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Archive for December, 2012

December or January Divorce?

Wednesday, December 26th, 2012

Can’t stand living with your spouse for another minute?  Don’t want to start another year with him or her?  Geoff Williams, Reuters, writes on NBCNEWS.Com today that it may be to your advantage to wait a few days until January to file for divorce.  He gives these reasons:

1. Year End Bonuses.  In Virginia, the date for determining marital assets is the date of separation.  In Maryland and DC, it is the trial date, but the court can take into consideration assets acquired after separation.  So you may want to time your separation, depending on whether you or your spouse is receiving the year end bonus.

2.  Emotions.  If your spouse remembers that you ruined Christmas, that may make it harder to settle.

3.  Shopping.  Your credit card bill may be higher in January if your spouse decides to get even with you by shopping.

4. Taxes.  If taxes go up in 2013, you may get a bigger deduction for paying alimony or have higher taxes for receiving it.

5. Planning.  Use the year end to start gathering and organizing all the financial information and documents you are going to need for your divorce.

I guess Ashton Kutcher didn’t read the article.  He filed for divorce from Demi Moore on Friday.

Social Media Clauses in Separation Agreements

Friday, December 21st, 2012

Divorcing parents routinely add provisions to separation agreements saying they won’t speak ill of the other party in front of the children.  However, some now are adding specific clauses to deal with social media like Facebook and Twitter according to an article by Aisha Sultan in the St. Louis Post Dispatch.

Some provisions deal with managing the children’s online photographs or profiles.  Others prohibit parents from disparaging each other online where the children might someday read it.

University of Missouri professor, Larry Ganong, says social media is just one more thing that angry ex-spouses can fight about.  He says parents may continue to fight after divorce in an effort to control the other spouse’s parenting behavior.

Prenup Lifestyle Clauses

Thursday, December 20th, 2012

Prenuptial agreements mostly deal with what happens in the event of death or divorce.  But they can also be used to set up how a couple will handle their finances during the marriage.

It is also possible to put non-financial provisions, so called lifestyle clauses, in a prenuptial agreement.  So a couple can agree on who does which household chores, or how much television watching is permitted or even how may times a week you will have sex.  You can set a weight limit.  You can agree to a penalty for cheating.

Some couples view these as valuable provisions, sort of like a mission statement for their marriage or an extension of their vows.  Others find them to be negative saying that a marriage with lifestyle clauses is doomed from the beginning.

How they would be enforced is another question.  Will the court order an overweight spouse to lose 10 pounds?

Waiting Until After the Holidays to Divorce

Wednesday, December 12th, 2012

Lawyers know that the Season of Joy is followed by the Season of Divorce.

There are more separations and divorce filings between January and March of each year.

“People somehow expect the joy of the season is going to correct a troubled marriage and it never does,” Ginita Wall, who runs a divorce workshop, told NBC.

Making the Best of the Holidays After Divorce

Monday, December 10th, 2012

Guest Post by Donna Swanson, a legal blogger for the Law Offices of Daniel Jensen.

For many families, the holidays tend to center around families and friends. From Thanksgiving through the New Year, many people make a special effort to see their loved ones and spend time with their family. This often manifests as traveling to visit family and going through familiar family traditions. While this can be extremely exciting for many, it can be, unfortunately, particularly difficult for those going through a divorce or learning how to cope after a recent divorce.

In a divorce, a person not only separates their life from their previous spouse, but also that person’s family and friends. For some, this is not as much of an issue; however, for other people, trying to figure out what to do and how to cope without these traditions and people can be especially hard. Although it does get easier as more time passes, there are certain ways that a person can prepare him or herself so that the holidays are not as difficult.

