Bitcoin, a digital currency, can be used to hide assets in a divorce, warns Jane Croft in the Financial Times. Dishonest spouses are failing to disclose Bitcoin investments. Unlike bank accounts or stock, it is harder to link Bitcoin investments to a particular person. There are also online forum discussions on how to use Bitcoin to hide wealth. Divorce lawyers are starting to add questions about digital currencies to their discovery requests.
George and Betty Lou Blake had been married for 37 years. He was 56 and she was 57 when they got divorced. He made $42,500 a year and she made $20,000 a year.
Courts now favor rehabilitative alimony for a set period rather than indefinite alimony, but there are two exceptions. The judge granted Betty indefinite alimony and the appeals court affirmed.
Since George made twice as much as Betty, the judge might have applied the second exception to rehabilitative alimony and given Betty indefinite alimony on the basis of unconscionable disparity.
Instead, the judge applied the second exception, finding that in view of her age and, given the time necessary for further education or training, “I don’t know that there’s a whole lot more that she can do. She’s doing the best she can.”
Blake v. Blake, 81 Md. App. 712, 569 A.2d 724 (1990)
When someone pays alimony they get a tax deduction for it. But the same amount should be included as taxable income on the return of the person receiving alimony. I think most divorce lawyers believed, and cautioned their clients that the IRS computers will automatically detect any variances and flag the returns. It turns out the IRS computers are not that good.
The inspector general for the IRS has issued a report, according to the Washington Times, that the U.S. government loses hundreds of millions of dollars a year in false alimony deductions. The report says that the IRS doesn’t have a system for detecting the false claims. 47 percent of returns filed in 2010 got it wrong said the inspector general.
Most cases involved a deduction for alimony without matching income on the recipient’s return. In other cases, taxpayers did not report who they were paying alimony to or gave a false taxpayer identification number for the recipient. “Apart from examining a small number of tax returns, the IRS generally has no processes or procedures to address this substantial compliance gap,” the report said.
In order to make a fair and equitable alimony award, the divorce court judge must look at all the factors necessary, including the following:
(2) the time necessary for the party seeking alimony to gain sufficient education or training to enable that party to find suitable employment.
Employment is not required, however, if a party is already self-supporting. Mrs. Hull was almost 61 years old and her husband was 66 at the time of their divorce. The wife never worked during the marriage and the husband was retired from the CIA. The parties had both inherited funds and when they sold their home, they each had assets of over one million dollars.
The trial judge found that both parties were self-supporting and therefore no alimony was required. The wife appealed and the appeals court affirmed the ruling of the trial court.
Since 1980 the law in Maryland has favored rehabilitative alimony over indefinite alimony. Rehabilitative alimony is for a fixed period. Indefinite alimony is until one of the parties dies or the party receiving alimony remarries.
The purpose of alimony is to make a person self-sufficient and not to award a life- time pension. Nevertheless, the legislature has recognized two exceptions where indefinite alimony might be appropriate.
The first is where the dependent spouse cannot become self-sufficient due to age, illness, infirmity, or disability.
The second is where there will be an unconscionable disparity in the standard of living of the parties after the divorce.
Section 11-106(c) of the Family Law Article, Maryland Code.
In a post titled “Determining Marital Property in Maryland, Virginia and the District Of Columbia” (June 17, 2011), I said:
“This article is about when the accumulation of marital property ends. It starts at the time of the marriage. When you return from the honeymoon and go to work the next Monday morning you are earning marital property – the stuff the divorce judge divides. When is the first day you can go to work and earn separate non-marital property? It depends on the jurisdiction.”
And after reviewing the applicable statutes, I said:
“When you and your spouse have separated, intending to remain separated, and do not have a property settlement agreement, in Maryland and the District of Columbia the property you acquire from the date of separation until the date of divorce is marital property. In Virginia such property is not presumptively marital, and in general is determined to be separate property, unless special facts and circumstances are established to overcome the presumption.”
