January 20

Ask a lawyer 04: Fair Divorce

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In this episode, Blaine Clooten invites Andrew McGuire to discuss some of the top questions coming up around divorces.


Some of the highlights they hit on are: 

If you're interested in listening to this episode, you can do so by heading over here and listening or the transcript is below for your reading pleasure.  

Enjoy the listen (or read) and we'll see you next time!


Transcript


Blaine Clooten

This is Blaine Clooten with Andrew McGuire for Ask a Lawyer. We are here in conjunction with fairpunishment.org and our Twitter handle. And what's the Twitter handle Andrew?

Andrew McGuire

@mylegalcenter, where you can ask all your legal questions, which is not legal advice. I'm not a lawyer. I am the layman similar to you, wondering what the answer to many of the questions that you have.

Blaine Clooten

All right. And I'm Blaine Clooten. I am an attorney, but I'm not your attorney. So if you have questions at the end of this, then please contact an attorney. This information is for general use only. It's not considered legal advice. So with that, Andrew, what's our topic for today?

Andrew McGuire

Yeah. Before I actually ask you is question, I do want to reiterate the fact that I am coming up with the questions. Blaine is not preparing answers. It's on the fly and these episodes come up when we have questions that people are asking and need answers to. So the topic and the question that we're getting into is, how do I protect myself financially from my spouse?

Blaine Clooten

How do you protect yourself financially from your spouse?

Andrew McGuire

Yes. That's the question. That's the topic.

Blaine Clooten

Okay. So that's a good question because I need a little more context to know what they need to protect themself financially from.

Andrew McGuire

Well, I can get into it a little bit more because that's the main question that keeps coming up, but it's really tied to another topic, which is what is a fair divorce settlement?

Blaine Clooten

Okay. Now we're talking. So.

Andrew McGuire

Yeah. That's the topic.

Blaine Clooten

Because I was going to say, so if we back up for a second on the idea of protecting yourself from your spouse. So first of all, you're married, right?

Andrew McGuire

Yeah.

Blaine Clooten

So if you're needing to protect yourself from your spouse, we got something wrong.

Andrew McGuire

Yeah.

Blaine Clooten

We have a failure to launch issue, right?

Andrew McGuire

Right. Something's wrong when the first question you think of is, how do I protect myself from my spouse? So that seems weird because you're in a.

Blaine Clooten

Right.

Andrew McGuire

Partnership. I have a ring on. That doesn't make any sense.

Blaine Clooten

So one of the ways that I explain relationships to people or marriages, I should say, is that a marriage is a, like you just said, it's a partnership. So it's the same protected, legal status as most businesses have. And so what ends up happening is that you're able to purchase and sell property, take out loans, do all the types of things that you would be able to do individually, but you qualify for better rates, you can get better property because you're married. Because you have that dual income and you have basically a co-signer in every single one of those things that you're buying. The same thing happens in a divorce generally.

Blaine Clooten

So most states have a requirement, whether you're a community property state, or a non-community property state, or something else in between. Almost all of them have a requirement that there's going to be some sort of equitable distribution of property. And so if we want to understand a fair resolution, the first thing that we really need to understand is what property is out there, what actually exists. And the only way that we can do that is by gathering our documents and going through that analysis.

Blaine Clooten

So the first thing that you need to do is go and get your hands on every single financial document that you can get your hands on. This is retirement accounts, bank accounts, anything that has numbers on it and has a value, you need to put your hands on there so that you can understand what you're trying to deal with. Because if you don't understand what is out there and what exists, then the only way for you to get at that is through the discovery process once the case is filed.

Andrew McGuire

Okay.

Blaine Clooten

You'll never really understand what a fair settlement is until you know what actually exists.

Andrew McGuire

Well, true. But some of these other questions are leading down a rabbit hole that nobody really wants to go to. I'm going to ask them anyway, because someone's asking, but can you legally hide money from your spouse? So if you're going to go get all these accounts with dollars associated to them, right? And say, "Here's everything that exists." So you know what to protect yourself from, if this were to happen, can you actually go and hide money? So don't answer that yet, but that's one bucket. Then there's the other end of the spectrum, which is, can I empty my bank account before a divorce?

Blaine Clooten

Okay.

Andrew McGuire

So there's the two ends of the spectrum, right? Of these are questions that are asked quite a bit that I want to get answered. And then I want to go down a few different directions with this. But that's the first part of hiding money and then just, I'm just going to empty it all.

