Tag: marital agreement

Mistakes In Your Agreement

Posted by Ron Kauffman on

What happens when you discover mistakes in your marital settlement agreement? Family and divorce lawyers are always interested in protecting their clients, and themselves, against mistakes. When agreements are entered into fast and furiously, mistakes can happen. One married couple in Florida found out just how courts look at mistakes in a marital settlement agreement.

Mistake Divorce Agreements

Fast and Furious Divorce

In 2019, the wife filed for divorce. In their in pretrial stipulation, the parties agreed they would each keep their own cars and pay their respective car loans. However, their agreement was not specific as to what type of car each party owned and which care they would keep.

At their final hearing, the trial court entered a final judgment and incorporated their agreement. The husband kept the 2010 Mercedes and the wife kept the 2005 Mercedes.

About a month after their divorce the wife asked the family judge to correct their final judgment, arguing, in part, that the 2010 Mercedes actually belonged to her, that they no longer owned the 2005 Mercedes, and that they actually owned a 2015 Mercedes. The Husband argued in response that the 2010 Mercedes was really his car, and that there was no error in the final judgment.

During the hearing on her motion, the wife told the judge the 2010 Mercedes is titled in her name, it was her Mother’s Day gift for herself, and they intended for her to keep the care when they signed the agreement.

The husband argued that they purchased the 2010 Mercedes after being in a car accident with their previous vehicle. The couple alternated which vehicle they drove based on their needs. Before their divorce, the husband testified that it was always his understanding that he would keep the 2010 Mercedes when entering into the agreement.

Following this hearing, the court found a mutual mistake in the agreement and final judgment should be set aside. The trial court entered a Consent Order Equitably Distributing Vehicles giving the wife a one-half interest in the 2010 Mercedes and sole possession of the 2015 Mercedes. The husband appealed.

Florida Setting Aside Final Judgments

After a final judgment is entered in a divorce, courts are limited in granting relief, but not entirely. For example, a court can relieve a person from a final judgment because of things like, mistake, inadvertence, surprise, or excusable neglect, newly discovered evidence, fraud and the like.

Motions seeking relief from a judgment usually must be filed within a reasonable time, and usually not more than 1 year after the judgment. However, there is no time limit in Florida if the motion for relief is based on a fraudulent financial affidavit in marital or paternity case.

Fate of the Furious

On appeal, the husband argued that, at most, there was a unilateral mistake on behalf of the wife, which is insufficient grounds to set aside the final judgment.

The appellate court agreed. A marital settlement agreement may be set aside when it is entered into as a result of mutual mistake. However, a mutual mistake occurs when the parties agree to one thing and then, due to either a scrivener’s error or inadvertence, express something different in the written instrument.

But if the mistake is due to your own negligence and lack of foresight and there is absence of fraud or imposition, equity will not relieve you.

In this case, the parties’ agreement provided that “each party shall keep their own vehicle. However, there was no evidence regarding the vehicles at the final hearing, and the motion for relief filed afterwards only showed that the parties’ testimonies contradicted each other. The order was reversed and the original agreement and its disposition of the cars was reinstated.

The appellate decision is here.

When a Prenuptial Agreement Fails

Posted by Ron Kauffman on

If marriage is a business relationship, a prenuptial agreement is like the incorporation documents. But what happens if during your marriage you find out the prenuptial agreement you paid for fails? For one woman, the results of a prenup fail could mean the loss of her entire inheritance.

Prenup Fails

Protecting Your Assets

After you and your spouse get married, ‘what’s theirs is yours, and what’s yours is now theirs.’ Unless you get a prenup. A prenuptial agreement is a written document between prospective spouses thinking about marriage. A prenup becomes effective upon marriage.

What can you put in a prenup? There are few limitations, but you can agree on your rights to any property either you or your spouse have or will have, who can manage and control the property, and what happens to property in the event of death or divorce. You can also agree to alimony, or to waive alimony,  and many other issues that do not violate some public policy or criminal law.

