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Lamar Odom and the Risk of a Non-Finalized Divorce

Jessica Fagan HHRBy Jessica Reece Fagan, Hedgepeth, Heredia & Rieder

Divorce is an overwhelming process, emotionally and financially. And the last thing many people want to think about during the process is another emotional topic: catastrophic injury and death. But as the ongoing tragedy of Khloe Kardashian and Lamar Odom highlights, it is a topic that should be addressed.

 

While most are familiar with the context of a will, a document to dispose of one’s assets upon death, not everyone is aware of the use of a durable power of attorney and an advance directive for health care. 

  • A durable power of attorney allows you to appoint an agent to handle your property in the event of your incapacity. 
  • An advance directive for health care allows you to appoint an agent to make health care decisions for you if you are unable to make them yourself and allows you to indicate your end of life treatment preferences when you are unable to make such decisions for yourself.  This document has replaced the old health care power of attorney and living wills over the last several years.  

lamar odom

Georgia has a statutory form for advance directives for health care. The person designated as the health care agent will make health care decisions, and/or direct the withholding or withdrawal of life-sustaining procedures and/or the provision of nourishment or hydration.

When there is no advance directive for health care in place, however, the right to make medical decisions falls to family members, generally in the following order: spouse, adult children, parent, siblings, and then other family members.

 

As highlighted by the Khloe Kardashian and Lamar Odom situation, when a divorce is not finalized, or when an advance directive for health care has not been updated, that person will still have the legal right to make medical decisions.

 

It is unclear as an outsider, of course, whether Ms. Kardashian is making decisions because the divorce is not final and she is still legally his wife, or if it is pursuant to a power of attorney or an advance directive for health care. What is clear from news reports is that Ms. Kardashian – his soon-to-be ex-spouse – is the only individual in the world who legally had the power to make decisions for Mr. Odom while he was unconscious and while he remains in critical care.

 

In Ms. Kardashian and Mr. Odom’s case, this may not be a terrible situation—at least in front of the camera she seems to truly care for him and reports indicate he is recovering. But for other divorcing couples, the concept of an estranged, soon-to-be ex making decisions around whether to keep one on life support over the rest of his family’s wishes is downright terrifying.

  • In addition to the right to make medical decisions, a spouse in a non-finalized divorce may also find themselves entitled to certain monetary benefits.
  • If a soon-to-be-ex spouse has not updated his or her will or beneficiary provisions (regarding life insurance, retirement accounts, etc.) and then dies unexpectedly, such assets could go to the ex-spouse and leave an estate in costly probate litigation sorting out the donative intent under the terms of a will and a divorce settlement agreement. Accordingly, if a person is contemplating divorce, it is critical to get these issues addressed.

 

“We advise our clients to review their estate planning documents whenever they are anticipating a life-changing event such as a marriage, divorce, or new child,” says Brent Howard, an attorney with Bryan Cave in Atlanta whose practice includes estate planning. “Such events typically change the client’s desired estate plan and the appointment of people they trust to handle either their estate plan in the event of death or their finances and medical decisions in the event of an incapacitation.” 

 

Timing is important, however. Once a divorce is filed, most counties in Georgia have an automatic domestic relations standing order that prevents either party from changing the financial status quo, which often is interpreted as changing the beneficiary designations on legal documents.

 

Generally speaking, it is permissible to update a will, power of attorney and/or an advance directive for health care during a divorce.

  • But even if the will is updated to exclude a soon-to-be-ex spouse, a surviving spouse may still have some rights to the estate under law, should the other spouse die while a divorce action is pending but has not been finalized. 
  • Georgia does not require a married individual to leave anything to his or her spouse, but a surviving spouse can petition the court for an award of year’s support.  (Year’s support is a creditor claim against the deceased spouse’s estate equal to support for the spouse for a year.)

 

“If a married individual is considering a divorce or separation, the individual should update his or her estate plan to prevent the estranged spouse from having legal authority over his or her finances and health care decisions prior to the final order dissolving the marriage,” advises Howard.  “Even though the new plan can also disinherit the spouse in the event of death prior to the final order of dissolution, it is still subject to any spousal share required by state laws.”

