Highsmith v. Highsmith: Sometimes, equitable division just isn’t fair.

by Andrea Knight

In a decision entered September 12, 2011, the Georgia Supreme Court affirmed a decision that illustrates the different results obtained from using premarital funds to buy a traceable asset like real estate versus transferring premarital funds to a joint account to buy real estate.  In this case, Mrs. Highsmith contributed $210,000 of premarital funds while Mr. Highsmith contributed $50,000 of premarital funds.  Because Mr. Highsmith’s funds went to real estate, he was able to keep his $50,000 plus an investment return as nonmarital property.  Mrs. Highsmith, on the other hand, lost the $210,000 she put into joint accounts in order to fund joint real estate investments.  There’s a reason why the source of funds rule exists, but it is sometimes a little harsh.  Here, at least, the trial court had ameliorated some by giving Mrs. Highsmith a little extra out of the marital property in its equitable division award.  There is some indication that there might have been a difference result had Mrs. Highsmith traced the movement of the nonmarital funds out of her separate account, through the joint account, and out into specific properties.

Ward v. Ward: More Cold Water on Prohibitions of Overnight Visitors

by Andrea Knight

In a decision entered May 31, 2011, the Georgia Supreme Court entered another opinion striking down a so-called morality clause prohibiting parents from having a boyfriend or girlfriend spend the night while a parent has custody of a child.  However, as with the prior ones struck, the provision differs rather significantly from the standard language employed in many divorces.  And as with some of the prior clauses struck, it comes to us out of the Griffin Judicial Circuit, a circuit that over the past years has been prone to both unusual morality clauses and to morality issues on its bench – although we believe that both of those issues are now behind the Griffin Circuit.

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How to Front Load Alimony without Triggering Recapture

by Andrea Knight

Alimony lookback rules remind me of memorizing rules for oddly spelled words originating in Old or Middle English, such as “I before E except after C”.  Simple enough, but odd.  I think that is because the look back period makes terrific sense from a tax policy perspective, but feels counterintuitive when negotiating an agreement.  However, we have courtesy of the tax code a bright line test we should be able to feed into agreements.  It’s bothered me that when the issue arises, I end up with rough calculations.  If we have a formula to calculate mass-energy equivalence, surely there’s a formula for this simple issue?

For the uninitiated, the three year look-back period means that you can’t pay all alimony up front and keep the tax deduction because it is simply gussied up property division attempting to take advantage of the alimony tax deduction.  Which, typically, is precisely what is happening.  But within limits, we can relocate a chunk of the asset division to alimony without violating the three year look-back period.  This perfectly legal tax arbitrage gives both parties a little extra cashflow in the year of the divorce.  Below I’ve calculated how to maximize the front loading within the limits of the Internal Revenue Code.

The short answer to maximizing front loading where total alimony is at least $37,500:

(Total – $37,500) / 3 = Year 3 Alimony.

Year 1: Add $22,500.  Year 2: Add $15,000/

For those who are interested,  I’ve shown my work as well as recapture formulas below.

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The Assumptions Behind Plain Language

by Andrea Knight

 

Ran across this lovely speech by Peter Butt from the University of Sydney.  I wanted to draw out the highlights so I’ve edited the original speech for a quick look.

“Suppose you want to impose on a tenant the obligation to repair the leased premises.  ”The tenant must repair the premises.”  ’Premises’ would be defined elsewhere and need not be repeated.  No need to expand on the term ‘repair’: it is an ordinary Enlgish word whose meaning when used in leases has been elucidated by many judicial decisions.

“Yet compare that wording with the verbal excess that appeared in the ‘repairing’ covenant that gave rise to litigation in England.

[The tenant shall] when where and so often as occasion requires well and sufficiently… repair renew rebuild uphold support sustain maintain pave purge scour cleanse glaze empty amend and keep the premises and every part thereof… and all floors walls columns roofs canopies lifts and escalators… shafts stairways fences pavements forecourts drains sewers ducts flues conduits wires cables gutters soil and other pipes tanks cistern pumps and other water and sanitary appartus thereon with all needful and necessary amendments whatsoever.”

“Probably, the verbosity was prompted by a desire to be legally precise.  If so, it failed, because the clause still ended up in court in a dispute over meaning.  This demonstrates one of the great misconceptions of traditional legal drafting — that somehow a complex, traditional style is more precise than modern, plain language.

“The assumptions of plain language [and the studies supporting these assumptions]:

1. 1. That is possible to effectively express legal concepts in plain language, without loss of certainty and precision.  
   
2. 2. That plain legal language saves money.
   
3. 3. That judges prefer plain language.  
   
4. 4. That clients prefer plain language.

Full notes from the lecture including footnotes available here:

http://www.slideshare.net/tomwinfrey/private-legal-documentsdoc

Long v. Long: when custody pending in both Juvenile and Superior, the 1st filed takes precedent.

by Andrea Knight

Long v. Long (3/29/10) was a direct appeal filed by the mother of the children of multiple orders issued in a divorce action that effectively conflated a deprivation case pending in Juvenile with the divorce case in Superior Court, and then assumed jurisdiction over all pending matters in both cases in Juvenile.

