to sue in a separate action to enforce. If the separation agreement is not incorporated into the divorce decree, and your spouse violates the agreement you can still seek money damages for the violation of the agreement, but it is easier and faster if the agreement is incorporated into the divorce decree.

What is the difference between a contested or uncontested divorce?

Divorces are either contested or uncontested. Contested divorces are those in which the respondent disputes any issue in the case - the divorce itself, the property division, child custody, alimony, etc. Uncontested divorces fall into two categories - (1) Consent Divorces - the parties agree on all major issues; and (2) Default causes - where the respondent fails to appear to contest the divorce or any issue in it, either because he or she chooses not to oppose it, or because he or she cannot be located.  By entering into a Marital Settlement  Agreement you make your divorce an uncontested divorce.

How long are the parties bound by a Marital Settlement Agreement?

A separation agreement is a legal document that will bind you through many years and determine your rights, obligations, and responsibilities from your marriage. You and your spouse can amend the agreement if you both consent to the changes; or it can be modified by a court order, provided the agreement does not specifically state that the agreement is not subject to any court modification. Nevertheless, the court can always modify provisions in an agreement regarding the care and custody of any minor children.

Do the courts review the fairness of a Marital Property Settlement Agreement?

In an uncontested divorce, the court nearly always approves the agreement of the parties if it is generally fair and the court is convinced that the agreement was entered into by both spouses without fraud or coercion. Often the court may want to review financial affidavits attached to the agreement in order to determine its fairness.

In negotiating your agreement, you should be guided by how a court is likely to divide your property, award custody and child support, and deal with other issues.

What is the difference between "marital property" and "non-marital property"?

In an "equitable distribution state" state, like Georgia, all property acquired during the marriage is "marital property" and all property is divided into marital property (which means it is both yours and your spouse's) and non-marital property ( which means the property belongs to either you or your spouse alone). I general the following rules apply which categorizing property into "marital" or "non-marital property":

1. If the asset or debt was acquired after the date you were married it is presumed to be a marital asset or debt.

2. A non-marital asset or debt is one that was acquired before the date of your marriage. It is also a non-marital asset if you acquired it through a gift or inheritance. Income from non-marital property is also considered non-marital property.

3. Even if an assets or debt was acquired by your spouse individually, it is considered to be a marital asset or debt, if acquired during the marriage. This includes rights in pension and profit-sharing plans.

4.Real estate that is in both names is considered marital property.

How is property divided in Georgia?

In Georgia, the basic rule is that all marital property is divided equitably. In December 1980, the Georgia Supreme Court decided the case of Stokes v. Stokes 246 GA 765 (1980).  The case concerned the property rights of the parties in a divorce action. The court held that the couple's marital property should be divided euitably between them. Each party can retain any property that he or she owned prior to the marriage. It doesn't matter in whose name or names the marital property is listed. If the property was acquired after the marriage and is therefore marital property it must be divided equitably.

To divide marital property, the court or a jury must consider:

• length of the marriage;

• the age, health, occupation, vocational skills, and employability of each party;

• the service contributed by each spouse to the family unit;

• the amount and sources of income, property, debts, liabilities, and needs of the parties;

• debts against the property; whether the division is instead of, or in addition to , alimony;

• and the opportunity of each spouse to earn money or acquire property in the future.

Another financial issue involves debts that must be paid. The court may divide the responsibility for the debts, or it may order one or the other party to ay all debts.

SOURCE: Georgia Divorce Online

Georgia Property Division Factors

In Georgia, the property and debt issues are typically settled between the parties by a signed Marital Settlement Agreement or the property award is actually order and decreed by the Superior Court within the Decree of Divorce.

Georgia is referred to as an "equitable distribution" state. When the parties are unable to reach a settlement, the Superior Court will take the following approach to dividing the assets; First, it will go through a discovery process to classify which property and debt is to be considered marital. Next, it will assign a monetary value on the marital property and debt. Last, it will distribute the marital assets between the two parties in an equitable fashion. Equitable does not mean equal, but rather what is deemed by the Superior Court to be fair.

There are no factors listed in the statutes regarding what is considered by the court when distributing the property upon divorce.

The verdict of the jury disposing of the property in a divorce case shall be carried into effect by the court by entering such judgment or decree or taking such other steps as are usual in the exercise of the court´s equitable powers to execute effectually and fully the jury’s verdict. (Georgia Code - Sections: 19-5-13)

Since Georgia is an "Equitable Distribution" state, all marital property will be divided in an equitable fashion according to the court unless agreed to otherwise by the divorcing spouses. What does "equitable" mean? Equitable can be defined as "what is fair, not necessarily equal." To automatically believe the marital property would be divided 50-50 would be a wrong assumption in any equitable distribution state.

SOURCE FOR POST: DivorceSupport.com

No Prenup? Take These Steps

Turn up the lights, turn down the music and forget about romance.

It's time to face the business side of marriage.

Cold as that may sound, the Census Bureau recently released data that should make even the most blissfully married couples forget pheromones and focus on finances.

According to the Bureau, the length of first marriages has been getting steadily shorter since it started collecting such data in 1955. Of couples married back then, about 70% made it to their 25-year anniversary. Now, fewer than half of couples who were to celebrate their silver anniversary sometime after 2000 actually ended up doing so. The majority of marriages ended, due to divorce, separation or death.

"Even the most optimistic people have to ask themselves, 'What financial shape would I be in if my marriage ended?'" says Marilyn Capelli, a financial adviser in Bloomfield Hills, Mich.

The most effective way for couples to button down their finances is through a prenuptial or postnuptial agreement. But many people are reluctant to even raise the possibility of drafting one because it seems so, well, out of sync with that bit about "till death do us part."

Short of one of those contracts, there are some moves that may help you land on solid financial ground, no matter what happens.

Legally, Who Gets the House (and Do You Really Want It Anyway?)

Divorce lawyers often see a fair share of controversy over the marital home. The house is visible, valuable, and emotional. There are good reasons to stand your ground: continuity for the children, emotional attachment, and sometimes even convenience. There are also some not-so-good reasons: vindictiveness, ego gratification, and just plain greed.

Courts take into account many factors before deciding who gets the house. They include the “Good Reasons” listed below and bad reasons, such as when a physically abuse spouse wants the house or when someone who abandons his family later returns to claim the home.

Many states have divorce-related automatic restraining orders that prohibit the sale or mortgaging of the marital home. Even if the property is only in your name, you are not allowed to sell or encumber the home without spousal or court approval. Also, your spouse may file a “lis pendens,” a lien saying that there is a claim on the title.

