September 2009 Archives

September 29, 2009

Promoting a Legacy of Harmony Through Pre and Post Marital Areements

Frequently, Premarital Agreements are used to modify rights of the spouse who survives the other. Maryland's law of inheritance gives a surviving spouse the right to elect against the will of a spouse who has died. The surviving spouse's elective share varies depending on what other relatives also survive. For example, if there is a surviving adult child, the spouse is entitled to $15,000 plus one-half of the intestate estate. More details concerning the rights of the surviving spouse under various circumstances can be found in Section 3-102 of the Estates and Trusts Article

Maryland Family Law Attorneys know that one of the principal advantageous of an agreement is to clearly establish what the surviving spouse will receive and thereby eliminate the uncertainty under Section 3-102. This uncertainty arises because there is a right to organize ones affairs in a manner that keeps assets out of ones' intestate estate. One example is transferring assets to a trust during life.Doing so reduces or eliminates what the surviving spouse can claim as his or her elective share.

Maryland's highest appeals court recently upheld such a transfer in Karsenty vs. Schoukroun. Nevertheless, such a transfer can be held to be a fraud intended to frustrate the rights of the surviving spouse. Unfortunately, the Court declined to give a "bright line" test for determining when a transfer during life will be considered fraudulent. One of the six factors, "motive" of the decedent will often be in dispute and require expensive and far reaching litigation. Rather than a legacy of an expensive and bitter dispute, a Premarital or Post Marital Agreement that will create certainty and promote harmony will often be the prudent choice.

September 24, 2009

Treachery Under the Marital Propery Act

A Court of Special Appeals decision in De Ariz vs. Klinger De Ariz reveals the potential treachery that can occur in litigation. The decision is a reminder that the courts were long ago instituted as the preferred alternative to dueling, murder and mayhem. Why am I, seasoned Maryland Divorce Lawyers being so dramatic? Consider how a wife's award under the Maryland Marital Property Act was eviscerated by the conduct of her ex-husband, his attorneys and a decision of Court of Special Appeals.

The Circuit Court for Montgomery County, after protracted and bitter litigation, granted wife a monetary award under the Marital Property Act of $110,000 saying the award would be payable when the family home was sold. The judge specifically said that she was not entering a judgment against husband at the time of her decision to shield him from interest that would accrue prior to the sale of the house.
He and his lawyers responded to this misguided act of concern for husband's welfare by entering into a series of agreements pursuant to which they received two liens on his interest in the home in order to pay off unpaid legal fees. When the amount of these liens was added to a judgment against husband for unpaid legal fees, the total exceeded the amount to which he was entitled for his interest from sale of the home. Because the trial judge had delayed entering a judgment against husband, these other liens stood ahead of wife's claim. If the trial judge had entered a judgment against husband at the time of her decision, wife's award would have been first in line to be paid. Instead the lawyers received the money. Wife was left with no obvious mechanism to collect her monetary award.

Wife rushed back to the Circuit Court judge who felt betrayed by husband and his attorneys. She entered an "emergency order" entering a judgment in the amount of $110,000 in wife's favor against husband's lawyer. However on appeal, this emergency order was ruled erroneous. The appeals court was apparently embarrassed by this result. It commented: "no good deed goes unpunished", a glib reference to the trial judge's decision not to enter an immediate judgment to shield husband from accruing interest charges prior to the sale of the house. This was clearly not the proudest moment for Anglo-American jurisprudence.

September 21, 2009

Real Property Owned by One Spouse with Third Party:Other Spouse May Get Order of Sale

A recent decision by the Maryland Court of Special Appeals establishes a new precedent useful to Maryland Divorce Attorneys in effectively representing clients in the disposition of real property. In Triantis vs. Triantis, the parties separated after being married for 29 years. They owned real estate, some titled jointly, some separately and some with a third party. The stipulated in their separation agreement that all real estate was to be considered jointly owned, regardless of what was shown on the documents in the land records. They also agreed to reasonable efforts to sell the properties.

One of the parcels was 40 acres that Husband owned jointly with a third party. Four years after the separation agreement was recorded in the land records, the parcel remained unsold. Wife filed a lawsuit in the Circuit for Montgomery County, requesting that the land be sold "in lieu of partition". The Circuit Court judge rejected her petition without even allowing her a trial on the grounds that she did not have legal title to the land, meaning that her former Husband and third party, not Wife were on the deed.
On appeal, the decision was reversed. The Court of Special Appeals ruled that if wife held a concurrent equitable interest in the land that was fully vested she would be entitled to an order of sale pursuant to section 14-107 of the Real Property Article. The Court sent the case back to the trial judge to determine if wife's equitable interest was fully vested.

