Archive for the 'Property Division' Category

Get a Grip and Let Go!

Tuesday, January 26th, 2010

Personal property includes, but is not limited to, cash, savings accounts, checking accounts, stocks, bonds, jewelry, antiques, collectibles and pets. The personal property of individuals may be separate or marital and subject to distribution in a divorce. The term personal property does not include real estate or that which is affixed to it.

Personalty, a subset of personal property, is a person’s stuff, as the late George Carlin put it — the things people accumulate during a lifetime– chattels, including clothing and furnishings.

The spouses should divide all personalty. These goods, as economists call them, that people accumulate lose almost all value the moment they the leave the store. As a rule of thumb, almost anything bought in a mall, anything that is plugged in, uses batteries, anything for the house goes for yard sale prices when it is sold. These are the things “you do not need but cannot live without,” as one wag put it — the “unnecessary necessities,” as Mark Twain called them, that help drive America’s consumer economy.

Divorcing couples hurt and bleeding from the pain and suffering of a marital failure, sometimes foolishly battle for possession of nearly worthless items that somehow have a symbolic meaning. That warped Bob Dylan album bought during the happier times of the marriage — the one that has not been played in ten years because neither spouse owns a working stereo — takes on great symbolism because possession suggests vindication.

Couples should stand back and get a grip — and let go. Possession of these relics of a failed marriage vindicates no one, and paying a lawyer to fight for a useless record, or the fourth set of dishes that have been stored in a rental box since they displaced the third set, dissipates money both spouses need to start a new life.

A House is Just a Building; a Home Is a State of Mind

Friday, December 4th, 2009

In many, if not most divorces, the family dwelling is the couple’s largest asset. Its disposition can be very problematic.

Couples facing a divorce generally have three options in regard to the marital home, but each spouse needs to look at the prospects with a cold eye. The house is a building on a piece of land; a home is a state of mind and a habit of the heart. In the emotional turmoil that accompanies most divorces, many people think home when they should think house. Home — and all the hopes and dreams it symbolizes — may have been an accurate way to describe the building in which a family lived during the happier times of a marriage, but house is a more accurate way to see it when the frigid winds of divorce blow in the door. In short, hanging on to a house will not make it a home.

The disposition of real estate has become even more problematic since the collapse of the housing market. In some metropolitan areas in some jurisdictions, unsold housing greatly depresses the housing market. Divorcing couples face the prospect of selling a house in a depressed market. Anecdotal reportage suggests that some couples have postponed divorces in the face of these sour conditions.

That said, a divorcing couple in general has three options:

1) Sell the house on the market. In this routine, the couple sells the house and makes a clean break and divide the proceeds after paying off the outstanding mortgage. This course is no different than if the couple remained married and sold the house as an intact couple moving elsewhere.

2) Sell the house to one spouse who buys the other out. This regime often appeals when the custodial parent wants to stay in the house so that the lives of the dependent children are disrupted as little as possible. It may require that the purchaser obtain a new mortgage, or take over the existing one. Sometimes one spouse uses promissory note to pay the other his or her share over time.

3) Agree to own the house together. This regime is often used when the couple wishes to minimize the disruption in the lives of school age children. Very often it is accompanied with a deferred sale agreement by which the former spouses agree that the home will be sold when the children reach a certain age. Until then, one former spouse (often the custodial parent) lives in the house. This routine may require the couple to work out the terms and conditions of maintenance agrees and payment of the mortgage. The couple, who owned the house as tenants by the entirety when married, now own it as tenants in common when divorced.

Options 2 and 3 require careful consideration, particularly for a custodial mother, who should do sharp pencil work in calculating the costs of taking over the property.

Lottery Winnings Are Not a Matter of Chance

Tuesday, December 1st, 2009

Equitable property division sometimes makes for differences of opinion by judges about what is fair, but in one area, courts are almost entirely of one mind: the division of lotteries. Lottery winnings, whether from tickets purchased during a marriage or during a separation preliminary to a divorce, are marital property and subject to equitable distribution between the spouses.

In the case of winnings from a ticket purchased during a marriage, the courts find little trouble dividing winnings in half. In one 1990 Illinois case, In Re Mahaffrey, the husband argued that the lottery proceeds were income, paid in his name, and that they were his sole and separate property. The court brushed aside this argument, stating that the title theory of ownership was no longer recognized in equitable distribution, and likening lottery installment payments to pension rights subject to distribution.

Even when the ticket is purchased during a period of separation but before the divorce, courts have said that the winning proceeds are marital, not separate property, particularly in jurisdictions where the date of classification of assets is the date of dissolution of the marriage.

Even in cases where the an interlocutory decree has been handed down, courts have held that in so far as lottery winnings go, “the parties to a divorce remain husband and wife until the final decree of divorce.”

Winning tickets purchased during a separation may seem to support the argument that the proceeds are separate, but the key seems to be that when a jurisdiction uses the date of filing as the date of classification, lottery winnings are marital property.

In general, as far as lotteries and proceeds go, it is not over until the fat lady sings and she does not sing until the divorce is final.