Case law - Marital Property Titled to Someone Else

Krstin Nicevski v. Greta Nicevski was decided last year on July 9. My apologies for the delay in writing this one up - put it down to the turmoil of last Summer and Fall. However, the case points out something important and so I am going ahead on write on the case.

The Indiana Court of Appeals opinion sets out the issue quite well:

Appellant-respondent Krstin Nicevski appeals from the decree of dissolution of his marriage to appellee-petitioner Greta Nicevski. Krstin argues that the trial court erred by including the value of a residence titled in his parents' name in the marital estate and directing him, among other things, to pay Greta $40,000, or half of the value of the residence. Finding that the trial court was without authority to include the residence in the marital estate because Krstin's parents were not joined as necessary nonparties pursuant to Indiana Trial Rule 7(B), we reverse and remand with instructions to revise the decree of dissolution consistently with this opinion.

Note that the property held by the parents is not automatically removed from the possibility of being included in the marital pot, but there was procedural and evidence problems in including the parents' property in this marital pot.

The Nicevski Court relied upon In re Marriage of Dall, 681 NE 2d 718 (1997) and Indiana Trial Rule 7(B). Trial Rule 7(B) reads as follows:

Motions and other papers. Unless made during a hearing or trial, or otherwise ordered by the court, an application to the court for an order shall be made by written motion. The motion shall state the grounds therefor and the relief or order sought. The requirement of notice is satisfied by service of the motion.

Vadas v. Vadas, 762 NE 2d 1234 (Ind. Supreme Court 2002) provides more on this point and about Dall:

The Court of Appeals reversed, holding that "an equitable interest in real property titled in a third-party, although claimed by one or both of the divorcing parties, should not be included in the marital estate." Id. at 722. Although the couple "may have hoped eventually to acquire legal title to 1236 the property ... they did not have a definite agreement that title would be transferred to them." Id. at 721 (distinguishing Sovern v. Sovern, 535 N.E.2d 563 (Ind.Ct. App.1989), where "the owners of record title disclaimed any interest in the real estate."). Therefore, in Dall, "neither Husband nor Wife possessed the definite interest necessary for the home to be included in the marital estate." 681 N.E.2d at 721.

The holding of Dall promotes predictability, consistency and efficiency by excluding "remote and speculative" interests from the marital estate. See 681 N.E.2d at 722. The property at issue here is just such a speculative interest. Rita's investment and James' labor increased the home's value during the marriage, but general market conditions before and after the marriage would also account for some part of the appreciation. (R. at 146-47, 279, 284.) The sale to James and Rita was to occur at some unspecified future date, contingent upon James' getting back "on his feet" financially. (R. at 144.) Neither price nor terms had been discussed, although John wanted to recover what he put into the property (unlike the record owner in Sovern, who did not claim any interest in the property in question). (R. at 147.)

If property is titled to another, is there evidence showing that the property should be included in the marital estate?

In Re Marriage of England v. England gives an idea of how to answer that question:

Husband contends that his interest in the Rumpke property is akin to those in Loeb and Fiste that were excluded from the marital pot. He contends that his interest is completely defeasible and that he has no present interest of possessory value. We disagree. To the extent Husband's interest in the property is defeasible, he for the most part controls the defeasance. In Loeb and Fiste, the defeasance would occur because of an act over which the remaindermen had no control — death or a change in beneficiary. Here, Husband loses his interest in the property if he abandons the property, ceases to use it as his primary residence, or opposes Rumpke's plans to expand its landfill, all of which are choices Husband would make of his own accord.[1] Husband also loses his interest if both dwellings on the property are destroyed or become uninhabitable. Although it is true, as Husband points out, that the dwellings could be destroyed by fire or weather tomorrow, it is also true that they may never be destroyed and Husband will live on the property virtually rent-free for the remainder of his life. Finally, Husband also loses his interest when he dies, but in that case, it is possible he may have enjoyed the use of the property for a nominal rent up to the time of his death. See Hacker, 659 N.E.2d at 1111 (noting that husband was "correct in asserting that there are no guarantees he will be granted continued residence [on a farm owned by his parents, but] [c]onversely, he may also be allowed to live there rent-free for the remainder of his life" and therefore, the trial court did not err in considering husband's continued use and occupancy of the farm in dividing the marital assets).

In addition to this situation being unlike Loeb and Fiste because here, Husband controls the defeasance, this case is also unlike Loeb and Fiste because those cases dealt with future interests. Here, Husband presently has a possessory interest in the property for his use and enjoyment. Husband is able to live on the property, farm the land, and cut the timber. The fact that the property is available for Husband's continued use and occupancy at a minimal yearly rent is relevant under Indiana Code section 31-15-7-5(c) as an economic circumstance of the parties and the trial court did not abuse its discretion in considering this interest in dividing the marital estate.

Coming Soon to An Indiana Supreme Court Near You

Way too quiet this morning. Secretary is not in and spent some time catching up on e-mail. I am beginning to think that catching up on e-mail is akin to the hamster actually getting somewhere when its runs on its wheel.

