Equitable Distribution

Important Info About Divorce and Debt

Published on: March 13, 2014 | On behalf of Arnold & Smith, PLLC

Attorney Matthew R. Arnold answering the question: “Do I need an attorney to get a Divorce in North Carolina?”

A recent article in the Huffington Post dealt with the issue of debt and divorce. Many people understand that when a couple in North Carolina files for divorce they must equitably divide their assets and liabilities (debts). However, what you may not realize is that the division worked out between you and your spouse does not alter the contract you signed with the company you owe money to.

The problem is that in cases where couples spend time hammering out detailed divorce settlement agreements regarding how debts will be divided, many are shocked to discover that the divorce decree does not have the power to change the agreements with creditors. This means that even though the divorce agreement clearly says your spouse will be responsible for the car loan or for paying the credit card debt, if he or she flakes, the creditor can turn around and come after you for the money (assuming your name was on the debt in the first place).

The reason is that divorce decrees are agreements between two parties, husbands and wives, and they have no legal force to change previous agreements made with third parties, such as credit card companies or mortgage lenders. This means that no matter how detailed your divorce decree is in assigning responsibility for marital debts, you will both be considered legally responsible for all common debt until it is either paid off or refinanced.

So how can things go wrong? The most common way that debt turns problematic is when one party either cannot or will not continue making the payments he or she agreed to make as part of the divorce settlement agreement. That means if your spouse stops paying the mortgage, the car note or the credit cards, you can find yourself in trouble given that the creditor will likely turn to you to pay the remaining balance of the loan, regardless of what your divorce agreement says.

Experts Say Pet Custody Battles On The Rise

Published on: March 11, 2014 | On behalf of Arnold & Smith, PLLC

Attorney Matthew R. Arnold answering the question: “Does adultery affect who gets custody?”

Apparently it’s true what they say, dogs really are man’s best friends. And women’s best friends. Oh, and don’t forget about the cats. A recent survey of the American Academy of Matrimonial Lawyers discovered that more divorcing couples are fighting over custody of their pets today than ever before.

Specifically, the survey found that 27 percent of lawyers say they have seen a rise in the number of people engaged in pet custody disputes during the past five years. Additionally, 22 percent of lawyers say that the judges across the country are more receptive to hearing pet custody cases. Another 20 percent of respondents said that courts instead preferred to treat pets only as assets, not willing to engage in conversations about custody.

Sadly, experts say that many instances of pet custody battles are often brought by one spouse as an attempt to gain leverage over the other spouse who actually has a deep attachment to the animal. In these cases, one spouse believes that by threatening to keep the animal for him or herself, it might be possible to extract other concessions from the pet-loving spouse.

The problem with this strategy (beyond the fact that it is sad and needlessly hostile) is that judges often see through this fight as it quickly becomes obvious which person truly does have the deeper connection to the animal. When this happens, it can end up making judges angry with the one spouse for wasting the court’s time on a frivolous matter.

Supposedly Broke British Bloke Ordered To Pay Wife $30 Million :: Separation and Divorce Lawyers in Charlotte, North Carolina

Published on: December 5, 2013 | On behalf of Arnold & Smith, PLLC

Attorney Matthew R. Arnold answering the question: “Are overtime, bonuses, and commissions included in calculating child support?”

British tabloids were covered in articles about the final judgment in one of the country’s longest running and most contentious divorces cases. Late last week a British High Court judge issued his ruling in the case, ordering a supposedly penniless businessman to give his wife upwards of $30 million.

Though it may seem hard to believe, the result managed to anger both sides as each had very different views of what the family’s finances were. The unfortunate judge was left to try and divine the truth between two very divergent versions of reality.

The first theory was advanced by the husband, Scot Young. Scot spent the entire six years of his trial claiming that he was near destitution, arguing that his once lucrative business had folded during the financial crisis. Scot said that he went from hundreds of millions of pounds in assets to more than 30 million pounds in debt. As a result, Scot claimed he was unable to afford to pay his ex-wife any money or pay her whopping $9 million dollar legal tab.

