Same Sex Marriages, DOMA, and Taxes

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On behalf of Ronald H. Kauffman, P.A. posted in Domestic Partnerships on Wednesday, October 24, 2012.

Death and taxes impact everyone, gay or straight. Recently, the issues of homosexuality, same sex marriage and divorce have been in the news, especially with the presidential debates. Whatever side of the debate you may find yourself, have you ever asked whether homosexuals should be taxed differently? When asked that way, the question sure sounds unconstitutional.

In 1963, Edie Windsor met her late-spouse, Thea Spyer, in New York City. They entered into a committed relationship, and lived together in New York. In 1993, they registered as domestic partners in New York City when it became available. In 2007, as Spyer’s health began to deteriorate, they decided to marry in Canada – which permitted gays and lesbians to marry. Two years later, Spyer died, leaving her estate to Windsor.

The unlimited marital deduction is one of the major deductions in determining a taxable estate. There is no limit to the amount of the marital deduction, so a married person can potentially eliminate estate taxes by leaving the entire estate to her surviving spouse. However, the Defense of Marriage Act, or DOMA, prohibits federal recognition of same-sex marriages. Because of the operation of DOMA, Windsor did not qualify for the unlimited marital deduction, and was required to pay $363,053 in federal estate tax on Spyer’s estate.

So, in addition to losing her spouse, and facing the prospect of living her remaining years alone, Windsor now faced a $363,053 federal tax bill that married heterosexual couples do not have to pay. In 2010, Windsor commenced a lawsuit seeking a refund of the federal estate tax levied on Spyer’s estate and a declaration that DOMA violates the Equal Protection Clause of the Fifth Amendment.

Last week in Windsor v. United States, the Second Circuit Court of Appeals found that DOMA’s section 3 does not pass constitutional muster. I understand that a petition for a writ of certiorari is already pending in the U.S. Supreme Court.

If You Want Your Marriage to Last Should You Move to New Jersey?

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On behalf of Ronald H. Kauffman, P.A. posted in Divorce on Thursday, October 18, 2012.

Marriage and divorce are important events. Not surprisingly, researchers, policy makers, and the public are always interested in up-to-date information about the demographic characteristics of marital events, and they reveal a lot about nationwide patterns.

The New York Times recently reported on the latest Census figures about marriage and divorce. According to the 2011 American Community Survey released last month by the U.S. Census Bureau, New Jersey ranks last among the states in the percentage of residents 18 and older who are divorced.

The New York Times article notes a few reasons. “The composition of New Jersey married individuals is quite favorable across several indicators, providing some evidence for the low divorce rate,” said Susan L. Brown, a sociology professor and co-director of the National Center for Family and Marriage Research at Bowling Green State University in Ohio. “These factors include education, race-ethnicity, age, and age at first marriage.”

However, the Census revealed a lot of other interesting variations among U.S. states, and between men and women. For instance, the states with the highest divorce rates for men were Arkansas and Maine. But, the states with the highest divorce rates for women were different. Alaska and Oklahoma topped the charts in that category. How did Florida rank? Not terrible, a little under the national average for both men and women 8.5 per 1,000 men and 9.9 per 1,000 women. The national averages for men and women were 9.2 per 1,000 and 9.7 per 1,000 respectively. So, while New Jersey has one of the lowest divorce rates, it also has one of the lowest marriage rates too. Maybe you don’t need to pack your bags for the Garden State so quickly.

Who Keeps The Engagement Ring?

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On behalf of Ronald H. Kauffman, P.A. posted in Equitable Distribution on Monday, October 15, 2012.

It’s been said that a diamond is a girl’s best friend. Mount it in a ring and hand it on bended knee and its value goes well beyond mere money. In divorce court the old adage takes on a new meaning. Few people know that the engagement ring tradition started for a specific legal purpose. As Slate.com notes:

[T]here was another factor in the surge of engagement ring sales-one that makes the ring’s role as collateral in the premarital economy more evident. Until the 1930s, a woman jilted by her fiancé could sue for financial compensation for “damage” to her reputation under what was known as the “Breach of Promise to Marry” action. As courts began to abolish such actions, diamond ring sales rose in response to a need for a symbol of financial commitment from the groom, argues the legal scholar Margaret Brinig -noting, crucially, that ring sales began to rise a few years before the De Beers campaign. . . The “Breach of Promise” action had helped prevent what society feared would be rampant seduce-and-abandon scenarios; in its lieu, the pricey engagement ring would do the same.