 

In sum, life can change in an instant. If you are considering divorce, it is strongly recommended that you meet with your attorney prior to filing to not only discuss the reality of a divorce action, but to discuss the terms of your estate planning documents, as well. A person is well-advised to ensure that their intention and desires remain intact regardless of their mental capacity.

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Couples: Be Careful What You "Like", Social Media Prenups On the Rise

Social Media Prenups -- HHR Blog entry

by Rebecca Crumine Rieder, Hedgepeth, Heredia & Rieder

Crumrine 2

 

As social media becomes an increasing presence in our lives, there’s been a sharp increase in the role these platforms can play in marriage and divorce. The American Academy of Matrimonial Lawyers reports as many as 80 percent of divorcing couples now cite social media as a contributing factor in the breakup.

 

The story of the woman caught sexting with a man not her husband during a recent baseball game is a great example. We don’t know where this couple ended up, but chances are it wasn’t a fun weekend for either of them! http://www.huffingtonpost.com/entry/baseball-game-sexting_55b5b152e4b0a13f9d18ebf6.

 

Socsocial media logosial media conventions are as new as the medium and evolving as rapidly, making it ripe for misunderstanding. A clause addressing social media in a prenup may help avoid some of the worst pitfalls during the marriage, and after. The term “social media” may mean major platforms like Facebook, Twitter, LinkedIn and Instagram, but may also include more private methods, like texting, email or messaging apps like SnapChat.

 

What does a Social Media clause look like?

  • A social media provision in a prenup (short for “prenuptial agreement,” or an agreement made prior to the marriage), lays out how to use social media as a couple

  • It serves two purposes: one, to decide how each partner may use social media during the marriage, and two, how each partner may depict the other person on social media in the event of a divorce

 

When people get angry, they can lose the ability to think straight. So the object of the social media provision is to have the couple agree, while still together and still on the same page, on what the reasonable parameters of social media use should be. It should cover the time period during the marriage and during a divorce, and should include the financial penalties for violating the agreement.

 

Laying down the rules clearly and establishing consequences ahead of time can help avoid conflict and hurt feelings.

  • During a marriage, the couple may decide to share social media accounts, or to share passwords

  • Each may specify what is okay for the other person to share about him or her

  • Couples might want to decide together who is okay to have as a friend on these networks, including family, friends, and coworkers, and who is not, particularly ex-girlfriends or ex-boyfriends

 

In the event of a divorce, people often are filled with anger and frustration, and the desire to vent their feelings on social media is understandable. But it isn’t really an appropriate forum. An ugly post on social media, whether true or not, can be damaging to professional or personal life, sometimes to a far greater extent than intended.

 

Airing dirty laundry in public is rarely a good idea, and a social media prenup with penalties reminds individuals of that. Someone who knows ahead of time what the acceptable parameters are, and what the penalties for infraction are, will think twice before flaming an ex online.

 

Parents should also remember that their children may find these derogatory posts online; maybe not today, but someday, and that they will not reflect on either partner in a positive light. “The internet is forever” may be a phrase taught to children to encourage them to show good judgment online, but their parents would be wise to heed this motto also.

 

By spelling out what is acceptable online behavior and what is not, and delineating consequences for violating the agreement, the social media prenup acts as a reminder that the short-term satisfaction of posting something negative about the other partner online is rarely worth the long-term consequences.

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Who Gets the House? Real Estate and Family Law

By Jon Hedgepeth, Hedgepeth, Heredia & Rieder

When a couple divorces, very often one of the largest single assets is the family home, which is often titled in both names and jointly mortgaged or secured. Since it is impractical to divide a house physically, that issue must be dealt with in other ways.

Selling The House
The most straightforward solution to dividing marital real estate is to sell it and thus convert it to cash, which can be divided equitably. Many couples find this solution satisfactory, but there are still details to be worked out.

When a divorcing couple are selling a house, there are certain parameters that need to be set:

  • Who is responsible for choosing a real estate agent?
  • Does the other partner get a chance to choose a different agent if the house doesn't sell within a designated time?
  • What are the guidelines and responsibilities for getting the house ready to sell?
  • If the house doesn't sell within a certain time, will the price be lowered, and by how much?

 Read more in this article from the Daily Report: http://at.law.com/Mz2NLy!