There are two things she advises before getting married: (1) buy separate comforters for your bed, and (2) get a prenuptial agreement that fully protects you – even if you don’t think your assets are worth much. Without a prenup, you might learn you’re not be protected the hard way.

In the article, the reporter got married right out of graduate school and had no job. Her assets consisted of a used car, a cat, and an inheritance she kept in a trust fund. Her future husband had no assets, but was planning to go to dental school which had a hefty price tag. The Wife’s prenup ensured that her trust fund could not be used to pay for his graduate school tuition.

Notwithstanding her prenup though, during the marriage, the wife used her trust fund monies on their living expenses. Then she decided to ignore the prenup entirely. She used all of her premarital inheritance as a down payment on a marital home. Then she titled the house in both names. Then she also agreed her husband’s salary would pay the mortgage and most other bills related to “their” home.

Florida Prenuptial Agreements

I’ve written about prenuptial agreements before. Prenuptial agreements are not just for the rich and famous. Anyone who brings assets, or a large inheritance, into their marriage can benefit from a prenuptial agreement.

Prenups are important to have in place before a married couple starts investing in businesses, properties, and other investments.

But there can be ‘prenup fails’ too. In addition to being completely ignored, prenups can also be challenged in court. Florida has both case law and a statute to help lawyers, judges, and the parties determine if a prenuptial agreement is enforceable. For example, Florida adopted the Uniform Premarital Agreement Act.

The UPAA is a statute that requires that all premarital agreements be in writing and signed by both parties. It is enforceable without consideration other than the marriage itself.

Couples wanting to sign a prenup can enter into an agreement with respect to their rights and obligations in any of their property. Whenever and wherever property was acquired or where it is located; couples can control their right to buy, sell, use, transfer, or otherwise manage and control their property if they separate, divorce, or die.

When ruling on the validity of a prenup, Florida courts must consider things such as fraud, duress, coercion, in addition to the unfairness of the agreement, and whether there was any financial disclosure. While prenuptial agreements may be challenged in court, we will have to wait and see if the court will invalidate Costner’s prenuptial agreement.

A Messed-up Prenup?

After seven years, the husband informed his wife that he wanted a divorce. He also wanted to sell their jointly owned house and split the profits equally. Without a house though, the wife couldn’t qualify for a mortgage on a new home, and all of her premarital inheritance money was now tied up in a marital home she had to split with her soon to be ex.

When the wife contacted her lawyer to enforce her prenuptial agreement, and get back the deposit she alone paid for in their joint home, she learned the hard way her prenup would not help her. Why? Because she’d spent her inheritance on a marital home titled in both of their names. Her prenup only protected her trust fund money from being spent on paying off her husband’s student loans.

The couple came to an agreement, which was fleshed out over the next few weeks by their lawyers. They sold the house, and the wife got enough money from the sale of her marital home to pay for rent – with the help of alimony.

She was officially divorced by the end of the year, but she found out the hard way her prenup failed to protect her because she ignored it. The wife could have protected her inheritance in several ways: not putting the home in joint names, or amending her prenuptial agreement to decide how her down payment would be treated in a divorce.

Instead, she learned a few lessons. Her advice now is: “Get a prenup.”

The Business Insider article is here.

Prenups Can Speed A Divorce

Posted by Ron Kauffman on

Exhibiting “warp speed”, actor William Shatner’s divorce from his fourth wife, Elizabeth Martin, has been finalized. The “Star Trek” actor filed for divorce last month, and apparently finalized it a month later. His prenuptial agreement likely helped speed his divorce to an early settlement.

Prenups Speed Divorce

Warp Speed

According to many reports, Shatner’s net worth is over $100 Million dollars from over two decades in acting. Distributing the actor’s fortune could have been a tremendous source of litigaton had there not been a prenuptial agreement.