Making the holidays easier to manage after a divorce may come easy for some; however, no matter how amicable or easy a person’s divorce was, it may be best to consider the following tips in an effort to ensure the holidays go as well as possible:

  • Start new traditions – the holidays are rife with traditions. From choosing a Christmas tree to cooking Christmas dinner, people tend to do the same activities year to year and place significant value on these. While many of these can continue after divorce, some cannot. As such, coming up with new traditions that replace some of these old traditions cannot only help you solidify the fact that you are starting a new life, but also help you avoid focusing on the old traditions.
  • Make plans in advance – the holidays typically require a great deal of planning to make things work between family and friends. This can be exaggerated when you are divorced, particularly if you have children with your ex-spouse. In order to minimize the effects this has on you and your family, not to mention avoiding unnecessary frustration and anxiety, it is usually best to plan out as many activities, traveling, and custody plans with your ex-spouse as possible.
  • Take your mind off things- whether it is scheduling more dinners and outings with your friends or working with charities, seeing people and enjoying different activities can help you from dwelling on negative thoughts and feelings.

These tips can help you ensure that you are taking all necessary steps and allow you to focus on things to make your holiday season a happier one.

Equitable Distribution in North Carolina

Friday, December 7th, 2012

Guest Post By Brian King, Managing partner at the King Law Offices

[Editor’s Note:  Maryland does not have a Plaintiff’s Inventory Affidavit, but we do have a Financial Statement and a Joint Property Statement.  It is interesting to see how other states do it. — James J. Gross]

Perhaps the most difficult part of an equitable distribution case is the discovery phase. This begins with the difficult task of putting together an inventory affidavit.

The Plaintiff’s Inventory Affidavit begins the process. This must be completed within 90 days after service of a claim for equitable distribution, the party who first asserts the claim shall prepare and serve upon the opposing party an equitable distribution inventory affidavit listing all property claimed by the party to be marital property and all property claimed by the party to be separate property, and the estimated date-of-separation fair market value of each item of marital and separate property.[1] The Defendant’s Inventory Affidavit is then due within 30 days after service of the inventory affidavit, the party upon whom service is made shall prepare and serve an inventory affidavit upon the other party.[2]

The inventory affidavits prepared and served pursuant to this subsection shall be subject to amendment and shall not be binding at trial as to completeness or value. Because the initial inventory affidavits are subject to later amendment, it is unwise to place too much reliance upon them. By the time the case is tried, the facts may be materially different from what was stated in the initial inventory affidavit.

In particular, note that the opposing party’s financial affidavit does not constitute a binding admission as to the classification or value of any property owned by the parties. A party’s own financial affidavit is likewise not binding, especially where relevant information is withheld by the other side.[3] The court may extend the time limits in this subsection for good cause shown[4].

The affidavits are subject to the requirements of General Statutes section 1A-1, Rule 11, and are deemed to be in the nature of answers to interrogatories propounded to the parties. Any party failing to supply the information required by this subsection in the affidavit is subject to N.C.G.S. § 1A-1, Rules 26, 33, and 37. During the pendency of the action for equitable distribution, discovery may proceed.[5]

The inventory affidavits are therefore intended to supplement traditional discovery, not to replace it. Discovery begins with the inventory affidavits, but it does not end there. “[F]ormal discovery procedures as provided by the North Carolina Rules of Civil Procedure are available to the parties in an equitable distribution action to gather the information needed for the parties to prepare and for the trial court to make its determination.””[6]

Note in particular that the opposing party’s inventory affidavit may well contain good-faith misstatements, inadvertent errors, or even outright lies. The inventory affidavit is no more likely to be correct than a response to an interrogatory or a statement made in a deposition. It is therefore essential to use the traditional discovery process, to the maximum extent possible, to double-check all statements made on the opposing party’s inventory affidavit. To take a very simple answer, if the other party owns a business, do not rely on the value stated on the inventory affidavit. Use the normal discovery process to obtain financial information about the business, and retain an expert to evaluate that information and determine whether the value stated on the affidavit is correct.