Divorce Tip: 1) You don’t want a stranger in a black robe (the judge) making your decisions, and 2) only your attorney can properly advise you given your particular circumstances and your state’s law. Whatever the law, ideally the decision regarding the house should be based on mutual agreement, without court intervention.

If you have one or more of the "Good Reasons" listed below, then you can take the next step in deciding whether it is economically feasible to keep the house.

Good Reason #1: The kids – school-aged children are often traumatized by a divorce, and moving can compound their emotional distress. However, sometimes a fresh start might be emotionally healthy, so speak with a child psychologist if you aren’t sure.

Good Reason #2: Sentimental or emotional attachment – for example, if you were the stay-at-home spouse and you’re emotionally attached to the house. Similarly, an attachment might exist if the house belonged to your parents or a relative before you were married.

Good Reason #3: House as settlement tool – the division of marital assets should be acceptable to both sides. You can use the house as a bargaining chip, or “settlement tool.”

Divorce Tip: If you are going to fight, make sure it is for the right reasons and that you can afford the house.

SOURCE: DivorceNet

Georgia Divorce Laws

The increase in divorce has its effect, directly or indirectly, on virtually every family in the country. The following information is designed to summarize briefly Georgia's divorce laws.

Marriage is a civil contract which the state has an interest in preserving. Accordingly, the marriage relationship can be dissolved only as provided by law, by either a divorce or an annulment. It also may be altered by a decree of separation granted by our courts. In any case, there must be a proceeding in the Superior Court of the county in which the person seeking the divorce, separation decree or annulment must prove "grounds" (valid reasons prescribed by law).

What are the grounds for divorce in Georgia?

In Georgia there are 13 grounds for divorce. One ground is "irretrievably broken" (sometimes referred to as the "no-fault" ground). The other 12 grounds for divorce in Georgia are "fault" grounds.

What is a "no-fault" divorce?

To obtain a divorce on this basis (irretrievably broken), one party must establish that he or she refuses to live with the other spouse and that there is no hope of reconciliation. It is not necessary to show that there was any fault or wrongdoing by either party.

What are the "fault" grounds?

To obtain a divorce on one of the 12 "fault" grounds, one must prove that there was some wrongdoing by one of the parties to the marriage.

As an example, one fault ground is adultery. Adultery in Georgia includes heterosexual and homosexual relations between one spouse and another individual.

Another "fault" ground for divorce in Georgia is desertion. A divorce may be granted on the grounds that a person has deserted his or her spouse willfully for at least a year. Other "fault" grounds include mental or physical cruel treatment, marriage between persons who are too closely related, mental incapacity at the time of marriage, impotency at the time of marriage, force or fraud in obtaining the marriage, pregnancy of the wife unknown to the husband at the time of the marriage, conviction and imprisonment for certain crimes, habitual intoxication or drug addiction, and mental illness.

Is there a residence requirement for getting a divorce in Georgia?

Yes, one spouse must have lived in the state of Georgia for six months or Georgia must have been the last domicile of the marriage.

Must the husband and wife live apart when a divorce complaint is filed?

No, but the spouses must be considered separated in a legal sense before one can file for a divorce. Spouses may be considered separated even if they are living in the same house, if they are not sharing the same room and/or not having a sexual relationship.

How does one file for a divorce?

The person seeking the divorce (the plaintiff) will file a document called a "complaint" with the appropriate Superior Court. This complaint includes information on the marriage including present living arrangements, children of the marriage, assets, debts, and the specific reason claimed for seeking a divorce. A copy of the complaint will be served on the other spouse (the defendant) by the sheriff.

Where does one file for a divorce?

A complaint for divorce should be filed in the Superior Court of the defendant's county of residence or, if the defendant has recently moved from the state of Georgia, in the county of the plaintiff's residence. This would be considered the domicile of the marriage. Upon the defendant's consent, the complaint may be filed in the plaintiff's county of residence regardless of whether the defendant has moved from the state of Georgia or not.

What should I do if I receive a complaint for divorce that my spouse has filed?

The spouse who receives the complaint should promptly consult a lawyer. The spouse may contest the reason claimed for the divorce or contest the claims for child custody, child support, alimony or property division by filing an answer with the court. If an answer is not filed within 30 days, the right to contest the complaint may be lost.

Is there a way to live apart without getting a divorce?

A party who wishes to live apart permanently, but who does not want to get a divorce, may file a "separate maintenance" action. The spouses will remain legally married although living apart. The court may order that alimony be paid by one spouse to the other and the court may divide property between the parties.

What is an annulment?

Unlike a divorce, which dissolves a valid marriage, an annulment is a legal decree that the marriage is now void and was invalid from its inception. If there are children born of the marriage, an annulment may not be granted and the marriage may only be dissolved by divorce.

Must I go to court to get a divorce?

Not necessarily. Spouses may be able to reach an agreement resolving all issues arising from the marriage, including finances, division of property and custody and visitation of children. The agreement is presented to the court as a settlement agreement and, upon approval, made an order of the court. The court's order, called a final judgment and decree, concludes the lawsuit. If the parties cannot reach an agreement, a judge or jury will resolve the issues. However, a judge always decides matters of child custody and visitation.

How long does it take to get a divorce?

If there is agreement between the parties, the divorce is considered uncontested. An uncontested divorce may be granted 31 days after the defendant has been served with the complaint for divorce. If there is disagreement as to any matter, the divorce will be obtained when the case reaches the court, which can take many months.

What happens while I wait to go to court?

Either of the spouses may request a temporary hearing. This hearing is not a final trial. A temporary hearing resolves the issues of child custody, visitation, child support, alimony, debts and possession of property on a temporary basis until the final trial. The judge will issue a temporary order that applies only until the time of the final trial. The temporary order may also prohibit one party from interfering with the other party or the children and prevent the transfer and selling of assets.

What is decided at final trial?

Questions of child custody and visitation are decided by the judge. The judge alone or a 12-person jury (if one of the parties has requested) will resolve all of the financial issues of the marriage, such as division of property, division of debts, alimony and certain findings concerning child support (gross income of both parties and whether any deviations from teh presumptive amount of child support are in the best interests of the child, and if so, what those deviations should be). At the final trial, both spouses present evidence by their own testimony and may call other witnesses. The decision rendered by a judge or jury is written into a court order that is binding upon both parties. The wife's maiden or former name can be re-established if she so desires.

What about the children?

The welfare of children is of major concern to the court. Neither parent is automatically entitled to custody. The judge looks at the best interests of the child when determining  custody. The judge considers many factors when deciding custody, including the age and sex of the child, compatibility with each parent and the ability of each parent to care for and nurture the child. A child more than 14 years of age can choose which parent will have custody upon the consent of the court. The court considers it important for a child to maintain relationships with both parents; therefore, visitation rights are awarded to the parent who is not given legal custody of the child.

