“I’M DIVORCED: NOW WHAT?” by Justin O’Dell

So Dick and Jane got divorced.  Jane has the kids on a primary basis with Dick having visitation.  Before they each settle back into their own lives, each one of them has some important “I’s” to dot and “T’s” to cross related to their respective estates.

First and foremost, Dick and Jane should each immediately update their life insurance policies, 401k policies, IRA policies and any other benefits or plans wherein a beneficiary has been named.  Their divorce may require them to name each other as the beneficiary (or a trustee beneficiary for the children) for a certain amount. If so, that provision should be followed.  However, all other policies and accounts need to be immediately updated.  If, for example, Dick were to die and Jane was still listed as the beneficiary of a life insurance policy or IRA, the policy or account is going to pay out to her.

The second thing each needs to do is update their Wills.  In the instance where a party has a Will executed while married, but then gets divorced, the Will is not revoked.  However, the spouse is treated as predeceasing the maker of the Will.  This is a safety net for the parties in the event that they do not update their Wills and avoids the draconian consequences seen with life insurance and the like, but the situation is still rife with potential problems.  First of all, the Wills created as a married couple probably created a Guardian for the children and a person to serve as Trustee over any money left to the children.  Either person may wish to revisit that decision.  If the parties had named Jane’s sister while married, Dick may want to change Trustees of money he leaves to the children to someone from his own family.  As for the Guardian, the opposite spouse would be the presumptive guardian of the children if one of them died.  However, when that second spouse died, the Court would make a decision based on the person appointed in that spouse’s Will.  It is imperative that each side make an expression as to whom they would wish to have in that role.

Thirdly, both spouses need to make a note about their tax status and future filings.  The parties have probably been filing joint returns.  Now as separate tax filers, they are no longer both benefitting from certain deductions.  One spouse may be able to file head of household, one may have the dependency exemptions over the children and one of them may have the mortgage interest deductions.  If one is paying alimony to the other, it may be tax deductible to the payor and taxable to the payee.  Both Dick and Jane may want to speak with their CPA and tax preparer to review their withholding status and also to plan to set money aside for future taxes.

Lastly, Dick and Jane may want to start a diary or journal of the various dates, deadlines and obligations arising under the decree.  It might be beneficial to keep a calendar regarding the dates visitation and parenting time is exercised and the dates when it is swapped.  Each side may wish to keep a log of any disputes and of the other parties’ attendance at the children’s events, activities, conferences and the like.  Often times parties will act like this sort of journaling is unnecessary under the belief that “We are getting along and working together, so I don’t need to arm myself for future court.”  Those parties are well-served to remember that the couple also exchanged wedding vows which contained a host of promises and commitments, yet wound up in a divorce.  Life changes and situations certainly present themselves which neither party anticipated.  It is better to be ready than to be caught off-guard and guessing.

DICK & JANE “FINAL TRIAL: PART II” by Justin O’Dell

As we continue to look at Dick and Jane and the topic of divorce, we have moved through a temporary hearing, looked at their discovery issues and we are now headed for a showdown.  Mediation – a final settlement conference – has failed.  The parties are preparing for a bench trial which presents the question, “What happens in a divorce bench trial?”

Many litigants don’t realize it, but a divorce is a civil action.  For example, when polling a jury, a lawyer might ask “Has anyone ever been a party to a lawsuit?”  Many potential jurors often say “no” even when they have been through a divorce.  Divorces generally follow the same rules of evidence and trial procedure as other civil cases.

The first bit of confusion surrounding a trial is the process of having the case set for a final trial.  Compounding the confusion is the fact that every County and every Judge within every County controls his/her calendar differently.  Some Judges specially set all of their hearings and cases, some Judges schedule a handful of matters for the same one or two day calendars and some Judges publish lengthy multi-week trial calendars and place cases “on call” for 2 or 4 hour advance notice of their trial start date and time.  In complicated or lengthy cases, the lawyers will endeavor to have the Court specially set the case as the only matter for consideration and commencing at a certain date and time.  This gives the lawyers the ability to arrange for witnesses and arrange their schedules.  However, special settings are problematic to the Court.  If the case runs longer than announced, the Court has to start bumping other matters.  If the case suddenly settles or is continued, the Court has an empty day with no cases to move.  As the case nears a final trial, it becomes all the more important that Dick and Jane have lawyers familiar with the local rules (written and unwritten) and procedures (written and unwritten) for getting a hearing and have a relationship with the Court staff and personnel to help schedule.

The second aspect of trial that is often most surprising to litigants is that the “aha” moments so often presented on television and in movies rarely occurs.  By the time the case is being finalized, the parties have conducted discovery, exchanged documents and evidence and perhaps even taken depositions.  Each side is very well versed in the arguments and positions that the other side will take and should be prepared to counter the same.

The trial process moves much like any other civil case.  Each lawyer will stand and make a brief opening statement.  The opening statement is not evidence, but is designed to outline to the Court the facts that the evidence will show.  In domestic cases, Judges most often want the opening statements by both lawyers to provide them with the following information:

  • Names and number of children affected and each party’s position on custody;
  • Assets of the parties and desired split for each;
  • Debts of the parties and desired split for each;
  • Income of each party and positions on child support and alimony;
  • Conduct and other factors which each party will ask the Court to consider in making a decision.