Florida abolished the appropriately termed “heart balm statutes”. Heart balm statutes were laws allowing couples to sue each other to recover money for the alienation of affections and breaches of contract to marry. As one court poetically noted:

[A] gift given by a man to a woman on condition that she embark on the sea of matrimony with him is no different from a gift based on the condition that the donee sail on any other sea. If, after receiving the provisional gift, the donee refuses to leave the harbor – if the anchor of contractual performance sticks in the sands of irresolution and procrastination – the gift must be restored to the donor. A fortiori would this be true when the donee not only refuses to sail with the donor, but, on the contrary, walks up the gangplank of another ship arm in arm with the donor’s rival?

So where does that leave the engagement ring in divorce? Our statute requires a trial judge to set apart each spouse’s non-marital assets. The general rule which developed is that an engagement ring given before the marriage becomes a non-marital gift if the marriage is completed. If so, the ring becomes the non-marital property of the Wife.

Some Common Divorce Mistakes to Avoid

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On behalf of Ronald H. Kauffman, P.A. posted in Board Certified Lawyer on Saturday, October 13, 2012.

During the first meeting with divorcing clients, I frequently bump into similar problems. Many clients make some common mistakes, and some of the suffering associated with divorce can be self-inflicted, or at least avoidable. Below I’ve listed some of the frequent mistakes I see, in the hope, you can avoid them.

Not reading your prenuptial agreement

If you are going to sign a prenuptial agreement before your marriage, you should take the time to speak to a board-certified specialist in marital and family law. The prenup may, nor may not be, in your best interests, but almost always favor the richer and more powerful party. Florida adopted the UPAA (Uniform Premarital Agreement Act). The rules for drafting enforceable agreements are now pretty clear, although the date of your agreement can have a big impact on which law applies. Alimony waivers remain somewhat problematic, because a trial court has the authority to disregard some of them. However, appellate decisions are moving towards upholding them.

Adding someone to the title of your non-marital property

Property owned prior to marriage is your non-marital property. As long as the other spouse is not joined in title, your property will remain non-marital, with one very important qualification: If there is a mortgage on the property that is paid down with marital funds, the marital estate may have a claim to the enhancement in value to your non-marital property. If you transfer the title from you alone, to you and your spouse, you may have converted the asset to marital property.

Commingling Property

Commingling is a little like adding your spouse to your non-marital property. If you want double the price of your divorce, even if you have a prenuptial agreement, mingle all of your non-marital investment accounts money together into one account. Commingling creates a host of issues and an accounting nightmare. If you want to claim your non-marital property funds in a commingled account, you will be required to do an expensive and difficult trace of the funds using a forensic accountant. A safer way to maintain your non-marital funds is to keep them in a separate account. If you need to make cash infusions into a marital account, realize that you are probably kissing the funds goodbye.

Misplacing Important Documents: prenups, bank records, property records and investment accounts

Record keeping is not fun but has gotten a lot easier with scanning hardware and software. Bank records, investment records, tax returns and prenuptial agreements represent evidence which will become a part of your case.

Hopefully, you can avoid some of the problems I frequently run into when interviewing potential new clients.

Return to Underwater Treasure: More Gold

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On behalf of Ronald H. Kauffman, P.A. posted in Equitable Distribution on Wednesday, October 3, 2012.

The year 2008 saw the birth of a new marital asset in Florida, and its divorced upon divorce can be easily overlooked. The ‘Save Our Homes’ Amendment (SOHA) limits increases in your home’s assessment.

In 2008, the Florida Constitution was amended to allow homeowners to keep a portion of their SOHA differential after their home is sold, and port it to a new homestead. I wrote an article examining the equitable distribution implications of SOHA after divorce. The article, published in the Florida Bar Journal, is available here.

There was a big limitation with the old law if spouses wanted to divide the SOHA benefit unequally. The Department of Revenue, under its Emergency Rules, interpreted the statute to mean a husband and wife who divorcing and both abandoning the homestead, would each take their 50% share of the assessment limitation difference, and the property appraiser could not accept a stipulation designating the difference otherwise.

In light of the Department’s interpretation, dividing the asset in divorce became trickier. An amendment to the statutory language was needed to allow couples the freedom to designate the percentage share of the benefit. That amendment happened this year. Florida Statute §193.155 now provides that a husband and wife who abandon jointly titled homestead property may designate the percentage attributed to each spouse of the differential between market value and assessed value that is portable to a new homestead property.