However, court documents show the former couple had a prenuptial agreement in place, which allows the 88-year-old to keep his “Star Trek” royalties, the news outlet said. The actor was married to Martin for 18 years.

When reached by Fox News last month, Martin shared her brother had died around the time Shatner filed for the divorce and that she was with her family “during this time of grief.” “Respect distance from divorce topic while we grieve my brother respectfully,” she added. Representatives for Shatner did not immediately respond to Fox News’ request for comment.

Florida Prenuptial Agreements

I’ve written about prenuptial agreements before. Prenuptial agreements are about more than just exploring the strange new world of marriage. A prenuptial agreement (or “prenup” for short) is a contract between people intending to marry. A prenup determines spousal rights when the marriage ends by death or divorce. This can be especially important for those who boldly go into fourth marriages.

If you divorce without a prenup, your property rights are determined under state law, and a spouse may have a claim to alimony while the suit for divorce is pending and after entry of a judgment. Many couples divorcing would prefer not to to explore the strange new worlds of family court.

That’s where prenups come in. Prospective spouses may limit or expand state laws by an agreement. Prenups are also used to protect the interests of children from a prior marriage, and to avoid a contested divorce.

As shown in Shatner’s case, prenups can also be the fastest way to resolve a future divorce . . . if they’re done right.

There are a galaxy of problems with prenuptial agreements too. If a prenuptial agreement includes any provisions that violate the law or public policy, it may automatically be deemed invalid.

Additionally, a prenuptial agreement cannot waive child support, and can’t set an amount for child support. Courts have plenary power over support issues, so child support amounts are determined by courts based on our child support guidelines.

Also, a premarital agreement may not be enforceable in a family court case, for instance, if it was not signed voluntarily; or if it was the product of fraud, duress, coercion, or overreaching.

Flying Through the Divorce Nebula

In the Shatner divorce, he listed the couple’s separation date as February 1, 2019. He was previously married to Nerine Kidd, Marcy Lafferty and Gloria Rand. He shares two daughters, Lisabeth Shatner, 58, and Leslie Carol, 61, with Rand.

The actor shot to fame in the 1960s for his role as Captain James T. Kirk in the original series run of “Star Trek” and went on to have a lucrative film and TV career afterwards.

Shatner’s third marriage, to Kidd, ended in tragedy in 1999 when she died of accidental drowning in their swimming pool. Although the actor had filed for divorce after two years of marriage shortly before the incident, he explained in his 2018 book “Live Long and…What I Learned Along the Way” that he was nonetheless grief-stricken by the loss.

The Rise of Starfleet

Last week, President Trump unveiled the new logo for the United States Space Force, America’s newest branch of the military. Many are saying the logo looks suspiciously like the logo for the fictional Starfleet Command in the Star Trek entertainment universe.

Fellow Star Trek actor, George Takei, who played the character “Sulu” on the original series with Shatner, mocked the new logo for Space Force. After it was unveiled, Takei quickly tweeted:

‘Ahem. We are expecting some royalties from this..’

In his Washington Post opinion piece, Takei drew parallels between the Trump administration and a Star Trek episode called ‘Mirror, Mirror,’ where the USS Enterprise bridge crew find themselves in a parallel universe where ‘cruelty’ has replaced ‘diplomacy.’

The Fox News article is here.

 

Speaking at Marital & Family Law Review Course

Posted by Ron Kauffman on

Honored to be asked to speak to over 1800 divorce lawyers, judges, hearing officers and other professionals at the prestigious Marital & Family Law Review Course in Orlando from January 31st to February 1st. I will be discussing modifications of parenting plans, settlement agreements, alimony and support. The event is co-sponsored by the Florida Bar Family Law Section and the American Academy of Matrimonial Lawyers.

Cert Review Speech

Modifications

Life happens. When it does, we often have to make changes to our parenting plans, agreements, the alimony we pay or receive, and the amount of support being paid. What do you need to modify any aspect of your divorce agreement or order?