May the parents share custody?

The court, in its discretion, can award joint custody instead of sole custody. There are two types of joint custody. Joint legal custody means that both parents have equal rights and responsibilities for major decisions concerning the child; joint physical custody means that physical custody is shared by the parents in such a way to assure the child substantially equal time and contact with both parents. In awarding joint custody, the court may order joint legal custody, joint physical custody or both.

What are child support obligations?

The child support law in Georgia changed effective Jan. 1, 2007. The new law is based on an "income shares" model that requires consideration of both parties' gross income. "Gross income" has a very broad definition and encompasses salary, commissions, income from self-employment, bonuses, overtime payments, severance pay, recurring income from pensions, interest and divident income, trust income, capital gains, gifts, prizes, lottery winnings and income from any other source. Once the monthly gross income of each party is determined, the two incomes are added together to get the combined ajusted income amount. A Child Support Obligation Table is then used to get the Basic Child Support Obligation. To use the table, locate the line corresponding with the combined adjusted income amount and then apply the amount in the column that corresponds with the number of children for whom support is being determined. That Basic Child Support Obligation is then applied to each parent's proportionate share of the combined adjusted income.

(For example, if the father's monthly gross income is $3,000 and the mother's montly gross income is $2,000, their combined adjusted income is $5,000, of which the mother's income represents 40 percent and the father's income represents 60 percent. The child support obligation for a family with combined adjusted income of $5,000 per month for two children is $1,297. Thus, if the father is the noncustodial parent, he will pay 60 percent of the child support obligation, $778.20, or if the mother is the noncustodial parent, she will pay $518.80, which is 40 percent of the child support obligation.)

The cost of medical insurance on the child and the cost of work-related childcare will result in the amount of the child support payment being modified with credit being given to the parent who is actually paying these expenses. In addition, the amount of child support may be modified by certain deviations provided it is in the best interest of the child to deviate from the presumptive amount of child support. Examples of deviations may be extraordinary education expenses like private school tuition or tutoring; extraordinary medical expenses; or special expenses which must exceed 7 percent of the basic child support obligation, such as extracurricular expenses, sumer camps, dental insurance, parenting time adjustment or any other appropriate deviation. You can access the guided electronic worksheet used in calculating child support at www.georgiacourts.org/csc. You may also download an Excel version of the worksheet through this same website.

In addition to the child support payment, the court (or parties by agreement) will also designate what percentage each parent will pay of the child's uncovered medical and dental expenses.

In Georgia, both parents have a duty to financially support the child until that child turns 18, marries, dies or becomes emancipated, whichever occurs first. However, if the child has not graduated from high school prior to reaching age 18, then the obligation to support that child continues until the child graduates from high school provided the child remains a full-time student, but not beyond the age of 20.

May I receive money for the children's college?

The court cannot order parents to pay for college. However, parents may agree to pay child support beyond the age of 18 or to pay for college expenses.

What is alimony?

Alimony is payment by one spouse to the other for support and maintenance. The court may grant alimony to either the husband or the wife. Alimony may be for a limited period or until the spouse receiving alimony dies or remarries. It may be paid in one payment of money or property, or it may be paid over a period of time.

What happens to "our" possessions in a divorce?

One of the most difficult and complex areas of divorce is the division of marital property. Marital property is all property acquired during the marriage, except for property received by gift from a third party or by inheritance. Each spouse is entitled to an equitable share of all marital property acquired during the marriage. The judge or jury will decide on the division of marital property. Marital property will be divided equitably (not necessarily equally) between the parties regardless of how the title to the property is held. There is no set formula or percentage amount used to divide marital property.

How will the court order be enforced?

The court order can be enforced by garnishment or a contempt action. A contempt action is filed in the same court that issued the divorce. In addition, support orders can be enforced through the district attorney's office if the non-paying spouse resides out of town.

If my spouse and I agree on all matters pertaining to getting a divorce, do we still need a lawyer?

A lawyer will ensure that all matters that should be resolved in a divorce are resolved. Acting without a lawyer could end up being a costly mistake both to the parties and to their children.

What do I do if I am the victim of family violence?

Georgia has a law protecting victims of family violence. The parties do not have to be married in order for a victim to ask the court for relief. However, the parties have to reside in the same household. A victim of family violence can file a petition with the Superior Court that family violence has occurred in the past and may occur in the future. The court can issue a temporary order granting a variety of remedies, including eviction of the offending party from the residence or providing suitable alternate housing for the victim and children, as well as financial relief.

The victim does not need a lawyer to file a Family Violence Petition. The clerk of the Superior Court in the victim's residing county may provide forms for the Petition or be able to direct a victim to a family violence shelter or social service agency for direction.

SOURCE: State Bar of Georgia

Your Spouse’s “Hidden” Assets - A Checklist

The following is a list of easily-overlooked or "hidden" assets in property settlement or division cases:

1. Frequent flyer mileage
2. Security deposits (e.g., utilities, car lease)
3. Timeshare property
4. Leased vehicles, cell phone, other items
5. Stock options
6. Memberships (e.g., country club)
7. Bond or deposit for country club
8. Unused vacation, sick leave
9. Patents, copyrights, royalties
10. Income tax refunds
11. Income tax capital loss carry-forwards
12. Income tax charitable contribution carry-forwards
13. Marketable govt licenses (radio licenses, commercial fishing quotas)
14. Special retirement benefits (“golden parachutes”)
15. Retirement - life insurance benefits
16. Retirement - medical benefits
17. Retirement - survivor benefits
18. Hobby or other collections
19. Contract rights from marital employment (e.g., insurance renewal payments for agent)
20. Affiliation “rewards” programs (e.g., points or discounts for credit card use)
21. Entertainment tickets, season ticket options
22. Business vehicle for personal use
23. Prepaid rent, leases, subscriptions
24. Burial plots
25. Life insurance cash surrender value (or perhaps death benefit if insured is elderly)
26. Tort, worker’s comp claims
27. Stock options
28. Hangar lease (for aircraft)
29. Hotel or credit card points
30. Cash
31. Small business retained earnings
32. US Savings Bonds, other securities
33. “Hidden value” items - rare items of personal property (e.g., antiques), rare pets, collectibles
34. Options to purchase property
35. Unpaid commissions on deals set to close
36. Referral fees (e.g., for personal injury lawyers)
37. Security or performance bonds posted
38. Car insurance prepaid
39. Taxes prepaid

Modifying or Undoing a Property Division

A property division that has been agreed to by the parties or ordered by the court is very hard to get out of. Courts favor "done deals" and do not want to encourage the parties to run back to court to litigate their dispute all over again.