This opinion illustrates how complex property disposition can become in divorce. It requires a three step analysis in cases involving property owned by one spouse with a third party: (1) if spouse does not hold record title, does that spouse hold a concurrent equitable interest, (2) is that equitable interest of a type that authorizes an order of partition under section 14-107 and (3) is that equitable interest fully vested? If so, spouse is entitled to an order of sale.
If the three part test is not met, the spouse who is not record owner may be entitled to other relief under the Marital Property Act but would not be entitled to force the sale of the property.

September 16, 2009

Maryland Premarital and Domestic Partnership Agreements Can Work

Many Marylanders want to know whether a Premarital or Domestic Partnership Agreement is right for them. These agreements can serve a variety of purposes depending on individual facts and circumstance. They can be grouped into several categories, frequently encountered by family law attorneys. The following list is by no means exhaustive.

For more mature couples who have acquired both assets and children prior to their new relationship, the purpose is often to protect assets for the children of prior relationships, while making appropriate provisions for the new spouse. For couples with substantially different levels of financial resources, the goal may be shielding the financially stronger partner from claims for marital support in the event of breakup. Younger couples, often already living together, may view marriage as the next logical step but want to minimize the cost and emotional turmoil of divorce should it occur. Partners who may or may not be legally capable of marriage in this state, desire to establish the ground rules for their partnership.

Although Maryland, unlike Virginia and D.C. has not adopted the Uniform Premarital Agreement Act, the courts have generally upheld such agreements. However they will not be permitted to tie the hands of the court with respect to issues relating to children, such as support, custody or visitation. There is also precedence that curtails waivers of alimony under circumstances in which denial of spousal support would be unconscionable. Nevertheless, with appropriate legal counseling, couples can confidently use these agreements to meet most of their legitimate goals. You can expect future blogs on this site to explore relevant issues in more detail.

September 13, 2009

Legislation Responds to Custody Disputes Triggered by Residence Change

A decision by a parent to relocate a child's or parent's residence can trigger alarm bells for the other parent. This frequently triggers a rush to court. However, an experienced Maryland custody lawyer knows that the backlog in the Courts can work against efforts to gain judicial relief.

Legislation enacted in the 2009 legislative session improves the non moving parent's opportunity to respond. Senate Bill 299, effective October 1, 2009, authorizes the court, in any custody or visitation proceeding to include as a condition of custody or visitation that a parent provide notice of at least 90 days of the intent to relocate the permanent residence of the party or the child. This notice can be required for relocation either within or outside the state. The previous law allowed a notice period of 45 days. However the new legislation goes one step further. It provides that if either parent files a petition regarding a proposed relocation within 20 days of the written notice of relocation, the court shall set in a hearing on the petition on an expedited basis. It is critical to note that the petition must be filed within 20 days to warrant expedited treatment.

There is frequently wisdom in the adage "justice delayed is justice denied." In custody or visitation disputes that involve a change of residence, getting into court as quickly as possible may be critical. As a former member of the Maryland House of Delegates representing Howard and Montgomery Counties, I am delighted to see that my former colleagues were astute enough to give these types of cases a scheduling priority. Depending on the facts, this can prove to benefit either the parent who plans to relocate or the parent responding to the move. However, it is most likely that the opportunity for judicial scrutiny will benefit the children at the center of these disputes.

September 10, 2009

United States Armed Forces Members Get Help With Custody and Visitation

On October 1, 2009, a new law takes effect that will assist Maryland Custody and Visitation Lawyers representing members of the United States Armed Forces who have been deployed. As a former nuclear submarine officer and member of the Maryland Legislature, I am heartened at the enactment of a new section of Maryland Family Law that will benefit the children of members of the Armed Forces. The purpose of Chapter 672 (HB 422) is to ensure that any order or modification of child custody or visitation should specifically reference the deployment of the service member and give that member certain rights. These include reasonably accommodating the leave schedule of the service member and facilitating telephone and electronic mail between the deployed parent and the child. The order will also required the deployed member to give timely information regarding the member's leave schedule.

boy_ready_to_ride.jpgWhen the deployed parent returns, there is a right to an expedited hearing on custody and visitation provided that the petition is filed within 30 days of the end of the deployment. The court will also grant an expedited hearing if it finds that extenuating circumstances prohibited the filing within 30 days.

Deployment means compliance with military orders to report for combat operations or other active duty service for which the member is required to report unaccompanied by any family member or that is classified by the service as "remote". It does not cover National Guard or Reserve annual training, inactive duty days or drill weekends.

September 8, 2009

Dissipation of Marital Propery: Acrimonious Issue

Whether a spouse has dissipated marital assets can be a pivotal issue in disputes under the Maryland Marital Property Act. This act requires the court to (1) determine all marital property (property no matter how titled acquired by one or both parties during the marriage and all property owned as tenants by the entireties, except property excluded by valid agreement) and (2) value all marital property owned by each of the parties. In step 3, the Court may grant a monetary award based upon the eleven factors set forth in section 8-205 of the family law article. The monetary award may be made only from marital property and only up to the value of marital property owned by the spouse that has to pay.