In Florida, a substantial change is what must be proven in court when a parent wishes to modify a previous court order or divorce or separation agreement. It may be the person who must pay alimony or support and recently retired, lost their job, or received a significant pay cut.

A change may come from a whose job now allows them to spend more time at home and would like to spend that extra time with their children. Whenever there has been a substantial change in your circumstances you may be able to ask for a modification of your court order or agreement

Certification Review Course

It is a privilege to be invited to speak again at the annual Marital and Family Law Certification Review course again.

The annual seminar is the largest, and most prestigious advanced family law course in the state. Last year’s audience included over 1,800 attorneys and judges from around the state.

The review course is co-presented by the Family Law Section of The Florida Bar, and the American Academy of Matrimonial Lawyers.

Registration information is available here.

The Art of Divorce

Posted by Ron Kauffman on

Dividing assets in a divorce is not only a requirement, it can be a difficult aspect of a divorce. If so, valuing an art collection is singularly one of the most disputed parts of a divorce. Not only is valuation a problem, but people are emotionally attached to their artwork as one billionaire couple in New York has found out.

art of divorce

Billionaire’s Row

The ex-husband is Harry Macklowe, a real estate developer. The ex-wife is Linda Macklowe, an honorary trustee of the Metropolitan Museum of Art, who is passionate about collecting modern art.

Together they have accumulated a $72 million apartment, so large it runs the full length of one side of the Plaza Hotel, with windows overlooking Central Park. A second Manhattan apartment is high up in one of the tallest buildings in the Western Hemisphere, along the so-called Billionaires’ Row.

Their $19 million house in the Hamptons on Long Island has neighbors with boldface names, including Martha Stewart and Steven Spielberg. The $23.5 million yacht is a 150-foot-long prizewinner.

And then there is the art collection, an enormous trove of masterpieces that the judge presiding over the divorce described as “extraordinary” and “internationally renowned” and that has become the latest chapter in the exes’ rancorous unraveling. Among the more than 150 pieces are multiple works by Pablo Picasso, Jeff Koons, Willem de Kooning and Mark Rothko.

The exes’ lawyers have fought about what most of them were worth — one rare moment of agreement came when two art experts hired separately by the exes both valued an Andy Warhol creation filled with images of Marilyn Monroe at $50 million — and who should get them.

Florida Property Division

I have written about property division before. Florida is an equitable distribution state when it comes to dividing art in divorce. In a proceeding for dissolution of marriage, in addition to all other remedies available to a court to do equity between the parties, a court must set apart to each spouse that spouse’s nonmarital assets and liabilities.

In distributing the marital assets and liabilities between the parties, the court must begin with the premise that the distribution should be equal, unless there is a justification for an unequal distribution.

Whenever an agreement cannot be made between the spouses, the court’s distribution of marital assets or marital liabilities must be supported by factual findings and be based on competent evidence. Whether the court distributes artwork equally or not, the court must make specific written findings of fact as to each marital asset and the individual valuation of significant assets, and designation of which spouse shall be entitled to each asset.

Because an effective valuation is important, most attorneys will hire an expert appraiser to provide the appropriate report and testimony to the court.

It’s Up to You New York, New York

The Macklowes’ divorce comes with the twist of an impressive art collection that has been valued at as much as nearly $1 billion. In 2016, Mr. Macklowe told Ms. Macklowe that the marriage was over. By the end of last year, the Macklowes’ divorce had been granted. Mr. Macklowe then put giant images of himself and Patricia Landeau, his new wife, on the side of a luxury condominium building in Manhattan that he built.

But the wrangling continued over how to divide an art collection that David N. Redden, a former vice chairman of Sotheby’s, called “fairly staggering” and “one of the great prizes.” In the Macklowes’ divorce, the former spouses had to unload the art “to sustain their lifestyle. They don’t have the cash.” About 60 to 75 percent of their assets were tied up in the art collection.