But The Indiana Lawyer Update did bring news of cases being transferred from the Indiana Court of Appeals to the Indiana Supreme Court and included this one:

Anne M. Bingley v. Charles B. Bingley, No. 02S03-1002-CV-122, the Court of Appeals ruled for the first time that post-retirement health-insurance premiums paid by a former employer aren't a marital asset subject to a division. The trial court didn't include Charles Bingley's employer-paid, post-retirement health-insurance premiums when dividing the couple's assets during the dissolution process.

Anne Bingley argued the payments fall under subsection 2 of Indiana Code Section 31-9-2-98(b), as a retirement benefit not forfeited upon the termination of employment, and cited several Indiana cases that found pension benefits to be marital assets. But the Court of Appeals ruled the premiums weren't a marital asset subject to division. The cases Anne cited involved monthly monetary payments made directly to the pension-holding spouse; Charles' benefit wasn't payable to him but was non-elective and couldn't be divided or transferred, wrote Judge Elaine Brown.

In his concurring opinion, Judge Terry Crone encouraged the Indiana General Assembly to address a perceived ambiguity in the definition of "retirement benefits" and "vested" in terms of the Internal Revenue Code.

Indiana Cases: Property division and a constructive trust

What to do when a third party has an interest in property that is part of the marital pot? The Indiana Court of Appeals dealt with this problem in Leever v. Leever.

Appellant-petitioner Lisa A. Leever appeals the trial court’s order dissolving her
marriage to appellee-respondent Doug R. Leever. Lisa argues that the trial court erred by refusing to consider certain real estate as part of the marital estate, instead placing the real estate in an equitable constructive trust in favor of Doug’s parents. Finding that the trial court properly placed the real estate in constructive trust but should have assigned the real estate a value and included it in the marital estate, we affirm in part, reverse in part, and remand with instructions to assign a value to the real estate, include it in the marital estate, and re-divide the marital estate consistent with Indiana Code section 31-15-7-5.

The Court of Appeals explains constructive trusts here:

A constructive trust is a creature of equity, devised to do justice by making
equitable remedies available against one who through fraud or other wrongful means
acquires property of another. Kalwitz v. Estate of Kalwitz, 822 N.E.2d 274, 280 (Ind. Ct. App. 2005). A constructive trust is imposed where a person holding title to property is subject to an equitable duty to convey it to another on the ground that he would be unjustly enriched if he were permitted to retain it. Id.

***
While it is well established that fraud is a prerequisite to the imposition of a
constructive trust, this prerequisite is not confined to fraud as one might define it for
purposes of criminal law. Zoeller v. E. Chicago Second Century, Inc., 904 N.E.2d 213,
221 (Ind. 2009). Rather, the remedy is available where there is standard fraud or a breach of duty arising out of a confidential or fiduciary relationship. Id. The duty to convey the property may arise because the property was acquired through fraud, duress, undue influence or mistake, or through a breach of a fiduciary duty or the wrongful disposition of another’s property. Kalwitz, 822 N.E.2d at 280. The basis of the constructive trust is the unjust enrichment that would result if the person having the property were permitted to retain it. Id. This type of trust is more in the nature of an equitable remedy than an independent cause of action. Id.

Here the Court of Appeals explains why constructive trusts can be used in dividing marital property:

By imposing a constructive trust, the trial court implicitly found that a fiduciary or
confidential relationship existed between Doug’s parents and Doug and Lisa. A
confidential or fiduciary relationship exists when confidence is reposed by one party in another with resulting superiority and influence exercised by the other. Kalwitz, 822 N.E.2d at 281. In Indiana, certain legal and domestic relationships raise a presumption of trust and confidence as to the subordinate party on the one side and a corresponding influence as to the dominant party on the other side. Meyer v. Wright, 854 N.E.2d 57, 60 (Ind. Ct. App. 2006). These relationships include that of attorney and client, guardian and ward, principal and agent, pastor and parishioner, husband and wife, and, as in this case, parent and child. Id. Here, the existence of a confidential relationship is self-evident because Verna and Don trusted Doug and Lisa with the ownership of their home while Verna and Don were still living in the residence.

What to take away from all this? Putting marital property in another person's name does not mean that it will escape the divorce court.

New Indiana Court of Appeals Decision - Paying off a Marital Debt

Husband was to pay $9,000.00 in installments to wife, husband does pay as ordered but instead starts paying out of a pension payment, and then stopped those payments after paying $7,502.66. (Marriage of Hurt, pages 2 -4). Apparently, they lived together after the divorce.

At a contempt hearing, the parties disputed whether the money sent by husband to wife was meant to pay off the judgment.

Problems for the husband:

1. The parties seemingly forgot that there was a court order and decided to do their own thing.
2. Because of 1, husband never got an explicit agreement that his payments wee against the judgment; and
   
3. Husband never got a satisfaction of judgment which would have put an end to everything.

The Indiana Court of Appeals put it this way:

Here, the record reveals that during 2007 when the funds were being directed into
Wife’s accounts, Husband and Wife had reunited, and they were paying bills jointly.
During this time period, Husband was not receiving any additional disbursements from his pension. Wife used much of the funds paid to her on joint expenses, including paying for auto insurance on Husband’s truck and for a life insurance policy insuring Husband’s life. Wife also spent the funds on food, hardware, utilities, and trips to the drug store which benefitted both Husband and Wife. Also, Wife testified at the hearing that the reason for the pension funds being directed into accounts solely in her name was so the funds would not “show up in [Husband’s] account while he was doing the bankruptcy.” Transcript at 13. Also, in January 2008, soon after Husband and Wife again separated, Husband redirected the monthly payments from his pension to pay to an account in Husband’s name, and to stop all payments to Wife’s accounts. As Husband attested to at the hearing, however, he never filed, nor requested that Wife file, a satisfaction of the judgment.