In most states, there is a period of time after a court enters its order in which one of the parties can ask the court to reconsider its decision. Such a request may be called a motion to reconsider or a motion to vacate the judgment. The time period for making such a request varies between states, but it is often thirty days after entry of the court's order that is at issue.

The party seeking reconsideration may argue that the court made a mistake in understanding the facts of the case or in applying the law. The party also may claim that some new facts have arisen that make the original order unfair. (Generally, the party claiming new facts must have a good reason for not having discovered the facts earlier.) In most cases, courts turn down a party's request for reconsideration, but if the court accepts the party's arguments, the court may modify the order or conduct additional hearings.

Fraud or duress are two other bases for seeking modification of a court order or settlement agreement. Fraud means that one party has deliberately deceived the other party on a significant matter. If, for example, one party to a settlement agreement lied about the amount of his or her assets and the other party later found out that a substantial amount of assets were hidden, that could be a basis for asking the court to vacate the property settlement and order a new distribution of property.

Duress occurs when one party is forced into an agreement by extreme, unfair pressure from the other party. In this circumstance, a court also might vacate an agreement and order a different distribution of property. Duress is difficult to prove. Most judges assume that parties to a divorce agreement are under some degree of stress. The amount of stress and pressure that a party must have been under before a court will allow the party to back out of a deal is very high.

Separate or Nonmarital Property

The laws of dividing property vary from state to state. As a starting point, however, most states allow parties to keep their own separate or nonmarital property. Nonmarital property includes property that a spouse brought into the marriage and kept separate during the marriage. It also includes inheritances received during the marriage and kept separate during the marriage. In addition, nonmarital or separate property may include gifts received by just one spouse during the marriage. A few states permit division of separate as well as marital property when parties divorce, but the origin of the property is considered when deciding who receives the property.

The right of a spouse to keep his or her separate or nonmarital property may depend on the degree to which the property was, in fact, kept separate. For example, if a wife came into a marriage with a $20,000 money market account and wanted to keep it as nonmarital property, she should keep the account in her own name and not deposit any funds earned during the marriage into the account. She should not, for instance, deposit her paychecks into the money market account, because the paychecks are marital funds and could turn the whole account into marital property. (Marital property will be explained in the next section.) The process of changing nonmarital property into marital property and vice versa sometimes is called transmutation (from Latin words meaning "cross" and "change").

Another example: If a husband inherits some stock from his mother during the marriage and he wants to keep it as nonmarital property, he should open his own investment account and should not use the account for any investments that he and his wife own together. If a husband or wife decides to use some nonmarital funds for a common purpose, such as purchasing a home in joint tenancy, that money normally will become marital property. The nonmarital property will be viewed by the courts of most states as a gift to the marriage.

Similarly, if a wife or husband takes nonmarital funds and places them in a joint checking account, the funds generally will become marital property. In some states, the presumption that funds placed in a joint account are marital property can be overcome by specific proof that the spouse depositing the funds did not intend to have the funds used for a marital purpose. Nonetheless, if a husband or wife does not want nonmarital property converted into marital property, it is best to keep the nonmarital property separate. Always.

Property distribution laws have many intricacies and variations between states; understanding them usually requires a lawyer's help. For example, in many states, the increase in value of nonmarital property (such as an investment account or a house that is held in the name of only one party) also would be nonmarital property. In some states, however, the increase in value would be marital property.

SOURCE: FindLaw

Marital or Community Property

Marital or community property is defined somewhat differently by different states, but it generally includes property and income acquired during the marriage. Wages earned during the marriage are marital property. A home, furniture, and cars purchased during the marriage usually are considered marital property.

When property is considered to be marital or community property, the court has the power to divide the property between the parties. Unlike separate or nonmarital property, one party does not have an automatic right to keep the property in the event of a divorce.

If title to property is held in the name of only one spouse, that does not necessarily mean that the property is not marital or community property. Assume, for example, that wife and husband both work and use their wages to purchase a car. If title to the car is only in the wife's name or only in the husband's name, the car still is marital property because payments for the car came from marital funds (their wages). Even if one spouse bought the car with his or her wages, was the only driver, and held title to the car, the car still is marital property because payments came from marital funds.

As a practical matter, if husband and wife owned two cars and a judge had to decide who receives which car, the husband and wife probably would each receive the vehicle that he or she primarily drove. Nonetheless, if the property in question is marital property, the judge has the power to give it to either party.

A pension also is usually marital property, even though it may have been earned by the labor of only one spouse during the marriage. To the extent that rights to a pension were earned partially during the marriage and partially during a period when the parties were not married, the part earned during the marriage may be marital property and the part earned when the parties were not married may be nonmarital property.

SOURCE: FindLaw

Checklist: Dividing Marital Property

When dividing marital property, it's easy to get caught up in who gets the big stuff--the cars, the house, the boat. In actuality, all of your marital property must be divided, and in the heat of a disputed divorce it may be easy for some important details to fall through the cracks. The following checklist can help you keep your bearings so that you and your attorney can work together to formulate a property settlement that is in your best interests.

• Real Property

  ____ Marital homestead

  ____ Vacation home(s)

  ____ Business property

  ____ Rental property

  ____ Undeveloped land

• Personal Property

  ____ Home furnishings

  ____ Rugs

  ____ Antiques

  ____ Artwork

  ____ China

  ____ Crystal

  ____ Coin collections

  ____ Stamp collections

  ____ Collectibles

  ____ Guns

  ____ Computers

  ____ Home office equipment

  ____ Jewelry

  ____ Clothing

  ____ Furs

  ____ Motor vehicles

  ____ Boats

  ____ Campers

  ____ Recreational vehicles

  ____ ATVs

• Financial Assets

  ____ Cash on hand

  ____ Checking accounts

  ____ Savings accounts

  ____ Christmas club accounts

  ____ Educational accounts

  ____ Retirement accounts

  ____ 401(k) plans

  ____ Pensions

  ____ Profit sharing

  ____ IRAs

  ____ Stocks and bonds

  ____ Mutual funds

  ____ Certificates of deposit

  ____ Annuities

  ____ Life insurance policy cash values

  ____ Trusts

• Business Assets

  ____ Sole proprietorships

  ____ Partnerships

  ____ Professional practice

  ____ Professional degree

  ____ Other business interests

• Other

  ---

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  ---

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SOURCE: FindLaw

Divorce: Effect on Insurance Policies

Divorce presents a number of critical financial and emotional issues. Among the more complicated financial issues are those relating to insurance. Health, car, homeowner, and property insurance are a few of the common types of insurance that can be viewed as assets in a marriage. Upon divorce, the responsibility and expense of maintaining appropriate policies through payment of premiums must be taken into account. Payment of premiums on such policies can be part of the divorce settlement. Following is a discussion of divorce and its effect on insurance policies.