As for the value of the art, during the lower-court proceeding, each side hired an expert to appraise the art. Mr. Macklowe’s expert estimated the value at $788 million; Ms. Macklowe’s expert said $625 million.

“If this had been a case with one or two fewer zeros, it would be an ordinary kind of dispute. Because of the prominence of the parties and the amount of money involved, this is a case that attracts natural attention.”

Ms. Macklowe did not want to let anything go. “She stated that she wished to enjoy the collection and sell individual pieces only as necessary to support her standard of living.” That would have posed tax problems for Mr. Macklowe. The wife wanted all the major pieces of art to go to her, and she would decide what to sell and when to sell it. The husband would have to pay taxes on what would be sold, because the value that would be attributed to the works would be the after-tax value. She would keep the art, the art would get sold and he would pay the taxes.

The New York Times article is here.

 

Extortion and Divorce in Malibu

Posted by Ron Kauffman on

Kurt Rappaport, a successful realtor in Malibu California, claims his Guess-model wife, Sarah Mutch, has been trying to get him to tear up their prenuptial agreement and pay her millions in the latest example of extortion and divorce.

Extortion and Divorce

Marital Point Doom

Rappaport filed for divorce from Canadian fashion model, Sarah Mutch, in February. In the new civil lawsuit, Rappaport alleges that after their $3 million wedding, Mutch began bitterly complaining about the terms of the prenup and demanded that he change the terms or “the marriage is over.”

The civil lawsuit goes on to allege when he refused to tear up the prenup, she went wild with his credit card, charging hundreds of thousands of dollars for various things.

The lawsuit also claims Mutch threatened that if he didn’t pay her bills, she would “release false information about him and his friends to the press and social media outlets.”

Rappaport filed a police report in April, detailing some of the alleged threats. According to the police report, obtained by TMZ, Rappaport says Mutch “threatened to fabricate a ‘Me Too’ sexual harassment report at the hands of his wealthy friends.”

He says she threatened to go to the media with the allegations if he didn’t give her “millions and millions of dollars.” He told cops she said, “If I don’t get what I want, I’m going to drop a bomb and end your career in a week!”

Rappaport says when he refused to put the property in her name or tear up the prenup during the marriage, she began berating him, calling him “selfish, cheap, greedy and disgusting.”

Florida Extortion and Divorce

In divorce, as I have written before, it is easy to cross the line from harmless threats to the crime of extortion. The fact remains that in Florida, it is a second-degree felony to threaten to expose another for the commission of any crime or offense for one’s own pecuniary advantage.

There are several examples of how this happens in divorce. One which comes to mind, is taxes. It is not uncommon for spouses to threaten to report the other spouse to the IRS for underpayment of taxes unless money is paid to keep the silence.

Another very common extortion technique – which is especially true these days – is to issue a threat to report a spouse to immigration officials. One spouse will to use the threat of deportation unless money is paid in a settlement. This has become more common these days as the country cracks down on illegal immigration.

Extortion also happens when signing settlement agreements. For example, spouses sometimes threaten that if the other spouse does not sign the settlement agreement, the other spouse will tell the children about infidelity, or something else to ruin what reputation the spouse has.

Mutch Ado About Nothing?

Mutch filed legal documents, also purportedly obtained by TMZ, which claim she thought they would have children and realized he had no such intention. They got into a heated argument on the way home.

She also alleges when they got home, he began screaming at her, saying all she cared about was money and she was a “greedy monster.” She says she then told him she wanted a divorce.

The legal documents also have Mutch claiming there was a pattern of verbal abuse over a period of years, alleging Rappaport tried to slam through doors when she would lock herself away from his outbursts and that she never threatened him.

Mutch is seeking temporary attorneys’ fees to determine if she could challenge their prenuptial agreement – which reportedly gives her $45,000 a month for half the duration of the marriage. The marriage only lasted 16 months. She is also is seeking an award her temporary spousal support.

The TMZ article is here.