Often times, the Court will interrupt or engage in discussion with both lawyers during the opening statement in an effort to make sure that the list above is accurate and agreed upon (even if the division of the same is not) and to try and determine the number of items upon which the parties have agreed.  For example, by the time a case is being presented for a final divorce, it is not uncommon that the parties have already separated smaller bank accounts, begun using separate credit cards, divided up most personal property and will agree that each party can receive the automobile that he or she is presently using.

From a strategy standpoint, the presentation of the case is very different.  Jane is going to most likely try and present a “rear-ward looking” case while Dick will be presenting a “forward looking” case.

Jane is going to focus on the length of the marriage, the amount of time she spent outside of the workplace raising children and building Dick’s career and new business.  Jane is going to try and build a case that Dick’s affair and extramarital conduct was the cause of the divorce.  Her arguments will center upon maintaining the similar “standard of living enjoyed during the marriage” as justifying alimony and a high level of child support.  Jane’s arguments will also push that her contributions to the marriage have caused Dick to not only realize a high income now, but also to realize high income in the future.  As a result, Jane will argue that she should share in that which she helped to build.

Dick’s case is the opposite.  Dick will likely acknowledge Jane’s contributions to the marriage and assert that the division of the assets acquired during the marriage is in recognition of those efforts.  However, Dick is going to point out that Jane is now working or could now be working, able to support herself and maintain her own standard of living.  Dick will also try and show that the marriage had been on the rocks for a period of time before the affair and that the conduct may have precipitated the filing for divorce, but was not the cause of the end of the marriage.  He may point to Jane’s past infidelities as evidence   Dick is going to strive to demonstrate to the Court that his new business is based solely on his efforts and potential and not based upon his past income history.

The case will end and the divorce will be final.  Ultimately, Dick and Jane will be forced to move on.  For couples like Dick and Jane who divorce with minor children involved, the reality is that the divorce only ends the marriage, but the relationship survives.  Dick and Jane will have to learn to co-parent and cooperate.  If they do not, they will find themselves in Court with increasing frequency and could find that the children suffer as a result.

Next month, we will move off the topic of family law and look at some post-divorce estate planning issues that Dick and Jane will need to consider.

 

Final Trial

By Justin O’Dell

As we continue to look at Dick and Jane and the topic of divorce, we have moved through a temporary hearing, looked at their discovery issues and we are now headed for a showdown. Mediation – a final settlement conference – has failed. The question for the parties as they head to a final trial is this: Judge or Jury?

Georgia is one of only two states (Texas being the other) that allows for a jury trial in divorce cases. However, certain issues involving minor children, specifically custody, visitation and child support are not subject to jury resolution. Jury trials in domestic cases are rare. Most often, a jury trial is demanded in instances where the judge assigned to the case has certain tendencies and proclivities that are contrary to the interests of one party or in instances where the judge, in temporary proceedings, has dealt with a party harshly (for example, a temporary contempt citation) and the party does not wish for that temporary situation to influence the ultimate outcome related to alimony or property division.

For these reasons, it is critical that in the process of selecting counsel, Dick and Jane inquire about their attorney’s experience in the County wherein the case will be filed. Outcomes in divorce are variable by Judge, particularly in cases involving alimony and valuation/division of self-owned businesses. Some Judges tend to believe in and award alimony as a matter of course, unless given reason otherwise and others view alimony with skepticism and require a substantial showing of cause before making an award. In high asset cases, the judge assigned to the case and their tendency in this regard can have a net effect of tens of thousands of dollars on the parties. If Dick or Jane were to get a “bad draw” in the judicial assignment and the case cannot settle, a jury trial conversation and election may be the option of last resort.

A jury trial adds significant expense, at least double or more, when compared to a bench trial or trial before a judge. In addition to standard trial preparation, each attorney must prepare for jury selection, jury charges and jury verdicts. Even more importantly, Judges often allow a degree of informality to non-jury domestic trials, specifically related to the use of evidence, the flow of witnesses and testimony and behavior of counsel. A jury trial is presented and conducted with a higher degree of formality and requires a higher degree of preparation.

Although each jury is different and hard to predict, there are some tendencies that also emerge from juries. Generally speaking, a jury is likely to contain one or more members who have divorced. Those jurors are going to bring personal bias and experiences to deliberation that can have an effect on the outcome. These experiences can cut both ways. For example, a divorced female who received alimony might be inclined to make an award to Jane and a divorced female who did not receive alimony might be disinclined to do so, reasoning “I did not get it, why should she?” Divorced men become less predictable. Does a divorced male who had to pay alimony view the payment with resentment and “stand up for his fellow man” and deny Jane support or does he approach the situation with “I had to pay my share, so should he”?

The presentation to the jury will also have to be tailored by the lawyers. In presenting information about the value of Dick’s business, the parties will have to make sure that the expert witnesses are able to adequately convey all of the aspects of the valuation process. Typically, lawyers and experts are presenting this information to judges who have repeatedly heard about the valuation elements and are simply looking for the summary. Jurors have to be educated from square one. Common sense would also seem to dictate that a jury is going to want to get the information needed, make a decision and get home. The lawyers would then be careful about getting into too much of the fault issues, adultery and history of problems during the marriage. However, the popularity of reality television, gossip magazines and entertainment “news” shows teaches that everyone loves to hear about someone else’s train wreck.

