In some ways, divorce proceedings are much like that of a bankruptcy. Both can involve the litigation of highly personal matters, and both require intense, third-party analysis of your finances.
In both scenarios, once a filing is made, every financial decision you make thereafter – and some you made before – are going to be considered and sifted and potentially used against you.
Highland divorce lawyers know that this is why, if at all possible, you want to discuss the implications of a separation and divorce in advance of the actual filing. Divorce usually results in a hit to the financial stability of all involved. However, with proper planning, that effect can be minimized, and we can work to ensure you aren’t penalized for financial decisions you made that the court later deems improper.
One particular element to which the judge will pay close attention is the transfer of any property or assets made soon before or after the filing. In working to distribute marital property equitably, the courts needs to make sure all of it is appropriately considered. If the court determines that certain marital property or assets were inappropriately conveyed (or sold) prior to a final decision, the judge may order that property given in whole to the other party or that the offending party forfeit its equivalent.
This scenario recently arose in the case of Stanley v. Stanley, weighed by the Supreme Court of Appeals of West Virginia. Although this is an out-of-state case, West Virginia, like Indiana, is an equitable distribution state, and the same basic legal principles are applicable.
Here, the law of the state is that any married person who conveys interest in real estate has to notify his or her spouse within one month of the conveyance if it involves an interest owned by the other party. (Indiana has a similar law, codified in Indiana Code Title 30, Article 4, Chapter 3.) In West Virginia, when one party fails to abide by this provision and a divorce occurs within five years of that conveyance, the value of whatever interest might have accrued in that property is thus considered marital property for the purposes of equitable distribution.
Here, the husband appealed an earlier order in favor of his wife, whom he alleged conveyed real estate property to her children without providing him notice prior to their divorce. He argued this property should be considered part of the marital estate.
Records indicate the pair married in 1997. At the time, the wife owned 27 acres of real estate, subject to a trust deed. After the pair were married, the husband received a settlement from the Veteran’s Administration on a prior claim, and subsequently gave his wife $30,000 of that to pay off the outstanding debt on that deed. Further, the husband contended that he aided his wife in making numerous improvements to the property, including three additional buildings, the maintenance of multiple fence lines and the routine maintenance necessary to maintain the home the two shared on that property.
When the marriage began to deteriorate, the husband offered to move out of the home and make no claim on the land, so long as the wife would pay him the $30,000 he had invested from his trust. Initially, she agreed, but she never formally accepted these terms.
A bifurcated divorce was held, with the issue of equitable distribution being handled separately. It was in preparation for this that the husband’s attorney learned that the wife had conveyed 27 acres of property to her adult children in the form of a gift. She did so while the pair were still married and without notice to her husband. The transfer was made after the pair had begun settlement discussions regarding the husband’s reimbursement for his investment and improvement contributions.
He argued that his wife’s actions were in direct violation of the law, and the property should have been included as marital property for purposes of equitable distribution. The wife argued that to do so would result in a windfall for the husband.
The family court disagreed, siding with the husband. Although the appellate court reversed, that finding was reversed by the higher court, meaning the husband ultimately prevailed.
Now, the wife will be responsible for paying out to her ex-husband the monetary equivalent share of property to which he otherwise would have been entitled had she not sold it. Plus interest.
Indiana Family Law Attorney Burton A. Padove handles divorce and child custody matters throughout northern Indiana, including Gary and Hammond. Call Toll Free 877-446-5294.
Stanley v. Stanley, May 27, 2014, Supreme Court of Appeals of West Virginia
More Blog Entries:
Daniel v. Daniel – Military Benefits as Marital Property in Divorce, April 15, 2014, HIghland Divorce Lawyer Blog