All these issues are important, and they all need to handled outside any settlement agreement or order. That's because it is easy for any potential buyer to go look up the title, see who the sellers are, and see if they are in divorce proceedings. Then, because divorce agreements are public record, the potential buyer can go in and pull the agreement and see that, for example, on a certain date the price must drop by some amount or percentage. That is clearly not in the best interest of either of the sellers.

 

What we recommend instead is a side agreement. It is essentially the same as a settlement agreement but it is not filed with the court and is not a public record. Instead, the side agreement is merely referenced in the settlement agreement. It is just as enforceable and ultimately may be filed with the court in the event either party needs to enforce it. However, it keeps private details of a real estate transaction out of the public eye.


Keeping The House
In some cases, one partner may want to stay in the house following a divorce. For example, in the case of parents with school-age children, one partner may want to keep living in the house for the purpose of staying in the same school district. The simplest solution is for the resident homeowner to buy out the non-resident homeowner's share, but these situations are often not simple.

The resident partner may not be able to afford to stay in the home on his or her own, and he or she may ask the non-resident partner for assistance in remaining in the house for a limited time, such as until the child moves on from that school. Sometimes alimony can be paid directly to the mortgage lender, so at least the payer is getting a tax deduction for it. There are some issues involved with getting a mortgage paid and taken as alimony (sometimes all of the mortgage interest deduction cannot be claimed). In these cases, the issues of refinancing comes up.

The non-resident partner may be reluctant to be responsible for a house he or she doesn't live in, because credit may be affected, and getting a loan can be difficult with his or her name on the mortgage, which shows up in a credit report as an ongoing obligation. And, even though the market is getting firmer, the lending is still tight and complicated any time you refinance.

Very often there will be equity lines or other liens and encumbrances on the house, and those must be paid off first, which diminishes the equity. Younger couples are less likely to have alimony as an issue, because length of marriage is a factor in determining alimony. Even with someone who is determined not to pay alimony, once they examine the tax consequences/liability of it, they may realize that it makes sense to stay on the mortgage for a limited period of time until the other person can sell the house or get the children to a certain milestone before moving on.

Bankruptcy
Years ago, after the real estate market crashed, couples in divorces were often basically fighting over debt. There were many houses that were financially underwater, so at that point, bankruptcy was a legitimate scenario. It's less common today.

If the parties want to declare bankruptcy so they can be absolved of the debt, the issue of short sales will still come up as a 1099 tax event, which is essentially imputed income, if the house is sold for less than the value of the loan on the house. After all, the lender may take back the house and sell it. Any shortfall may be imputed as income to the former owner. That is an issue a lot of people did not contemplate when drafting their settlement agreements- that there will be a tax liability down the road if the house sold "short" or if it is foreclosed upon.

Regardless of which path a couple takes, answering the question of "So what do we do with the house?" is a necessary part of many divorce negotiations. Taking a close look at the needs and finances of all parties can help everyone arrive at a workable solution.

Gossip Girl Actress in International Child Custody Battle; Oct. 26 Hearing in Monaco

Crumrine 2By Rebecca Crumrine Rieder, Hedgepeth, Heredia & Rieder

Actress Kelly Rutherford’s has been receiving a lot of press lately. Rutherford, an actress best known for roles on Melrose Place and Gossip Girl, is engaged in a bitter custody dispute with her German ex-husband, Daniel Giersch.

The case involves a number of important issues regarding custody of children where the parents reside in different countries, and highlights the potential pitfalls of changing jurisdictions during custody proceedings. What’s interesting in this case is that even before the custody issues can be heard, the question of jurisdiction has to be resolved.

The jurisdictional issues around custody cases involving parents (and children) with dual citizenship will only become more common as our world "shrinks" due to ease of travel.

 Hague Convention Dictates International Custody Issues

rutherfordThe Hague Convention dictates the law if the custody case is between the residents of two member countries. In the Rutherford case, custody is split 50/50 between the mother, an American resident, and the father, who lives in Monaco. Further complicating matters is the fact that Rutherford has moved back and forth between New York and California, muddying the issue of where she resides.In an international case, jurisdiction belongs to whomever has the current custody order. 