Ultimately, for Dick and Jane, a bench trial is probably the most likely scenario. Even when faced with particular biases of a Judge regarding certain aspects of a case, the reality is that it can be easier to convince one person to change his or her mind than to predict the minds of twelve inexperienced strangers and change their inherent prejudices.

Next month, we will wrap up the Dick and Jane divorce adventure with a discussion about their final trial and trial strategies.

“Dick and Jane” Mediation by Justin O’Dell

As we continue to look at Dick and Jane and the topic of divorce, we have moved through a temporary hearing, looked at their discovery issues and we are now headed for a showdown.  Prior to a final trial in the case, the parties will be required to attend mediation in an effort to resolve the case.
Mediation is not the same as arbitration, though the two are frequently confused.  Arbitration is where the parties agree to submit the case (or parts of the case) to a binding decision by a third party that they have chosen or whom has been appointed.  Arbitration is an option for resolving a divorce, particularly in instances where the parties wish to maintain privacy and/or would like someone with unique experience or expertise to consider all or part of the case.  Mediation, on the other hand, is a settlement conference that may or may not result in an agreement.  Either party is free to terminate mediation at any time and for any reason.  Neither party can be compelled or forced to agree to anything at mediation.

Despite being non-binding, mediation is overwhelmingly successful at getting cases resolved.  Cobb County’s Office of Dispute Resolution generally reports an annual settlement rate of 60 – 75% in domestic relations cases.  The actual settlement rate attributable to mediation is likely higher as a number of cases settle in the days leading up to mediation or settle after mediation due to the progress made in that setting.
Mediation begins with the selection or appointment of a “neutral” or mediator who will facilitate the process.  Mediators in domestic cases are usually, but are not required to be, lawyers.  Many mediators are retired Judges from the Superior Court who bring with them years of experience in trying and deciding domestic cases.  Mediators receive initial training through the Georgia Office of Dispute Resolution and also have to maintain annual continuing education requirements.
The selection of a mediator is essential to the mediation process.  Dick and Jane won’t likely know anything about the mediator and his/her mediation style.  The lawyers for each will have a memory bank upon which to draw and will likely have conversations about possible mediators.  Some mediators have a laid back, facilitative style whereby they are able to pass settlement offers between parties and massage each party toward the other party’s viewpoint.  Other mediators respond well to emotional outbursts and have a “counselor” type approach and are able to listen and provide sympathetic ear toward the hurt, anger or frustration being displayed, while also encouraging the party to let that emotion drop and keep the process moving.  Lastly, some mediators are the more forceful “suck it up and get over yourself” type, who can provide each party with an effective dose of what the unsympathetic reaction of a Judge is likely to be.

Mediation will generally start in a group session.  The mediator will review the mediation process, the rules and the role of the mediator.  The parties and lawyers are all asked to sign an agreement indicating that they have read and understand the rules of mediation.  Most important among the mediation rules is confidentiality.  In order for settlement conferences to be productive, both sides must be comfortable making compromises.  If a party felt that a compromise could be admitted in Court, the process would break down quickly.  For that reason, any admission or compromise or settlement proposal made in mediation is confidential and not available for use in Court.

Some mediators allow for each side to make a general statement in the group session of the issues to be resolved.  However, this process can be detrimental to the mediation atmosphere.  Often times, the lawyer or the party will become accusatory and argumentative regarding their position on the issue.  For this reason, many mediators and lawyers prefer to skip the overview portion of the joint session and move immediately to the caucus portion.

During caucus, the mediator meets with each party and his/her lawyer privately.  In that meeting, the mediator wants to know three pieces of critical information:
1) What are the issues to be decided? (i.e. alimony, custody, child support, specific property division)
2) What is that party’s position on each of the foregoing?
3) What are going to be the stickiest issues or possible barriers to getting a deal done today?

Of the foregoing, the third item is critical to success.  There are some barriers and issues which will torpedo a mediation faster than others.  Some issues cannot, by their nature, be compromised.  For example, if the issue being determined is related to custody and the Mother truly believes that the Father is abusing the child and wants no visitation or strictly supervised visitation, but the Father adamantly denies the abuse and wishes to have extended visitation, it will be difficult to compromise the relative positions.  Alternatively, the parties may not have values on property or business interests completed.  The parties may be unwilling or unable to approximate values and cannot productively mediate the case.
It is essential that each party arrive to mediation prepared to settle, but also prepared in general.  Mediation, even if unsuccessful, can be treated as a dry run for trial and used to gain insight into the positions of the other party and to glean a reaction from a neutral third party.

Next month, we will move Dick and Jane on to a final trial?  The question to consider will be – judge or jury?justin2

 

Divorce: Discovery

As we continue to look at Dick and Jane and the topic of divorce, recall that the process is underway and we have moved past the temporary hearing into the discovery phase. This month and next, we will look into the discovery process and determine the information that each side will need to have to move the case into a posture for settlement or a final trial.