(Opinion at 8 -9).

Recently, I have seen a few cases where people decided that the court's Orders did not apply to them for some reason known only to them. Think more along the lines obliviousness than something more malevolent. This case seems to fit in this pattern.

Remember that whether your case is a divorce or paternity case, your life is now joined with the court and its Orders. Do not follow those Orders at your peril.

One last thing, if the issue in your head was the value of a lawyer then think about this: husband has still to pay $9,000.00 to wife after he thought she was paid off plus paying for trial and appellate counsel. How much would have calling his lawyer before he started making payments have saved him? My guess is $15,000.00. And probably whole lot less frustration.

When Is A Division of Pension Dischargeable in Bankruptcy?

Short answer: it is not even part of the bankrtuptcy.

I bring this up because I just used Google Scholar's ability to search appellate opinions.  I decided to see if it included Indiana opinions and so I used my full name.  It does include both Indiana appellate decisions and decisions from our Indiana bankruptcy courts. 

The search turned up an opinion from Judge Bayt from the United States Bankruptcy Court (Indianapolis Division) in a case of mine dealing on whether husband could discharge a division of his pension from his divorce:  In re Britten.  Judge Bayt did a wonderful job of collecting the case law on pensions and QDRO's and I do not think there are any major changes since then.

Quite a learning experience on two levels.  The first was about the law and the second was about research.  The second one was much more humorous - call it a case of both lawyers looking at the trees and not the forest.

I no longer practice consumer bankrutpcy law but I am quite happy to represent creditors - including divorced spouses - in bankruptcy court.prop

Property Division - Comparing Indiana and Texas

I have another reason to prefer Indiana's divorce laws. Reading Dallas Divorce Law Blog's Will it be held against me if I get another woman pregnant before my divorce is final?, I got struck by how commonsensical we are.

Texas is a no fault divorce state which essentially means that neither party necessarily has to prove the other did something "wrong" causing the divorce. However, fault grounds often arise in divorce proceedings and the court will consider them in dividing the community property. The division of property under the Texas Family Code has to be "just and right" - not necessarily a 50/50 split. A man and wife are still considered married until the court enters a final decree of divorce, therefore getting another woman pregnant before your divorce is final is considered adultery. So, what is the effect?

Back in law school, my Contracts professor had a class of words and phrases he called "weasel words". I read "just and right" as being weasel words. With Indiana's 50/50 presumption, there is little discretion other than in totaling up the numbers. I see a far wider-ranging discretion than Indiana allows.

For an example of an Indiana case, take a look at my New Indiana Case: Swadner v. Swadner Part V (Property Division).

You may also find How does Indiana value the marital pot? interesting.

Thinking About the Financial Issues of a Divorce

Thanks to New Jersey Family Issues for its Divorce is around the corner — how do you protect your financial interests while your marriage dissolves and pointing me to The New York Times' Financial Decisions to Make as You Divorce.

So this week, I assembled that list, with help from readers and members of the Institute for Divorce Financial Analysts. The institute certifies financial planners and other professionals who specialize in helping people whose marriages have ended.

You may be willing to pay any price to remove yourself from a toxic marriage with the least amount of haggling. Many more of you, however, are probably seeking an equitable split, but have no idea what to budget for or evaluate.

So this list is a place to start. Please post additions to it in the comments with the related post on the Bucks blog.

Give the whole article a good read, please.

Missouri Divorce & Family Law Blog also published a post on financial issues -  The Financial Aspects of Divorce: Why It usually IS "All About The Money":

...There are so many financial aspects of divorce that have to be balanced that if parties aren’t careful, they can end up in a big money mess. Here are a few of the big ones:

1.       2 households instead of one: Before a couple or family divorces, they live in one residence with one set of bills and expenses, paid by however much money the couple/parents bring in. Upon divorce, the same level of income still exists, but now there are two mortgages/rent, two sets of utilities, two sets of grocery bills, two car payments, relocation expenses, first and last month’s rent, and so on. Basically, double or so the expenses on the same income.  It is not hard to see how difficult this is in and of itself.

2.       Debts. These days, many families are just a paycheck or two away from real trouble with credit cards and other unsecured debts, and if there are significant debts involved in the divorce, a real challenge exists. Sure the court can divide the debts and assign liability to each spouse, but it doesn’t do much good if the net marital estate is significantly reduced or eliminated by the debt. A divorce is a separation of financial livelihoods, and when possible, it is a good idea to use assets in the marital estate to reduce or eliminate debt before dividing assets. The less debt after the divorce the better for both parties, even if on paper one spouse is supposed to be responsible for it. It is a future fight or bankruptcy filing waiting to happen.

