Archive for April, 2014

The “Wright” Strategy for Increasing What You Keep in Your Divorce

Tuesday, April 22nd, 2014

In a post titled “Determining Marital Property in Maryland, Virginia and the District Of Columbia” (June 17, 2011), I said:

“This article is about when the accumulation of marital property ends. It starts at the time of the marriage. When you return from the honeymoon and go to work the next Monday morning you are earning marital property – the stuff the divorce judge divides. When is the first day you can go to work and earn separate non-marital property? It depends on the jurisdiction.”

And after reviewing the applicable statutes, I said:

“When you and your spouse have separated, intending to remain separated, and do not have a property settlement agreement, in Maryland and the District of Columbia the property you acquire from the date of separation until the date of divorce is marital property. In Virginia such property is not presumptively marital, and in general is determined to be separate property, unless special facts and circumstances are established to overcome the presumption.”

In a recent case, Wright v Wright, 61 Va. App. 432; 737 S.E. 2d 519; 2013 Va. App. LEXIS 53, the Court of Appeals of Virginia considered whether Mr. Wright’s strategy in the two plus years between the date of separation and date of the divorce hearing required a finding to bring post-separation expenditures of marital property back into the marital pot to be divided with Mrs. Wright.

Husband had certain marital accounts totaling about $2,800,000. Husband earned approximately $1,500,000 per year; Wife was a homemaker. During the post-separation period, the marital accounts declined to about $1,415,000 on account of Husband’s payment of joint income taxes, real estate taxes on the marital home, tuition and school expenses for a child of the parties, spousal support to Wife and his own attorney’s fees and expert witness fees. Husband deposited the money he did not spend on these expenses to his separate accounts which, of course, were not marital.

The Court of Appeals said none of those expenditure were improper so they did not amount to “marital waste.” They explained that there are only two categories of expenditures of marital funds “proper” and “waste.” If your spending of marital funds falls into the “proper” categories it’s okay even if that permits a big decline in marital assets to be divided and a big increase in the separate funds of the party following the strategy.

The result in Wright provides a road map for the higher earning spouse to skew the division of marital property in his or her favor in some Virginia cases. If you are the lower earning spouse you want prompt filings, quick hearings and, if the stakes justify it, an injunction on expenditure of marital property.

Also, for multi-state or potentially multi-state cases, Wright is another reason that in a case with a relatively long separation, all other things being equal, the higher earning spouse probably wants the divorce case to be heard in Virginia. As I’ve said here before, a little planning and a little audacity can get you into the Court you want to be in. And a little more planning during separation can increase the property you get to keep.

Some of the facts here are from an article by one of the lawyers involved in the case. What’s wrong with Wright, Ronald R. Tweel (Virginia Family Law Quarterly, Spring 2014)

JDR, Fault Divorce or Wait

Thursday, April 10th, 2014

My last post said that when a spouse needs child support or custody relief in the first post-separation year in Virginia, the choices are filing a petition requesting custody and/or support relief in Juvenile & Domestic Relations Court (hereinafter “JDR”), asserting fault grounds in a complaint for divorce from bed and board and for the custody and/or support relief in Circuit Court, or waiting one year from separation to file a complaint in Circuit Court for final divorce (called divorce a vincula matrimonii) on separation grounds and for the custody and/or support relief.
JDR is structured to be friendly to the self-represented. There are forms for most pleadings, the clerk’s office schedules the hearings and hearings are relatively informal. However, dockets are crowded and relief is not as speedy as in Circuit Court where you can be before a judge for temporary relief in 21 days. Also, either party can appeal to the Circuit Court and have the entire case reheard. The Circuit Court does not just review the record of what happened in JDR (there is no actual record), the Circuit Court rehears the entire case. In general, the unsatisfied party simply has to file a notice and pay an appeal fee. So when you prevail in JDR it often only means you won round one. And if you had an opportunity to start in Circuit Court instead, it was an unnecessary and inconclusive round one – a waste of time and money.
When you have evidence of clear fault grounds – adultery, physical cruelty, actual abandonment – the choice of where to file is a no-brainer. You file for divorce in Circuit Court and seek the additional custody and/or support relief. But this discussion is about choices so it concerns those cases where the evidence or the fault is less than clear. The advantages of a Circuit Court suit must be weighed against the downside risks. These include, for example, possible harm to the parenting relationship, the general ratcheting up of conflict, costs and attorney’s fees that often result from an accusation of fault, and the loss of credibility with the court if there is a failure of proof. In this weighing, one must also consider how important it is to be in the Circuit Court and how important it is to get into court now rather than wait out the year.
That is the third choice a party can make in this situation – wait one year, then file for divorce on one year separation grounds. This is what is often done. Because, of course, the choice is not between going to court now or doing nothing for one year. In the meantime there are negotiations with your spouse, getting the time-sharing schedule set by action and discussions, dividing accounts by self-help – just take your half, and dealing with many other issues. Often the important work of separating your affairs, dividing property and debt, and settling how to raise the children post-divorce is worked out during that first post-separation year, resulting in a Marital Settlement Agreement that resolves all issues. And if you agree on less than all, you can bring a complaint for divorce on one year separation grounds in Circuit Court and ask the judge to grant your divorce and decide the remaining support, custody or property issues.

Where to File for Custody and Support in Virginia

Thursday, April 3rd, 2014

When separated spouses in Maryland and the District of Columbia require the aid of the court to resolve issues of support or custody they know where to file their case – in the local Circuit Court in Maryland and in Superior Court in the District of Columbia. And if they have been separated for less than the period required for an absolute divorce, they can include a request for limited divorce (legal separation in DC) in the support and/or custody suit.

Not so in Virginia. The circuit courts are the trial courts of general jurisdiction, and are the trial courts preferred by lawyers, including family lawyers. But the court with jurisdiction of minors, including custody and support of minors, and support of spouses, is the Juvenile & Domestic Relations District Court (“JDR”).  Although a complaint for spousal support can be filed in Circuit Court without also seeking divorce, the Circuit Court only has concurrent jurisdiction over child support and custody matters if there is a divorce case pending.   And, unlike in Maryland and DC, when the spouses have been separated for less than the required period (one year in general, six months with a written separation agreement and no minor children), a complaint for limited divorce is often not an option because in Virginia there aren’t any no fault grounds for limited divorce (called divorce from bed & board or, in Latin, a mensa et thoro ).
In this situation, the spouse needing custody or child support relief faces a choice. He or she can:

1. File a petition requesting custody and/or support relief in JDR;

2. Assert fault grounds and file a complaint for divorce from bed and board and for the custody and/or support relief in Circuit Court; or

3. Wait the one year period and then file a complaint in Circuit Court for final divorce (called divorce a vincula matrimonii) on separation grounds and for the custody and/or support relief.
Each of these choices has advantages and disadvantages which I will address in my next post.

 
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