From Jane’s standpoint, the discovery process will center on two areas, the first of which will be personal to her but ultimately of little long term benefit to the Court and the second of which will be critical to resolution of the case by settlement or trial. Unfortunately, too many litigants become obsessed with the former and minimize efforts on the latter.

First, Jane is undoubtedly going to want information on the subject matter of Dick’s affair. There is no issue that this subject is relevant to the issue of divorce, but not to the extent that Jane might think. One’s emotion side drives this quest for information and it is not uncommon for someone in Jane’s position to seek answers to these questions:

  1. Who is she?
  2. When did it start?
  3. How long as it been going on?
  4. Is Dick intending to stay in a relationship with this person or was it a “fling?”
  5. Why did this happen?

While many of these questions are critical for Jane to resolve in order to move past the emotional issue of the affair, many of these answers will have little relevance in Court. Judges are very accustomed to hearing about misconduct and tend to try keep focused on the incomes of the parties and assets to be divided. The Court will want to be aware that an affair occurred, but usually only needs to know:

  1. When did the affair start?

    If the affair is post-separation, it did not cause the divorce unless it can be shown that the affair or relationship was contemplated or “in the works” prior to the separation. If the affair was 5 years before the separation and ended as quickly as it happened, it probably is not the cause of separation either.

  2. Has Dick used marital funds in furtherance of the relationship?
  3. Is the relationship ongoing and does it have the potential to impact the children?

It is not uncommon for one spouse to ask the Court for an order prohibiting Dick from keeping the children away from individuals with whom he was romantically involved. For many years, the Court would enter these prohibitions as a matter of course, particularly in cases where an affair had occurred. However, a series of appellate decisions in Georgia have consistently held that a blanket restriction on contact with members of the opposite sex or individuals with whom a party is in a romantic relationship is overly broad and unenforceable unless there is a specific finding that the situation or introduction would have a harmful effect on the children. Some appellate examples include:

  • Ward v. Ward, 289 Ga. 250, 250–51(1), 710 S.E.2d 555 (2011) (holding that trial court abused its discretion in amending visitation provision in final decree to provide that mother “ ‘shall not have any overnight male guests while the minor children are present’ ” because the provision would prohibit the mother “from having visitors with whom she has no romantic relationship”);
  • Arnold v. Arnold, 275 Ga. 354, 354, 566 S.E.2d 679 (2002) (holding that trial court abused its discretion in prohibiting children “from any contact with a certain named friend of Wife” when there was “no evidence that the relationship between Wife and her friend was or will be harmful to the children, or that they ever engaged in any inappropriate conduct in the presence of the children”);
  • Brandenburg v. Brandenburg, 274 Ga. 183, 184(1), 551 S.E.2d 721 (2001) (holding that trial court abused its discretion in prohibiting father from exercising visitation with children in the presence of his girlfriend, even if the two should marry, when there was no “evidence that such relationship had or likely would have a deleterious effect on the children beyond that normally associated with divorce or a parent’s remarriage”);
  • Mongerson v. Mongerson, 285 Ga. 554, 556(2), 678 S.E.2d 891 (2009) (holding that trial court erred in prohibiting husband “from exposing the children to his homosexual partners and their friends,” which was “an arbitrary classification based on sexual orientation” but holding that trial court’s decision to prohibit children’s exposure to paternal grandparents was not an abuse of discretion when evidence showed that grandparents “had been physically and emotionally abusive of the children”), overruled on other grounds by Simmons v. Simmons, 288 Ga. 670, 706 S.E.2d 456 (2011).

The second area of discovery which is far more critical to the case and is often minimized by the party is the financial aspects of valuing Dick’s company. In an upcoming blog, we will devote an entire discussion to the process of valuing a marital business. In the context of this discussion and the initial discovery requests, Jane needs to be highly focused on the operation of the business more than the financial outputs. Most often, a party will request information about the numbers, for example:

  1. Profit and loss statements;
  2. Financial statements;
  3. Tax returns;
  4. Bank records; and
  5. Balance sheets.

This information is certainly sufficient for generating a value of the company. In fact, if limited to this information there would be little point in Dick and Jane hiring opposing financial valuation experts. On this information alone, the generally accepted standards of the valuation industry would cause most valuation experts to generate a result that is not substantially different from one another. However, the financial records only tell a portion of the story. For reasons we will discuss in greater detail, it is far more important that Jane gain an accurate picture of the following:

  1. Largest customer and percent of revenue;
  2. Market share data, including industry competitors;
  3. Covenants not to compete among key employees;
  4. Previous value statements of enterprise v. personal goodwill;
  5. Executive compensation packages; and
  6. Recurring v. Non-recurring revenue items.

This information will be critical in “moving the needle” up or down and will generate the adjustments made by a valuation expert. This is where some subjectivity can enter the process and Jane’s attorney will need to be armed with information to bolster her expert and attack the expert retained by Dick.

Next month, we will look at the discovery process from Dick’s standpoint. Dick’s major concern should be balancing the provision of information against his own self-interest.

Divorce: Temporary Hearing – What does Dick need?

