Updated-Separated New York Couple Campaign Against Each Other For Assembly

All is fair in love and war.   The same must be true in divorce and politics.

In an extreme case of “you have it, I want it,” Politico is reporting that a New York State Assembly member is being challenged for her seat by her estranged husband.    

Mark Schimel has been nominated by the Nassau County GOP to run against Democrat Michelle Schimel, with whom he separated last year after 32 years of marriage and two kids.

While the candidates may have irreconcilable differences, the campaign could devolve into a bitter personal battle as they publically air their dirty laundry with all sorts of marital recriminations.    

Even the husband’s mother was shocked and outraged.  

Mark Schimel’s mother, Irma, told the New York Daily News she was shocked by her son’s decision to challenge Michelle.

“You’re joking,” she told the Daily News. “This is a really startling thing. It’s a shock. Why would he do this?”

Irma added that she believed her son will “never win anything against Michelle.”

“I love her very much,” Irma told the tabloid. “I can’t believe he’d do a thing like this. I’m going to talk to him.”

This may be a campaign even jaded New Yorkers watch.

UPDATED- Mark's mother must have spoken to him.   He withdrew from the race.  

 

A Change in Custodial Parent's Income- The Effect on Child Support

New York Child support.jpgOne question I am frequently asked goes something like this:  I am the custodial parent of a child in New York.  My income has doubled while the father, the non custodial parent’s income has remained the same.   What effect will this have on his child support payments to me?

The answer – Under New York’s child support guidelines (CSSA), the basic child support payment would be unchanged.   The formula for calculating child support, in its most basic form is:

combined  parental income  x the CSSA guideline percentage x (non custodial income)/the combined income)

If, for example, the custodial parent’s income increased from $100,000 to $200,000 but the non-custodial parent’s income remained constant at $100,000, the basic child support obligation would remain constant for the parties’ one child.  

The support guideline amount for one child is 17%.

Original support 

$200,000 combined income  x 17% x  100,000/200,000=  $17,000

Increased income

$300,000 combined income x 17%  x 100,000/300,00= $17,000

What would change is the non custodial parent’s contribution to the statutory add-on’s.  Each parent would responsible for his/her pro rata share of child’s educational, extra-curricular activities, and unreimbursed medical expenses.   In this example, the non-custodial parent’s pro rata share would decrease from 1/2 to 1/3.  

Equitable Distribution in New York: Enhanced Earning Capacity of Law Degree Limited to 10%

iStock_000012393400XSmall.jpgIn New York, if, during the marriage, one spouse earns a degree or obtains a professional license, the enhanced earning capacity is a marital asset which may be distributed as part of the divorce.   So, how much is a professional degree worth in terms of equitable distribution?

If you are not the person who earned the degree or obtained the license, one appellate court answered, not that much.  In Esposito-Shea v. Shea, the wife earned a law degree during the marriage and was only obligated to pay her husband 10% of her resulting enhanced earning capacity.    

An enhanced earning capacity is the difference between the earning capacity of the party before and after earning the degree or attaining the license. 

According to the court’s decision:

[A] nontitled spouse seeking a portion of the enhanced earning potential attributable to a professional license or degree of a titled spouse is required to establish that a substantial contribution was made to the acquisition of the degree or license . . .[w]here only modest contributions are made by the nontitled spouse toward the other spouse's attainment of a degree or professional license, and the attainment is more directly the result of the titled spouse's own ability, tenacity, perseverance and hard work, it is appropriate for courts to limit the distributed amount of that enhanced earning capacity.

The husband in Esposito-Shea v. Shea maintained that he was entitled to a large portion of  the wife's law degree because he was the family's primary wage earner during the parties' marriage and arranged his work schedule so that he could care for their children while the wife attended law school. However, said the court:

these sacrifices represented "'overall contributions to the marriage rather than an additional effort to support [the wife] in obtaining [her] license."  In addition, the wife's own efforts in obtaining her law degree cannot be minimized. For example, she worked in part-time positions throughout the marriage and was employed during the summer months while attending law school. She earned merit scholarships and paid a significant part of her law school tuition with an inheritance she received during the marriage. Under the circumstances, it cannot be said that Supreme Court abused its discretion in limiting the husband's distributive share of the wife's law degree to 10% of its overall value.

The trend, as highlighted by this decision, is for courts to award the lion’s share of degrees and licenses to the person who has the “ability tenacity, perseverance, and hard work to actually earn the degree, not their spouse. 

Child Support: Is My New Spouse's Income Used to Calculate My Payment?

One of the most frequent questions I am asked goes something like this:  

I am paying child support for my children pursuant to a New York support order.  I have just remarried.  Will my new spouse’s income be used to calculate child support to be paid to my ex? 

