Divorce is not the easiest to get through. From the emotional turmoil and splitting of assets – to pensions and businesses, there are many factors to consider, especially if a prenuptial agreement was not signed prior to getting married.
Family law attorney Kirk Stange touches* on all the factors we should consider when splitting up in divorce: from pensions to hidden assets, he uncovers what your attorney should be doing to help you.
Military Family Law
What is the Servicemembers’ Civil Relief Act and how does it relate to military personnel and divorce?
The Servicemembers Civil Relief Act (SCRA), formerly known as the Soldiers and Sailors Civil Relief Act (SSCRA), was enacted in 2003 and significantly expanded the protections provided to people entering the military, called to active duty and deployed service members. Many of the provisions in the SCRA can be applied to protect the rights of service members who are going through a divorce or family law matter. The key protections the SCRA provides to service members going through a divorce are as follows:
- In the context of a family law matter, if a default judgment was entered against a party and the outcome negatively affected somebody because they were not present to defend themselves in the action, the court has the authority to reopen the matter.
- If a party is deployed and cannot be present for the proceedings to defend themselves, the proceedings can be postponed, or stayed, until they return. This can be especially important when issues like custody need to be resolved.
The reality is that to get divorced in most states in the United States, cheating or marital misconduct does not need to be proven.
Divorce and Separation
In order to ensure the divorce process goes as smoothly as possible, how should clients prepare for what may be contested divorce matters?
It is critical that a party hire an attorney who has experience in contested divorce matters. If the case cannot settle prior to trial, having an attorney who has significant trial experience is vitally important. After the attorney has been selected, it is crucial that parties give their attorneys all the necessary information as early as possible in the process. This can include providing all the documents and evidence that the client feels are potentially important in the case, including financial information from tax returns, account statements, deeds, estate planning documents and anything else that can have a bearing on property and debt division, spousal support and child support. However, if custody is at issue in the case, it can also be critical to provide all the information that a party thinks is important in terms of their custody request as well. This can include school and medical records and a litany of other information.
The use of private investigators is generally on the decline with the advent of no-fault divorce.
How are allegations of cheating and marital misconduct handled? Does proving marital misconduct make a difference?
The reality is that to get divorced in most states in the United States, cheating or marital misconduct does not need to be proven. A party typically only has to show that the marriage is irretrievably broken and that there is no reasonable likelihood that the marriage can be saved. However, some states still will consider marital misconduct as one of the factors as it relates to property and debt division and spousal support (previously known as alimony). For example, where I am licensed, in Missouri and Kansas, the conduct of the parties during the marriage is a factor that the court can look at in property and debt division and spousal maintenance. However, in Illinois, where I am also licensed, the courts do not consider marital misconduct as a factor for property and debt division and spousal maintenance. Having said that, there are some cases where marital misconduct could have a bearing on the best interests of the children for the child custody portion of the case.
If a party fears for their safety in a divorce or family law matter, it is important that an attorney act quickly to protect their client.
In divorce and family law matters, would you advise clients to hire a private investigator?
The use of private investigators is generally on the decline with the advent of no-fault divorce. While courts in some states can consider marital misconduct for property and debt division and spousal maintenance, many courts are hesitant to give it much weight. However, there are still some cases where parties do opt to hire private investigators to:
- Prove marital misconduct and/or adultery;
- Show unsafe or harmful practices relative to the best interests of the children;
- Serve crucial witnesses and opposing parties’ summons/subpoenas as a special process server;
- Identify hidden financial and other assets;
- Conducting surveillance; and/or
- Substantiate untrue statements about income and employment.
If the other party violates the Order of Protection or Restraining Order, they can often be charged criminally.
What factors impact how marital property and debt is divided in divorce?
Equitable division is how most states divide marital property and debt in divorce. Marital property and debt are all property or debt accumulated during the marriage. Separate property, which is not divisible in a divorce, is property that was obtained prior to the marriage or property that was obtained by gift, inheritance or that is set aside in a prenuptial or postnuptial agreement. Factors most courts look at in dividing marital property and debt are:
- The economic circumstances of each spouse at the time the division of property is to become effective, including the desirability of awarding the family home or the right to live therein for reasonable periods to the spouse having custody of any children;
- The contribution of each spouse to the acquisition of the marital property, including the contribution of a spouse as homemaker;
- The value of the nonmarital property set apart to each spouse; and
- Custodial arrangements for minor children.
Some states, as I mentioned previously, will also look at the conduct of the parties during the marriage, while others do not.
In these cases, the court is going to take the value of the business interest into consideration when dividing all marital property and debt.
How should cases be handled if there is domestic abuse? How do you handle these cases differently, especially if your client fears they could be in danger?
If a party fears for their safety in a divorce or family law matter, it is important that an attorney act quickly to protect their client. Laws can vary by state and the exact verbiage can be a little different. However, generally, parties will want to seek an Order of Protection to prevent the abuse. In some states, this is known as a Restraining Order. If the other party violates the Order of Protection or Restraining Order, they can often be charged criminally.
There are lots of variables that go into the valuation of a businesses’ interest and a professional business valuator is almost always needed.
Business Interests
Protecting your business in divorce: Can you refuse to split your company’s assets?
If the business interest was obtained during the marriage, in an equitable division state, the business interest is going to be treated as marital property unless there is a prenuptial or postnuptial agreement that sets it aside to one party. In these cases, the court is going to take the value of the business interest into consideration when dividing all marital property and debt. In some cases, the value of the business interest can be offset against other assets that the other spouse receives, like a home, investment or retirement account, as some examples. In these cases, the business interest does not have to be split. The other spouse just receives another asset of roughly the same value. However, in other cases, this might not be possible and the business interests may need to be split or sold. Regardless, what is critical in these cases is to have a business valuator enlisted early in the case to ensure that the value of the business is fair and accurate. There are lots of variables that go into the valuation of a businesses’ interest and a professional business valuator is almost always needed.
