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Articles Posted in Division of Assets

Free-Scarlett-Johansson-Picture-300x225As it is has become apparent Scarlet Johansson has filed for divorce. Her husband Romain Dauriac is from France.  He does not appear to want to contest the divorce issue but seems likely to contest the Child custody issue.  He and Scarlet share a daughter who is a Toddler named rose. He states that he is the primary care giver of the child.  He further states that Scarlet is always on a film shoot and he has to make his schedule work for her while she films. Scarlet appears to be taking the high road according her statement to public.  She states that ultimately her daughter will know how her divorce went down.  Clearly Scarlet does not want to make any of her divorce issues public.  However, due to the public nature of her career how can she really argue she wants to make her divorce private when she is such a public figure.  Her statements about having a private divorce may be based on false hope rather than reality.

As far as the child custody issues go there appears to be a big issue with regards to international child custody laws.  As Romain is from france.  If both parties can agree as to a schedule of visitation and custody then the international child custody issue will not be an issue.  However, if Scarlet and Romain cannot agree as to any schedule, then who will become the primary custodian of the child, Rose will be a very important issue. And how that will be determined by the Court will be very factual sensitive.  The Court will have to investigate who partakes in the day to day upbringing of Rose and who can maintain that type of contact with the child going forward.  The law Family Courts use is the “Best Interest” standard.  There are many criteria the Court will assess and then determine what is in the Best Interest of Rose and who should she reside with.  The Court can also make a custody determination giving primary custody to a parent that does not live in the United States such as Romain.  Since France is part of the Hague Convention Treaty Courts in the United States can freely decide that a child can reside outside The United States without much fear of any risk losing jurisdiction.

Secondly, the Johansson divorce will involve some property issues.  As Scarlet is a high profile actress who makes millions of dollars for her movies it is apparent she makes substantially more money than her husband Romain who is a curator of Art shows in New York.  Normally there would be a very big Spousal support issue where Scarlet would be paying her husband Romain thousands of dollars of support for a period of half of the length of the marriage. But both parties signed a prenuptial agreement which probably contracted away any spousal support issues the couple might face during their divorce proceedings.  Therefore Romain probably will be given a much smaller settlement of any assets Scarlet earned during their marriage.

It should not be the point of a prenuptial agreement to avoid all financial responsibility to the other spouse.  As the family law code sections are abundantly clear about is that they do not want the spouse who is not on the receiving end of the prenuptial agreement and stands not to benefit at all from the prenuptial agreement that fairness is the key.  The family law Code is clear that is wants equity and fairness in the protection of marital assets.  Although a party can contract away their assets and debts through the prenuptial agreement it is vital to the integrity of the family law judicial system the one party does not blindside another less fortunate party and take off with all the loot.

California legislature has codified these prenuptial statutes under family code section 1612(c) and section 1615 that unconscionability and independent legal representation are a mandate to making an enforceable prenuptial agreement. One party cannot unduly take advantage of another party through one sided and lopsided contracts that give the other party nothing while the other party hauls away all the money.  If both parties and more importantly the party who has the assets to protect can enter the prenuptial setting with an open mind to make the contract fair and equitable that party will avoid unnecessary litigation down the road.  People, however, often enter these prenuptial agreements with a greedy mindset and try either to outsmart or blatantly take all the assets away from the other party.  This leads to an obvious disparity in the contractual agreement and creates a huge public policy concern.

That is the reason that an independent legal counsel is almost mandatory for the legitimacy of the prenuptial agreement to work.  Without the independent legal counsel for the party not receiving a financial gain at the outcome of the prenuptial agreement would create innumerable unconscionable agreements that would be too easy to enter into and create too many unequally bargained contracts.

Former Los Angeles Dodgers owner Frank McCourt’s ex-wife, Jamie McCourt, said the $131 million divorce settlement she agreed to last year is unfair after her ex-husband sold the team for $2.15 billion.

Jamie McCourt, in a request filed Sept. 24 in state court in Los Angeles, said the settlement is based on fraud and asked that it be set aside. Frank McCourt, as late as Aug. 31, 2011, declared under penalty of perjury that the fair market value of their assets was less than $300 million, according to Jamie McCourt’s request.

Frank and Jamie McCourt settled their divorce battle in October 2011 after two years of litigation, including a trial over the validity of their postnuptial agreement. Jamie relinquished her claim to be co-owner of the Major League Baseball team in exchange for $131 million. The sale of the Dodgers in March left Frank with $1.7 billion, Jamie McCourt said.

In today’s world, more and more couples are opting to stay married in hopes that the value of their homes rise. Indeed, thousands of home-owning couples owe more on their mortgages than their homes are worth. This is especially true in states such as Nevada.

Indeed, 60 percent of Nevada homeowners who have mortgages owe more than their homes are worth, says the Santa Ana, Calif., analysis firm CoreLogic. Because of this, more couples are staying together for the sake of their home only because they cannot afford to get out of the whole.

There are other couples who will go through with the divorce but continue to own their home jointly in hopes that the market will improve years later. But jointly owning a property after divorce is a cause of concern. Specifically, the newly divorced couple will have to decide who will pay for what. Who will cover the cost of the mortgage, taxes, insurance, utilities, repairs, maintenance?

The divorce battle between Seattle Mariners co-owner Chris Larson and his soon to be ex wife, Julia Calhoun is unfolding even deeper. Last month, a trial valued Larson’s share in the Seattle Mariners at $641 million. King County Superior Court Judge, William Downing, based the ruling on testimony of two sports team valuation experts, and compared the Mariners favorably to the Texas Rangers, which sold for $593 million and the Houston Astros, which sold for $610 million, during the past year.

