The Business of Divorce

By Mark David Blum, Esq.

Chances are, by the time you read this, its already too late. You are married, have kids and are well on the way to a successful retirement. My advice? Stay married. Otherwise, be prepared for the miseries of a corporate takeover and partnership dissolutionment.

Notice, I made no mention of love or marriage. Such issues are better left for social philosophers. They certainly have no role in a divorce. Judges don't care; neither do the lawyers.

New York requires that in most circumstances, there be "grounds" proven for divorce (abandonment, adultery, cruel and inhuman treatment, insanity). "Fault", however, has absolutely nothing to do with the distribution of the marital estate. "Who did what do whom" creates only fodder for argument and discord; the last things you need during a divorce. In only reported instance known to me, "fault" was taken into account when allocating the marital estate.

There, the wife had attempted to kill her husband for his money. Short of murder or attempted murder, however, the horrors of adultery, cruel and inhuman treatment, insanity or abandonment mean nothing in today's divorce actions other than to satisfy a "legal" standard. Words on a page.

Boiled down to its gravy, every divorce is a dissolution of an economic relationship. Assets of the marriage, separate property, custody, child support, the "a" word, and legal expenses are the only true concerns of any divorce court.

It is said that, "hard cases make bad law." Among the hardest was O'Brien v. O'Brien, where in 1985, New York's highest Court found the mere presence of a spouse in a marriage and that spouse's presumed support to have a constituted financial investments in a professional license. There, a husband left his wife after nine years of marriage: Coincidentally, two months after he received his license to practice medicine. The Court awarded the wife 40% of the value of the medical license (its lifetime earning potential). It was presumed that the unlicensed spouse sacrificed her own future and similarly worked toward a common future of enhanced earnings. When the husband left for a young pretty nurse, he was required to pay for his sins.

Lawyers first gasped, and then grasped at the O'Brien holding. For the good of our clients, we rushed to expand O'Brien and succeeded in expanding O'Brien to reach any professional license, enhanced education, business or investment made by one spouse. Now, the non-participating spouse automatically becomes a partner with an undivided undetermined interest.

A local matrimonial attorney became victimized when his divorcing spouse demanded payment for an interest in her husband's law practice. O.K., so she owns part of the license; but the practice too? The Courts said that when the husband opened his office, his license "merged" with the practice and the wife's interest followed. In my own dusty files, there is a case where the wife started college in January, moved out on her husband in February and got her R.N. license nearly two years later. Be sure that the wife "settled" handsomely with the husband by buying out his interest in her license.

The general rule is that everything accrued during the marriage is "marital" property subject to "equitable" distribution. What is "equitable" and what is accrued after the marriage are questions that keep judges awake at night and allow layers to sleep well. These questions, however, do constitute the entirety of the divorce activity. Consider one horror story where a lawyer purportedly got married AFTER he passed the bar but prior to his admission. He too paid for his transgressions.

New York's Domestic Relations Act has been affectionately called the "Lawyer's Full Employment Act". It is laced with archaic attitudes and ambiguous terms. Later modifications only made it worse. "Equitable distribution"? What's that? Prove grounds for divorce? Fiscal health is not a factor to be considered in custody awards? What all this does, is create havoc amongst lawyers and clients and make aggravating and expensive what should otherwise be a cool business settlement.

As just one example: If you want the financial edge in the settlement, then being the custodial parent of any minor children is the role to pursue. Love for the children is only a secondary matter. Remember, however, that what is in the "best interests of the children" is the legal standard Thus, when deciding whether to fight for custody opens the door to any relevant fact; meaning anything derogatory than can be mustered to establish the "fitness" or "unfitness" of either parent.

Make no mistakes, actual physical custody of the children is a giant windfall. Child support is mandatory in accordance with the Child Support Standards Act; to the tune of 17% of your gross income minus FICA only for just one child. If you make more than $80,000.00, then the Family Court can deviate upward or downward from the statutory percentages. Add onto that, mandatory child care, mandatory college contribution, mandatory medical insurance, mandatory uncovered medical contribution, and mandatory life insurance proceeds, and the cost of supporting the child becomes greater when out of the marriage than within.

For example: Assume you and your spouse are both self-made. No "silver spoon", no rich uncle, no political connections. You both gain advanced degrees and build successful careers. During the marriage, you both agreed to instill these same "Horatio Alger" values requiring the child to do it themselves. Guess what? In a divorce, a custodial parent could demand a college contribution for the child. If the non-custodial parent is the only moneymaker, then that parent could be saddled with the full cost of a college education; many years hence. (Ever think you would hope your child did NOT get into Harvard?) If the custodial parent does not pursue this, purportedly, the child could do so themselves.

The answers? Stay married, if you already are. Don't, if you are not. If you unfortunately find yourself in a divorce, settle. Forget about the cheating, the sexual dysfunction, the loneliness. It does nothing but make matters worse. Treat the process as a business settlement. It only requires that you two get along for just a few more hours and knock out an agreement. There is no better way to scam the lawyers than to peaceably resolve the issues, cut your losses, lick your wounds, and get out there and do it all over again. You could give the money to me or keep it for yourselves.

But hey, I have to eat too.

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