As we continue to look at Dick and Jane and the topic of divorce, recall that the process is underway. As we move through the process, we are going to examine each phase from the perspective of Dick and from the perspective of Jane. Last month, we looked at the temporary hearing from Jane’s perspective. This month, we approach the same hearing from Dick’s standpoint.

Dick’s primary concerns moving forward are as follows:

  1. Maintaining contact and a relationship with his children;
  2. Making sure that the funds he earns support Jane and the children but don’t prohibit him from providing for them either;
  3. Minimizing the financial impact of the divorce and avoiding funding a “war chest” for the attorneys;
  4. Shielding his marital indiscretions from the case.

Just as Jane should view all of her goals at the temporary hearing through the lens of family stability, Dick should have the same approach.

On a temporary basis, he may be willing to concede that Jane is the primary physical custodian but he should ensure joint legal custody. Dick may have some subject areas of legal custody over which he would like to have final decision making authority. For example, he may feel strongly about public v. private school, certain medical treatments of the children or their religious upbringing. The Court may not decide final legal custody on a temporary basis, but if Dick does not make these areas known at this phase, he will lose out on his ability to do so later.

The parenting time and visitation schedule will be an important opportunity for Dick to demonstrate his role as a parent and Father. If he bites off too much time and cannot keep it up due to work conflicts, he will play right into Jane’s arguments. If he takes too little time, he runs the risk of becoming a “Disneyland Dad” or guy that just sees his kids every other weekend, but is not really involved in their lives. The best outcome would be for Dick to try and obtain visitation time that blends weekends and weekdays so as to give him quality time and involvement with the children. Schedules like Thursday after school until returning to school on Monday morning one weekend and Thursday after school until returning to school on Friday morning the next weekend are becoming increasingly popular with the Courts. The schedule is predictable and structured and minimizes back and forth for the children. In addition, the children are exchanged through the school, rather than in a parents driveway (which can be tense and lead to disputes).

Financially, Dick needs to step up at the temporary hearing and support the family, but he must be prudent in doing so. The temporary order should be structured so that it is just that, temporary. Most Judges and Courts are going to expect Jane to seek some level of employment. If she is receiving all of the funds that she needs or wants on a monthly basis, she may not be inclined to push for work. From Dick’s standpoint, he would be best to volunteer to pay certain monthly expenses (mortgage, utilities, car note and insurance, etc…) directly rather than just giving the money to Jane. On a temporary basis, all of the foregoing is commonplace. This creates a feeling that this structure is not permanent and will be revised on a final basis. On the contrary, if Dick were just to pay over a sum of money each month in gross support, a precedent could be created for a final order.

Attorney’s fees and the payment of Jane’s attorneys will be a major struggle for Dick. If he cuts off funds to Jane completely, she cannot obtain adequate representation and the case will bog down. On the other end of the spectrum, if she has or receives a large amount of funds, she may be inclined to start a major battle.   Dick should concede that some fees may be appropriate (particularly in light of his misconduct problem) so as to appear reasonable, but should push that additional attorney’s fees be borne by the parties individually or be paid equally utilizing marital assets as the source. Some Judges will state that it is very necessary that both spouses (regardless of fault) need to “feel the pain” of the divorce process if they choose to keep fighting. The goal of every Judge is for the parties to settle the case themselves. If one side is paying 100% of the costs on both sides of the fight, the non-paying side has no incentive to ever end it.

Next month, we will look at the discovery process from Dick and from Jane. We will focus on what each side needs to gain by way of information, particularly as it relates to the valuation of the marital business.

Divorce: Temporary Hearing – What does Jane need?

As we continue to look at Dick and Jane and the topic of divorce, recall that the process is underway. As we move through the process, we are going to examine each phase from the perspective of Dick and from the perspective of Jane.

For this month, we will look at the temporary issues from the perspective of Jane. Jane’s primary concerns moving forward are as follows:

  • Maintaining stability & a routine for the children;
  • Making sure she has adequate funds to pay household expenses;
  • Making sure she has adequate funds to get through the costs of the divorce, including amounts to find out about assets;
  • Discovering information about the extent of Dick’s affair

In preparation for the temporary hearing, Jane should focus most on the children and the stability of the family. By presenting the case through that lens, all of her concerns above can be met. On a temporary basis, Jane would push for a determination that she has primary physical custody and joint legal custody of the children, with her having final decision making authority over legal decisions affecting the children’s healthcare, education, religion and general welfare. The Courts use a form document called a “Parenting Plan” to lay out the provisions controlling custody and visitation. It will be most important for Jane to come up with a realistic schedule for the children so that they can meet their academic and extracurricular requirements with minimal disruption. The Court will want to start the parties on a schedule that looks more and more like things will look when the parties are completely divorced. Jane may want to push for an order from the Court preventing Dick from introducing the children to any new love interests. On a temporary basis, a mutual order of this sort would not be out of the question.

From a financial standpoint, Jane will need to prepare a budget. The budget will document all of the household and children’s expenses. The budget is known as a Domestic Relations Financial Affidavit. The Court will look at the budget and determine the amount of money needed for Jane and the children and order that Dick pay the same. The Court can order that certain expenses be paid directly (like a mortgage) and that other funds are to be given to Jane for the payment of expenses.