3.       Child Support: Quite simply, nobody is happy with it. If you have to pay it, it is going to be perceived to be too much, and if you are receiving it, it is perceived to not be enough.  In Missouri child support is largely a mathematical calculation based on incomes and other expenses, and to some degree it is what it is.   But regardless, it another factor affecting the same level of income pre-divorce, and it will never make a party “whole” or maintain a pre-divorce standard of living.

4.       Maintenance: Although there is no mathematical formula the same holds true as does for child support, it is probably both too much and not enough,  and it is still going to have to come out of the same pot of money.  Unless the parties are very well off financially to begin with, to expect the same standard of living pre-divorce is usually unrealistic. Although appropriate in some cases of long marriage, large disparities in income, or other factors, maintenance in Missouri is awarded in a small percentage of cases.

5.       Health Insurance: Regardless of your politics on the issue, health insurance is expensive and upon divorce usually a former spouse cannot remain on the other spouse’s health insurance. So, unless both parties can get affordable health insurance, if such a thing exists, then this can be a big financial factor that likely may only have a handful of undesirable solutions.

6.       Attorney fees and case costs: On top of all of this, the divorce is a direct expense in terms of attorney fees and costs associated with the case. If the case is contested, then the total cost on the family is the sum of both spouses total investment in the case. Attorney fees are not usually awarded, which is all the more reason to try to approach the case in an informed and rational way, and try to keep costs and conflict down. The higher the conflict, the higher the cost every single time.

Missouri Divorce & Family Law Blog gives some good advice at the end, people "be smart and rational about how to separate financially and view their situation in a realistic way."

I am intrigued about Divorce Shield's message - even if  I do not feel comfortable recommending the site to clients.  That may be a quirk of my personality - I do not have the same reaction to Dollars of Divorce (on Twitter here).  Another site to look at for information is:  Faggio Financial.

Using an accountant and your lawyer ought to get the same result, but I leave that decision to you.  The thing is do something!

Dividing The Personal Property

I ran across How to Divide Personal Property in a Divorce Case at the South Carolina Family Law Blog which reprinted a post from Daniel Margolin at The Oregon Divorce Blog. :

Personal property, meaning furniture, art, family photos, pets, and other general property, in a divorce is treated no differently than the division of other assets. A dollar value figure is placed on the property and the allocation of property is dealt with as part of the general division of assets and debts. For example, if all of the personal property is worth $20,000 and one party takes all of it, they would owe the other party $10,000 as either a cash payment or out of the division of some other asset or by taking on a similar amount of debt.

The better way to deal with the division is for the parties to agree on who takes what piece of furniture and not assign a dollar figure to anything. This can be more complicated with valuable artwork. Family photos are generally given to one party with the other party having an option to make copies.

If there is a clear dispute over which property each party wants, the easiest method is to have the personal property appraised. The appraiser will make a list of all property and assign dollar values to each piece and then the judge can make a determination of how it is divided.

Fayette County Local Rules: TEMPORARY RESTRAINING ORDERS

Used to be that we would routinely file restraining orders and then the General Assembly passed the Indiana Civil Protection Act.  That statute divides personal issues from property issues.  For issues of personal safety, we have to use a protective order.

Property issues still require a restraining order.  I freely admit that it has been a very long since I have seen anyone request a temporary restraining order.  Maybe people behave better now, perhaps the parties do not have property of such value that they feel the need for a restraining order.  Protective orders are still too common.

Perhaps my interest in noting this Fayette County local rule comes from a sense of nostalgia but there are some interesting points.  Most of the rule incorporates Indiana Trial Rule 65:

(E) Temporary Restraining Orders - Domestic Relations Cases. Parties wishing protection from domestic or family violence in Domestic Relations cases shall petition the court pursuant to IC 34-26-5.  Subject to the provisions set forth in this paragraph, in an action for dissolution of marriage, separation, or child support, the court may issue a Temporary Restraining Order, without hearing or security, if either party files a verified petition alleging an injury would result to the moving party if no immediate order were issued.

(1)     Joint Order. If the court finds that an order shall be entered under this paragraph, the court may enjoin both parties from:

(a)     transferring, encumbering, concealing, selling or otherwise disposing of any joint property of the parties or asset of the marriage except in the usual course of business or for the necessities of life, without the written consent of the parties or the permission of the court; and/or

(b)     removing any child of the parties then residing in the State of Indiana from the State with the intent to deprive the court of jurisdiction over such child without the prior written consent of all parties or the permission of the court.

(2)     Separate Order Required. In the event a party seeks to enjoin by a temporary restraining order the non-moving party from abusing, harassing, or disturbing the peace of the petitioning party or any child or step-child of the parties, or exclude the non-moving party from the family dwelling, the dwelling of the non-moving party, or any other place, and the court determines that an order shall be issued, such order shall be addressed to one person. A joint or mutual restraining order shall not be issued. If both parties allege injury, they shall do so by separate petitions. The trial court shall review each petition separately and grant or deny each petition on its individual merits. In the event the trial court finds cause to grant both petitions, it shall do so by separate orders.