As a general rule, the inventory affidavits are more useful for identifying marital property than for classifying or valuing it. Perhaps the most clear issue surrounding the equitable distribution affidavit was in the recent Ross v. Ross[7] case from 2011. In that case, a request for protection asked the husband to produce any and all documents upon which you have relied, or intend to rely, to support your contention that the land and/or the residential building at 7018 Ocean Drive, Emerald Isle, North Carolina is your separate property, including but not limited to any evidence of source of funds used in acquiring said alleged marital property.

The husband ignored the request for a considerable period of time, and then responded: Any and all documents that I have to support my contention that the land and/or residential building at 7018 Ocean Drive, Emerald Isle, North Carolina is my separate property, is [sic] proprietary at this time. This evidence will be presented and reveled [sic] in court at the ED hearing(s) when necessary. I have always contended the Emerald Isle property is my separate property from the beginning. (Refer to Plaintiff’s Interrogatories, June 14, 2002, items 5 and 6.)

The broad claim that the requested information was “proprietary” was essentially a complete failure to respond to discovery. The husband “was claiming that he is the owner of his documents and he will not reveal them to anyone unless and until he wants to; this is not a valid or reasonable response to a discovery request.” Id.

The trial court imposed a very harsh sanction—it struck the husband’s equitable distribution claim, and barred him from testifying at trial. But the Court of Appeals held the sanction justified by the husband’s complete and long-standing failure to comply with discovery.

The Court of Appeals then held that the: “Plaintiff has no right to keep his “proprietary” information which he has been required by court order to produce in discovery a secret until he deems it necessary to reveal it at the equitable distribution hearing. Plaintiff does not have the prerogative to decide what information he will produce in discovery after the trial court has ordered this production. Thanks to plaintiff’s intransigence, the trial court has not yet had the opportunity to reconsider the classification and valuation of the marital and separate interests in the Emerald Isle property and to enter an order as directed by our prior opinion. The trial court’s sanctions order barring plaintiff’s equitable distribution claim and presentation of evidence does not prevent the trial court from entering an order as to classification and valuation of the separate and marital property but affects only the evidence which will be available at the hearing which will someday, we trust, be held on this issue.[8]

Striking of claims as a discovery sanction is rare, but it is justified when there has been a complete and long-standing failure to comply with discovery.

  • [1] N.C.G.S. § 50-21(a)
  • [2] Id.
  • [3] See Franks v. Franks, 153 N.C. App. 793, 571 S.E.2d 276 (2002) (profit-sharing plan was marital property even though not listed in pretrial order, where husband did not disclose the plan until the actual hearing).
  • [4] N.C.G.S. § 50-21(a).
  • [5] Id. § 50-21(a).
  • [6] Coleman v. Coleman, 182 N.C. App. 25, 29, 641 S.E.2d 332, 336 (2007).
  • [7] Ross v. Ross, ___ N.C. App. ___, ___, 715 S.E.2d 859, 863 (2011)
  • [8] Id. at ___, 715 S.E.2d at 865-66

About The Author: Brian King is the managing partner at the King Law Offices, and is a member of the North and South Carolina bars. Brian King is a graduate of Campbell Law School and completed his undergraduate degree at University of North Carolina at Charlotte.

Valuing the Marital Residence

Monday, December 3rd, 2012

In Maryland divorces, the court is required to determine the value of marital assets including the marital residence.  Enter the real estate appraiser.  Appraisers say about a third of their business comes from divorce cases.  And they are noticing an increase in business.

One approach in divorce is for both parties to hire one neutral appraiser to give an opinion of value.  But in highly contested cases, where there are a lot of assets at stake, it is not uncommon for each party to hire their own appraiser.   Appraisers say that two professional appraisals should come in within 10% of each other but that doesn’t always happen.  In cases where the appraisals vary widely, sometimes a third appraiser is called in to reconcile the difference.

With property values rising and falling rapidly in the past few years, the date of the appraised value can make a difference too.  And a real estate appraiser doesn’t value the contents of the house.  That requires a personal property appraiser.

 
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