The answer is generally no.   Your new spouse is not responsible for paying to support your children from a prior relationship. The exception is, however, if your children are going to seek public assistance, your new spouse’s income may be considered.

A more problematic scenario arises when the new marriage allows you to avoid an expense, and by virtue of not incurring an expense, you have imputed income.  For example, suppose you move into your new spouse’s fully paid for home (obtained through his/her divorce); you would, in theory, have no housing expense.  By virtue of not having a mortgage or rent payment, you now could have more money available to spend on your children.   

If  you and your new spouse file a joint tax return and there is an application to modify child support, the joint tax return will be have to be produced, but only your income will be used to make the support payment calculation.   

There Are No "Do Over's" of Divorce Settlements to Recover Madoff Losses

Don’t you just love it when you are right? 

Three years ago, I wrote about the lawyer who was trying to re-open his divorce settlement to recover his Madoff losses.  In consideration of the wife retaining the marital residence and other assets, the lawyer had retained his “investment” in Madoff funds. Of course, after the divorce, the Madoff investment became worthless.  The Husband wanted to  reopen the divorce settlement.

At the time, I wrote:

Had the account value gone up, it is doubtful that husband would have shared the profits with his ex-wife. Alternatively, had the wife poorly invested the cash she received from the husband, she would have no claim against the ex-husband for her loss. And what about all the people who bargained for the marital home, which is now worth substantially less than it was one year ago-should they look to have their former spouses share in the loss?

There is a practical reason why the husband cannot win this case-if the mere fact that some former marital asset lost value could subject a settlement agreement to attack, there would be no finality to divorce. Every agreement would be at risk for a post divorce attack. In order for there to be finality, in absence of fraud, duress or coercion etc., agreements must be enforced.

The case wound its way up to the New York Court of Appeals which ruled that the agreement could not be reopened.   In Simkin v Blank, New York’s highest court stated in language eerily similar to my prediction:

This situation, however sympathetic, is more akin to a marital asset that unexpectedly loses value after dissolution of a marriage; the asset had value at the time of the settlement but the purported value did not remain consistent. Viewed from a different perspective, had the Madoff account or other asset retained by husband substantially increased in worth after the divorce, should wife be able to claim entitlement to a portion of the enhanced value? The answer is obviously no.

The Husband had argued that the agreement should be set aside because the parties made a mutual mistake about the existence of the Madoff account.  The Court rejected that theory because there was an actual Madoff account which the Husband could have cashed out of any time prior to the collapse of the Ponzi scheme.

Had this settlement been reopened, every agreement, not just divorce agreements, could be subject to attack with the benefit of hindsight.  At least now, a settlement agreement has some finality.  

New York's No Fault Divorce and Temporary Maintenance Rules Revisited

Though divorce filings are up on Long Island since the New York’s no-fault divorce law took effect 17 months ago, the law is having its intended effect; couples are concentrating on the financial and child custody issues rather airing their dirty laundry in grounds trials.

According to Newsday, the number of new divorce cases in Nassau County increased by 6% last year compared with 2009, the last full year under the old law. In Suffolk County, divorce filings increased by 9%.  

In a no-fault divorce, a spouse can simply claim a marriage has "irretrievably" broken down for at least six months before filing for divorce. Prior to New York’s adoption of no-fault divorce, a spouse was required to allege and prove, at trial, if necessary, grounds such as abandonment, adultery or cruel and inhuman treatment.

A law, enacted at the same time as no-fault divorce, to provide guidelines for temporary maintenance has been more problematic.  The formula, which sets guideline to award temporary spousal maintenance based on the spouses' incomes, fails to address how to deal with household expenses such as mortgage and utility payments.   Revisions to the law are slated to be introduced sometime this spring. 

Ironically, as Newsday reports, advocates for the victims of domestic violence, who were among the biggest critics of no fault divorce, have grown to embrace it.  

Advocates for victims of domestic violence have been won over by the no-fault law. They originally opposed it because they felt the history of abuse might not be factored into divorce settlements. But as it turned out, judges are much more likely to quickly award support and attorney fees that make it possible for women to leave an abusive home and get adequate legal representation, they said.

Though no fault streamlined the divorce process, the temporary support guidelines are a mess.  Rumor has it that the revisions will include guidelines for post judgment maintenance as well.    Rather than speculate as to the “fixes,” we will just have to wait and see and hope that the cure is not worse than the disease

Why You Should Retain an Attorney in Your Divorce?

New York Divorce attorneyThere is no requirement that a party in a divorce hire a lawyer.   The internet, my website, included, is full of legal information and forms.   So, armed with plethora of online information, more and more people are attempting to save money and do the “do it yourself divorce.”   Is that a mistake? I think so. 

The old adage is true; "He who represents himself has a fool for a client."    This is particularly true in the case of divorce.  