(3)     Effect of Order. An order entered under this paragraph is automatically effective upon service. Such orders are enforceable by all remedies provided by law including contempt. Once issued, such orders remain in effect until the entry of a decree or final order or until modified or dissolved by the court

And for the Fayette County Rule:

LR21-FL00-FL-8

TEMPORARY RESTRAINING ORDERS

Subject to the provisions of Ind. Trial Rule 65, in an action for dissolution of marriage, legal separation or child support, the Court may issue a Temporary Restraining Order, without hearing or security, if either party files a verified petition alleging an injury would result to the moving party if no immediate order were issued.

If the Court finds that an order shall be entered, the Court may enjoin both parties from:  Transferring, encumbering, concealing, selling or otherwise disposing of any joint property of the parties or asset of the marriage without the written consent of the parties or the permission of the Court;  Removing any child of the parties then residing in the State of Indiana from the State of Indiana from the State with the intent to deprive the Court of jurisdiction over such child without the prior written consent of all parties or the permission of the Court.

In the event a party seeks to enjoin the non-moving party from abusing, harassing, disturbing the peace, committing a battery on the moving party or any child or step­child of the parties, or exclude the non-moving party from the marital residence, and the Court determines that an order shall be issued, such order shall be addressed to one person only. A joint or mutual restraining or protective order shall not be issued. If both parties allege injury, they shall do so by separate petitions. The Court shall review each petition separately and grant or deny each petition on its individual merits. In the event the Court finds cause to grant both petitions, it shall do so by separate orders. The moving party shall provide the Court the following information concerning the non-moving party:  Name; Age; Date of Birth; Race; Sex; Height; Weight;  Scars, tattoos or other identifiable characteristics; Home Address: Telephone No. Work Address: Work Telephone No; and. Work Hours.

 I just do not see where the Local Rule adds to the general state rule.

What Other Indiana Family Law Blogs Are Saying

I have been writing about many things the past few months and been writing about others are writing elsewhere but realized this past week that I have not truly noted what other Indiana family law blogs are writing about. I think all of us have a slightly different slant (I sometime call my cantankerously pedantic)  That is my mea culpa and here is what I have for you.

William Wilson of South Bend, Indiana writes Indiana Family Law.  He may have even started his blog before me and is consistent on his emphasis on collaborative family law.  Here reminded us back in October that the new child support guidelines take effect next month - Indiana Child Support Guidelines changing.  Here are some other posts very much worth reading:

• Why can’t my child decide which parent he wants to live with?
• What is it like to go to court? Looking for stories  There is a good point here for non-lawyers and lawyers in this one.  A point I may be just as guilty of anyone else - remembering that non-lawyers have no idea what court will be like. (And he is looking for comments, if you got stories  then let him know!)
• How to survive your divorce: a free ebook.  Thinking I want to see this, too.

Ryan Cassman publishes All Things Family Law - Indiana Divorce & Family Law Blog and practices with Hollingsworth & Zivitz, P.C..  He has been kind enough to point out some things on here but I still like him and his blog!  Well, enough to keep a close eye on what he is doing.  Here are some of the posts I have not noted and like:

• Joint Legal Custody - Religious Services and Parenting Time
• Retirement and Divorce - Are Paid Health Insurance Premiums An Asset? (He has been much better than I have been lately of writing up new appellate cases.
• Indiana Child Support Guidelines - High Earners Pay More, Low Earners Pay Less.  Pay attention to this one - another article about our new child support guidelines - these will be a major disruption from what I have heard and what I have been able to get read.

Down in New Albany, the firm  Waters Tyler Scott Hofmann & Doane, LLC publish DIVORCE LAW INDIANA.

• Indiana Family Law Case Update: refusal to sign joint tax return & taking kids to church during visitation.  Another reminder that I have been remiss in not reporting on new Indiana cases.
• Split custody of siblings - not a subject I have seen discussed anywhere else.
• Taking your child holiday shopping for your ex-spouse.  Again, something I have not seen written about.
  

More About Community Property and Common-Law Property

I found Questions and Answers about Property Ownership During Marriage in Missouri written by Professor Barbara Glesner Fines of the University of Missouri - Kansas City School of Law which does a very good of explaining the differences between community property and common law property states (Indiana is in the latter).

For a California perspective, you might want to read 'Community property' can have a very broad meaning, especially here in California. from Orange County Divorce Lawyer Blog.

My own explanation is here.

Stories like California Court Rules that, When a Child Support Obligor Remarries, in connection with a Motion to Modify the Court Should Consider 50% of the Income from Community Property Assets make very happy not to be in a community property state.

Fayette County: Dissolution Procedure - Exhibits for Personal Property

No idea who had this idea or how it came to be put into a local rule but the judges down in Connersville have what I call a good idea.  I think the lawyers reading this will see how this rule reduces the time (and therefore) of getting exhibits relating marital property and debt into the record but that might not be so clear to you who are non-lawyers.

Exhibits need to be admitted before they become evidence.  If not done properly, an exhibit can be kept out if there is an objection that is upheld by the judge.  This rule seems to me to envisage working out the objectionable exhibits before a hearing.  That moves the hearing that much quicker.

I also see the rule as setting out a proposed splitting of the marital property and debts in a tangible format that the judge can use in dividing the property and debts.  Not a bad idea at all.