The second theory was proposed by Scot’s former wife, Michelle. Michelle always said that her husband was hiding vast amounts of money in offshore accounts and had purposely made himself appear bankrupt for the sole purpose of avoiding forking over millions in a divorce. Michelle claimed that her husband was worth hundreds of millions of dollars, possibly even billions. She said that her husband’s offer of a $300 million settlement several years ago proved that he was sitting on more money then he claimed.

Man Sues After Discovering Twitter-Millionaire Wife Hid Stock During Divorce :: Separation and Divorce Lawyers in Charlotte, North Carolina

Published on: December 3, 2013 | On behalf of Arnold & Smith, PLLC

Attorney Matthew R. Arnold answering the question: “Are overtime, bonuses, and commissions included in calculating child support?”

A very interesting case out of New York City showcased the importance of making accurate and complete financial disclosures during a divorce. The case dates back to a 2007 split between Stuart Strumwasser and Jennifer Johnson. Prior to the divorce Stuart was making $43,000 a year while his wife made even less. After the divorce was finalized, Stuart was ordered to pay child support for his two young twins, money he has paid faithfully ever since. Everything seemed normal until Stuart decided to check up on his wife recently and performed a social media search, ultimately finding his wife’s profile on the business site LinkedIn. Imagine his shock when he read that Johnson was described as a first-round investor in Twitter.

After recovering from his surprise, Stuart began retracing his steps and remembered that prior to their divorce his wife went by herself on a trip to visit her brother in San Francisco. He was left alone in New York watching their two young children and thought nothing of the vacation. Only later did he find out that Jennifer had actually been secretly meeting with her ex-husband while in San Francisco. Her ex was a longtime friend and colleague of Jack Dorsey, founder of Twitter.

While in San Francisco, Jennifer took a meeting with Dorsey and invested between $10,000 and $50,000 in the social media company that was then in its very early stages. Estimates now reveal that that investment is worth between $10 and $50 million.

Stuart was furious after discovering his ex-wife’s windfall and has now filed suit against her in a Manhattan court. In his complaint Stuart accuses Jennifer of committing fraud by omitting the investment from their divorce financial disclosures. He is now asking that his wife repay $120,000 in child support that he’s forked over in the years since the divorce as well as 30 percent of her shares in Twitter.

How To Divide Property In A Divorce :: Separation and Divorce Lawyers in Charlotte, North Carolina

Published on: October 15, 2013 | On behalf of Arnold & Smith, PLLC

Attorney Matthew R. Arnold answering the question: “Is there some property that the judge cannot divide?”

A common problem in divorce concerns what will happen to the house. One common problem that many couples discover is that if one person receives the house in the divorce and does not refinance this can wreak havoc on all parties, potentially preventing the other spouse from applying for a mortgage due to the additional debt and also linking the two together in the event that the person responsible for paying for the house defaults.

To help solve this problem, divorcing couples should carefully map out their property-division plans, paying special attention to what happens with the marital home. The following are some tips for what to do if you’re facing similar problems.

1. What if both parties want to sell the house?

This is the most straightforward of all possibilities. No bickering or complicated refinancing, the couple simply needs to agree on a listing price, a schedule for showing the home and then a plan to divide any expenses involved in the sale of the house. Once the home has been sold, the couple needs to distribute the proceeds in whatever way was agreed on in the divorce decree. If the house sells at a loss, then things can get messy as both parties are eager to move on from the money pit. However, careful planning can ensure that language is written into your divorce agreement saying that any profits and losses are split following a sale.

2. What if one person wants the house?

In this case the person who wants the home should try to refinance it on their own. This is made easier if the house has equity. If so, then the home can be refinanced and the spouse who keeps the home can simply pay an equalization payment to the other party, giving them their half of the equity in the property. If the person keeping the house cannot afford to refinance on their own then a serious conversation needs to be had about whether it’s worth the risk to allow both parties to keep their name on the place or, instead, whether the property should simply be sold.