The Hague Convention is an international agreement between courts with provisions established to ensure that custody hearings take place in the best interests of the child. It states that jurisdiction is based on where the children reside. For most of the last three years, the children have been living in Monaco, but for the last two months they have been living in New York.

Because Rutherford has only lived in New York and California, it might seem obvious that the custody must lie in one of those states. But actually, because the case takes place across international borders, the provisions of the Hague Convention come into play.

Here are some of the key points of the dispute:

  • The children, who came to the U.S. to be with Rutherford in July of this year, were scheduled to return to their father in Monaco on August 7, but Rutherford announced that she would not abide by that deadline.
  • Giersch’s attorney accused the actress of child abduction, saying that the children are “habitual residents” of Monaco. However, the Hague Convention states that if a parent has made an agreement not to establish a child’s residency in a foreign country, especially one where the child is not a citizen, that country cannot lawfully claim the child as its own resident.
  • Rutherford’s attorney maintains that her children are American and that Giersch agreed in 2012 not to pursue habitual residence for the children in any other country.

"The Court intends that each child's habitual residence will remain the United States, and that any foreign travel or stays in other countries will be temporary in nature, and not result in a change of either child's habitual residence, or of jurisdiction to modify custody and visitation orders, or issue new custody and visitation orders," California judge Teresa Beaudet wrote in an October 2012 judgement.

Rutherford did agree to return the children on August 11, and a hearing in Monaco is scheduled for Oct. 26. Giersch and Rutherford will need to be present at that hearing. Based on the finding above, It is possible at that point the Monaco court may decide to cede jurisdiction to the New York Court.

Custody Battle on the International Stage

This is a larger scale, a more complicated version of what happens often when parents divorce and one parent, especially the custodial parent, moves to a different state. For example, if a couple from Georgia gets divorced and one moves to another state, say Tennessee, these issues might come into play. In such a situation, if either parent wants to bring a custody case it must first be filed in Georgia.

  • Georgia has what is known as exclusive continuing jurisdiction under the Uniform Child Custody Jurisdiction and Enforcement Act (UCCJEA) enforced in all fifty states.
  • However, if the custodial parent can prove that Georgia is a “non-convenient” forum for the hearing, it can be moved to Tennessee. The case must first be filed in Georgia, and the Georgia court will talk with the Tennessee court to determine if Georgia is truly non-convenient.
  • For instance, if all the witnesses – teachers, friends, doctors – reside in Tennessee, then Georgia is clearly non-convenient. If the custodial parent cannot provide a compelling reason to the court to switch venues, then the case will remain in Georgia.

There are many reason why parents relocate following a divorce, but thinking ahead to potential custody issues can help minimize the disruption to children of protracted custody hearings.

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Timeline of the Kelly Rutherford custody case:

  • 2006: Rutherford and Giersch are married.
  • 2008: Rutherford files for divorce while pregnant with their second child.
  • 2009: Couple reaches a settlement of joint legal and physical custody.
  • April 2012: Giersch deported by U.S. State Department (because of information given to the State Department by Rutherford’s attorney), and becomes unable to enter the U.S. to visit his children.
  • May 2012: The children go to France to spend the summer with their father. At that time Rutherford asked the court to grant her sole custody so she could keep the children in the U.S., as the existing joint custody agreement required her and the children to travel frequently to visit Giersch, since he could not travel to the U.S. Giersch has not since reapplied for a visa.
  • August 2012: A California Superior Court judge rules that the 50/50 custody arrangement should remain, and moreover, that since Giersch is unable to enter the United States, the children should live with his mother in France and attend school there. Rutherford, as the parent who can cross borders at will, is required to travel to visit them. Thus, the judge placed the American children in French custody.
  • May 2015: Rutherford is granted temporary sole custody of her children by a California judge following a ruling that the children be brought back to the U.S. The children return to live with her in July.
  • July of 2015: A California judge rules that the state does not have jurisdiction because Rutherford now lives in New York, and the custody reverts to Giersch. Rutherford then files a case in New York but the New York court also rules it did not have jurisdiction. Giersch files a claim that the children are “habitual residents” of Monaco and that the hearings should be held there.
  • August 7, 2015: Rutherford decides against returning her children to Monaco, preferring instead to attend a custody hearing scheduled for Sept. 3 in Monaco.
  • August 11, 2015:  A New York judge orders Rutherford to return the children to Giersch in Monaco immediately.

