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Divorce Finances: Know the Numbers

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Most people are not born independently wealthy so saving for retirement is a part of budgeting. Ideally married couples work together to save money for their old age.  They know exactly how much the other has and they know how it has been invested, right?

Fidelity Investments recently published the 2015 edition of it’s online biennial Couples Study. Surprisingly, the study showed that although many couples think they communicate well about money 40% of the couples surveyed didn’t know how much money their spouse made the previous year.

Sadly, the study also showed that over 50% of the couples did not know how much money they would need in retirement to maintain their current standard of living.  What does this have to do with divorce? Imagine how difficult it would be for someone to ask for a fair settlement in a divorce if they don’t know how much money their spouse made or how much money they needed to maintain their current standard of living?

Investment companies like Fidelity help people improve their understanding of the family finances.  A good place to start is taking an active role in understanding the tax returns or reading the credit card bills.  When someone is getting divorced or thinking about getting divorce, and if they have never managed their own finances before, it is a good idea to look for an investment firm and financial advisor to help.

From the perspective of a divorce attorney,  it seems that often times one spouse is more prepared than the other.  Generally people don’t plan their divorce, and often end up with a lack of financial literacy.  When a person receives a large settlement and is responsible, for the first time in many years, for paying the bills solo then financial literacy has real implications for the future.

In New York and many other states a person is entitled to half of their spouse’s IRA, 401K, or other retirement investment if they have been married at least 10 years.  There are also statutes now which determine temporary and permanent alimony payments and child support.  At Jones Morrison, we can help teach financial literacy and provide the financial and litigation support necessary to successfully navigate the future.

Allison Levinson
Of Counsel, Jones Morrison, LLP

Husband Files for Divorce After Taking $25M Worth of Art

By DivorceMagazine.com

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Tracey Hejailan-Amon, a Manhattan socialite, filed a lawsuit against her husband, millionaire Swiss entrepreneur Maurice Alain Amon, after claiming he hid anart collection valued at $25 million before filing for divorce.

Hejailan-Amon, who was in Europe when Amon filed for divorce, stated that she collected the artwork – between 17 and 20 pieces – during the couple’s marriage. The collection included pieces by Andy Warhol, Jean-Michel Basquiat, Damien Hirst, and other artists.

In her lawsuit, which was filed on Monday, she described her husband’s removal of the artwork from their $16 million Manhattan apartment as “illegal and unlawful,” claiming the artwork is marital property. Hejailan-Amon’s lawsuit states the couple did not sign a prenuptial agreement.

According to attorney Sarah B. Hechtman – who practices practices matrimonial and family law at Jones Morrison, LLP in Westchester NY – Amon did not have the right to take the artwork or attempt to sell it. “In New York, the law provides that neither spouse may transfer or sell or otherwise disturb any assets pending resolution of the matrimonial case,” she explained. “During the litigation (or settlement negotiations) of the matter, it will need to be determined what is marital property and thus subject to equitable distribution, and what is separate property.”

Peter Bronstein, a lawyer for Amon’s private company, has claimed that his client has full ownership of the artwork and that it is not marital property, adding that Hejailan-Amon was aware of Amon’s plan to remove the art from their apartment.

“If the art was purchased with marital or joint assets, then the court would find (or the parties would agree) that it is marital property and would divide it between the parties ‘equitably’ or fairly,” said Hechtman.

According to Hejailan-Amon, Amon had the artwork taken to a Queen’s store facility in October before filing for divorce in Monaco – where there’s no legal concept of shared property. In the lawsuit, she stated her husband had already put one painting up for auction. Amon claims to have residency in Monaco; however, Hejailan-Amon says the couple never lived in the country.

Hejailan-Amon, 47, and Amon, 64, married in Hong Kong in 2008. Since then, they have lived in various cities around the world. According to her lawyer, Aaron Richard Golub, Hejailan-Amon was not aware Amon was planning a divorce. “She was in Europe and she didn’t even know what was going on. She thought she was happily married,” Golub told the New York Post.