After Divorce: Does Coverage Continue?

Federal laws regulating health and other types of federally regulated insurance may allow partners in a marriage to continue the policies after divorce. These regulations require that insurers continue coverage for up to 36 months before the insureds are required to apply for independent coverage. Beyond meeting the expense of premiums during this interim period, it may be necessary to assess whether or not a former spouse will be able to qualify for coverage at the end of the COBRA-mandated period.

Pre-existing health conditions or disabilities may make it impossible for a former spouse to obtain independent coverage, necessitating negotiation of adequate provisions to meet such expenses beyond a COBRA-mandated period. Conditional provisions, with accompanying insurance arrangements, may also be advised to protect against potential changes in health or disability conditions.

Often people may also carry long-term care policies or have insurance policies as part of their retirement portfolios. Accounting for such assets, equitably dividing such assets and providing for continuation of such coverage are increasingly important in divorce settlements. This is not only because younger people are beginning to anticipate and provide for such needs earlier in life. It also occurs because divorce affects couples of all ages and, not uncommonly, even marital unions of many decades' duration.

Specific Assets and Effect of Divorce: Credit and Divorce

Mary and Bill recently divorced. Their divorce decree stated that Bill would pay the balances on their three joint credit card accounts. Months later, after Bill neglected to pay off these accounts, all three creditors contacted Mary for payment. She referred them to the divorce decree, insisting that she was not responsible for the accounts. The creditors correctly stated that they were not parties to the decree and that Mary was still legally responsible for paying off the couple's joint accounts. Mary later found out that the late payments appeared on her credit report.

If you've recently been through a divorce -- or are contemplating one -- you may want to look closely at issues involving credit. Understanding the different kinds of credit accounts opened during a marriage may help illuminate the potential benefits -- and pitfalls -- of each.

There are two types of credit accounts: individual and joint. You can permit authorized persons to use the account with either. When you apply for credit -- whether a charge card or a mortgage loan -- you'll be asked to select one type.

Individual Account: Your income, assets, and credit history are considered by the creditor. Whether you are married or single, you alone are responsible for paying off the debt. The account will appear on your credit report, and may appear on the credit report of any "authorized" user. However, if you live in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin), you and your spouse may be responsible for debts incurred during the marriage, and the individual debts of one spouse may appear on the credit report of the other.

Advantages/Disadvantages: If you're not employed outside the home, work part-time, or have a low-paying job, it may be difficult to demonstrate a strong financial picture without your spouse's income. But if you open an account in your name and are responsible, no one can negatively affect your credit record.

Specific Assets and Effect of Divorce: Allocation of Debts

In addition to dividing property, most couples also have debts to divide. Sometimes the debts will exceed the assets. The court, or the parties by agreement, will divide whatever property the couple has and then allocate the responsibility of each party to pay off particular debts. (The wife pays off MasterCard; husband pays off Visa . . .).

If the debts were jointly incurred, both parties remain ultimately responsible for them. If the spouse who was supposed to pay a particular bill does not, the creditor still can look to the other spouse to collect the amount due. For example, if during the marriage the husband and wife applied together for a MasterCard, both signing the application and both promising to make payments, both are liable to MasterCard, even if only one spouse made the charges.

If a court or a settlement agreement requires a wife to pay the MasterCard bill, but she does not and MasterCard collects from the husband, the husband can sue the wife for the loss, or he may be able to deduct his loss from future payments he may owe his wife (such as alimony, if there is any).

Given the potential for continued joint debts, even after a divorce, it is important to limit one's liability for the other spouse's debts. Thus, it is best to close joint credit card accounts or other joint accounts as soon as a divorce is pending (unless one has a great deal of faith in the soon-to-be-be former spouse). If it is not possible to close an account because there is an outstanding debt that cannot be paid off immediately, it is prudent for a spouse to notify the creditor that he or she will not be responsible for any additional debts beyond current outstanding balances.

For example, if there is an outstanding home equity loan of $10,000, but an available line of credit of $40,000, it probably is best to notify the creditor (orally and in writing) that the line of credit should not be extended beyond $10,000. Similarly, if one spouse co-signed on a business loan for the benefit of the other spouse's business, it would be prudent for the spouse who does not own the business to notify the creditor that he or she will not be responsible for any business debts beyond those already incurred.

One spouse normally will not be responsible for the debts of another spouse if debts were incurred only in the name of the spouse who made the purchase. In many states, however, an exception will be made for debts that are considered family expenses. Examples of family expenses include groceries for the family, the children's necessary medical expenses, and children's clothes. If a debt is considered to be a family expense, both spouses probably are liable for the debt, even if only one of them incurred the debt. Community property states also generally make spouses liable for each other's debts incurred during the marriage.

Educational loans are a common debt. Generally, a court will direct each party to repay his or her own loans for educational expenses. If, however, the debts were incurred during the marriage, it is possible for the court to direct one spouse to repay the other spouse's educational debts.

SOURCE: FindLaw

Specific Assets and Effect of Divorce: Dividing Personal Property

Even in contested cases that have to be decided by a judge, most parties manage to decide between themselves how to divide the relatively small items of personal property. Nonetheless, the phrase "they battled down to who got the last teaspoon" reflects the intensity of emotion that can come with divorce.

Even couples who are relatively amicable when splitting up usually manage to find a few pieces of property to fight over. The individual piece of property often is not truly important by itself, but it comes to represent the frustrations of a relationship that has failed. Perhaps it is easier to obtain an emotional release from fighting over some object than focussing on the underlying personal issues that caused the marriage to end.

If the parties truly cannot resolve a dispute over personal property, a judge can do it for them, but that normally is not a cost-effective way to resolve the issue. If the judge does have to resolve the dispute, the judge will consider the same factors discussed in the section on dividing marital or community property. In addition, the judge may consider who acquired the property, who uses the property, and whether the property has a special connection to the original family of one spouse.

If the wife and husband are having a difficult time dividing personal property, they might try some techniques that have been used by other couples.

The spouses together can prepare a list of all the property in dispute. One spouse can take that list and divide it into two separate lists. Then the other spouse can choose which of the two lists to take as his or her property. Presumably, the spouse who drew up the two lists will have an incentive to prepare an equal division of property. This arrangement is a variation on the way parents often encourage children to divide a disputed candy bar: have one child divide the candy bar and let the other child choose which piece to take.