Best Buy CEO Sells Millions Of Shares To Pay Mounting Divorce Tab :: Separation and Divorce Lawyers in Charlotte, North Carolina

Published on: September 5, 2013 | On behalf of Arnold & Smith, PLLC

Attorney Matthew R. Arnold answering the question: “How much does it cost to get divorced, and how does the billing process work?”

A recent financial disclosure form by the CEO of Best Buy reveals just how pricey divorce can sometimes be. The Chief Executive of Best Buy, Hubert Joly, announced to the press that he had to sell $10.4 million in shares of Best Buy stock to help fund his ongoing divorce.

According to a report filed with the Securities and Exchange Commission, Joly’s sale of 350,000 shares of stock took place earlier this month. A company spokesperson says that Joly’s sale of stock has nothing to do with a negative outlook on the prospects of the company. Instead, the official said that Joly’s sale was necessary to liquidate some of the CEO’s assets to help pay for a pricey divorce. Despite the sale, Joly remains heavily invested in Best Buy.

Though most couples in North Carolina do not have the luxury of selling millions of dollars of stock to fund a pricey divorce, money is an incredibly common worry about the divorce process, regardless of income. In fact, a recent survey found that among those couples without children who were facing divorce, the cost of divorce was the number one concern. Surprisingly, the cost of divorce rated even higher than worries over dividing marital assets. Among couples with children, the cost of the divorce was second only to worries about child custody and visitation schedules.

So how can people keep their divorce costs from spiraling out of control? First and foremost try and make the divorce less adversarial. In Joly’s case, his split from his ex has been incredibly combative and has stretched on for many months. The fact is simple: the longer a divorce lasts the more expensive it will be. Though no one should simply agree to hand everything over to his or her spouse in the interest of expediency, there is also no reason to fight tooth and nail over every knickknack.

Recent Celebrity Divorce Gives New Meaning To The Phrase “Splitting Hairs” :: Separation and Divorce Lawyers in Charlotte, North Carolina

Published on: August 22, 2013 | On behalf of Arnold & Smith, PLLC

Attorney Matthew R. Arnold answering the question: “What does uncontested divorce mean?”

In a bizarre case that highlights just how strange some celebrity splits can be, Black Keys guitarist Dan Auerbach and his wife have finalized their divorce. TMZ recently confirmed that the final settlement papers have been filled in Tennessee, bringing to an end a divorce that began in February of this year.

Like most divorce cases, Auerbach’s divorce from his wife, Stephanie Gonis, involved a financial settlement, a division of their marital assets and a child custody agreement. The two had been married for four years and had one child together, a four-year-old girl named Sadie.

According to family court documents, Gonis will walk away from the marriage with a lump sum settlement of $5 million as well as a 2012 Toyota Highlander and one of the family’s two homes. Though the amounts are certainly large, the division of assets, including vehicles and homes, is pretty standard and similar to the process faced by ordinary couples across North Carolina who must divide the assets that were accumulated over the course of their marriage.

Where the Auerbach divorce diverges from the mainstream is in one of the odd personal items that Gonis will receive in the divorce settlement. Appearing in the divorce agreement is a notation for “Bob Dylan Hair.” Apparently the two had purchased an unknown quantity of the famous rocker’s locks and Gonis felt like the hair should be hers.

Nebraska Supreme Court Throws Out $100 Million Lawsuit Against Divorce Attorney :: Separation and Divorce Lawyers in Charlotte, North Carolina

Published on: July 11, 2013 | On behalf of Arnold & Smith, PLLC

Attorney Matthew R. Arnold answering the question: “When do you get alimony?”

A woman in Omaha is likely pretty unhappy today after a recent ruling by the Nebraska Supreme Court regarding her divorce case. The woman, Mary Kay Young, had filed suit against her former divorce attorney for $100 million, claiming the woman, Pamela Govier, cost her a fortune by providing bad legal advice.

The lawsuit by Young was filed last year after Young realized just how bad of a deal she got from her 2006 split. Young claimed that her attorney gave her bad advice by telling her to accept a divorce settlement that would pay her a $3 million lump sum as well as $12,500 in monthly alimony for up to 10 years. $3 million up front and $150,000 a year? Sounds fantastic, right?