Alimony is becoming increasingly harder and harder to obtain. Women of all walks of life are expected to work and contribute to the household expenses. On a temporary basis, the best argument for Jane to make is going to be to lay out a plan for the future. If Jane needs to go back for job training or schooling, she should present a plan to do so and ask for an award of money to pay for the same. The Courts are going to look much more favorably on Jane if she can present a logical plan to return to work as opposed to simply making a request for funds every month.

On the issue of attorney’s fees, Jane needs to outline the plan for litigating the case and, specifically, the amount of funds needed to get the case to a settlement posture. Courts are very receptive to the use of reasonable attorneys’ fees in order to get a case resolved and not subjected to a final trial. If Jane attempts to make the temporary hearing all about Dick’s affair and appears out for “vengeance” the Court is going to shoot her down. A Judge is not going to be inclined to allow Jane funds to go on the warpath. Jane will need a reasonable amount of money to use the discovery process to get a handle on the parties’ assets. One major issue will be determining the value of Dick’s new company (we will devote an entire blog post to this subject later). If Jane can outline a fee proposal designed to get this information, the Court would be inclined to grant the award.

It might be difficult for her to contemplate, but Jane will need to wrestle with the decision of selling the house. If the parties have equity in the house, a sale might be the only way to access the funds in order to divide them. This is particularly true if the parties do not have sufficient funds elsewhere to offset the value of the house. It might be tempting for Jane to enter into an agreement whereby she keeps the house and the equity in it and allows Dick to keep other assets in exchange. However, Jane should caution against becoming “house poor” or in a situation where she has a high, unaffordable mortgage payment and her savings is inaccessible due to being in the equity in the house. Jane will need to consider the needs of the children for stability and structure and determine if the house can or should be sold.

Next month, we will look at the same issues from Dick’s perspective. Dick must be very cautious about setting a precedent for payments and managing damage control.

Divorce: The Case is Filed, Now What?

Justin O'DellBy Justin O’Dell

As we continue to look at Dick and Jane and the topic of divorce, we will assume that both have met and selected counsel and that the process of divorce is underway.  This brings us to the filing of a divorce and what happens next.

Recall that our case involves a contested divorce (no settlement agreement reached before filing).  For those who do not recall the facts about this family, you can find them here:  http://www.odelloneal.com/blog/dick-and-jane/meet-dick-and-jane-2/.

The first issues, post-filing, for Dick and Jane are temporary issues.  In order to deal with these issues, Georgia law allows for a “temporary hearing.”  The purpose of a temporary hearing is to address the immediate needs of the parties and the children, specifically temporary custody, temporary child and spousal support, temporary use and possession of assets (including the house) and temporary payment of expenses.  The decisions on some of these issues can be quite different from the ultimate outcome in a divorce.  For example, on a temporary basis the Judge could order the wage earning party to continue to pay a variety of expenses directly, like mortgages and car payments.  Thus, issues like alimony and even child support may be addressed through the payment of direct expenses.  On a final basis, the Judge is going to expect each party to pay his or her own expenses and will deal with availability of funds through child and spousal support.  If the parties have a contested custody matter, the Judge may be inclined to consider alternative custody arrangements like shared/split parenting time or even “bird-nesting” (where the parents take turns living in the house with the children rather than the children moving from home to home).

Although Judges do not divide assets at a temporary hearing, it is not uncommon for the parties to be awarded temporary use and control of the same.  Those awards are generally an indication of where the asset is ultimately going to go.  For example, if a Judge awards Jane temporary use and possession of the marital residence on a temporary basis, the asset (if not sold) is going to probably remain with her in the final settlement.

A temporary hearing is also designed to ensure that each party has access to funds to secure adequate representation.  Georgia law allows an award to be made to the non-primary wage earning spouse from the marital estate or from the earnings of the other spouse for payment of her attorneys’ fees and litigation costs.  This allowance is recognition that it would be fundamentally unfair for one spouse to be forced into a settlement simply by being unable to afford the process or unable to conduct discovery regarding assets.

A temporary hearing is usually set anywhere from 30 – 45 days following the filing of the divorce, though this time can be longer in some counties than others.  Most parties are able to reach a temporary agreement without the intervention of a Court.  This is true even in instances where there are hotly contested issues in the case.  Many times, the temporary order is simply a reflection of the status quo.

One of the most underappreciated benefits of the temporary hearing can be the “venting” process.  In our case, Jane may be particularly upset about Dick’s alleged misconduct.  The lawyers in the case might be indicating a possible temporary resolution that would be workable for everyone.  Jane may feel that the resolution is unfair given “what he has done.”  In a temporary hearing, Jane can require Dick to get on the stand.  Dick can be compelled to answer questions about his conduct (or he can take the 5th Amendment and refuse, which in a civil case allows the Judge to assume an admission).  Jane can take the stand and discuss the impact and difficulty on her children and her family.  Most often, the Judge will then issue a decision somewhere along the lines predicted by the lawyers.  Maybe the Judge will direct a comment or two toward Dick about his behavior.  Maybe the Judge will direct a comment or two toward Jane about moving on and making sure the children are not alienated against their Father, regardless of his behavior.  Jane may feel some catharsis from having had a public moment.  Both parties may come to understand that they do not want to be in front of a Judge again.  Finally, both parties may come to believe that when the lawyers who they have hired and who have extensive experience in the field and with the Judge, both indicate and seem to agree on a potential outcome, they are probably pretty accurate.