Where a party owns and operates a business, the risk can also increase because income and assets can often be shielded within the business.
What are the signs your partner could be hiding assets?
Every case is different and the signs are not always uniform. However, in cases where one party has almost complete control over the finances, this can increase the risk of hidden assets. In some cases, both spouses might not have access to all the financial records. One spouse might also set up bank accounts in their own name. If a spouse travels overseas, the risk can often increase. Where a party owns and operates a business, the risk can also increase because income and assets can often be shielded within the business.
Private investigators can also help locate and identify hidden assets.
How challenging is it to prove that your partner is hiding assets?
Experience has taught us that finding hidden property can be challenging. To do so, we often involve forensic accountants. These professionals review tax documents and other financial records to locate hidden assets or to exonerate a party depending on the situation. Private investigators can also help locate and identify hidden assets. With the advent of social media evidence, oftentimes, the evidence of the hidden assets can be found online. Another way to locate hidden assets is through the use of a computer forensic expert who can lawfully gain access to electronic devices to search for evidence of hidden assets.
A prenuptial agreement can help a party protect their pension interests.
If proven, how can the above impact a divorce proceeding?
If a party hides assets, it can have a tremendous impact on the proceedings. First, it can destroy the party’s credibility with the judge. This can impact all facets of the case. Second, hiding assets is also illegal and could subject a party to civil or criminal penalties for being untruthful with the court. Finally, it can also result in that party giving up a disproportionate share of the assets they were hiding and that party having to pay the other spouse’s legal fees and costs for having to track down these assets.
his means that both parties need to have separate legal counsel.
When should one consider hiring a forensic accountant?
There are many cases where a party should consider hiring a forensic account. Some common situations are as follows:
- Identifying income from a closely held business or professional practice to see if any of it has been concealed or transferred elsewhere;
- Determining if assets have been squandered, encumbered, concealed or hidden in anticipation of divorce proceedings;
- Helping trace funds owned prior to the marriage to determine if it is separate property and, therefore, belong to one spouse alone; and
- Helping valuate a business interest.
More parties are seeking to resolve their divorce and family law matters outside of court. Many parties try mediation.
Pension Sharing
How is a pension split during a divorce?
A pension is divided in divorce just like any other marital asset in an equitable division state. The first question is whether the pension interest accumulated during the marriage? If so, the marital portion is divisible in divorce. Typically, the division is implemented through the use of a Qualified Domestic Relations Order (“QDRO”).
Are there ways for clients to protect their pension or retirement assets during divorce?
A prenuptial agreement can help a party protect their pension interests. The key is that the prenuptial agreement would need to be completed before the marriage and in a matter that is procedurally and substantively fair. This means that both parties need to have separate legal counsel. The prenuptial agreement also has to be entered into freely, voluntarily and without undue influence or duress. Both parties also have to engage in a full and fair disclosure of their assets and debts. Past that, and if there is no prenuptial agreement, if a portion of the retirement assets were accumulated prior to marriage, this can often be traced by a forensic account.
Alternative Dispute Resolution
If parties can settle their divorce outside of court, data shows that parties are more apt to comply with a settlement agreement versus a court order.
Is alternative dispute resolution growing in prominence in divorce and family law matters?
More parties are seeking to resolve their divorce and family law matters outside of court. Many parties try mediation. Mediation can be voluntary or some courts can order parties to participate in mediation. Other parties are trying collaborative family law. In collaborative family law, each party hires a collaborative lawyer on a limited scope representation agreement where the lawyer can only represent the party in the collaborative process and cannot litigate the matter in court. In the collaborative process, other professionals (divorce coach, financial neutral and child custody professional) work to get the parties toward settlement.
Paternity cases are really on the rise due to increasing out-of-wedlock birth rates.
Do you think parties should try to resolve their divorce or family law matter outside of court?
I do think settlement outside of court is worth the try for parties. If parties can settle their divorce outside of court, data shows that parties are more apt to comply with a settlement agreement versus a court order. This can result in fewer repeat visits back to court. It can also help parties who have kids keep tensions to a minimum so that they can co-parent more effectively with one another.
Besides divorce, what are some of the other most common types of family law cases?
Paternity cases are really on the rise due to increasing out-of-wedlock birth rates. These are cases involving custody and child support between unmarried parents. Next to divorce, these may be the most common type of family law matters. We also help clients with adoptions, guardianships, surrogacy agreements, domestic violence matters and prenuptial agreements and other family law matters.
About Kirk:
Kirk Stange is a Founding Partner at Stange Law Firm, PC, a divorce and family law firm that presently has 20 office locations in the United States in Missouri, Illinois, Kansas and Oklahoma. LawFirm500 has also recognized Stange Law Firm, PC as one of the fastest growing law firms in the United States since 2016. Mr. Stange has been on the list of Super Lawyers for Family Law by Missouri and Kansas Super Lawyers Magazine since 2015.
I once had a child custody case where the opposing party actually hired a hit man to kill my client.
Can you share your most challenging case yet, and how you overcame it?
I once had a child custody case where the opposing party actually hired a hit man to kill my client. While this can add significant stress to the case, it is vital that the safety of the children and everybody else is put at the forefront both civilly and criminally.
What three characteristics are important for a family lawyer?
In addition to educating yourself about the ins and outs of the area of law, it is important that a family lawyer be empathetic in terms of what the client is going through, while maintaining boundaries and leadership at the same time.
What motivated you to practice law?
I really wanted to make a difference in the lives of real people going through difficult times.