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Can You Be Held Responsible for Your Dead Ex-Spouse’s Debt?

Tuesday, September 16th, 2014

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One of the primary issues divorcing couples must work out is property division.  This includes both assets and debts. In both equitable division states (such as Georgia) and community property states, a final divorce decree will outline exactly how marital property is to be divided and how marital debts are to be allocated.  Community property states will divide all marital property and debts equally, but the divorce decree will still specify how it will be equally divided.

While a final divorce decree will protect you in court if your spouse is not making payments on a joint debt for which the divorce decree made him responsible, the creditor itself will not be appeased by the court order.  This is because the divorce decree is between you and your ex-spouse – the creditors do not sign off, nor are they a party to the agreement so they are not required to abide by it.  Thus, if your ex-spouse dies before he/she has fully satisfied a debt in both your names, the creditors are likely to come after you.   A dead ex-spouse’s debt can become your problem, by Jeanne Sahadi, money.cnn.com, June 25, 2014.

For example, consider a situation wherein you and your ex had a joint credit card for which he was responsible post-divorce, but he dies before he has paid it all off.  In that case, the credit card company will likely come after you for payment because your name is on the card as well.  If you don’t pay it, it could be detrimental to your credit.  You could try filing a claim against his estate, but this takes time so you will likely be forced to pay it in the interim so you don’t damage your credit.

There are a couple things you could try to do to lessen your risk:

  1. Request that your settlement agreement/divorce decree have a clause requiring the party responsible for the debt post-divorce to refinance the debt to remove the other spouse’s name.  Houses and cars can be refinanced. If your ex will not be able to qualify to refinance into his own name, consider taking on the debt yourself along with some additional assets to balance it out.  That way, payment of the debt will be in your control.  Not all debt can be refinanced this way but it is worth a try.
  2. Estate planning attorney Geoff Germane of Kirton McConkie suggests that, at the time of your divorce, “you could try to enter into what’s called a ‘novation’ or ‘accord and satisfaction’ with the creditor to erase your further liability for the debt.  This is essentially an agreement with the creditor that you are no longer responsible for the debt.

Though neither of these options is foolproof, they are certainly worth a try to reduce your risk of being later help responsible for a debt from which you assumed you were already safe.

Surrogacy May Complicate Divorce in Georgia

Wednesday, September 10th, 2014

It goes without saying that many couples begin the process of growing their family with the intention to remain married and raise their children together. However, it is often hard to predict whether a couple many divorce or separate in the future, or when that divorce such a divorce or separation may occur relative to the birth of a child. With this being said, a couple’s use of assisted reproductive technologies such as intrauterine insemination, in vitro fertilization, freezing sperm, eggs, or embryos for future use, or surrogacy may raise several legal questions and complications in the event of divorce. Surrogacy in particular has the potential to raise several legal complications due to questions surrounding the relationship of the child to the intended parents.

How should child custody be determined in a divorce case where the couple is expecting a child via surrogacy, and the child will likely not be born prior to the divorce being finalized? Does the genetic relationship between the intended parents and the child matter? If so, in traditional surrogacy cases, is the father automatically entitled to sole custody to the exclusion of the intended mother because he is the only intended parent with a biological connection to the child? Should the intended mother, who may have no biological connection to the child, be obligated to pay child support? Can the surrogate intervene in the divorce action to petition for custody rights? It is questions such as these that exhibit how surrogacy may potentially complicate Georgia divorce.

The questions posed above also exhibit why it is extremely important to have a written and detailed agreement documenting each party’s intentions prior to entering into a surrogacy arrangement or any type of third-party assisted reproduction arrangement. Such an agreement should also contemplate what would occur in the event the intended parents separate or divorce.

If you are contemplating surrogacy, or if you have already taken advantage of other forms of assisted reproductive technologies and are now considering divorce, please contact a member of our Atlanta Divorce Team. We will provide you with the assistance and information you need to navigate the Georgia divorce process.