The parties must be husband and wife at the time that the jointly owned property is abandoned. They must file a form with the property appraiser prior to either person applying for the portable differential, and the designation, once made, is irrevocable. However, once that form is filed, couples will have the freedom to designate the SOHA benefit how they like.

A Movie Review!

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On behalf of Ronald H. Kauffman, P.A. posted in Child Custody on Sunday, September 30, 2012.

As a matrimonial attorney, I don’t much care for movies about child custody cases. I’d seen, but didn’t like, Kramer v. Kramer, Falling Down, and Intolerable Cruelty. I just don’t think custody battles make for good film. Talk to Strangers proved me wrong. You can see the trailer here.

Clients are often surprised to learn that divorce attorneys and judges don’t usually see the children in the divorce process. This means that we sometimes become immune to its impact on children. Talk to Strangers corrects this problem. It looks and feels realistic, shows you the custody evaluation process from the children’s perspective, and comes with a guide for clients. It’s a short, dramatic mockumentary of the custody process meant for its teaching value. Anyone who is involved in the process will learn something, but the movie seems to be aimed primarily at clients.

This is a good movie to watch. First of all, it’s short, coming in at around 25 minutes. Its film locations, a suburban Connecticut home and cold courthouse, make the movie very convincing. The acting is good and professional, especially the brother and older sister, who do a great job portraying the deteriorating relationship with their parents and each other. All the performances are good. In a closing scene, the parents are shown a video of themselves confidently predicting how great their children will do at the end of the process because they are going to work so hard at it. You’ll want to cry.

Tell your clients who have any interest in fighting a tough custody battle to buy this short movie first (it’s probably the cheapest way to settle a custody battle). Oh, and tell them to bring tissues.

Talk to Strangers

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On behalf of Ronald H. Kauffman, P.A. posted in Child Custody on Friday, September 21, 2012.

child custody cases are emotionally draining, and high conflict child custody cases can have a huge impact on children involved. How to lessen the impact of child custody cases on children has been a problem which lawyers, judges and every other professional in the process have long sought.

A Connecticut family lawyer, Deb Grover, who was serving as Chair of the Connecticut Bar Association’s Family Law Section had the idea to create a film to lessen the impact to children. The film is called Talk to Strangers, and was funded by the Connecticut Bar Association, and written by family law specialist Larry Sarezky and produced by Sarezky with Deborah Grover.

From the website:

Talk to Strangers is a fictional portrayal of what happens when parents divorce, and the custody of the children is in dispute. The film family, particularly the children, trudge through the intrusive and lengthy process that leads to a determination of custody. We see them in interviews with family court personnel and observe the tense and painful family interactions that take place.

If you take a minute to watch the trailer for the movie, you quickly see why this film is very different from other videos available on the subject, as it appeals to you on a strong emotional level. The trailer can be viewed here. I just ordered it, and look forward to viewing it, but here’s what others are saying:

“A must-see for parents and counsel involved in this terrible process known as custody litigation.”

– Arthur Balbirer, Esq. – past president American Academy of Matrimonial Lawyers

“…Talk to Strangers, both the film and the pocket guide, are wonderful. The voices of the children speak louder than any educational program…”

– Robin M. Deutsch, Ph.D – Children & the Law Program, Dept. of Psychiatry Massachusetts General Hospital

“This wonderful film… will provide insight and great assistance. Watch it and learn!”

– Alan Dershowitz – Harvard University Professor of Law

Gestational Surrogacy Contracts :-)

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On behalf of Ronald H. Kauffman, P.A. posted in Child Custody on Thursday, September 20, 2012.

According to the Associated Press, on Sept. 19, 1982, the smiley emoticon was invented by professor Scott E. Fahlman, who proposed punctuating humorous computer messages by creating this:

🙂

Which of course led to this

🙂 🙂 :] =] =) :^) :?), and sadly, this 🙁 🙁 :-c :-< :-[ :[ :{

Just as new technologies – such as reproductive technologies – bring new benefits, they can bring new types of child custody cases. Consider this English woman’s concerns reported in the Daily Mail:

A married woman whose husband donated sperm without her knowledge is calling for clinics to be forced to ask for a wife’s consent . . . and says the sperm should be treated as a ‘marital asset’.

Putting aside the question of whether sperm is marital property, Florida does protect surrogacy, and has comprehensive laws protecting the baby, intended parents, the egg donor and the surrogate.