LR21-FL00-FL-15

DISSOLUTION PROCEDURE

Prior to commencement of a final dissolution hearing, the Parties shall prepare a joint exhibit setting forth all the marital property.  This exhibit shall not only give a description of the property and debt but the agreed upon value of the property and amount of the debt.  If the Parties can not agree upon a value or an amount then the exhibit shall set out each party's value or amount.  In addition the exhibit shall state who is to receive the property or pay the debt or that the distribution of the items at issue.

More on Automatically Stopping Transfers of Property

Florida Divorce * Child Custody * Domestic Violence Law Lawyer also picked up on the news I reported in Divorce and Restraining Orders - an Idea from New York. I am adding this to show how Florida handles this issue(which is the same as Indiana).  Here are the highlights from Look, Florida (and Other States): New York Legislates Automatic Protection of Marital Assets During Divorce Case

In Florida, things currently work exactly the opposite way. (Except in certain counties that automatically impose a restraint along the lines of the New York statute.)

In most of Florida (including Broward and Palm Beach counties) today, if either spouse wants the court to restrain the other from transferring marital assets, the spouse seeking the restraint must go to court – to try to persuade the court to do it.

The New York legislation saves both spouses litigation expenses, unclogs the courts a bit and preserves the marital assets (or estate) from the get-go of the divorce case.

Is Indiana a common law state or a community property state?

No, Indiana is not a community property state.  Assets acquired during the marriage are considered to be part of the marital pot but they are not owned in the same sense as if they would in a community property state.

For an example of community property issues, I found Florida Divorce Blog's Community Property Baseball Team: Husband Gets Half the Players (Chosen Blindly or Randomly, Of Course) and Wife Gets the Other Half? interesting:

Wife has served as chief executive of a professional baseball team acquired during the long-term marriage.

Since the split, Husband has allegedly purported to fire Wife … and assert sole ownership of the team.

Wife, a non-practicing attorney, is reportedly not taking the termination lying down. Quite the contrary, she is rumored to be exploring a takeover.

Their state of residence, California, is a community property state though.

In general, that means that all property acquired by either during the marriage is split 50/50.

Absent a prenuptial agreement (prenup) or postnuptial agreement (postnup), however, that would suggest that both spouses, not just Husband, own the team.

For more on property issues, follow the link below next to the label "property issues"

Educating the Public on Selling Real Estate

With the curent economy, selling real estate remains problematic.  Lugar Real Estate has a Squiddo lens, Selling Your Home, that seems to provide a bit of education on selling a how.  The creator explains his motivation for creating the page as follows:

I was motivated to create this lens because of a client who wanted to sell. Unfortunately, once we received an offer, my client discovered that he owed more on the home than he realized, which meant that he could not afford to sell his home. He had failed to understand that the home equity line of credit that he took out, coupled with the 100% financing he did when he bought the home caused him to be upside down in a market of decreasing home values. I had always had a policy to stay out of my client's mortgage business, but after his experience, I realized that not only do I have a right, but an obligation to know this information for mine, my client's, and the buyer's sake.

Finding Hidden Assets

I promised one reader a while back an article on finding assets. Due to the press of business, I was not able to comply wiht that request but instead offer How to Find Hidden Assets -- Part 2 from Divorce and Family Law in Tarrant County, Texas

This is part 2 of an excellent article written by Warren R. Shiell in the Los Angeles Divorce and Family Law Blog with tips about how to find hidden assets. As mentioned before, it is not unusual to suspect (often correctly) that some assets are not being disclosed. Sometimes, there are clues that an attorney or other layman can find, but other times, it is necessary to bring in an expert forensic accountant to uncover various assets. The following section of the original post by Warren R. Shiell has suggestions about some of the types of financial records that can produce evidence or clues about undisclosed assets.

"The following checklist of research items may assist in determining the whereabouts of hidden assets or if, in fact, they exist at all:

"1. Financial Statements – Any loans from lending institutions require sworn financial statements to be filled out. In most cases, the borrower is trying to impress the lending institution with the extent of assets and may exaggerate these. Looking back five years or so at these statements may put you on the trail of assets which are now unaccounted for, or which show valuations substantially greater than what is now claimed.

"2. Personal Income Tax Returns – A review of personal Federal and State income tax returns and attached schedules filed during the past five years may indicate sources of interest or dividends. The returns may also reveal unknown sources of income or loss from trusts, partnerships, or real estate holdings. You should also review W2’s, 1099’s, 1098’s and K1’s.

"3. Corporate Income Tax Returns – If one spouse is the principal owner of a closely held corporation the corporate tax returns should be reviewed for the following: a. He or she may be manipulating his or her salary by taking less pay and then taking loans from the corporation to make up the shortage. He or she may be charging personal expenses to corporate accounts, which will later be reimbursed or charged to the officer’s loan account.c. Corporate returns should also be reviewed for excessive or unnecessary retained earnings (undistributed profits). These may be disguise available profit distributions or an artificially low salary level.d. Reimbursement of prior capital contributions or repayments of loans to the corporation may also provide hidden cash flow to your spouse.