In a recent case, Wright v Wright, 61 Va. App. 432; 737 S.E. 2d 519; 2013 Va. App. LEXIS 53, the Court of Appeals of Virginia considered whether Mr. Wright’s strategy in the two plus years between the date of separation and date of the divorce hearing required a finding to bring post-separation expenditures of marital property back into the marital pot to be divided with Mrs. Wright.
Husband had certain marital accounts totaling about $2,800,000. Husband earned approximately $1,500,000 per year; Wife was a homemaker. During the post-separation period, the marital accounts declined to about $1,415,000 on account of Husband’s payment of joint income taxes, real estate taxes on the marital home, tuition and school expenses for a child of the parties, spousal support to Wife and his own attorney’s fees and expert witness fees. Husband deposited the money he did not spend on these expenses to his separate accounts which, of course, were not marital.
The Court of Appeals said none of those expenditure were improper so they did not amount to “marital waste.” They explained that there are only two categories of expenditures of marital funds “proper” and “waste.” If your spending of marital funds falls into the “proper” categories it’s okay even if that permits a big decline in marital assets to be divided and a big increase in the separate funds of the party following the strategy.
The result in Wright provides a road map for the higher earning spouse to skew the division of marital property in his or her favor in some Virginia cases. If you are the lower earning spouse you want prompt filings, quick hearings and, if the stakes justify it, an injunction on expenditure of marital property.
Also, for multi-state or potentially multi-state cases, Wright is another reason that in a case with a relatively long separation, all other things being equal, the higher earning spouse probably wants the divorce case to be heard in Virginia. As I’ve said here before, a little planning and a little audacity can get you into the Court you want to be in. And a little more planning during separation can increase the property you get to keep.
Some of the facts here are from an article by one of the lawyers involved in the case. What’s wrong with Wright, Ronald R. Tweel (Virginia Family Law Quarterly, Spring 2014)
I told my wife, Holly, this morning, about a study last year that concluded couples who watched movies together, and then had a conversation about what they saw, were 50 percent less likely to divorce.
Now Professor Ronald Rogge is conducting a new study in which he is asking couples to watch five movies in one month and then discuss them. Couples will pick their own movie or select one from a list of pre-selected films, then talk about the movie, guided by questions provided to them. The questions are about subjects like conflict resolution and providing support to each other during stressful times.
I said the movies were probably “chick flicks”. Holly asked me if they had done any studies on divorces by couples where the wife was forced to watch bad science fiction movies with the husband.
Can divorce affect your health? Feeling chest pains, shortness of breath, or dizziness? You may be suffering from Broken Heart Syndrome.
According to doctors at the Mayo Clinic, going through a divorce, break-up, or the death of a loved one can bring on symptoms like those of a real heart attack.
These symptoms are caused by a surge of stress-related hormones. In some cases, part of the heart temporarily enlarges and does not pump well.
Fortunately, the symptoms can be treated and reversed.
The number of people looking for information about divorce on Avvo.com spikes between New Year’s Day and Valentine’s Day. Avvo reports a 40% increase.
One reason for this may be that people use the romantic holiday to reevaluate whether they are happy in their marriage or not.
About two thirds of the people using Avvo for divorce information are women.
Avvo profiles and rates attorneys and also contains peer endorsements and client reviews.
My son is too cool to be in the chess club at middle school. He thinks it is too nerdy. What can I say? I was a nerd. I joined the chess club when I was in middle school. Only it was called junior high back then.
I played a lot of chess in my youth. I thought I was pretty good. That is until I met Marc. I met Marc in the army. He was a chess master. While waiting for the Viet Nam war to wind down, we had a lot of time on our hands. So Marc taught me chess.
I already knew how the pieces moved and how to checkmate. I thought that was all there was to know about chess. Marc opened my eyes.
I learned about power, time and space. I learned that each piece had a value and some pieces changed value depending on what stage of the game you were in. I learned that there was an open, middle and end game. I learned tactics with names like pin, fork and x-ray attack. There was a whole new level of complexity to the game I had played for years unaware.
I think this is true in practicing law as well, and divorce law in particular. When I started practicing, I knew the law (how the pieces moved) and how to win a trial (checkmate). But over the years, I have learned that my cases and clients have many more levels of complexity than I had first supposed.