For example, Florida allows commissioning couples to enter gestational surrogacy contracts in which a surrogate relinquishes her parental rights. Gestational surrogacy contracts are reviewed by courts to confirm that they are in accordance with Florida law, and for a birth certificate to be issued. But, problems can arise. Consider a recent Florida case involving lesbian partners:

Two women decided to have a baby, paid a reproductive doctor to withdraw ova from one of them, fertilize them, and implant the fertilized ova into the other partner. The procedure worked, and a child was conceived to a birth mother and a biological mother. Two years later the mothers separated, and the birth mother severed the biological mother’s contact with the child.

If the biological mom is simply an egg donor under Florida law, her parental rights are relinquished. If she isn’t a donor, she’s entitled to parental rights. So, what are the biological mom’s rights? At least in one Florida case, the biological mom was found to be entitled to her parental rights, and did not statutorily relinquish them.

The outcome in that one Florida appellate case may not be followed in other appellate districts, so a consultation with a family law expert is advised.

A Presumption of Equal Timesharing?

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On behalf of Ronald H. Kauffman, P.A. posted in Timesharing/Visitation on Friday, September 14, 2012.

Increasingly, clients are demanding shared custody and 50-50 child custody, meaning they want to divide the time with their children and other parent equally and have equal decision making rights. I’m also hearing calls for legislation to make joint custody and equal time sharing mandatory. The British government recently announced it is seeking to amend Section 1 of the Children Act 1989 to introduce a legal presumption of ‘shared parenting’.

When parents get along reasonably well, and live close by, an equal timesharing schedule may be in the children’s best interests. It can: foster Florida’s policy of frequent contact with parents after divorce, reduce custody litigation, spare thousands of children from being dragged into a battle between their parents, and discourage custody cases which have more to do with how much child support gets paid than timesharing.

Equal timesharing can be done in different ways: Week on/week off, 5-5-2-2 (in which a parent has the child for two weeknights then the child goes to the other parent for two weeknights, then the child goes back to the first parent for the three day weekend and the first two assigned weeknights which equals five nights.) and more. I can’t list all of the schedules possible, but an equal timesharing schedule is only limited by the parties’ willingness to be creative.

The rub of course, is creating a timesharing schedule which maximizes parent/child time, and minimizes transition troubles. While a 50/50 timesharing schedule may be desired, geographic distance, school hours, extra-curricular activities, and work schedules make equal timesharing impractical. In those cases, a more traditional timesharing schedule may be desired, and any shortfall in a parent’s timesharing can be made up during long school breaks, like Christmas and summer.

In order for an equal timesharing schedule to succeed though, the parents have to be flexible, and put the interests of the children first. This is easier said than done. Inevitably, school and extra-curricular activities – or a parent’s work commitment – are going to require the timesharing schedule to be adjusted. If parents are inflexible and unwilling to cooperate with each other, 50% timesharing can have a 0% chance.

Bad Gift Idea for a Second Marriage: A Muslim Prenup

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On behalf of Ronald H. Kauffman, P.A. posted in Agreements on Tuesday, September 11, 2012.

In an earlier post I hinted that a prenup made a fine gift for a second marriage. But not all prenuptial agreements are created equal. An interesting case out of Kansas City refused to enforce a Muslim divorce. News of the case comes from The Volokh Conspiracy.

The Muslim premarital agreement is known as a mahr agreement. Mahr agreements are negotiated before the marriage between the groom and the bride’s family. Mahr agreements have two parts: a premarital payment in exchange for marriage vows, and a post-nuptial payment made if the marriage ends in divorce or death (a sort of deferred settlement). According to the wife in the Kansas case, her mahr agreement required the Husband pay her the deferred payment of 1,354 gold coins – worth about $677,000.

There were a lot of problems with the mahr agreement in the Kansas case. These problems often arise in marriage contracts from foreign countries which are primarily for religious purposes, or intended to be enforced in religious or foreign courts. The most important grounds the court gave for not enforcing the mahr included:

1. The mahr was never translated into English;

2. The mahr would function as a penalty, and Kansas is a no-fault state;

3. The mahr created tension between the Establishment and Equal Protection Clauses; and

4. The court suggested the mahr might not even qualify as a prenuptial agreement.

Florida law is slightly different from Kansas in this area. There are very few Florida appellate cases, and no Florida Supreme Court cases about mahr agreements. However, at least one Florida court has held muslim religious agreements may be enforceable in Florida, if they comply with secular contract law.

Whether you have a foreign premarital agreement, or want to enter into one, you can incorporate your religious or secular customs into a legal agreement, and have them enforced in Florida. As the Kansas case shows though, this is not something to be left for the imams back home.