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/ Home / Editorial / Money & Meaning / Family Matters /
Fighting Words
Legal Land Mines
Kimi Puntillo
09/01/2007

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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