With a 30.6% share of the team, Larson remains the largest minority owner in the Mariners. His ownership is exceeded by the majority owner, Hiroshi Yamauchi, 84, who owns 55% of the team.

Larson’s wife originally sought a 50/50 split in assets for an approximate total of $300 million. However, the court ruled that a substantial part of Larson’s joint estate — Mudville Nine Inc., the company he used to purchase his stake in the Mariners starting in 1992, was his separate property and not subject to division with Calhoun. The asset has a value of $196 million with a discounted market value of $176 million if sold on its own as a minority share in the team.

The question of who owns the Dodgers will soon be determined next year in the latest saga of the McCourt divorce. The divorce trial is expected to take place in the Spring or Summer of 2012 and last about 30 to 45 days.

To recap, Frank McCourt claims sole ownership of the Dodgers while soon to be ex-wife Jamie claims that she owns half. It is unclear when the Dodgers will emerge from federal bankruptcy protection. After the Dodgers took a $150-million bankruptcy loan from Major League Baseball, Frank McCourt’s attorneys said the team had funding to operate until well into next season.

Although Superior Court Judge Scott Gordon could decide ownership of the team before the bankruptcy proceedings end, he emphasized Wednesday that “the ultimate question of the disposition of the Dodgers” would need to wait for a resolution in Bankruptcy Court. Until the issue gets out of bankruptcy court, the team cannot be sold through the family law court.

An excellent article published earlier this month by Fox Business News outlines some of the pitfalls that dissolving a marriage holds for one’s credit rating. The article makes several points that anyone contemplating an Orange County divorce would be well-advised to keep in mind.

First and foremost – and, it must also be said, unfortunately – it pays to be a bit wary of your soon-to-be-ex while going through the divorce process. “People do unpredictable things during emotional times,” the article notes, citing a credit counselor. It goes on to describe a woman whose husband apparently ruined her credit on purpose by failing to honor a number of bills he had promised to pay.

From the perspective of an Orange County family law attorney, this is a reminder of why care and caution are always important. If a couple holds joint credit cards or other accounts it is critical that there be a written understanding of who will become responsible for what, and equally critical that each party prove to the other that its joint credit obligations have been met. Changing the names on everything from utility bills to in-store loyalty cards can be a surprisingly lengthy and frustrating process. The sooner it begins – and the more carefully each party monitors it – the smoother it is likely to be.

Last spring I wrote about an obscure tax provision known as the “Innocent Spouse Rule” and the potential effect it can have on an Orange County divorce settlement. Needless to say, that is far from the only tax issue that can arise when one is contemplating a divorce. Recently, the Wall Street Journal’s Smart Money column offered some useful pointers on major (and, in most cases, more common) issues that also bear consideration.

While state law governs many aspects of divorce – such as the community property rules that apply here in California – many of the tax implications of a Los Angeles or Orange County divorce are ultimately federal in nature.

As the Journal outlines, a key tax aspect of divorce involves what are known as Tax-Free Transfer Rules. “The general rule is that you can divide up most assets… without any federal income or gift tax consequences,” the paper notes. If such transfers take place after the divorce becomes final, however, it is important that they be written into the settlement. If, for example, the settlement gives ownership of the house to one spouse but gives the other a share of any future sale price, that cash would come to the second spouse tax-free because the sale was made “pursuant to your divorce or separation agreement.” Similar, though often more complex, rules lay out specific treatment for stocks and bonds and for any capital gains realized from them.

The seemingly endless, and endlessly acrimonious, California divorce of Frank and Jamie McCourt is due back in Los Angeles family court later this month. According to Bloomberg News, a judge has scheduled the couple’s latest hearing to consider Jamie’s request that Frank be forced to sell the Los Angeles Dodgers immediately “so they can divide the proceeds.” The agency reports that the judge “will at the same hearing consider an earlier request by Jamie McCourt for information about the Dodgers’ business.”

Frank, in turn, is asking the judge to rule that Jamie has no right to be involved in the media rights deal he is reportedly close to completing with Fox Entertainment.

And so it goes. Legally-speaking the couple have been divorced for some time, but a lengthy fight over a post-nuptial agreement (the court eventually ruled in Jamie’s favor – throwing the agreement out) as well as deep differences over the future of the baseball team have prevented them from reaching a final settlement.

When last we left Frank and Jamie McCourt – a couple who, over the last 18 months, have engaged in what is arguably the biggest, bitterest and highest profile Southern California divorce in recent memory – Jamie had just won a major victory with a Los Angeles family law court’s ruling that a disputed post-nuptial agreement is valid and she, therefore, is a co-owner of the Dodgers.

That made last week’s headline in the Los Angeles Times a bit surprising: “Frank and Jamie McCourt working quietly on a settlement.” ‘Quiet,’ ‘settlement’ and ‘McCourt’ are words we are not accustomed to seeing together in the same sentence. The confluence of that headline and Opening Day made this seem like a good time for an update.

The Times report says attorneys for the couple sought and received postponement of a hearing scheduled to take place early next week regarding settlement issues. The hearing had been scheduled to consider Jamie’s demand “that Frank be ordered to provide her with extensive financial documentation regarding the Dodgers’ business operations.” The Times notes that media reports over the winter have indicated that Jamie is willing to cede her share of the team back to Frank in exchange for a payout “but she has balked at the proposals he has offered” so far. The postponement request, coming after about a month of renewed settlement talks, may indicate that the two sides are making progress.

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