Demi Moore and Ashton Kutcher have a prenup? Maybe you need one?

Demi Moore and Ashton Kutcher have a prenup? Maybe you need one?

Even if the age gap between you and your partner is not very large or your net worth is not in excess of $290 million, a marital agreement may be for you.

A marital agreement is a contract. Common names for a marital agreement are a prenuptial agreement, if entered before you marry or postnuptial agreement, if entered after you marry. Michigan recognizes both types of marital agreements.

It is unfortunately true that every marriage ends. Statistically, ½ of marriages end in divorce and the other ½ of marriages end in death.

Michigan law provides that a properly entered marital agreement is an enforceable contract. In simple terms, the divorce and probate laws will not control your destiny, your marital agreement will.

Marital agreements are powerful tools to plan your future, determine property rights and alimony. The agreements can dictate not only what happens if you divorce, but also what happens when a spouse dies.

The marital agreement can either expand or eliminate your rights to property, probate, homestead, and the right to act as an executor and administrator of your spouse's estate.

Another common use of a marital agreement is as a legal separation agreement. The parties enter into the marital agreement and live separately, while maintaining the financial benefits of marriage. With a marital agreement, there is typically no public record of the contract. Therefore, the parties can maintain their health insurance, tax benefits and other benefits of marriage without the necessity to live as husband and wife.

Demi Moore and Ashton Kutcher should have a prenup, maybe you should too.

Daniel

Why Kim Kardashian does not have to give back her engagement ring.

Married for 72 days?

Keep the ring!

Etiquette books may say if a marriage has lasted less than a year, then an engagement ring should be returned. Michigan law, is not politically correct on this issue. If the Kim Kardashian divorce was filed in Michigan, she would get to keep the ring.

Under Michigan law, as long as the parties go through with the wedding, the ring is a gift and need not be returned in the event of divorce. On the other hand, if a party breaks off the engagement, the ring is returned, regardless of the circumstances why the wedding was cancelled or who cancelled the wedding.

So the ridiculously large, the reported $2 million diamond ring Kardashian received from now-ex-husband Kris Humphries, she keeps it.

Now if they only had a pre-nuptial agreement . . .

Daniel

Citation: 244 Mich. App. 697,625 N.W.2d 136,2001 Mich. App.

Criminal considerations in divorce

Recent headlines shed light on a frightening application of Michigan law. On December 26, 2010, the Detroit Free Press reported that a Rochester Hills man faces up to 5 years in prison - - for reading his wife’s email.

Leon Walker of Rochester Hills is being charged with unlawfully reading his then wife’s email which substantiated that his wife was having an affair with a man who had once been arrested for beating her in front of her son.

As a Michigan divorce specialist, I am qualified to inform you that the conduct of a spouse is relevant in the division of property, an award of alimony and in custody and parenting time decisions. Specifically, evidence of Mrs. Walkers’ adultery was relevant evidence in the underlying divorce case.

Michigan law is clear. It is unlawful in Michigan to intentionally and without authorization access the email of another. The statute is Michigan Compiled Laws, section 752.795, P.A.1996, No. 326, § 1, Eff. April 1, 1997.

In addition, Mrs. Walker’s adultery was also unlawful in Michigan. Michigan law is equally clear. It is a felony to commit adultery in the State of Michigan. The statute is Michigan Compiled Laws, section 750.30, and the statute is current through P.A. 2010, No. 226, of the 2010 Regular Session, 95th Legislature.

A divorce can be a highly emotional event. Michigan law instructs judges to decide divorce cases based on equity (fairness) using statutes and case law for directions on what is fair.

The prosecution of Mr. Walker is troubling because it sends a message of fear to divorcing couples. As if the emotional cost of a divorce were not enough, now people have to fear going to jail if they divorce. If you stop and think about it, in almost every divorce case a crime is committed. Take the following statutes into consideration:

MCL 750.30: Adultery, a crime punishable by more than one year in prison;

MCL 752.795: Accessing computers to acquire . . . or use computer services; (e.g. reading email) a 5 year felony.

MCL 750.539a: Michigan Eavesdropping statute: To amplify or transmit any part of the private discourse of others without the permission of all persons engaged in the discourse. (e.g. recording of telephone calls, other audio and videotape recordings, reading text messages . . . )

18 USC sec. 2701 Store Communications Act: The act makes it a Federal offense to access an electronic communication while it is in an electronic storage system.