"4. Partnership Income Tax Returns - Reviewing several years of partnership income tax returns (IRS Form 1065) may reveal sudden changes in the partnership interest or distributions. Such changes often occur at the time of a divorce and then compensating adjustments are made after the divorce is completed.

"5. Canceled Checks and Check Registers from Personal, Partnership, and Corporate Accounts - While time-consuming, it is always revealing to go over all the canceled checks and bank statements from personal accounts for the past few years, and post the expenditures to different columns under utilities, entertainment, loan payments, and so on. You will learn the amount of total expenditures per year, which sometimes exceeds income, and you will have a better feeling for cost of living and where budget cuts should be made. In terms of hidden assets, you may come across canceled checks for the purchase of property, which you never knew, existed. It is important to check off the canceled checks against the appropriate bank statement to make sure that you have all of the canceled checks. It is possible that certain checks were removed before they were delivered to you. For larger amounts deposits and withdrawals you should review the back and the front of the checks.

"6. Savings Account Passbooks - Acquire the passbooks for any savings accounts open during the past five years or more. Look for any deposits or withdrawals that are unusual in amount, or in pattern. A monthly withdrawal or deposit of money in the same odd amount may reflect mortgage payments or income receipts from sources that you are not aware of.

"7. Security or Commodity Account Statements - If one spouse has been buying and selling stocks or bonds or dealing in commodities, the broker with whom he or she trades furnishes monthly or quarterly statements indicating all transactions. A review of these statements going back a few years could reveal the existence of securities of which there was no knowledge or could raise questions as to the disposition of the sale proceeds. Cross checking securities transactions and bank accounts by date and amount will usually verify the source or disposition of the monies involved. If the securities are sold and the proceeds are unaccounted for, you can be sure the money is out there somewhere.

"8. Expense Accounts - Very often, a corporate employer will allow employees a great deal of leeway in their expense account reporting. A spouse may take advantage of this by exaggerating or even falsifying business expenditures. The employer maintains records as to expense account disbursements to the employee over the year with monthly detail. A check of these records will indicate the extent to which the employee is able to “live off” the expense account.

"9. Deferred Salary Increase, Uncollected Bonus, or Commissions - You should always determine whether a salary increase is overdue, when it will be forthcoming, and how much it is. Employers are sometimes sympathetic to their divorcing employees and willing to bend the rules slightly to defer salary increases, bonuses, or commissions in order to suppress apparent income. Ultimately, these increases, bonuses, or commissions must be paid to keep the corporate books straight, and the employer will rarely lie when put under oath or forced to make a written statement on the subject. Sympathy goes just so far."

Dividing Up The House

I like how Los Angeles Divorce and Family Law succinctly sums up the choices:

What are the options for dividing the house?

There are three options if you are trying to reach a settlement:

* One spouse buys out the community interest share of the other spouse;
* The house is sold and the proceeds are divided; and
* The house remains in joint names for a limited period of time and is then sold to the other spouse or is put on the market.

Those same choices apply in Indiana.  They also applied in contested hearings  The only question being - which one works best for the particular circumstances of the case?

What Happens to My Business if I get Divorced?

That is the question posed by Divorce Articles and Advice in the blog post, Does divorce mean my ex can get a hold of half my business?.

I think the English answer is not so different from the Indiana answer:

REALITY: It is very rare indeed for a business to be sold just because of a divorce and the relevance of business is often that it produces the income to provide for any children. If the business can afford a lump sum and your ex-wife needs the financial support, you may have to take out funds for that purpose. Normally though, the main relevance of a business, apart from producing the income, is that its rough value goes into the pot when calculating the overall assets.

Here, the spouse's interest in the business would be generally part of the marital pot, but then things can get complicated. Let me list the complications:

1. Whether the business is solely owned by the spouse or if there are co-owners.
2. Whether the business is a Limited Liability Company and what are the terms of the operating agreement.
3. Whether the business is a corporation and what are the terms of the corporation's by-laws.
4. How to value the business.
5. Was there a prenuptial or post-nuptial agreement?

And these are only the obvious complications.

Suggestion for any business owner facing even the possibility of divorce - get yourself to a lawyer.

Divorce and Restraining Orders - an Idea from New York

In Indiana, Protective Orders deal with threats from spouses. Restraining orders deal with property issues. Once upon, there were only restraining orders and they dealt with protecting both people and property.

For the law on restraining orders we need to look at Indiana Rule of Procedure 65 and specifically:

(E) Temporary Restraining Orders - Domestic Relations Cases. Parties wishing protection from domestic or family violence in Domestic Relations cases shall petition the court pursuant to IC 34-26-5. Subject to the provisions set forth in this paragraph, in an action for dissolution of marriage, separation, or child support, the court may issue a Temporary Restraining Order, without hearing or security, if either party files a verified petition alleging an injury would result to the moving party if no immediate order were issued.

(1) Joint Order. If the court finds that an order shall be entered under this paragraph, the court may enjoin both parties from:

(a) transferring, encumbering, concealing, selling or otherwise disposing of any joint property of the parties or asset of the marriage except in the usual course of business or for the necessities of life, without the written consent of the parties or the permission of the court; and/or

(b) removing any child of the parties then residing in the State of Indiana from the State with the intent to deprive the court of jurisdiction over such child without the prior written consent of all parties or the permission of the court.