Another option is to use a single list of disputed property. By flip of a coin or other method, one spouse chooses the first piece of property; then the other chooses; and back and forth it goes until all the property is divided. A variation on this approach would be to have a series of lists from which the spouses take turns, one list at a time. The lists might be categorized by the economic value or sentimental value of the items on each list.

Another somewhat elaborate approach could be used if the parties decide on an unequal division of property, but have not decided how to allocate the property. This approach also can be used for equal divisions of property. Again, the parties draw up a list of disputed property. Then they must agree on the value of each item of property, and post the value next to the item. The parties take turns selecting items of property. When either the husband or the wife has reached his or her designated quota (for example, 65% of the property as determined by the agreed values), then the other party receives the rest of the property.

If the husband and wife have enough fun working together on this distribution scheme, they might consider getting back together.

SOURCE: FindLaw

Specific Assets and Effect of Divorce: Pensions

When a couple divorces, they probably focus first on dividing the property that's easy to see--the home, furniture, cars, etc. The property they can't see--their intangible property--is also affected by divorce.

For many families, a pension is the largest asset, after the family home. Even if the pension is earned solely by the efforts of one spouse, the portion of it that was earned during the marriage is still marital property subject to division by the court.

Many courts prefer to give full rights to a pension to the party who earned it as long as the other party will have a sufficient amount of income and property from other sources.

If, however, the pension is the primary source of income that a spouse would have and there are no other significant sources of income, the court is likely to divide rights to the pension. The court can divide the pension between the spouses by percentages (i.e., spouse A will receive 60 percent, spouse B 40 percent) or by a fixed cash amount to one spouse with the remainder to the other spouse (i.e., spouse A will get $600 per month, spouse B $400).

Congress has passed a law facilitating division of pensions. The law allows entry of orders by a court called Qualified Domestic Relations Orders (QDROs). These orders, when properly entered by a court, require the administrator of a pension plan to send pension checks not only to the worker, but also to the worker's former spouse. The court cannot order a pension check to be written before the worker is entitled to the pension, nor can the court change the total amount of the pension that is due. But the court can direct that when a worker is eligible for a pension (even if he or she has not yet retired and is not drawing a pension), checks must be sent to the worker's former spouse.

For example, if a couple is divorcing after a worker has retired, the court may order that pension payments be divided fifty-fifty (or by some other percentage). If the couple divorces while the worker is still employed and accumulating retirement benefits, the court may ascertain the value of the pension as of the date of the divorce and order division of that sum. When the worker later becomes eligible for payment of retirement benefits, the spouse could receive pension payments for a portion of the pension earned during the marriage. The worker would receive the remainder of the pension, including all of the pension that accumulated after the divorce.

Specific Assets and Effect of Divorce: Family-Owned Business

As noted in the section on dividing marital and community property, courts usually favor giving a family-owned business to the spouse who runs the business. The other spouse may be given other assets in exchange, such as the family home or bank accounts.

The situation is more complicated if both wife and husband have been actively involved in the business. The court may set up an arrangement by which one spouse has the right to buy out the other spouse over time. Alternatively, the right to buy out the other could be sequential--first given to one spouse for a certain period of time, and then to the other spouse for the same period of time. As with handling division of the family home, a forced sale might be an option if neither party can buy out the other party (although most courts would favor giving the business to just one spouse rather than dissolving an on-going business).

If the court thinks the parties can continue to work together despite the divorce, the court may continue the status quo with the husband and wife remaining as business partners, even though they are no longer marital partners.

Valuation of family businesses can be difficult. A closely held business, by nature, does not have a value that can be readily ascertained on a stock exchange. If the business is of sufficient size, it could be worth the parties' efforts to hire experts such as accountants or business consultants to evaluate the business, assuming the value of the business is disputed or uncertain. On the other hand, if the business is very small or clearly does not have a significant positive value, it may not be worth the time and money to thoroughly evaluate the business.

When trying to ascertain the value of a business, it is helpful to look at financial statements of the business, reflecting the business's assets, liabilities, income, and expenses. Tax returns and checking account records also can provide valuable information--sometimes more accurate than the company's internal financial statements

Specific Assets and Effect of Divorce: The Family Home

What happens to the family home will depend on the facts of each case. If the wife and husband can agree between themselves on what should happen to the home, the court virtually always will accept their decision. If the wife and husband cannot agree, the court will decide.

If the parties own a house, condominium, or cooperative apartment and they have children who are still living at home, the law favors giving the house to the spouse who will have primary custody of the children, if it is affordable to do so. This promotes continuity in the lives of the children as well as in the life of the spouse who will live in the house.

If the parties cannot afford to keep the house, it may be sold and the proceeds divided (or perhaps given to one party). Division of money from sale of the house generally is made after paying off the mortgage and the costs of the sale such as commissions to the real estate brokers, transfer tax, and attorneys fees.

In some cases, there is a middle-ground approach: The spouse who has primary custody of the children will have a right to live in the house for a certain number of years, such as until the youngest child graduates high school. At the end of that time, that spouse will buy out the other spouse's interest or sell the house and divide the proceeds.

A variation on these arrangements is to give one spouse a right to buy out the other spouse for a fixed period of time, such as thirty days. If the first spouse cannot buy out the other spouse (perhaps because he or she was not able to obtain financing), then the second spouse has an equal period of time to buy out the first spouse. If neither spouse is able to buy out the other, then the house will be sold and the proceeds divided.

When only one spouse is going to occupy the house after a divorce, arrangements need to be made for payment of expenses related to the house. A common arrangement is for the party living in the house to pay the mortgage, property taxes, utilities, and routine repairs. If the spouse who is not living in the house retains an interest in the house (such a right to share in the proceeds when the house is sold at a later date), both parties might share in the costs of major repairs. Major repairs might be defined by the nature of the expense (repair of roof, replacement of appliance) or by dollar amount--for example, any repair costing more than $200.

Stock Options

Definition: A stock option is the right given to an employee by a corporation to purchase a set number of shares of the corporation's stock during a specific period of time at a fixed purchase price.

General Discussion: If an employee is given a stock option he/she is not required to purchase the stock, but can or may elect to exercise the option at his/her choice. Stock options are either statutory or nonstatutory.

Statutory options give the employee the ability to take advantage of special federal tax treatment that is accorded to incentive stock options. If the federal statutory regulations are met, the employee will not have to pay ordinary income tax on the options when they are granted or exercised. After they are exercised and sold they are taxed at the appropriate capital gains rate, provided they are held for the required amount of time. On the other hand, nonstatutory options usually are taxed as regular income when the option is granted (when the stock is purchased).