Sure, the money is nothing to sneeze at, but put in perspective it’s not such a great deal. The problem in the case is that Young’s husband, Henry Davis, was a very wealthy CEO of a major midwestern meat packing company. Young says that by signing onto the agreement advocated by her attorney, she missed out on what could have been half of her husband’s $192 million marital estate.

The state Supreme Court upheld the ruling by a lower court judge who found that Young never sufficiently proved negligence by her attorney. Young further claimed that the settlement agreement signed with her ex-husband should have been voided because it was executed under duress. The judge also rejected that contention, claiming that no proof of such duress was ever shown.

The Supreme Court also ruled on another strange aspect of the divorce case, saying that Young was not allowed to force her ex-husband to take a physical so she can buy a $1 million life insurance policy on him. Young’s attorney argued the policy was necessary to secure future child support payments by Davis in the event that he dies prematurely.

Are Couples Really Fighting Over Frequent Flyer Miles? Absolutely :: Separation and Divorce Lawyers in Charlotte, North Carolina

Published on: June 20, 2013 | On behalf of Arnold & Smith, PLLC

Attorney Matthew R. Arnold answering the question: “What can I do to gain custody of my child in North Carolina?”

A recent article in Forbes Magazine discussed how common it is for couples to have disputes when dividing marital assets. Everyone understands that there might be disagreements over mutual funds or retirement accounts, maybe fights over the value of the house or who gets what portion of the checking account. However, the author of the Forbes article pointed out that it’s not at all uncommon for couples to get into a dispute over who gets frequent flyer miles.

Though the idea might sound ridiculous, the author says the matter can be quite serious as the value of the “asset” can be substantial. Couples who have amassed tens or hundreds of thousands of miles or reward points over the course of their marriage realize that these things do have value and are often unwilling to simply hand them over to the other party. Serious reward users know that even points can lead to some fabulous first class trips and are worth a little bit of back and forth.

Though there may be value to the miles, the trick comes in dividing them, after all, it’s not a retirement account that can simply be split in two. The first step in dividing miles is to check terms and conditions of your reward programs. This can be incredibly tedious so brace yourself. One good example of the problems involved in dividing reward points is Marriott’s program which specifically says that points will not be transferred in the event of a divorce. Rather than try and force Marriott to divide your points, it’s best to just award them to one party and offset the award either with other points or by assigning value to them and paying your spouse.

Oil Billionaire Braces For Potentially Record-Setting Divorce Settlement :: Separation and Divorce Lawyers in Charlotte, North Carolina

Published on: June 13, 2013 | On behalf of Arnold & Smith, PLLC

Attorney Matthew R. Arnold answering the question: “What does uncontested divorce mean?”

The divorce of oil tycoon Harold Hamm has already been a dramatic affair. First there were the allegations of infidelity, then came news of secret audiotapes. Now that the case appears to be winding down, the issue that has everyone talking is the amount of the final settlement, forecasted to be among the largest in history.

Hamm, worth at least $11 billion, is preparing to divorce his wife of 25 years, Sue Ann. Though efforts have been made to keep the financial information quiet, experts have discovered that the two never signed a prenuptial agreement at the time of their marriage, meaning Sue Ann stands to profit handsomely from the arrangement.

Given that Hamm owns more oil than any other American, the fight for the money will be intense. The case has been a complex one, with one report of 50,000 pages of corporate information being turned over. The only issue that has been settled is that the case will move forward as “no-fault”, meaning the accusations of cheating will stay out of the remainder of the case.

Another issue that some experts believe has been resolved, and one that could prove critical to the size of the eventual settlement, is the date of separation. Though the issue may sound insignificant, in this case it could add several zeros to the end of any financial settlement between the parties. Harold Hamm previously argued in court filings that the date of separation was 2003, when the two parties filed for divorce on an earlier occasion and began sleeping in separate bedrooms. Sue Ann Hamm claims the date of separation was in May of 2012.