This isn’t Amon’s first conflict over marital property. Amon, who owns a security company, was previously married to Roberta Amon – whom he divorced in 2005. His ex-wife sued him for her share of marital money, according to New York Daily News.

An Alternative Approach to Divorce

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While a couple may only be divorced by a Supreme Court judge in the State of New York, how you proceed with obtaining one is your choice.  It need not be a hard-fought, conflict-ridden battle.

Collaborative law is a voluntary, contractually based alternative dispute resolution (“ADR”) process for parties who prefer to negotiate a resolution, rather than go through the litigation process. The distinctive feature of collaborative law, compared to mediation, is that lawyers represent parties during negotiations. Collaborative lawyers do not represent the party in court, but only for the purpose of negotiating agreements. The parties agree in advance that their lawyers will not continue to represent them in court if the collaborative law process ends without complete agreement.

The basic ground rules for collaborative law are determined in a written agreement, called a collaborative law participation agreement. The agreement generally states that the parties and their attorneys will conduct themselves in a respectful way toward one another. They require that everyone involved be honest and will not take advantage of the other side’s errors or oversights. They mandate that the parties keep all communication during the negotiation process confidential. The parties and professionals pledge to adhere to the spirit of collaboration and agree to end the process if they cannot continue in that spirit. The participation agreement ensures that if a party seeks judicial intervention, or otherwise terminates the collaborative law process, the disqualification requirement takes effect. Parties agree that they have a mutual right to terminate collaborative law at any time without giving a reason.

The goal of collaborative law is to encourage parties to engage in problem-solving, rather than positional negotiations. A positional approach is when the parties use the negotiation process as a contest to be won by one side at the expense of the other. Whereas a problem solving approach involves parties that view the dispute as a joint problem that needs to be solved together.

Collaborative law is often used for family disputes, when the parties will most likely continue to have a relationship beyond the resolution of their dispute. Often non-legal experts will become involved to enhance the collaborative process and help find the best possible solutions that work not only for the parties but, often, for family members who are not parties to the dispute.

All of these protocols are designed to encourage the open exchange of information without the threat of litigation.  Research has found that a problem-solving negotiation approach often is more effective than an adversarial one. The benefit to lawyers is the satisfaction of knowing that your client has been well served not merely legally, but holistically.

 

Sarah Hechtman

Attorney, Jones Morrison, LLP

Who Pays for College After Divorce?

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Summer is upon us and college admission letters have been received by now. While it is a happy time to celebrate a child’s success and admission to the school of his or her choice, figuring out how to pay for college is often not as pleasant. The question arises: when divorced, who pays for college? The answer to this important question should have been decided during divorce proceedings.

Payment for the costs associated with college, as well as for those associated with college admissions (travel to potential schools, test prep courses, application fees), should be contemplated at the time of divorce. Who pays for what, and how much, ought to be determined long before it is time for your child to apply. Will there be a “cap” on mandatory contributions to college costs at the SUNY level? Will the parents pay for a child until he or she graduates, even if it takes longer than the ordinary four years? Will both parties agree to contribute to graduate school? These are all decisions that should be contemplated, and answered, at the time of divorce to avoid future complications.

Divorce, while often difficult, can also be viewed as an opportunity for a fresh start and a chance to plan for the future. If it has not already been done, it is prudent to set up college savings accounts (“529″ accounts) at the time of divorce, to which both parents are obligated to contribute periodically. When dividing assets, allocating a portion to college costs may be a wise option.

If parents have neglected to provide for college funding in  divorce, who will pay? This depends on a variety of factors, including the child’s wishes and the parents’ ability to pay. A court may order a parent to pay for college, even in the absence of an agreement that obligates him or her to do so. Thus, it is sensible to decide well ahead of the time a child is ready for college how the payment of college costs will be handled.

 
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