Number One Complaint Against Georgia Divorce Attorneys

Saturday, September 6th, 2014

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Choosing the right divorce attorney is one of the most important steps a potential divorce litigant can make to ensure the success their divorce case. Vetting a potential attorney’s legal experience and seeking information regarding his or her hourly rate are both effective methods to employ in choosing the right divorce attorney. But, there is one vital topic that many litigants often overlook when interviewing potential divorce attorneys: the attorney’s client communication policy.

Inquiring into an attorney’s policies regarding responding to client communication is vital, because a breakdown in communication between attorney and client often leads to misunderstandings and dissatisfaction. In fact, the number one complaint or dissatisfaction expressed by divorce clients is the failure of their divorce attorney to timely return telephone calls and emails. To avoid entering into an unhappy attorney-client relationship, anyone considering divorce in Georgia should ask the following questions of all potential divorce attorneys they interview:

  • Does your office have a written policy regarding client contact and communication?
  • How soon do you response to client telephone calls and emails?
  • How does your office schedule in person client meetings?
  • Do you respond to all client communication personally, or is support staff assigned to respond to certain communication?
  • Is it easier to reach you by telephone or email?
  • How does your office bill for client communication by telephone and email?

Failure to Pay Child Support in Georgia May Result in Termination of Parental Rights

Tuesday, September 2nd, 2014

In Georgia, failure to pay court ordered child support comes with a variety of penalties. Such penalties generally include:  contempt citations, suspension of driver’s, hunting and fishing licenses, denial of passport applications, and potentially incarceration. If these penalties seem severe, it is because they were designed in an effort to dissuade non-payment of child support. However, the above mentioned penalties pale in comparison to what may be considered the ultimate penalty for failure to pay court ordered child support: termination of parental rights.

Georgia statutory law states the following with respect to the termination of non-custodial parents’ parental rights for non-payment of child support:

(b) Except as provided in subsections (e) through (h) of Code Section 15-11-96, the court by order may terminate the parental rights of a parent with respect to the parent’s child if: […] (2) A decree has been entered by a court of competent jurisdiction of this or any other state ordering the parent, guardian, or other custodian to support the child, and the parent, guardian, or other custodian has wantonly and willfully failed to comply with the order for a period of 12 months or longer.

O.C.G.A. § 15-11-94(b)(2).

The two most notable elements of this law are: 1) the non-payment must be “wanton and willful,” and 2) the non-payment must be in contravention of a court order to pay child support. According to the Georgia Court of Appeals, “wanton and willful” is defined as “without reasonable excuse, with a conscious disregard for duty, willingly, voluntarily, and intentionally.” In re H.B. and K.B., 174 Ga. App. 435 (1985). Thus, for example, if a parent’s non-payment is due to being laid off from his or her employment, such non-payment is not “wanton and willful.” In re S.G.T., 175 Ga. App. 475 (1985). With regard to the second element, a non-custodial parent’s parental rights may not be terminated due to failure to pay child support if no court order was ever issued obligating that parent to pay child support. Uniroyal Goodrich Tire, Co. et al. v. Adams et al., 221 Ga. App. 705 (1996).

With the above in mind, termination of parental rights is often only sought in the most severe cases of abandonment and non-support.

 

Failure to Pay Child Support is Downright Criminal

Sunday, August 24th, 2014

Many are aware that failure abide by a court order to pay child support comes with several consequences, including: contempt citation, garnishment, revocation of hunting, fishing and driver’s license, and passport denial. However, many parents may not be aware that failure to pay child support in the state of Georgia may also constitute a criminal offense, punishable by imprisonment.