It is interesting to note that courts are split on the application of these laws in domestic relations cases and for good reason.

Imagine every case of adultery, a spouse reading an email, or text message being prosecuted as a crime in Michigan. How many politicians, doctors, lawyers, neighbors, friends, relatives would be convicted felons?

The selective prosecution of Mr. Walker is a troubling precedent.

What's yours is both of yours? Maybe! The dangers of commingling assets.

The Michigan Court of Appeals has recently changed the rules regarding commingling of assets. Lawyers must advise their clients accordingly and clients should seek competent legal advice before commingling assets with his/her spouse.

When dividing property in a divorce, a primary consideration is whether the property is 'marital' or 'separate'. Generally, property acquired during the course of the marriage is 'marital' and subject to division in the event of divorce. Conversely, property acquired before (or after) marriage is separate property and not subject to division in the event of divorce.

However, there are a number of exceptions to the general rule set forth above. One notable exception is the commingling of a separate assets. The exception typically arises in this situation. One spouse has separate assets (e.g. savings from before marriage) and invests the money in the marital home, the home is then refinanced a few times with cash out and the parties continue to pay on the new mortgage. In this situation, Courts have ruled that the separate investment of a party has become marital once commingled into the marital home. More specifically, because the separate property is no longer traceable to the separate source (because of the refinancing, cash out, etc.) it has become marital and is subject to division in divorce.

Until recently, the prevailing view regarding commingling of assets has been that if money is traceable to the separate source, it would remain separate property and not subject to division in the event of divorce. However, the Michigan Court of Appeals has recently changed the rule. On July 13, 2010, the Michigan Court of Appeals decided the case of Cunningham v. Cunningham. The Court ruled that an asset from before marriage which was invested in the marital home during the marriage becomes marital property when it was invested in the marital home even though the down payment was traceable to one party.

Prior to commingling a separate asset, careful consideration must be given to how that asset will be treated in the event of divorce. What you thought was yours might unintentionally belong to both you and your spouse. If you are not married, consider a pre-nuptial agreement. If you are already married, consider a private agreement or post-nuptial agreement.

As always, feel free to call me to discuss any concern regarding your family law matters.

Daniel

The Findling Law Firm, PLC

414 W 5th Street

Royal Oak, MI 48067

(248) 399-3300

(248) 556-9783 (fax)

Email: Daniel@Findlinglaw.com

My blog: http://thedivorceguy-daniel.blogspot.com

My practice group's cool website: TheDivorceGuy.com

My firm's cool website: FindlingLaw.com

Changing pension or life insurance beneficiaries after divorce. A Judgment of Divorce may not be enough!

In almost every Judgment of Divorce, the parties either award or waive an interest in the former spouses' pension plan(s) or life insurance plan(s). However, if the benefit is governed by ERISA, a waiver in a Judgment of Divorce may not be enough and your former spouse may still receive benefits as an unintended beneficiary.

A. Pension

Recently, the U.S. Supreme Court Case, Kennedy v. Plan Adm. for DuPont Savings and Investment Plan, ruled that an ex-spouse cannot waive an interest in a former spouse's ERISA-governed pension plan through the divorce decree alone. The Estate sued the pension plan to recover the pension benefits wrongfully paid to the former spouse under the terms of the Judgment of divorce. In a unanimous decision, written by Justice Souter the Court held that the employer did not err in paying benefits to the former spouse even though the Judgment of divorce provided otherwise.

In light of the Kennedy decision, to ensure that a divorcing spouse's intent to waive her interest in the pension plan is effectuated, lawyers must get the proper forms from the plan administer before the entry of the Judgment of Divorce and make sure the waiving spouse signs them contemporaneously with the entry of the Judgment.

B. Life Insurance

While, Michigan law provides that a Judgment of Divorce must either extinguish or preserve in the Judgment any and all rights of a party in any policy or contract of life insurance, endowment or annuity upon the life of another, in which the spouse was named or designated as beneficiary, or to which he/she became entitled by assignment or change of beneficiary during the marriage or in anticipation of marriage.