This process can become even more complex when property that once existed is no longer in existence, often under suspicious circumstances. If the court finds that property was intentionally dissipated in order to avoid inclusion of that property from consideration of a monetary award, it will be considered a fraud on marital rights. As such, the court will declare the missing property to be "extant". Even if it cannot be located or has been dissipated, the court will treat it as existing and in the possession of the fraudulent party. This usually has the effect of increasing the monetary award to the defrauded party.

Heger vs. Heger is a 2009 decision that involved husband, a disabled Anne Arundel police officer, who had drawn down the equity of a home held in his name alone. The court held that dissipation had not been proven. Husband had used the money to pay credit cards, car loans, maintenance on the home and purchase furniture to replace what wife had taken. Other factors that the court considered were the prior practice of the parties in using equity credit lines. The court ruled that wife had not met her burden of proving that husband's principle purpose was to reduce funds available for distribution.

As a Maryland divorce lawyer who has assisted clients in prevailing on this issue, it is important to remember the importance of preventing dissipation before it occurs. Once dissipation has taken place, the victim of the fraud needs to assemble the evidence to prove both what has occurred and wrongful intent.

September 4, 2009

When Other Parent Is Unfit, Estate Planning Should Prepare For the Worst

A recent article in the Wall Street Journal used the Michael Jackson case to serve as a reminder to parents of the importance of naming a guardian for their children as part of their estate planning. That may be true but in my opinion as a Maryland custody lawyer, the story missed an important point. Not all biological parents are as easily persuaded to give up custody as Debbie Rowe. Watching the court award custody to Jackson's mother by consent of the interested parties, may have created a false sense of security in some parents who have reason to be concerned about the "other parent." .

Fortunately most custodial parents regard the "other parent" as the best alternative in case of their death. However there are parents who have reason to be concerned that in the event of death the other biological parent might gain custody. My experience with custody disputes has exposed me to cases that warrant such concern. Here's the problem. In Maryland, there is a fundamental constitution right to raise one's children. Unless a parent is unfit or there are "exceptional" or "extraordinary" circumstances, custody will go to the biological parent as opposed to a third party. The courts have determined that anyone including relatives and persons that might be regarded as de facto parents are "third parties" in this legal equation. In the absence of evidence, there is a presumption in favor of the biological parent.

If you have substantial concerns about what might happen to your child in the event of your death, you may want to consult a family law lawyer with experience in custody disputes. As part of your estate planning you should obtain an evaluation of whether the facts are sufficient to support the conclusion that the other biological parent is unfit or that "exceptional" circumstances exist. If so, the next step is to determine what evidence could be produced in your absence to prove it. The final step is to discuss how a plan for your child might best be implemented in the face of a potential legal challenges.

September 2, 2009

Indefinite Alimony Requirements Reviewed in Recent Opinion

A Court of Special Appeals decision on the issue of indefinite alimony has caught my attention. Alimony is an issue that depends on the trial judge evaluating the facts and exercising considerable discretion. In Lee vs. Andochick, an award of indefinite alimony was reversed. Since trial judges do not often get reversed on an issue over which they have so much discretion, it is worth taking a careful look at this opinion.

The best way to put the opinion in Lee vs. Andochick in perspective is to review Maryland's alimony statute enacted almost thirty years ago. In 1980 the Maryland Legislature revolutionized the concept of alimony. The new concept was to rehabilitate the dependent spouse to become economically self supporting. If the spouse seeking alimony is unable to support her or himself and if the other party has an ability to pay, alimony may be awarded based upon twelve factors listed in the statute. The award is usually to be considered "rehabilitative" and therefore will end after a specific period of time. In exceptional circumstances, alimony can be awarded for an indefinite period of time if (i) due to age, illness, or disability, a spouse cannot reasonably be expected to become self supporting or (ii) even after the party seeking alimony has made as much progress toward becoming self supporting as can reasonably be expected, the respective living standards of the parties will be unconscionably disparate. Like many indefinite alimony cases,Lee vs. Andochickwas fought on the issue of "unconscionable disparity."

Mr. Lee was employed by a brokerage firm and earned at the time of trial, $1.7 Million per year. Wife, a dentist earned $267,000. Therefore, husband earned over 600% of wife's income. The parties lived a lavish life style, enjoying extraordinary vacations, traveling on a private jet and a great deal of household help and assistance. The Appeals Court remanded the case to the trial court because it had not articulated how the parties' standards of living would be unconsciously disparate. It focused on the heavy debt that husband had accrued, amount of child support and payments he was to make as part of the marital property award. This opinion reminds me as a Maryland Divorce Attorney, that indefinite alimony requires a fact intensive inquiry that does not end with establishing disparate income. Furthermore, unconscionable disparity must be evaluated in the context of both the child support and marital property awards.
Lee vs. Andochick