Divorce is rife with hidden
hazards. From exorbitant attorney fees to unpredictable judges, divorcing
couples become vulnerable to insidious pitfalls, particularly as the emotionally
wrenching process clouds their judgment. Below we outline some of the most
troublesome areas and provide advice for proactively managing them.
State of Confusion. Many
individuals who file for divorce under the assumption that they are entitled to
half of all marital assets are shocked to find out otherwise. Forty-one states,
including New York, Florida, Illinois and Pennsylvania, allow only for equitable
distribution of marital property. This enables a court to decide how much to
award each party according to criteria such as the length of the marriage,
earning capacity and contributions to the marriage. This also encourages
aggrieved spouses and their high-priced attorneys to argue in innumerable ways
over evidence of these factors. In nine states—California, Idaho, Nebraska,
Arizona, New Mexico, Texas, Louisiana, Washington and Wisconsin—divorce courts
are bound by community property laws stipulating that spouses equally own all
income and assets acquired during the marriage.
Don’t Mess Around in Texas.
Texas remains a community property state: By law, divorcing spouses share
ownership of income and assets acquired during the marriage. But the state adds
its own twist to the concept: Divorce court judges can adjust awards based on
fault, and do not award maintenance (alimony) except in dire situations. Even in
these circumstances, Texas enforces a two-year limit on maintenance. But this
state’s penchant for allowing judges such extreme latitude—call it a cowboy
mentality—makes some attorneys cringe.
"If you have an affluent spouse, don’t get divorced in Texas,"
says Connecticut attorney Gaetano Ferro, president of the American Academy of
Matrimonial Lawyers, who favors a uniform federal divorce law. "The same case
can be decided tremendously different if you file papers five miles to the east
or five miles to the west."
Beneath the Veil. Hiding
assets from the court when divorcing a spouse is illegal, but common. Spouses
can squirrel away money in off-shore accounts, disguise liquid assets as
interest-free loans and conceal them among bogus business expenses. Most courts
will do little to assist the other party in the discovery process. The burden of
proof lies with the accuser, who is often left with the expensive task of hiring
forensic accountants and paying additional attorney fees and court costs.
"It’s a terribly unfair system in order to get assets
presumably rightfully yours," says Penelope (whose name is changed at her
request), a former corporate lawyer who was married 17 years before her husband
filed for divorce.
While some spouses can afford the high-cost hunt, others may
reluctantly decide to cut their losses. "Chasing assets is a process that can
take years of emotional strife," Penelope says. "See what you need, try to get
that, and be done with it."
Lying spouses rarely face legal ramifications for their
subterfuge. Accusing spouses should not expect to be reimbursed for the added
fees that come from lawyers, forensic accountants and other professionals. "What
a judge will do is give a person what she should have gotten if assets were
disclosed," says Ferro, who represented Jane Welch in her divorce from General
Electric chairman Jack Welch. "There’s no real disincentive for being dishonest.
More often than not, there’s no punishment."
The Moral Morass. The scales
of justice do not weigh the damage caused by a spouse who becomes needlessly
belligerent during divorce proceedings by filing baseless and vindictive
motions. "All it takes is one unreasonable person out of four people," says
Ferro, counting each spouse and the lawyers. "It will cost more money, the
process will be more difficult and dealing with the children will be more
difficult."
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