Georgia statutory law regarding the criminal offense of non-support, formerly referred to as child abandonment, states in relevant part:

 “(a) A child abandoned by its father or mother shall be considered to be in a dependent condition when the father or mother does not furnish sufficient food, clothing, or shelter for the needs of the child. (b) If any father or mother willfully and voluntarily abandons his or her child, either legitimate or born out of wedlock, leaving it in a dependent condition, he or she shall be guilty of a misdemeanor. Moreover, if any father or mother willfully and voluntarily abandons his or her child, either legitimate or born out of wedlock, leaving it in a dependent condition, and leaves this state or if any father or mother willfully and voluntarily abandons his or her child, either legitimate or born out of wedlock, leaving it in a dependent condition, after leaving this state, he or she shall be guilty of a felony punishable by imprisonment for not less than one nor more than three years. The felony shall be reducible to a misdemeanor. Any person, upon conviction of the third offense for violating this Code section, shall be guilty of a felony and shall be imprisoned for not less than one nor more than three years, which felony shall not be reducible to a misdemeanor. The husband and wife shall be competent witnesses in such cases to testify for or against the other.”

O.C.G.A. § 19-10-1(a)-(b). Although the above cited statute does not explicitly set out what constitutes willful and voluntary abandonment, Georgia case law interpreting this statue suggests that failure to pay court ordered child support may subject a non-custodial parent to prosecution pursuant to this statute. For example, in Carter v. State, 287 Ga. App. 463 (2007), father was ordered to pay child support in the amount of $114 per month. He failed to make those court ordered payments in April 2003, December 2003, April 2004, May 2004, July 2004, September 2004, October 2004, January 2005, March 2005, and August 2005. As a result, he was charged with and convicted of ten counts of misdemeanor child abandonment. On appeal, the Georgia Court of Appeals affirmed the trial courts judgment, because sufficient evidence was presented at trial indicating that the defendant failed to meet his obligation despite being employed and having the ability to pay. Id.

Criminal non-support is a serious offense, and as outlined in the above cited statute it may constitute either a misdemeanor or a felony. If convicted of misdemeanor abandonment, a parent may face up to 12 months in jail, a $1,000 fine, or both. O.C.G.A. §17-10-3. If convicted of felony abandonment, a parent may face up to three years of incarceration. O.C.G.A. § 19-10-1(b).

Although civil contempt actions are generally the preferred method for custodial parents to enforce child support orders in Georgia, a custodial parent wishing to initiate criminal proceedings against a non-custodial parent for failure to pay child support may contact their counties Solicitor’s Office or Prosecuting Attorney’s Office.

Is Life Insurance Marital or Separate Property?

Tuesday, August 19th, 2014

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In the case of Frankie Valli v. Randy Valli, the California Supreme Court answered the above stated question: life insurance is marital property (community property according to California law) if purchased with marital funds.

This issue was presented to the Supreme Court of California after Randy Valli appealed the trial court’s ruling in her divorce from Frankie Valli, lead singer of the critically acclaimed singing group the Four Seasons. Specifically, the issue on appeal was the trial court’s ruling regarding a $3.75 million life insurance policy purchased by the singer for the benefit of his wife. During the divorce proceeding, Randy Valli argued that she should retain the insurance policy as her own separate property because the policy named her as the sole owner and beneficiary. The trial court disagreed and held that the policy was community property because it was acquired during the marriage with funds from the couple’s joint bank account. The trial court went on to divided the policy between the spouses by awarding the policy to Frankie Valli and ordering him to buy out his wife’s half at its cash value, $182,500.

Randy Valli appealed the trial court’s decision, and the California Court of Appeals agreed with her argument. The appellate court reversed the lower court’s decision and held that the policy was Randy’s solely, because the policy was in her name alone. Frankie then sought redress from the Supreme Court of California, and in its May 15, 2014 opinion on the matter, the Supreme Court sided with Frankie and the trial court holding: “[…] we agree with the trial court’s characterization of the insurance police as community property.”

Although this matter was decided according to California law, which is distinct from Georgia divorce law in that Georgia is an equitable distribution state, not a community property state, it would not be surprising for a Georgia court to come to a similar conclusion based on similar facts. According to Georgia law, marital property is subject to equitable distribution between the spouses upon divorce. Property, whether real property, personal property, assets or income, is deemed marital if it was acquired by the spouses during the course of the marriage. Moore v. Moore, 249 Ga. 27 (1982). Thus, in a case similar to the Valli divorce, a Georgia court would likely find that a life insurance policy purchased during the marriage with funds from a couple’s joint bank account was marital property subject to division, regardless of which spouse was listed as the owner or beneficiary.

