September "Ask Stacy" — Taking Sides!
Robert J. La Verghetta - cropped from Image: Cappelletti Heisman Trophy
As we near the end of September, there is little doubt that we have entered the political season. You cannot turn on the TV, listen to the radio, or surf social media without being bombarded daily with ads from candidates across the political spectrum. I like to think of myself as a highly informed voter, but sometimes, I need a break from the non-stop politicking. Those are the times when I lose myself in an excellent Hallmark rom-com. Now that is entertainment! But I digress.
The rancorous and combative nature of today’s politics reminds me a lot of what I see daily in my family law practice. Unfortunately, divorce is often a highly contentious affair. That is why I always counsel my clients to do whatever they can to minimize the combativeness without compromising their best interests. Divorce is very complex, and no two cases are exactly alike. Today’s Ask Stacy questions reflect the diversity of the issues people face during these difficult times. With that, here are some of your questions.
Ask Stacy: My husband and I essentially agree about splitting all our assets, but our beloved dog is the only contentious issue. Five years ago, we rescued the dog from a shelter, and neither wants to part with him. How does the court settle such a dispute?
My Thoughts: Though some people won’t like hearing this, the courts view pets as property. In this case, where the dog was rescued during the marriage, it is considered community property. As a dog lover, I understand not wanting to part ways with a beloved pet. Over my many years in family court, I have witnessed hearings about the disposition of a pet. When the spouses can’t agree on sole ownership, the court may seek to determine who provides more of the pet’s care and decide based on this information. The court will often settle on joint custody, allowing both spouses to split time with the pet. In California, Section 2605 of the California Family Code still classifies pets as property in the context of divorce proceedings. However, the court is encouraged to consider the animal’s welfare, which can factor into the custody decision. Judges will listen to both sides and determine pet custody based on the pet's best interests; this is great progress in animal welfare, in my opinion.
Ask Stacy: Over the years, my wife and I have made investments independent of each other from our respective incomes. Now that we are divorcing, I would like to know how the court will handle her extensive cryptocurrency investments. Are they treated like any other asset? And how can I be sure she has not hidden anything from me?
My Thoughts: There are two parts to this question. The first is about how assets are divided. There is an inference here that if you are investing separately from your respective earnings, those independent investments are somehow your own. However, unless you have a transmutation agreement, a prenuptial agreement, or a postnuptial arrangement, all of the assets and earnings for both parties are considered joint. Therefore, your investments, albeit held separately, are still considered community assets that will be divided equally. The only instance where this is different is when the investments are made before the marriage. Unless those assets are commingled during the marriage, or the spouse who had the assets before spends significant time managing those assets, they will remain separate in the eyes of the court. The second part of your question has to do with cryptocurrency. Crypto can be more challenging; it is always best to find a forensic accountant who can help potentially find and value any cryptocurrency.
Ask Stacy: My husband and I are divorcing. We always wanted to have a child, but an illness prevented us from fulfilling that dream. However, before my treatment, we had several embryos frozen. I still would like to have a child in the future. What happens to those embryos? He is claiming they are equally his.
My Thoughts: When you started in vitro fertilization, you very likely signed an agreement that specified what would happen to any unused embryos should you eventually divorce. This is standard protocol with many fertility clinics. The reason these agreements are important is that otherwise, one spouse could end up being held responsible for a child he or she did not want, as well as the financial obligation of child support. Clearly, this is a complex situation. Courts in different states view this matter differently, so you will need to talk to your attorney about your rights in your particular state.
Ask Stacy: I was a fairly successful football player in my youth. I had the great privilege of winning a Heisman Trophy during the peak of my college career, which I cherish. My wife is demanding that I sell the trophy in order to split the proceeds. Will I be compelled to do this even though I don’t want to?
My Thoughts: Assuming you were not married while you were in college, the Heisman Trophy will be viewed by the court as your separate property. In other words, your wife is not entitled to it or any portion of it. The same would be true of anything you earned or secured before the marriage, with some exceptions (e.g., you may have bought a home that you now share.) So, whether it is an Oscar, a 1966 Mustang, or a neighborhood bowling trophy, it is your property. Technically, in California, the courts do not have jurisdiction over one’s separate property. Therefore, the court would not have the jurisdiction to order the sale of your separate property. But the court could order you to pay her.
Ask Stacy: A few years back, my husband and I decided to start a family. As a same-sex couple, we elected to go with a surrogate mother. We entered into a contract. She is now three months pregnant. Unfortunately, our marriage has fallen apart, and we are divorcing. My husband no longer wants the child and thinks we should offer it up for adoption. I want the baby. How does this get decided?
My Thoughts: The first question I have is, what type of surrogate contract do you have? In California, if you have entered into a valid gestational contract that designates both of you as the child’s intended parent, then you will both have legal parental rights. As such, your soon-to-be-ex will have a say in what happens with the child. It is important to note he will also have legal and financial obligations as a parent, as well. This is a complex scenario, one which I suggest you discuss with an attorney who specializes in this area of the law.
Ask Stacy: We have been married for two years, but things have not worked out. My husband and I are having a hard time splitting up some of our wedding gifts, one of which is of considerable value. A member of my family gave us the gift in question. Does that mean I have a right to it?
My Thoughts: Wedding gifts are generally considered community property regardless of where they come from. That said, many people divide these gifts according to each side's family. I can tell you from experience you really do not want to be in court trying to determine who gets what gift. This is something you should be able to work out amongst yourselves.
Ask Stacy: My wife had some very expensive cosmetic surgery a few years back. I came to find out that she was having an affair just around this time, which is why she wanted the surgery. I contend these expenses should be considered part of the community debts, and the community is entitled to reimbursement. Do I have a leg to stand on?
My Thoughts: In my opinion, this argument is not going to win in court. It is important to remember that the time you have your attorney spend chasing down losing arguments is money wasted. My advice would be not to look for things to fight over if they are not likely to succeed.
Ask Stacy: I own a business that provides trained animals for the entertainment industry. In our impending divorce, my husband claims he should get half of the proceeds from the business since he supported its creation, even though he has had absolutely nothing to do with it. How will the court view this?
My Thoughts: If your business was created during the marriage, he is entitled to a portion of it. This is true even if he had absolutely nothing to do with the building of your business. The law is very clear on this matter. Unless you have a prenuptial agreement, postnuptial agreement, or a transmutation agreement, your business will be viewed as a community asset.
Ask Stacy: My wife and I started a thriving social media influencer business during our marriage. Now that we are divorcing, how do we split our assets? How will the court determine who will get control of our social media accounts, shared profiles, and all of the digital content we have created? We have been unable to agree on how to divide this business because of the near-certain damage to our respective revenue streams.
My Thoughts: All of your social media accounts, shared profiles, and the digital content you have created are community property. If splitting them up will inevitably result in damage to the business, as you suggest, then you might want to consider staying in business together, even though the marriage is ending. Perhaps there is a way to divide these assets without completely harming the business. These are fairly new forms of business, so the courts may prove to be more of a blunt instrument than a scalpel when it comes to dividing this community property. You will want to work with your respective attorneys to explore how to keep from destroying all of the hard work you have done together.
Please note: The content and views expressed here are my own and do not reflect or represent the positions, strategies, views, or opinions of Blank Rome LLP.