Blaine Clooten

Sure. So at the end of the divorce case, if you've hidden an asset and it's later discovered, then most likely that divorce case can be reopened and that property redistributed. So in the end, at the end of the divorce case, it usually says that this is all the property that is marital assets of these people. And so if you haven't included everything, number one, you're committing perjury. And number two, you can set yourself up to reopen up the case. So in this context where we're going to hide assets, I don't know where you would hide them.

Blaine Clooten

You're going to hide them under your mattress, or you're going to hide them in a shell corporation, in the Cayman islands. I don't know how exactly they're going to hide it. But if you're sophisticated enough to hide assets and get away with it, you're probably not typing it into Google. You probably know how to do it already. I would just say in general, you should not hide assets. It's against little law. It's against the rules for divorce. So please don't do that. But if you do, expect that you're probably going to get caught.

Blaine Clooten

Emptying the bank account before the divorce starts. Yeah, technically you can do that, but it's going to be considered a marital asset and that's going to be part of your distribution, probably, if you run off and use it to buy another asset, then that asset's just going to become a marital asset that's part of the divorce. If you run off and go and pay a bunch of bills, then great. You've just reduced your marital debt, which was going to get assigned to somebody anyway. So I guess, in the other hypothetical, we're going, and we're taking the money and going to Vegas and putting it all on block.

Andrew McGuire

Yeah, I don't know what else we're doing. That's an asset.

Blaine Clooten

You get the chip set.

Andrew McGuire

The trip. Right.

Blaine Clooten

You can technically do that, but it's a bad idea.

Andrew McGuire

Well, it's a bad idea for a lot of reasons.

Blaine Clooten

I would not advise somebody to do that. This not legal advice. You need to go talk to your own attorney and find out whether that attorney's telling you to go ahead and empty your bank account or not.

Andrew McGuire

Yeah. The other piece of this, to going back to my, one of my original questions, what's a fair divorce settlement? And that just depends on, I mean, a lot of things, right?

Blaine Clooten

Yeah.

Andrew McGuire

But I think that's the most important question out of this whole subtopic of questions.

Blaine Clooten

Right. So what is fair? In order to know what is fair, first we have to assess what exists. And then a fair settlement is going to roughly do an equal distribution between the assets and the liabilities. So on one side of the ledger, we're going to have the assets. On the other side of the ledger, we're going to have all the liabilities.

Blaine Clooten

So let's just say in the hypothetical where we have one house that's valued at a hundred thousand dollars, we have one car that's valued at a hundred thousand dollars, most likely one person's getting the house and one person's getting the car. That's going to be a fair settlement because they're getting roughly equal value. But in the hypothetical where we have one house that's a hundred thousand dollars and we have one debt that's a hundred thousand dollars.

Blaine Clooten

Maybe it's a card debt for a hundred thousand dollars, the person taking on that debt is probably also going to receive the house because they have to be equal. You have to receive the same amount of liabilities as assets. So if you get a hundred thousand in debt and a hundred thousand in assets, then your net is zero. That's going to be the same as your other spouse. They're going to have a net zero. So whatever it is, the net net needs to be roughly the same.

Andrew McGuire

Okay. Got it.

Blaine Clooten

That's that's what's fair.

Andrew McGuire

Yeah. And the other sub-question here that I have is just around, what should a man ask for in a divorce settlement? Is that different than what a woman should ask for in a divorce settlement? Or does it really matter? Because two men might be married or two women might be married, but the questions more about the sex of the party. And to me just, I mean, it seems like a pretty simple answer. It doesn't matter, but you tell me.

Blaine Clooten

Well, in almost every state, as I've mentioned, it's going to call for an equitable division.

Andrew McGuire

Right.

Blaine Clooten

When a person is asking, what should a man ask for? And we're assuming that the question is around property and not around custody, right? Because.

Andrew McGuire

Yeah.

Blaine Clooten

What they should ask for, for custody, that's a whole different topic area, but this answer is going to depend primarily on whether or not the man is paying spousal support. And I know that that may be gender bias, but as a point in fact, the majority of cases that I've seen, if there is spousal support ordered, it's almost always the male is paying it toward the female where the female has been mostly a homemaker in raising the children. And now they're getting a divorce. She doesn't have the skillset to reenter the workforce immediately.

Blaine Clooten

So whether you're going to be paying spousal support as a maintenance to so that she can maintain the same lifestyle that she was accustomed to, or whether you're going to transition her so that she can get reeducated and reenter the workforce. Either way, she's going to need spousal support for some period of time, that is going to counterbalance against what type of property division you get. It's a possibility that in that scenario where there's spousal support, the spouse that is anticipated to receive spousal support may receive more property rather than spousal support.