However, in Metropolitan Life vs. Pressley, 1996 Fed. App. 0122P (6th Cir.) the Court held that the waiver in a Judgment of Divorce is not enough. A party must also affirmatively terminate his or her spouse as a beneficiary of an insurance policy because the provisions of ERISA preempt Michigan law and the effectiveness of this statutory provision. Therefore, after entry of a Divorce decree, the party should also change the beneficiary on the life insurance, endowment or annuity or risk allowing the ex-spouse to take the asset as an unintended beneficiary.

Drafters beware - the deductability of alimony

When drafting a Judgment or Order regarding alimony and spousal support, drafters beware that the mere use of the word "alimony" or "spousal support" does not affect the tax consequences of the payment.

Under I.R.C. sec 215, payments made for alimony are allowed as a deduction. However, in order for payments to be tax deductible, the eight requirements of I.R.C. sec, 71 must be met.

The eight requirements of I.R.C. sec. 71 are:

1. The payments must be made in cash; (e.g. providing a car is not deductible)

2. The payments must be to a spouse or on behalf of a spouse;

3. The payments must be made pursuant to a divorce or separate maintenance instrument;

4. The payments must not be designated as non-qualifying by the payor or non-taxable to the recipient;

5. Spouses may not be members of the same household;

6. The payment must terminate at the recipient spouse's death;

7. Spouses may not file a joint return; and

8. The payment cannot constitute child support.

So drafters beware and understand the application of I.R.C. sec. 71.

A family law specialist does make the difference in accomplishing a client's goals.

Daniel

U.S. Dad jailed in a custody battle - Parental Kidnapping Prevention and Remedies

This morning’s headlines shed light on one of the most frightening moments in a custody case with international ties:

An American dad is behind bars and his Japanese ex-wife is a fugitive from justice, due to an epic culture clash between Japan and the United States that is causing untold heartache for families.

While there is no one comprehensive integrated process for gathering and analyzing data and information on international child abduction cases, in 1988 family members abducted 354,100 children in the United States. (See http://www.ncjrs.gov/pdffiles1/ojjdp/190074.pdf) Clearly, many of these children were removed from the country.

What does the law provide?

A. The Hague Convention

The Hague Convention on the Civil Aspects of International Child Abduction (“Hague Convention”) provides for the prompt return of wrongfully removed children. Simply put, if the child resides in a member country, the member country will return the child. The Hague Convention is not in effect in Japan because they chose not to participate in the treaty. (For a list of the 48 Countries that participate in the Hague Convention, visit: http://www.travel.state.gov.

B. Parental Kidnapping Prevention Act (“PKPA”)

The PKPA provides that a felony warrant may be issued for parental kidnapping cases.

C. International Parental Kidnapping Crime ACT (“IPKCA”)

The IPKCA criminalizes international parental kidnapping and categorizes the crime as a federal felony.

Preventing International Child Abduction

A. The importance of a Custody Judgment

Courts speak through their Orders. A Custody Judgment or decree is an Order of the Court which sets forth the rights of the parents. In most cases, in order to obtain relief from parental abduction, there must be a custody judgment or decree setting forth the rights of the parents. A well-drafted custody and parenting time judgment may be the most important line of defense against international child abduction. For example, in high risk for abduction cases, a lawyer should draft the Judgment with appropriate safeguards such as a prohibition on international travel, supervised parenting time or avoid a joint custody order.

B. Make a record: Keep a list of addresses and telephone numbers of the other parent’s relatives, friends, and business associates. In addition, keep a record of the other parent's passport, social security number, bank accounts and physical characteristics.

C. Images and descriptions: Keep an updated photograph/video and description of your child (preferably every six months), include fingerprints and any special characteristics in your file.

D. Passport Issuance Alert Program: Federal Law requires the signature of both parents when obtaining a passport for a minor child. Notwithstanding, the State Department has implemented a Passport Issuance Alert Program which raises places the government on alert if a passport application is made for the minor child.

E. Be aware of “red flags”, such as:

• No strong ties to the United States;
• Friends or family living out of the Country;
• Limited financial reasons to stay in the United States;
• Quit his/her job, closed bank accounts (planning activities);
• A history of marital instability;
• Prior criminal records.

Child Abduction is a tragedy that can sometimes be prevented. If you have additional questions or concerns, please contact me.

Daniel