WHAT DO LAWYERS DO?
Why Do I Need a
Lawyer?
Identification of Property
Classification of Property
Division,
Assignment and Awarding of Property
Why Do I Need a Lawyer to
Handle My Divorce?
 Divorce is
expensive . . . expensive in a lot of ways. Emotional expense is very
important and must be managed or it can dramatically affect the quality
of your life. But the financial costs of divorce can be astronomical if
you fail to obtain a fair settlement.
Even so, a lot of people try to handle one of the most complicated
financial and legal transactions of their lives without legal counsel.
If their marriage has no financial matters of consequence -- great! But
the place where I think most people fail to grasp the process is they
simply do not know why they may need a lawyer.
Here's my answer to "What do lawyers do in the financial aspects of a
divorce?"
Identification of Property:
People often do not really know their own share of the marital estate
and, even more often, have very little understanding of their spouses'
property.
Further, people often times fail to appreciate or know how to truly
identify and/or label property in the numerous legal entities or
fashions available. Is the property a sole proprietorship, corporation,
LLC, S-Corp, trust, life insurance, cash value, frequent flyer miles,
bonuses, stock options, bond, stocks, etc.
We have developed a highly specialized "Marital Estate Overview" for
identifying, classifying and valuing all items of property.
Classification of Property:
Any reasonably diligent attorney will attempt to identify all
property which should be part of the marital estate or non-marital
property which should be assigned to his/her client. The threshold
questions are:
- Is the asset property?
- After clearly identifying the property, how should it be
classified?
- If it is mixed, how should the proportions be handled?
Our firm prepares a Marital Estate Overview as the starting place in
every case. We ask the client to acknowledge the Overview's development
as the picture grows clearer, which develops due diligence.
The latest edition of Graham and Keller's book, Kentucky Domestic
Relations, specifically Chapter 15 ("Classification and Division of
Property at Divorce"), provides an excellent discussion of the duty to
identify and then classify property. Re-read Sections 15.1 through
15.14, unless you are absolutely confident of your understanding of
classification.
Did you know the right to frequent flyer miles or to basketball
season tickets or to country club memberships might be assignable or
non-assignable assets? Do you understand how this fits in Kentucky's
"functional approach"? Does Kentucky's functional approach primarily
affect classification or value?
Are you properly classifying interspousal gifts as a good example for
self-examination? [Clark v. Clark, 782 S.W.2d 56 (Ky.App. 1990).]
We've heard reports of an influx of Russian brides who come to
America, get a lot of medical and/or dental work and then want a
divorce. Many of their husbands then want their "investments" back.
Another scenario spurring a good deal of discussion is whether breast
implants and other cosmetic improvements (or at least the cost of
surgery) are somehow divisible property in divorce.
We do not use these examples to be cute but, rather, to show how all
major expenditures of marital funds (over and above normal living
expenses) should result in marital property, a dissipation claim or at
least a very good explanation.
When is “active participation” decisive in classification or do you
have a valuation issue? [See Goderwis v. Goderwis, 780 S.W.2d 39 (Ky.
1989).]
There are thousands of other possible assets that must be considered,
not the least of which include:
- Agriculture subsidies and soil conservation payments
- Crop production contracts
- Tobacco bases and quotas
- Pets and livestock, including stud fees
- Blanket Powers of Attorney affecting agriculture and property
rights
- Burial plots
- Ownership of computer software
- Retirement community contracts
- Sick leave or vacation pay
- Time-shares in vacation condos
- Prepaid funeral arrangements
- Mineral rights
- Collectibles and antiques
- Patents, copyrights and intellectual property
- Lottery or gambling winnings
- Anticipated tax refunds
- Stock options
- Delayed bonuses or raises
- Loss carry forwards
We are not saying you need to pursue every conceivable asset; we are
saying every possibility needs to be considered.
Do you really understand transmutation? [See Bischoff v. Bischoff,
987 S.W.2d 798 (Ky.App. 1998), cert. denied, ___ U.S. ___, 1205 Ct. 175,
145 L.Ed.2d 148. (1999).]
After Graham & Keller, the next general reference book which should
be in your library if you handle any kind of substantial estate cases is
Brent R. Turner's book, Equitable Distribution of Property, 2nd Ed.,
West Group (2000), which explains the All-Property Model and
Dual-Classification Model. The comparison of these two models in Chapter
5 is a comprehensive discussion of your duty to classify property.
Failure to identify and classify property is an area where there is a
great deal of failure to competently practice Family Law. It will be
compounded if you do not know when and how the "onus" shifts during
tracing. Is the client’s father’s farm a pasture or a subdivision in the
making? How is income from non-marital property treated? [Contrast
KRS 403.190(2)(a) against Sousley v. Sousley, 614 S.W.2d 942 (Ky.
1981).]
Division/Assignment/Awarding of Property through:
- Negotiation
- Mediation
- Collaboration
- Litigation and/or Trial
- Motion Practice
- Appellate Practice
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