A few years ago one of our lawyers described our typical divorce case like this.  A couple marries, buys a house, divorces three years later, sells the house and each spouse walks away with $50,000.  If they weren’t married, they would be happy with this partnership and call it successful, instead of hating each other.

But in this market, housing prices have plummeted to values sometimes below the balance due on the mortgage.  Divorce negotiations have turned from how to split up the sales proceeds to who gets stuck with the house.

Even when one spouse agrees to take over the underwater house and the mortgage payments, the other spouse may have to keep their name on the mortgage which may make it difficult to buy another house.

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On the way to work I listen to the Sports Junkies on the radio.  They reported this morning that Redskins Owner Dan Snyder had paid $600,000 for two alligator desks and two chairs.

I tried to contrast this with a television interview I saw last night with author and motivational speaker Wayne Dyer .  Dyer says he has made the shift away from away from acquiring things.  He has stopped listening to his ego.  He gives away all the money he makes as a speaker because he doesn’t need it.  He has left his ambitiousness behind in pursuit of spiritual tranquility. Ironically, he said, he makes more money now than ever.

Dyer asked a question that made me think about my divorce clients struggling to divide income and assets through negotiation and litigation.  If I had two magic wands and one could give you whatever material possession you wanted and the other could give you peace of mind no matter what happens to you, which one would you choose?

“My husband and I have not been intimate for over a year,” Louise, an unhappily married woman tells Joe, a Maryland divorce lawyer, “and I want a divorce.”

“OK, any other woman in his life?” inquires Joe.

“No.”

“Hmmm, any domestic violence or threats?”

“No.”

“Then you’re going to have to move out of the house for a year before you can file a divorce complaint,” says Joe trying to push the box of tissues across his desk toward Louise unobtrusively.

“But we can’t afford that,” cries Louise reaching for the tissues, “There must be another way.”

Neighboring jurisdictions, DC and Virginia permit parties to be separated while living in the same house, but not Maryland.  In Maryland, spouses are required to live separate and apart under different roofs for one year if the both agree, and two years if they don’t.  This waiting period must occur before they can even file for divorce.  And the divorce might take a year or longer after that.  These are the no fault grounds.  Adultery and cruelty have no waiting period.

The purpose of this waiting period is to favor marriage over divorce and make sure the parties really, really want to be divorced and not married.  After all, sometimes people change their minds.  But the recession has forced many couples to live together in misery because they cannot afford to separate.

So Montgomery County Delegate Luiz Simmons, an attorney, will support legislation this year to add a new grounds for divorce in Maryland, according to this morning’s Frederick News Post.  If this law passes, couples who go a year without sex would be able to file for divorce.

A study commissioned by Massachusetts Mutual Life Insurance Company reveals that 60 percent of business owners do not have a plan in place to divorce-proof their companies.   According to PRNewswire.com, the study involved six focus groups and 518 business owners.

“If a company is owned by a couple, a divorce can paralyze the business and create divided allegiances among employees and customers,” said Beth Wood, VP of a Mass Mutual division. “It could also jeopardize a family’s wealth and the owners’ retirements,” she said. “Often, a divorce can force the owners to sell the business, with proceeds being divided by the parties involved.”

“When owners aren’t in business with their spouses, a divorce can still hurt the firm greatly, if an ex-spouse is awarded the business in a divorce settlement, throwing ownership and decision-making into doubt, and distracting employees,” Wood said.

MassMutual suggests the following ways to create a divorce-proof plan for your business:

* Buy-sell agreements that can be triggered by certain events, such as a divorce.
* Prenuptial agreements.
* Postnuptial agreements.
* Trusts.

A New York Times article reports new research from Utah State University shows that couples arguing about money at least once a week have a thirty percent higher chance of filing divorce.

In the study, sexual and financial issues were reported to cause arguments in marriages, but financial issues had the higher correlation to divorces.

The article suggested that couples should discuss the following financial issues with each other before they get married to avoid disagreements during the marriage:

* Individual financial past – how have you historically handled money?
* Who will be in control of joint finances in the marriage – who pays the bills?
* Credit history – do you have a good credit score? Have you always?
* How important is money – how rich do you want/hope to become?

Source: TotalDivorce.Com

New York City lawyer, Steven Simkin, paid his ex-wife, Laura Blank, 2.7 million dollars for her half of their investment with Bernard Madoff’s fund as a result of their marital settlement agreement.

When Simkin found out the fund was worthless earlier this year, he sued his ex to get the money back, claiming there was a “mutual mistake of fact” which gave his ex a windfall.

Manhattan Supreme Court Justice Saralee Evans refused to set aside the agreement and dismissed Simkin’s lawsuit.

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It’s not all that often that Federal prosecutors ask to intervene in your divorce.  But then not every divorce involves billions of dollars owed to the government.

According to today’s Washington Post, Walter Forbes, 65, former Chairman of the Cendant Corp. was sentenced in 2007 to serve 12.5 years in prison for accounting fraud in the 1990’s.  In 1999,  Forbes sold the family’s nearly $6 million, 11,000-square-foot New Canaan mansion in New Canaan, Connecticut, to his wife, Caren Forbes for $10.  Although Forbes owes the government and Cendant over $3 billion in court-ordered restitution, his wife owes nothing and so they couldn’t collect from her.

But when Caren Forbes filed for divorce in Bridgeport Superior Court in January of this year on the grounds that the marriage was irretrievably broken, the government asked the divorce judge to order her to transfer assets back to Walter Forbes.

Last week, Judge Howard Owens ordered Caren Forbes to transfer ownership of homes in Connecticut and Rhode Island, and half of the couple’s jewelry and art collections back to Walter Forbes so the government and Cedant can attach them and recover the money.

Helen Kirwan-Taylor, writing for the Wall Street Journal Europe today, describes a new trend in divorces:  The civilised divorce.

She says she first noticed the trend when a friend showed her a professionally taken black and white Christmas card of a recently divorced couple from Stockholm. “There they were smiling away on the card with their immaculately dressed children, even though inside they posted separate addresses below their names.”

This couple, writes Kirwan-Taylor, have a personal Civilised Separation Agreement in which they agreed to protect the children, respect one another, split everything down the middle fairly and never quarrel openly.

Think this will catch on in America?

That’s a question I get a lot.  How do you hire a divorce attorney when you have no money?  Here are some answers culled from the comments at OttawaDivorce.com:

• Second and third jobs
• Cash in all savings
• Borrow from pension
• Sell Assets
• Borrow from friends and family
• Credit cards
• Cut living expenses
• Line of credit
• Home equity loan

Please leave a comment here and tell us how you paid for a lawyer in your divorce.

Related Articles:

Reasonable Legal Fees in a Divorce–Oxymoron?

The High Cost of Divorce.

In Greenwich, Connecticut, publishing mogul Peter Brant has filed new pleadings in his divorce from Victoria’s Secret model Stephanie Seymour.

He alleges that she is spending $257,000 per month.  Her clothing bill alone is $50,000 a month.  She must have a big closet.

I can’t feel too sorry for Brant, though.  He is worth about $489 million.

Read more here.