The Longs were the parents of ten children who had been taken into protective custody by DFCS, with juvenile court proceedings still open.  Separately from the deprivation action, the Longs were also indicted for criminal charges related to their care of the children.

Mrs. Long filed for divorce in superior court, requesting custody of the children.  When the District Attorney learned that DFCS had plans to return four of the children to the custody of Mrs. Long, the DA sought and was granted the right to intervene in the divorce case.  The superior court then issued orders enjoining DFCS from permitting Mrs. Long to have any unsupervised contact with the children, and stayed the juvenile court from entering any orders contrary to the ruling in the superior court.

The appeals court reversed both the order granting the DA’s intervention and staying the juvenile court.  Juvenile had prior jurisdiction over all temporary custody matters due to the ongoing deprivation action.

(Trial court: Hon. J. David Roper, Burke Superior Court)

Michel v. Michel: Georgia Courts Have Authority to Divide Military Retirements When 10 Year Requirement Not Met

In Michel v. Michel (S10F0372, March 29, 2010), the court considered an appeal by the wife from a final divorce decree.  The trial court ruled it was preempted by federal law from dividing the military retirement benefits because the marriage was less than 10 years.  The Georgia Supreme Court reversed, noting that the federal statute specifically gave states jurisdiction over the division of assets in the event of a divorce.  The 10 year provision in the federal statute related solely to whether the federal government would make payments directly to the military spouse.  This limit on the payment mechanism “has no bearing on a state court’s authority to treat military retirement benefits as  marital property subject to equitable division, even when a marriage lasted less than ten years.”

Japan Solidifies Plans to Join Hague Convention on Custody Jurisdiction

by Andrea Knight

Today, the Japanese government confirmed it will move forward with its pledge to join the Hague Convention on the Civil Aspects of International Child Abduction.  Diplomatic pressures have been mounting for Japan in its relationship with Europe and North America as Japan and Russia continue to be the only members of the G-8 who have failed to ratify the treaty.  As divorce attorneys in Atlanta who represent Japanese nationals and those married to them, we hope that the Japanese government will swiftly follow through on its pledge.  It can be difficult to focus a case on the bests interests of the children of the marriage with the specter of kidnapping hanging over the courtroom.

There also continues to be speculation in Japan that this move towards the Hague Convention might also lead to the reform of Japanese domestic custody provisions.  In Japan and many east Asian countries, the child following the divorce typically would be awarded to one parent.  The other parent would only be permitted contact at the custodial parent’s discretion.  However, many families in Japan have already begun to ignore tradition, electing instead to enter into formal visitation and joint custody agreements.

Todd v. Todd: Supreme Court Eliminates Right of Direct Appeal of Custody Decisions in Most Divorces

Effective January 1, 2008, the Georgia General Assembly via House Bill 369 rewrote all of Georgia’s child custody statutes.  From the practical perspective of daily life as a divorce attorney in Atlanta, the biggest impact was the new (and often irritating) requirement to file a parenting plan.  Luckily, Cobb County divorces and Fulton County divorces have been largely exempt from the extra paperwork, at least in uncontested cases, because the judges in those counties have been flexible with Marietta and Atlanta divorce attorneys who they trust to incorporate all statutory required findings of facts even if not following the cumbersome Uniform Superior Court’s form parenting plan.

As time has passed, it appears to me the biggest substantive change from HB 369 is the new right to a direct appeal for family law litigants.  Prior to HB 369, OCGA 5-6-35(a)(2) required an application for discretionary appeal for any judges regarding divorce, alimony, child custody, and other domestic relations case.  Family law attorneys including State Senator Seth Harp have advocated for the right to direct appeal in all domestic relations cases, and in its initial draft, HB 369 indeed gave the right of direct appeal in all cases.

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Another tale of two marriages & FaceBook

Today’s Atlanta Journal Constitution has a story about a wife who made an upsetting discovery on FaceBook. When faced with some pretty good evidence that her husband was having an affair, the wife went on the paramour’s FaceBook page (which was open to the public) and found wedding pictures of this woman with her husband! A custody battle ensued and culminated when the husband snatched the children and took them to live with his 2nd wife. Now, the first wife claims that the only way she can see her children are on the 2nd wife’s FB page while she awaits a resolution of the custody case. I’ve always felt like some folks just want to get caught, but posting wedding photos on FB really takes it to a new level!

New law allows jurisdiction over out of state parties

SB 491 was signed by the Governor and went into effect on July 1. This bill was sponsored by Sen. Bill Cowsert at the request of the Family Law Section of the State Bar of Georgia. It clarifies that Georgia courts can continue to exercise jurisdiction over individuals who move out of state to enforce divorce, child support, and child custody orders by contempt. Under prior law, once a party moved away from Georgia, it was not possible to get jurisdiction over that party in some circumstances, leaving some folks without a way to enforce the court’s order.

The bill was amended to include the language from HB 545 which establishes a process to certify process-servers, allows service in gated and secured communities, and tolls the time to answer until after proof of service has been filed with the court. This language will hopefully facilitate service of pleadings.