(2) Separate Order Required. In the event a party seeks to enjoin by a temporary restraining order the non-moving party from abusing, harassing, or disturbing the peace of the petitioning party or any child or step-child of the parties, or exclude the non-moving party from the family dwelling, the dwelling of the non-moving party, or any other place, and the court determines that an order shall be issued, such order shall be addressed to one person. A joint or mutual restraining order shall not be issued. If both parties allege injury, they shall do so by separate petitions. The trial court shall review each petition separately and grant or deny each petition on its individual merits. In the event the trial court finds cause to grant both petitions, it shall do so by separate orders.

(3) Effect of Order. An order entered under this paragraph is automatically effective upon service. Such orders are enforceable by all remedies provided by law including contempt. Once issued, such orders remain in effect until the entry of a decree or final order or until modified or dissolved by the court. 

While once standard operating procedure, I cannot recall any time in the past ten years when I have used a restraining order or seen anyone else using a restraining order.  I do not recall the last time I had a cleint worried that the other spouse would destroy or hide property.

osndiering all that I think the New York law described in New York Divorce and Family Law Blog's Automatic Stays: Protecting the Financial Interests of the Parties in Divorce a good idea:

In the past, many matrimonial actions got off to a particularly acrimonious start because one spouse was fearful that the other would transfer and hide assets, cancel insurance and run up debts as soon as they received notice of the divorce. As a result, one party had to go to the expense of making a motion to obtain an injunction preventing to the other spouse from acting financially irresponsibly.

***

The summons will now state that an order is in effect and that:

1) Neither part shall sell, transfer, encumber, conceal, assign, remove or in any way dispose of, without the consent of the other party in writing, or by order of the court, any property (including, but not limited to, real estate, personal property, cash accounts, stocks, mutual funds, bank accounts, cars and boats) individually or jointly held by the parties, except in the usual course of business, for customary and usual household expenses or for reasonable attorney's fees in connection with this action.
(2) Neither party shall transfer, encumber, assign, remove, withdraw or in any way dispose of any tax deferred funds, stocks or other assets held in any individual retirement accounts, 401K accounts, profit sharing plans, Keogh accounts, or any other pension or retirement account, and the parties shall further refrain from applying for or requesting the payment of retirement benefits or annuity payments of any kind, without the consent of the other party in writing, or upon further order of the court.
(3) Neither party shall incur unreasonable debts hereafter, including but not limited to further borrowing against any credit line secured by the family residence, further encumbrancing any assets, or unreasonably using credit cards or cash advances against credit cards, except in the usual course of business or for customary or usual household expenses, or for reasonable attorney's fees in connection with this action.
(4) Neither party shall cause the other party or the children of the marriage to be removed from any existing medical, hospital and dental insurance coverage, and each party shall maintain the existing medical, hospital and dental insurance coverage in full force and effect.
(5) Neither party shall change the beneficiaries of any existing life insurance policies, and each party shall maintain the existing life insurance, automobile insurance, homeowners and renters insurance policies in full force and effect.

Indiana Supreme Court - Judgment Interest Not Mandatory for Family Law Cases

Why cases need read and not just their summaries:  Rovai v. Rovai.  That includes my summaries.

Reading the initial report on the case, it seemed that the Indiana Supreme Court had removed all use of the judgment interest statute from family law proceedings.

What the court actually decided was whether or not judgment interest was mandatory in family law cases.  Here is what the court wrote (for those not knowing what equity means, divorce courts came under the category of equity):

Cleanly put, the question is whether the statute directing interest on money judgments compels post-judgment interest be paid whenever money changes hands pursuant to a dissolution decree, or whether the dissolution statutes grant a court discretion to impose interest, or not, in the course of fashioning what the latter calls a “just and reasonable” division of property. I.C. § 31-15-7-4.

***

In a straight civil judgment, post-judgment interest and the time value of money bear such a straightforward relationship that courts are led to deploy adages like “interest goes with the principal as the fruit with the tree.” Reese v. Reese, 696 N.E.2d 460, 463 (Ind. Ct. App. 1998). By contrast, judicial decrees that assign debts, personal property, and real estate represent a more complex allocation of economic values. To these are added orders that reflect social objectives, such as enabling children and the leading custodian to continue living in the marital residence.

In such judicial decrees (and we rate the one before us as quite typical), where courts allot everything from physical objects to responsibility for debts of differing character to conditional rights of residence, the time value of money acquires a much more nuanced meaning than it does when a court hears a credit card collection case and says, “Judgment for $5,800.”

We conclude that the statute on civil post-judgment interest does not compel that interest run on the various internal elements of dissolution decrees. Rather, the dissolution statutes confer upon trial courts the authority to order interest or not in the course of fashioning a just and reasonable division of property.

Opinion at 4 - 5.

Interest becomes important any time there a need exists to collect money from an opposing party.  I think I am typical in that when I am collecting a money judgment from a spouse I use the judgment interest to help finance the collection efforts.  I think that might put the importance of judgment interest into proper perspective.

What this means is that from now on, the judge must specifically order judgment interest on money issues.

Also, it means that without a specific order from a judge, there is no interest on child support arrears.