For Dick and Jane, we are going to look at the goals for a temporary hearing in the next few months.  We will view the case from each perspective.  In order to set up the discussion, we will assume that Dick has been unfaithful and that Jane is aware of it.  However, unbeknownst to Dick, Jane also had an extramarital relationship that started about a year ago.  Hers never became physical, but was emotionally intimate, flirtatious through texts and social media.  It was also around this time that Jane withdrew from Dick physically and emotionally.  When confronted with the issue of his affair, Dick left the house to stay with his brother.  He has been seeing the children some on weekends and attending their activities.  Thus far, he has been maintaining all of the household expenses and giving Jane a few hundred dollars each month for expenses.  We shall see how the temporary issues unfold…..

Divorce: Consultations and Meeting an Attorney

why-us1By Justin O’Dell

Starting this Fall, we switched our discussion of Dick and Jane to the topic of divorce.  This topic is going to be far ranging and extensive and we will also be looking at various issues from the perspectives of both Dick and of Jane.

We have been looking at the process of hiring and selecting a domestic lawyer to handle a divorce.  For this month, we will consider the initial consultation and the expectations of the client and lawyer in that initial meeting.

  1. Consultations May Not Be Free. This is probably one of the biggest areas of disconnect between the public and family law attorneys.  The majority of attorney advertising is done by personal injury law firms and criminal defense firms.  Personal injury firms are paid based on a contingent fee, usually one-third to forty percent of the money recovered to the client.  Since they do not charge by the hour, these firms almost always offer free consultations.  Criminal law is generally handled on a flat fee basis and free consultations are also the norm.  Since these firms advertise “free consultations” many people are led to believe that all lawyers offer free consultations.  Most domestic lawyers (and general civil lawyers) charge their clients by the hour.  If they spent much of their day giving free hours to consultations, they would not have time left over for paying clients.  Some family law lawyers have managed to find a way to offer free consultations, but most do not.
  2. How Much Will This All Cost? One question that is always asked during the initial consult is “How much is this going to cost me?”   The reality is that unless you walk in the door with a completed settlement agreement in hand, no one knows and no one can predict.  An experienced lawyer can look at the situation and generalize, but even a seasoned veteran attorney would be making nothing more than an educated guess.  The degree to which the couple chooses to fight will control the costs.  More important than “how much will this cost me?” a better question for your lawyer is “How do we keep costs under control on our end?”  There are a lot of aspects of divorce litigation that are optional, even if perhaps helpful.  For example, Jane might tell her lawyer that “I think Dick has hidden money.”   Jane’s lawyer can hire a forensic accountant to investigate.  However, if Dick is only earning $40,000 per year and the parties are living paycheck to paycheck, the most that Dick could likely squirrel away would be a few hundred or even a few thousand dollars.  Is it worth spending $5000 or more to try and find such a small sum?  Alternatively, Dick may have concerns that Jane has started seeing a new man since he and Jane separated.  Is it really worth spending thousands of dollars in discovery related to this new relationship, if it ultimately will have little bearing on the outcome?  The client and attorney should quickly try and develop a consensus about the overall plan for the divorce and discuss the various aspects of the case that need to be proven and spend resources and finances accordingly.
  3. The Retainer & Billing Process. Most domestic attorneys work on a retainer.  Many clients do not get an adequate explanation of the retainer in their initial consultation.  Most attorneys bill incrementally (in tenths of an hour).  Many clients do not get an adequate explanation of incremental billing in their initial consultation.  Some lawyers charge an initial retainer ($2,500.00 or $5,000.00), draw down against that retainer on a monthly bill and require that the retainer account be reinstated to that level each and every month.  Other lawyers will require the amount to be reinstated only when it hits zero.  For billing purposes, some lawyers bill in minimal increments of six or twelve minutes.  This means that a quick phone call or e-mail could be charged for that minimum.  It is important in the initial consultation that both the lawyer and the client have a clear understanding of how the relationship will be charged.
  4. How Will It Turn Out? Most clients come to a consultation expecting to find out “how this will all turn out?”  There are some areas where the domestic lawyer can offer opinions and thoughts regarding potential outcomes.  If certain variables are known (like each spouses’ gross income), then child support is fairly predictable due to Georgia’s Child Support Worksheet and calculator.  Other areas of dispute, like alimony, vary from County to County and even from Judge to Judge within a County.  These areas are also highly dependent upon the facts of the case and how those facts are presented to the Court.  Any prediction is nothing more than an experienced guess.  Instead of “how will it turn out?” the better question is “What kind of divorce am I going to have?”  The lawyer and client must be on the same page regarding the process of divorce.  Does the client want things settled quickly and without fighting (even if the client has to pay or give up more to their spouse)?  Does the client have certain issues that are “non-negotiable” like primary custody or protection of non-marital property?”  The more the client has in the “non-negotiable” column, the more likely the divorce will be a fight.