Blaine Clooten

So maybe they receive the house that is free and clear, so they don't have to make any payments on it rather than receiving spousal support payments every month. So it's really going to depend. So what's fair for a man is going to depend primarily on what is the rest of the assets at stake, what are the liabilities and whether or not they're paying spousal support. And the inverse of that is also true for women.

Blaine Clooten

So what should a woman ask for in a divorce settlement is also then going to depend on, does she need a house for the children, is she going to be the custodial parent or has she been working. And she's going to have to provide spousal support to the husband. So then maybe she's giving him more of the property to offset the spousal support. It's so case by case specific that I can't really get into it without more of a hypothetical with specific facts.

Andrew McGuire

Yeah. Well, those were my questions for today.

Blaine Clooten

Okay.

Andrew McGuire

So I don't have any more specific questions around this topic, but it is interesting one and the way these are asked to get an answer, when obviously everything's so specific in case by case, but those are the questions for today.

Blaine Clooten

I know that it's rough, because I'm saying that it depends and it's specific and people want to go out and they want a silver bullet where they can say, in every single case I should ask for this. Well, there are some certain things that you should ask for when you kick off your divorce case. Number one, you should ask for attorney fees even if you start out the case, representing yourself. Because in a lot of states, if you don't plead it initially, then you can't go back and amend it and say, "Oh, I want attorney fees now."

Blaine Clooten

You should make sure that you list all of the property and debts at issue in your initial pleadings, in your initial petition or whatever it's called in your state. So that if you end up getting a default, if the person just fails to respond and you do a default judgment that everything that you've asked for in your initial pleadings are what ends up being awarded. So there's some certain things that you should do on the front end, but the most important thing that you can do to arm yourself in any one of these cases is to talk to in an attorney.

Blaine Clooten

Because the attorney's going to be able to give you some analysis and take a step back and say, "Well, these are the properties that you have. These are the debts you're going to have. And this is what the court's probably going to do." The biggest reason why attorneys are so valuable in different cases as opposed to doing it by yourself, which people do all day, every day, especially when they agree on stuff is that you want the attorney that is going to know the judge that you're in front of. You want to know how they're going to look at your case.

Blaine Clooten

They're going to want to know how they're going to respond to the arguments that you're making. And especially, in cases where it's custody, whether they're going to agree with arguments that you're making or not. And that's the value that the lawyer adds because they're in front of that judge all the time. Now, if you're in front of the judge all the time, there's probably a bad reason for it. And you probably don't want to be in front of that judge. You should probably disqualify that judge. Otherwise, you're probably an attorney.

Andrew McGuire

Okay. Well, I appreciate the info because it's helpful to understand why. But yes, I didn't realize that. Being in front of the judge every day, all day as the defendant is not a good thing.

Blaine Clooten

Right.

Andrew McGuire

But as the lawyer, it's a good thing. So yeah. Thank you for qualifying that.

Blaine Clooten

So the how to protect yourself financially, the most important thing that you can do is you can gather all those documents and then be thorough in your deposition process to make sure that you're really understanding all of the assets at issue. Otherwise, if we're asking about how to protect yourself financially from my spouse, then you need to keep your credit separate so that you each have your own independent credit cards.

Blaine Clooten

You could also have your own independent bank accounts. But on the front end, before you get married, you should talk to an attorney about a prenuptial agreement. And the reason that those are so effective is because they work and you pay an attorney a lot of money to make sure that they are accurate and that they've stated everything that you need them to state. So that's another way as a preventative measure, you can take an action before you actually get married. Aside from making sure that you're marrying the person you love and trust.

Andrew McGuire

Yeah. That would be the most important thing and where you should start, which is a whole other episode for another time.

Blaine Clooten

All right. Well, if those are the questions, those are the questions. This is Blaine Clinton for Andrew McGuire. Andrew, thank you for joining me and asking these questions that are being posed. If other people have questions, where should they go?

Andrew McGuire

Twitter @mylegalcenter. Post your question, we'll get to it. Please post away and we will respond accordingly.

Blaine Clooten

All right. I like your background more than mine. It makes me jealous. We're going to have to switch studios sometime.

Andrew McGuire

Yeah. We'll switch studios and I can take a picture of it and snap it and then you can just have a virtual background of the same thing. Lets do that.

Blaine Clooten

I'm going to green screen. All right. This has been Ask a Lawyer. Send your questions and we'll answer them. Thank you for joining.





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