Sources:

http://www.people.com/article/kelly-rutherford-new-york-fashion-week

http://www.people.com/article/kelly-rutherford-lawyer-wendy-murphy-custody-battle-appeals

Final hearing from 2012: http://images.eonline.com/static/news/pdf/RutherfordRuling.pdf

Same-Sex Marriage: Supreme Court Ruling Brings Right to Marry, Divorce, Create Pre-Nuptial Agreements and More

By Jon Hedgepeth, Hedgepeth, Heredia & Rieder

This week the U.S. Supreme Court ruled on the case of Obergefell v. Hodges, more commonly referred to as the "same-sex marriage case." The ruling resolves two issues: First whether the Constitution requires states to issue marriage licenses to same-sex couples — and then second, if the Constitution does not require states to issue marriage licenses to same-sex couples, must states recognize same-sex marriages performed in other states where they are legal?

The 2013 United States v. Windsor case struck down the federal Defense of Marriage Act (DOMA) as unconstitutional because it violated the Equal Protection clause of the constitution. It left unclear the issue of whether states could ignore valid same-sex marriages entered into in other states.

This current case answers that question, with ripples and ramifications that will affect marriage, divorce, pre-nuptial agreements, custody arrangements, division of property and more.

Here's where we were before the ruling:

  • About 70 percent of the American population supports gay marriage, and it was legal in 37 states.
  • Georgia was one of 13 states where gay marriage was not legal. A 2001 amendment to the state constitution specifically excludes same-sex couples from marriage and prohibits them from attaining any other form of legal family status.
  • Same-sex marriages were not allowed to take place within our state.
  • Same-sex marriages that took place in other states were not recognized as valid in Georgia.

The Supreme Court ruling in favor of same-sex marriage this month will bring a number of changes to Georgia as a state that has banned gay marriage. Potential outcomes include:

Same-Sex Couples Will Be Allowed to Marry
The primary effect is the one most people think of when the topic of gay marriage comes up: same-sex couples will be allowed to marry in Georgia, and have that marriage recognized as valid by the state. With that legal recognition comes legal protection, allowing same-sex couples the same rights and privileges as those guaranteed to marriage between a man and a woman. These include but are not limited to health insurance, state tax benefits, property and wealth sharing and transfers and next-of-kin status.

Same-Sex Marriages from Other States Will Be Recognized as Valid
Generally, states acknowledge marriages made in other states as legal and binding. But many states, including Georgia, have not automatically extended this recognition to same-sex marriages. Currently, same-sex couples who marry in a state that allows gay marriage will find those rights lost if they move to a state like Georgia that forbids it. This means they are excluded from health plan benefits, state tax benefits, and other legal rights married spouses enjoy.

Same-Sex Couples Will Be Allowed to Divorce In Georgia
An associated issue fewer people have considered, but that is just as important as the right to marry, is the right to divorce. Same-sex marriages end in divorce at about the same rate as traditional marriages. A same-sex couple that marries in another state and moves to Georgia currently cannot get divorced, because the marriage is not recognized as valid by the state. They cannot file for divorce or issue a divorce decree, and even though the marriage is not recognized as legal in Georgia, they are not free to remarry anyone else. These couples are left in legal limbo.

Prenuptial Agreements
A Supreme Court decision legalizing same-sex marriage means that all couples would have the same rights to create prenuptial agreements. It also would remove all barriers between states, meaning a prenup created in one state would be valid in the other 49 (with the usual caveat about differences in state laws of course).

Adoptions Will Become Less Complicated
Adoptions will also become more straightforward, as same-sex couples must currently go through a cumbersome two-step "second adoption" process, which allows a second parent to adopt a child without the first parent terminating their parental rights.

The Supreme Court decision will not clear all hurdles for same-sex couples, however. LGBT people are not protected against discrimination under the 1964 Civil Rights Act, or by any federal statute. Regardless of how much change the Supreme Court ruling brings in, as a society the echoes will continue to be felt for a long time after.

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