The first meeting with a lawyer is an important one.  Most often, the client wishes to receive answers to questions like cost and outcome.  The reality is that these issues, though important, are highly variable and highly unpredictable.  Rather than focus on costs and outcome, it is critical that both sides gain an understanding about the process of the divorce.   Over time, the process will help to control and manage both cost and outcome.

Divorce: Choosing an Attorney

IMG_8717By Justin O’Dell

Starting last month, we switched our discussion of Dick and Jane to the topic of divorce. This topic is going to be far ranging and extensive and we will also be looking at various issues from the perspective of both Dick and of Jane.

For this month, it is important to devote time and energy in determining how to hire a domestic lawyer. There are a lot of factors to consider in hiring a domestic relations lawyer and each factor is important.  More than anything, it is critical that the client have a high degree of comfort, confidence and trust in their lawyer.  If the attorney-client relationship is lacking in any of these three areas, the process will be extremely difficult. Along those lines, here are ten initial thoughts (in no specific order of priority) in choosing a family law attorney:

  1. Am I comfortable with this person? The answer to this question is unique to each individual. Some clients prefer attorneys of the same gender or race, others prefer the opposite. Some clients want a lawyer to be a tender heart and soothing voice, others prefer someone who can bluntly tell them to “get a grip.” Regardless of preference, the personality must mesh.
  2. Can I trust this person? The analysis here is simple. If you cannot be completely honest with your family law lawyer, you have the wrong lawyer. It is essential that your lawyer know everything to best represent you. If you cannot be that open, it is not a good fit.
  3. Does my lawyer practice where my case will be heard? Family law is different in this regard than most other types of cases. To quote the great Tom Browning, the discretion of a family law judge is “broader than the plan of salvation.” Different judges bring different attitudes and perspectives to issues like custody, alimony, misconduct, attorneys’ fees and so on. Your attorney needs to have a history and understanding of these factors in order to best handle the case.
  4. Does my lawyer need my business? This is a critical factor, often overlooked. The reality is that in a family law case, the longer the case goes and the more fighting that occurs, the more the attorney earns. There are law firms and lawyers who have high overhead to cover. There are law firms and lawyers who are struggling to pay the bills. In these instances, there is a latent danger that the lawyer could be picking a fight where one does not need to exist or advising against a settlement offer than might make financial sense (i.e. the lawyer rejects a total alimony award of $48,000.00 in settlement and goes to trial at a cost of $25,000.00 seeking to get a total alimony award of $60,000.00. Although the result obtained was “more” the net effect to the client was a monetary loss).
  5. Is my lawyer my cheerleader or my advisor? This is a fine line that exists in family law cases. Often times, lawyers can become emotionally invested in their clients due to sympathies to a particular situation. In these instances, both the lawyer and client become focused on “winning” rather than a positive overall outcome for the family unit. A lawyer must be able to tell the client, without hesitation, when the client is being irrational, off-base, unreasonable, etc… The lawyer is not to be a cheerleader merely feeding the client advice that the client wants to hear. The lawyer is to be an advisor and advocate.
  6. Will my lawyer go to Court? Most family law cases settle and most family law cases should settle. Parents and spouses should be able to take ownership of their own situation and, with advice and counsel, be able to hammer out an agreement for themselves. However, there are instances where compromise cannot be had and the facts get tough. Family law dos attract lawyer who simply are not interested in going to court or do not like the adversarial process. If the lawyer has a reputation of not wanting to go to Court or if an opposing counsel can sense that a lawyer is unwilling to try the case, the settlement negotiations become very one-sided.
  7. Does my lawyer explain the financial aspects of the case? Divorce litigation costs money and expenses can add up fast. As a case heats up, many lawyers start a routine process of following the same strategy for every client. Discovery depositions, demands for guardian ad litem, custody evaluations, etc… There is not a “one size fits all” divorce. Some clients cannot afford the full court press. Some clients can afford everything, but have no inclination to pay for it. A divorce can be fairly presented without exhausting every possible litigation strategy. It is important that the lawyer review the costs and benefits of each strategy with the client BEFORE committing to a course of action.
  8. Does my lawyer get along with the other lawyer? This is often hard for the client to gauge at first. Over time, the client should be able to review the correspondence between the attorneys and see them interact in person. It is not essential that the lawyers be best buddies, but they should be able to treat each other with civility, respect and professionalism. Although it is initially fun to read a caustic letter from your lawyer to the other side, in the end it just ratchets up emotion and ultimately expense.
  9. Does my lawyer return my messages? The number one complaint to the State Bar regarding lawyers is a lack of consistent communication. Your case is important to you and it should be important to the lawyer. If your lawyer cannot at least send an e-mail or leave a voice message in response to an inquiry, get a new one.
  10.  Does my lawyer have an investment in the community?   In choosing a lawyer, consider whether that lawyer is committed to their immediate environment. Are they involved in the civic, charitable and social causes on the community? If not, the lawyer is probably more interested in pulling money out of a community than truly being a part of it. Lawyers are uniquely suited and tailored to serve at Church, in civic clubs and on charitable boards. They are asked to do so constantly. If the lawyer is not involved somehow, somewhere, it is a deliberate choice.

Next month, we will look at the process of a divorce consultation and the first meeting with a lawyer. What should Dick and Jane expect to get out of that first meeting?