Why do corporations offer employees stock options? In order to determine the answer, each stock option should be analyzed on a case by case basis. The more common reasons are as follows:

1. The corporation wants to provide an incentive for the employee to remain with the company. This would represent compensation for services to be rendered in the future.

2. Options are offered to attract new employees who are usually then paid below the going rate in return for part of the future growth of the corporation. This would represent deferred compensation for services rendered in the present.

3. The corporation wants to give the employee a bonus for having done a good job. This would represent compensation for services rendered in the past.

Can One Spouse Force the Other to Leave the Marital Home?

One question that is frequently asked is whether someone can put his/her spouse out of the home without his/her consent.  When spouses cannot get along and at least one party realizes that they are headed toward separation or divorce, this issue must be addressed sooner or later.

The answer is that until and unless the Family Court issues an Order stating otherwise, both spouses have equal rights to the residence.  As such, each can try to put or keep the other out, typically by changing the locks and alarm codes.  However, the displaced spouse can take any necessary steps to regain entry to the home, including "breaking in" if necessary.  One cannot be criminally charged in South Carolina for breaking into his/her own home. 

Once the Family Court addresses this issue, an Order will be issued which clearly sets forth the parties' rights, responsibilities, and obligations with regard to the home.  Such an Order will generally set forth which party has the exclusive temporary use and possession of the home, as well as how the expenses related to the home will be paid as the case progresses.

Please note that I am not recommending that anyone put his/her spouse out of the house or that anyone forcibly break back into his/her home.  Those issues are very fact specific and trial strategy  with an experienced family law attorney should play an important role in making such a decision.

SOURCE: South Carolina Family Law Blog

Georgia Property Division Factors

In Georgia, the property and debt issues are typically settled between the parties by a signed Marital Settlement Agreement or the property award is actually order and decreed by the Superior Court within the Decree of Divorce.

Georgia is referred to as an "equitable distribution" state. When the parties are unable to reach a settlement, the Superior Court will take the following approach to dividing the assets; First, it will go through a discovery process to classify which property and debt is to be considered marital. Next, it will assign a monetary value on the marital property and debt. Last, it will distribute the marital assets between the two parties in an equitable fashion. Equitable does not mean equal, but rather what is deemed by the Superior Court to be fair.

There are no factors listed in the statutes regarding what is considered by the court when distributing the property upon divorce.

The verdict of the jury disposing of the property in a divorce case shall be carried into effect by the court by entering such judgment or decree or taking such other steps as are usual in the exercise of the court´s equitable powers to execute effectually and fully the jury’s verdict. (Georgia Code - Sections: 19-5-13)

Since Georgia is an "Equitable Distribution" state, all marital property will be divided in an equitable fashion according to the court unless agreed to otherwise by the divorcing spouses. What does "equitable" mean? Equitable can be defined as "what is fair, not necessarily equal." To automatically believe the marital property would be divided 50-50 would be a wrong assumption in any equitable distribution state.

SOURCE: DivorceSupport

Dividing Pensions: Separate Interest vs. Shared Interest

When dividing a Defined Benefit Plan (Pension) in a divorce case, the QDRO can be drafted using either a “Shared Interest” approach or a “Separate Interest” approach. The main difference between the two is that Separate Interest is based on the Alternate Payee’s lifetime and Shared Interest is based on the Participant’s lifetime. Below are some pros and cons of each approach:

SEPARATE INTEREST

•   Adjusts the amount of the award to be paid over the lifetime of the Alternate Payee rather than the Participant’s lifetime.
•   “Post-retirement” survivorship language for the benefit of the Alternate Payee is not required, because he or she is automatically guaranteed a lifetime of actuarially-adjusted benefits.
•   It is still necessary to include “pre-retirement” survivorship language to secure the Alternate Payee’s right to benefits in the event of the Participant’s death before retirement.
•   The Alternate Payee can choose to begin receiving benefits at a different time than the Participant.
•   If the Alternate Payee is much younger than the Participant, this approach is not favorable.
•   If the Alternate Payee predeceases the Participant, the benefit may revert back to the Participant or just disappear.

SHARED INTEREST

•   Benefits are adjusted over the lifetime of the Participant.
•   Must have pre- and post-retirement survivor language in the QDRO to secure the benefit for the Alternate Payee in the event that the Participant dies first.
•   Only method allowed if the Participant has already retired.
•   In the event that the Alternate Payee predeceases the Participant, the benefit reverts back to the Participant (if allowed by the plan).
•   Participant must begin receiving benefits before the Alternate Payee may receive benefits.
•   If the Alternate Payee is younger, he or she will receive more benefits using this method since the benefit is actuarially based on the Participant’s life expectancy.

Property settlements should spell out the terms of the division of the pension. It is not uncommon to see agreements containing clauses such as “the pension will be divided between the parties.”  Unless survivorship issues are agreed upon and put into the agreement, it is likely that one may be forced to use the Separate Interest approach, which may not be consistent with best interests.

SOURCE: DivorceNet

Tax Issues Related to Qualified Domestic Relations Orders and Divorce

An increasingly large portion of the assets of married couples consist of rights to payments and stock from pension plans. In many states such assets are subject to division during a divorce. Divorce and division of property are generally controlled by state law, but pension plans are controlled by federal law in many respects.

Pension Plans and ERISA
A major advantage of saving for retirement through a pension plan is that contributions from employees and employers for plans such as a 401(k) plan are not taxed as income until distributed by the plan, usually after retirement, at lower tax rates. However, under provisions of the Federal Internal Revenue Code, the assignment of pension benefits, including transfers to a spouse during divorce, may result in the loss of such tax benefits.

Definition of Equitable Distribution

In equitable distribution states, all property, whenever or however acquired, regardless of legal title, is subject to equal or unequal division.

Most states divide property according to equitable distribution statutes. Parties often have misconceptions about what is subject to division. For instance, in some states, if your spouse inherits money before marriage, even if the funds were always kept in his name and he never used them for family purposes, the funds are still subject to division. Such funds are part of the marital estate subject to equitable division. In this situation the division could be unequal, especially if the marriage was of short duration.

Each state’s divorce laws set forth mandatory "factors" judges must consider before making an equitable property division or awarding alimony. Some states also have "discretionary" factors courts may consider. Here are some mandatory "factors" incorporated into most state laws. Ask you lawyer for a copy of your state’s statute.

• Length of the marriage
• Age, health, occupation of the parties
• Station in life and life-style
• Liabilities and needs
• Contribution to the marital estate (economic, domestic, child-rearing, etc.)
• Assets and liabilities, sources and amount of income
• Behavior of the parties during the marriage
• Vocational skills, employability

SOURCE: DivorceNet

Equitable Division of Marital Property

The state of Georgia recognizes that each marriage partner has an equitable interest in all marital property acquired during the course of the marriage. Unlike states with community property laws, however, this equitable interest does not appear until a divorce is filed. The existence of this potential claim does not impair the transfer of property during marriage by either party.

