Hiding Money in Divorce

     Clients going through divorce often worry that their spouse may be hiding assets. A recent article in the Wall Street Journal talks about why this has become much harder to accomplish successfully. As the article points out, " Thanks to technology, hidden marital assets may be just a few clicks away". Facebook is the top source of compromising evidence. Smart phones provide a great deal of information. Technology makes it possible to examine spouses' email and text messages, their web searching histories, their facebook pages, their photos, their twitter accounts, their online financial accounts. The technology posses challenges for both the hider and the finder of information. The law about what type of search is legal is still evolving. For example, it is legal to do a public Google search on a spouse, but it can be illegal to use a false name to search someone's private facebook account. Other issues relate to installing a GPS on someone's car or installing keystroke monitoring on their computer. Issues arise about whether the information was publicly on a family computer or in a family vehicle or a phone on a family plan or whether it was in an individual account password protected. There are state specific laws about how a person is permitted to obtain information and documentation and whether or not information can be use as evidence depending on how it was obtained. As family law attorneys, we often are called upon to advise clients as to what they are and are not permitted to do or permitted to use as evidence under Federal and Virginia law.

This article was written by Phoebe P. Hall. Managing Partner/Attorney, Hall & Hall, PLC, 1401 Huguenot Road, Suite 100, Midlothian, VA 23113, and 4323 Cox Road, Suite 100, Glen Allen, VA 23060, Tel: (804) 897-1515, Fax (804) 897-2499

The information you obtain at this site relates to Virginia law only. It is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.

Tax Time

Tax time is rapidly approaching and having the proper tax professionals advising you during a separation or divorce is important.  Having those tax professionals working in conjunction with your attorney is a beneficial partnership as well.  Frequent questions that we hear and that are important to ask your tax advisor include:  Is my spousal support taxable or tax deductible?  Is child support taxable or tax deductible?  Who can claim the children as dependents for tax purposes?  Are any portion of my attorney fees tax deductible?  Who can claim the mortgage interest on the marital residence during a separation?  If I received retirement benefits from my spouse, do I owe taxes?  We are not divorced but we are separated, how should we file?  How should tax liabilities and/or tax refunds be allocated?  Understanding the financial impact of taxes on the overall divorce/separation scenario is a key component of negotiating and/or presenting a case to a court to decide.  Partnering with the right tax professional and attorney can help.

New Laws

The Virginia General Assembly has been hard at work this session and has enacted some  laws that impact citizens who are going through a separation, divorce, support matters, custody matters, etc.  One example is a new law that will be effective this year that provides " the court may enter a qualified domestic relations order or other order for the purpose of enforcing a support order by attaching or garnishing any pension, profit-sharing, or deferred compensation plan or retirement benefits pursuant to the United States Internal Revenue Code or other applicable federal laws."  This remedy is significant for those on either side of a support obligation and consultation with an attorney may be beneficial.

Discovery

"Discovery" and "subpoenas" are two terms that are used frequently by clients who are seeking information from the other party.  These two terms require that a legal court action is pending whether for divorce, support, custody, child support.  In Circuit Court actions, discovery is a broad term to include but not be limited to interrogatories (questions to a party), requests for production of documents to a party, subpoena duces tecum (requests for documents from a non-party), etc.  They are served and there is a rule of how long the person/entity has to respond.  In Juvenile and Domestic Relations Cases, some discovery requires a court order permitting it before it can be sent.

In negotiations, discovery cannot be used if no court action is pending.  At that point, it is up to the parties to engage in voluntary, cooperative disclosure.

Spousal Support

Spousal support awards based on formulas has been the topic of much discussion in the American Bar Association, Wall Street Journal, etc. Virginia adopted a formula in Va Code
§ 16.1-278.17:1 for determination of pendente lite (temporary) spousal support that provides: “If the parties have minor children in common, the presumptive amount of an award of pendente lite spousal support and maintenance shall be the difference between 28% of the payor spouse's monthly gross income and 58% of the payee spouse's monthly gross income. If the parties have no minor children in common, the presumptive amount of the award shall be the difference between 30% of the payor spouse's monthly gross income and 50% of the payee spouse's monthly gross income.”

This formula, however helpful, is not required to be used in all cases and is not required to be used for long term, post divorce awards.

It is important for you to know what are your absolute needs and what are your reasonable needs based on your marital standard of living.  Completing a budget form to help you understand your expenses and your income sources should be done sooner rather than later.

Equitable Distribution

Back to our series on divorce definitions.

“Equitable Distribution” is the concept used by Virginia to divide the marital estate.  Equitable means what is fair and reasonable, and in Virginia divorce law, it means what is fair and reasonable considering the all the statutory factors:  1. The contributions, monetary and nonmonetary, of each party to the well-being of the family;  2. The contributions, monetary and nonmonetary, of each party in the acquisition and care and maintenance of such marital property of the parties; 3. The duration of the marriage;  4. The ages and physical and mental condition of the parties; 5. The circumstances and factors which contributed to the dissolution of the marriage, specifically including any ground for divorce; 6. How and when specific items of such marital property were acquired;  7. The debts and liabilities of each spouse, the basis for such debts and liabilities, and the property which may serve as security for such debts and liabilities; and more.

Virginia does not require a 50/50 distribution, although it is frequent.  Virginia cases can have equitable distribution awards of 45/55, 40/60, etc. depending on the facts.

Divorce Definitions Continued

    Last month we started a series on divorce definitions, in that spirit, we want to talk some about the basics of a separation/divorce process and some of the misrepresentations we hear.
    “Filing” of a divorce refers to filing (or providing) the Complaint to the court clerk’s office to initiate the divorce process.  Filing occurs if an agreement cannot be reached or if an agreement has been reached, it is filed after the statutory time period (6 months from the date of separation if no children and one year from the date of separation if there is children). Settlement proposals are not filed with the court.
    “Serving” the other spouse refers to the procedure after a divorce is filed when the non-filing spouse receives a copy of the Complaint and in most cases are done by either  a private process service or the sheriff’s office.  Settlement proposals are normally not served. 
    Negotiations are a wonderful approach to seek a resolution; it is a voluntary process that requires participation from both sides.  The court system cannot force an agreement to be signed, and as a rule is not privy to the terms of the settlement discussions between the parties.