Good lawyers do a lot more than just fill in forms.   I, for instance, start with the mindset that not only do I want to resolve the immediate problem, I want to prevent future issues.   A well-crafted settlement agreement is long because it not only solves the issue at hand, but possible or likely “if this happens, then. .  .” scenarios. One common example of this type of planning is addressing what happens when one parent, at the last moment, cannot exercise their parenting time and the other, as a result, incurs a child care expense.   

Lawyers bring added value to the process.   By having handled many prior cases, we bring practical know how and experience to the table.  Because we have seen it before and your case is not our first, we can often use our perspective to finesse a workable solution to a problem. 

Moreover, we help avoid some unanticipated consequences of a contemplated settlement.   For example, the failure to tax impact some aspect of the settlement, could completely derail it and render the settlement economically unfeasible.

Lastly, we bring perspective. Since we are not enmeshed in the case, we can see the forest through the trees.   From our experience, we understand the range of possible outcomes and can formulate reasoned, unemotional legal arguments to advance your case.   On the other hand, we can counsel you against seeking the unobtainable or impractical.

Though retaining an attorney has a cost, the cost of not retaining one could be much higher. 

 

 

Continuing Legal Education Tomorrow -Divorce and Business Valuations

I will be participating as a panelist in a continuing legal education webinar tomorrow, March 15, 2012,  entitled “Divorce and Business Valuations”   at 1:00.  

How To Waive the Attorney Client Privilege By Email

HiRes.jpgAfter I had been emailing a client at the email address she had given me, I noticed something odd in my email program - my client’s husband’s name appeared as the sender of the emails she was sending me. When I questioned the client about this and she explained that the address she gave me was a “family email” which her husband not only had access to, but which he frequently read.   As a result, I can no longer email this client.

Communications between an attorney and a client are supposed to be privileged.  The purpose of the privilege is to ensure that communications between the attorney and client are confidential; neither the client nor the attorney can be compelled to reveal the substance of their communications.   However, if a third party is present, the privilege is waived.   By including her husband in the email exchange, the client may have the waived her attorney client privilege.

Taking the waiver of the attorney client privilege aside, I cannot fathom why the client would want her husband to be privy to the legal advice she was being given.  Sooner or later in our email communications, we would have discussed negotiation and litigation strategy (fortunately, we had not gotten there yet).   Wouldn’t it be nice to know your spouse’s settlement position before you made an offer?  Why accept x dollars, if they are willing to pay 3x? 

It just seemed like common sense to me that emails intended to be confidential would not be sent to the other spouse’s email.  In the old days when we mailed and faxed communication, we always made sure that the communications were “secure” and free from the other spouse’s prying eyes.

Given the ease of opening email accounts through gmail, yahoo and Hotmail and the fact that the majority of communication between a client and an attorney are going to be through email, I cannot understand why anyone would give a communal email address to their attorney.

I suppose I now  have a new question to ask during the intake process- is this your private email and does anyone else, particularly your spouse,  have access to it?    If anyone else has access to the email account, I may have to seat them in front of my computer advise them to open a new account for our privileged communications.  

What is the Purpose of a Preliminary Conference in a New York Divorce?

The first court appearance in most litigated divorces in New York is the Preliminary Conference.  In other states, this initial appearance is called a case management conference. 

The preliminary conference serves several purposes.  One of the primary purposes of the preliminary conference is to identify the issues that are in dispute.  Since not every issue in the divorce will be contested, at the preliminary conference, parties stipulate as to those issues that have been resolved. If, at the conference, an issue has been listed as resolved, it cannot be later litigated.  The agreement as to the contested and resolve issues is contained in a Preliminary Conference Order.

Until no fault divorce was adopted in New York, if marital fault was in dispute, a grounds trial would have been immediately scheduled at the conference.   However, with the advent of no fault divorce, most judges have taken the position the issue of whether a marriage has irretrievably broken down is not triable.

At the preliminary conference, the parties also have the opportunity to provide the judge with their respective theories of the case.   Some judges, armed with an overview of the case, will use this conference as an opportunity to initiate settlement discussions.   Other judges will simply use the conference as a procedural stop on the way to trial.   

In cases involving disputed child custody, at a preliminary conference, an attorney may be appointed to represent the interests of the children and the court may order the parties be interviewed by a forensic mental health professional. In cases involving the division of marital property, the court may appoint experts to value the marital property, whether it be real estate, a pension or an interest in a business. 

In addition to identifying the contested issues in the divorce, the preliminary conference serves the function as scheduling the case.  A preliminary conference order is issued which sets a timetable for the parties to exchange financial information and other evidence to be used at trial.   The exchange of financial information is part of the process known as discovery.  

Prior to going to court for the conference, it is important for the litigant to confer with his or her attorney to ensure that everyone is on the same page and in agreement as to the outstanding issues, the litigation strategy and the parameters of an acceptable resolution.