The first step is to determine what property held by the parties is actually marital property. There are several forms of property owned by the parties to a divorce:

• Separate property of one spouse owned before the marriage
• Separate property of one spouse acquired during the marriage
• Separate property of one spouse, which is a replacement, or substitute for property owned before the marriage.
• Appreciation in value of the separate property
• Increased value of separate property which is caused by active involvement of either spouse during the marriage, and subject to marital property claims
• Jointly owned marital property
• Marital property titled in only one spouse's name, but subject to marital property claims

Property Division Under Georgia Law

When a marriage ends, the couple must divide up their property and possessions. Either the couple can agree between themselves how to do this or the court will decide for them.

What is property?

Everything with exchangeable value or anything that goes to makeup a person's wealth: every interest, estate, obligation, right. Anything that you own or that generates income is considered by the law under the category of property:

Your car, your furniture, money in bank accounts, retirement plans, even a business or a profession is property. In a divorce action, property also means what you partially own and owe money on; it includes your debts.

The law in Georgia, views marriage as a relationship between partners, taking into account the monetary and nonmonetary contributions of each spouse to the family unit. Even if one of the partners never earned one dollar, that partner is considered to have contributed to the family's property (or wealth) and has rights to a percentage of that property.

How does the law divide property?

Georgia is an "equitable distribution state" which means that all marital property acquired during the marriage is subject to division. Property brought into the marriage is not subject to division in a divorce. In order to divide up property in a divorce action, categories of property have been established. Marital property includes all property that was acquired during the marriage, regardless of how it is titled (in whose name it is). Gifts from one spouse to another are marital property if they were purchased with marital funds. Pensions and business interests that were developed by one spouse are considered marital property if they were acquired during the marriage. In fact, the only property that the court may transfer from one spouse to another is half of a retirement plan, benefit package, pension, or profit sharing. .

Present Value Calculation Versus Deferred Distribution of Employee Stock Options

In an issue of national interest, the Pennsylvania Supreme Court in Fisher v. Fisher [769 A.2d 1165 (Pa. 2001)] held that employee stock options are not suitable for present value calculation and recommended deferred distribution. Since employee stock options are normally nontransferable, any domestic relations order would be on an asifwhen basis, with the employee spouse paying the nonemployee spouse his or her share when the option is executed. Thus, the domestic relations order amounts to a contract between the parties binding them after the divorce. This is very different from a qualified domestic relations order (QDRO), where the order is served on the plan, not on the employee, and the parties are separated. Even though the court discussed the fact that binding the parties is not desirable, it decided that immediate offset did not apply for stock options, since execution of the option is merely an expectation without a real value.

Comparison to Pensions

The nonemployee spouse (wife) argued that unvested stock options are similar to an unvested pension and may be valued as such. In Pennsylvania, a pension may still be present valued even if not vested. There are, however, many issues besides vesting in terms of the valuation of stock options. In essence, a stock option is much more speculative than a pension, and this is why the Pennsylvania Supreme Court found the options to be an expectation. Even if the stock options were vested, there still is an assumption of future service in the valuation of stock options. This is due to the nature of stock options. The option has an expiration date after which it cannot be exercised. It also has a strike price at which the owner buys the stock under the options. If the stock price exceeds the strike price before the expiration date, the option can be exercised by selling the stock, assuming the strike price exceeds the strike price of the option. The BlackScholes algorithm (mathematical method) uses the expiration date, the current price, the strike price, and the stock volatility (amount of fluctuation) to arrive at the BlackScholes value of the option. The higher the BlackScholes value, the more likely the stock is to exceed the strike price before the expiration date. Thus, applying the BlackScholes algorithm to an employee stock option assumes that the employee will stay with the company until the expiration date of the option. If the employee leaves, he or she forfeits the option.

Dividing the Property in a Georgia Divorce

In Georgia, assets and debts acquired during your marriage – called "marital property" will be divided "equitably" when you divorce. "Equitable" does not necessarily mean "equal," but what is fair to both spouses.

Not all property is considered "marital property":

• For example, property you inherit during the marriage generally is considered your own "separate property" and is not subject to equitable division
• Gifts given to you, except gifts you and your spouse give to each other, generally are not considered marital property

Judges have complete discretion in equitably dividing marital property and may consider any number of factors, including the conduct of the parties during the marriage. Other factors include:

• Each party's separate assets and financial status
• Each party's income and earning capacity
• Each party's debts and future needs

It is important to collect all the information you can about all your property, including when you purchased it, approximately how much it is worth, and details such as account numbers, serial numbers and so forth. Collecting this information before you see a Georgia divorce lawyer can save you a lot of time and money.

SOURCE: Lawyers.com

No Alimony, No Property Division, No Attorney's Fees; Just Divorce - Stanley v Stanley

The Supreme Court has affirmed a Fulton County Superior Court judge in Stanley v. Stanley. Justice George H. Carley wrote for a unanimous court.

In affirming the court below, the Supreme Court f ruled that the trial court, sitting as the trier of fact, was not required to award him any of the marital property and found that "the trial court entered a final decree which dissolved the marriage, but did not award either party any marital property, alimony or attorney’s fees."

The Court also considered the Husband's assertions that the trial court erroneously failed to award alimony or attorney's fees and ruled that the trial court did not abuse its discretion when it chose not to award either remedy to either party.

SOURCE: Supreme Court of Georgia

Husband’s application for appeal was automatically granted pursuant to the Domestic Relations Pilot Project. He contended on appeal that the trial court erred in not awarding him marital property, alimony, or attorney’s fees.

She Got Half the Trailer, But None of the Land - Johnston v. Johnston

In an opinion authored by Justice George H. Carley, the Supreme Court has unanimously affirmed a Morgan County Superior Court judge in Johnston v. Johnston.

At issue in this appeal is how the term "marital home" is to be defined with respect to the parties’ divorce decree. Wife claimed that it referred not only to a mobile home but also to the property on which it was located. Husband claimed that it referred only to the mobile home because "the real property . . . was owned by [him] prior to the marriage." The trial court ruled in his favor.

In the absence of a transcript of the hearing at which the trial court arrived at its determination, the Supreme Court notes that "there is no evidence that the mobile home was permanently attached to the real property on which it was situated." As a result, the Court ruled that "the ‘marital home’ consisted entirely of personal property," and "insofar as the real property is concerned, we must presume that the evidence supports the trial cour