On April 5, 2016, the collective eyes of Massachusetts divorce attorneys and estate planners were fixed on the Supreme Judicial Court, where the highly-anticipated oral arguments on “further appellate review” of Pfannenstiehl v. Pfannenstiehl took place.
The 2015 Appeals Court decision received national attention for its potential detrimental impact on the estate planning goals of families who desire to shield trust assets from divorce claims. In Pfannenstiehl, both the Trial Court and the Appeals Court went to great lengths to ensure that the wife would benefit, at least indirectly, from an irrevocable trust established by her soon-to-be-ex-husband’s father even though the husband had no control over the trust and could receive distributions only at the discretion of the trustees. The husband had no present, guaranteed, enforceable interest to receive or use assets or income from the trust. The trustees’ discretion was limited to making distributions under an “ascertainable standard” for a beneficiary’s health, education, maintenance and support. The Trial Court and Appeals Court decisions failed to account for the fact that the trustees did not make distributions to the husband for most of the marriage, and that the husband received distributions only during the final two years of … Keep reading
That handsome fellow on the right is a jackalope. He was given to one of my paralegals by a client in gratitude for her work dividing an extensive collection of very unusual stuff, which did indeed include another jackalope.
Many of you, if you divorce, will have extensive property to value and then divide, including stock options, retirement accounts, real estate, deferred compensation, and business interests. All of these will require some form of valuation. They also will require consideration as to whether they will be divided immediately, usual for retirement accounts, or one party will keep the asset and then pay the other, which is usual for real estate and business interests.
Sometimes divorce can be used to prevent divestment of an asset, as in the case of the unlovely Sterlings.
Then there are collections; I find these fascinating. I’ve had to find experts to value everything from fine art (easy) to circus memorabilia (not so easy), to jewelry, and once, designer handbags. The evolution of internet sales has made valuation of individual items a bit easier (Hermes handbags, for example, are now fairly easy to value). Also, the sheer size … Keep reading
The modification process is a bit more streamlined than the divorce process, mainly because there is a lot less discovery. Since the property division portion of a divorce agreement or judgement is not modifiable, issues of valuation are rarely necessary.
Modification has a defined starting date: the date of the divorce. What were the circumstances then? This is shown by the financial statements or the custody plan as well as the court judgement or the parties’ agreement. Then the question becomes: What are the circumstances now and what is the material change in circumstances that warrants a modification?
If the modification is being brought under the new alimony law, then the change in circumstances will have been set forth in the law itself. In these cases, generally the person paying is asking for a reduction. The burden of proof is on the recipient to show why (if she/he can) the reduction or elimination should not take place.
Aside from alimony cases, the party alleging the change in circumstances usually has the burden of proving that a material change in circumstances has occurred. Most judges will not allow modifications at the time of motions for … Keep reading