Professional Degrees are Not Subject to Division in Georgia Divorce

Sunday, August 17th, 2014

 

Obtaining a professional degree, such as a law degree, medical degree or a degree in accounting or business is an investment of both time and money. Like many other investments, professional degrees tend to benefit those who have invested the time and money to earn one in the form of better career opportunities and enhanced earning capacity. With that being said, if professional degrees may be viewed as investments, similar to investment accounts or investment property, the question may arise: “Are professional degrees subject to equitable division during divorce?”

In some states, the answer to the above question is an affirmative one. Professional degrees are viewed just like other forms of investment property and are subject to division upon divorce if deemed marital. However, Georgia is not one of those states. In Georgia, professional degrees are not subject to equitable division upon divorce. In a case specifically addressing this issue, the Supreme Court of Georgia held that professional degrees, such as medical degrees, were not subject to equitable division because “[t]heir value is too speculative to calculate, being simply the possibility of enhanced earnings they provide. That potential may never be realized for any number of reasons. [Professional degrees] have no exchange value or transferrable value on an open market, are personal to [the holder], terminate on his death, and cannot be assigned, sold, transferred or pledged.” Lowery v. Lowery, 262 Ga. 20 (1992).

Although a professional degree (or its value) may not be divisible upon divorce, it may impact an alimony determination. For example, if one spouse earned a professional degree during the course of the marriage, and the other spouse’s contributions to the marriage aided the degree seeking spouse in obtaining the degree, that spouse may be compensated for his or her contribution via alimony. Id. at 20 n.1.

 

Recognizing Rare Types of Divisible Property in Georgia Divorce

Saturday, August 16th, 2014

There are four main aspects of divorce in Georgia: child support, child custody, alimony and equitable distribution. In many divorce matters, equitable distribution, or the division of marital property upon divorce, is one of the most complex aspects of Georgia divorce. Equitable division is so complex, because before marital property may be fairly divided between spouses, potentially divisible property must first be identified, classified as either marital or separate, and valued.  Generally, couples find it easy to identify potentially divisible marital property, because such property often includes property such as: the marital home, vehicles, home goods and other real and personal property acquired during the marriage or with marital funds. However, homes and cars are not the extent of property that may be divided between divorcing spouses. There is a vast array of property, both tangible and intangible, that may be subject to equitable division during a Georgia divorce. Listed below are some types of property that may not be readily recognized as marital property subject to equitable distribution. This list is not exhaustive. Thus, if you are considering divorce and have questions regarding how your assets should be divided upon divorce, it is absolutely essential for you to consult with an Atlanta divorce attorney with the knowledge and skills necessary to identify potentially divisible marital property to ensure a fair divorce settlement.

 

Stocks and bonds

Mutual funds

Certificates of deposit

Money market accounts

Annuities

Life insurance policy cash values

Trusts

Security Deposits

Future Interests (Remainders)

Oil, Gas, and Mineral Interests

Intellectual Property, such as patents, copyrights, and contracts for royalties

Promissory Notes

Personal Injury awards for compensatory damages

Workers’ Compensation Awards

Pets

Business interests

Vacation clubs/Timeshares

Frequent flyer miles

Hotel Points

Season Tickets

Club memberships

 

 

Can Divorce Reduce my Social Security Retirement Benefits?

Sunday, August 3rd, 2014

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Many divorcés or soon to be divorcés who are familiar with the Social Security program or Social Security Retirement benefits may be aware that upon divorce, one ex-spouse may be entitled to receive retirement benefits stemming from the other ex-spouse’s work history. This also leads to the question: “Can divorce reduce my Social Security retirement benefits?” Fortunately for divorced individuals and those who are currently going through the divorce process in Georgia, the answer to this question is no.

If you and your ex-spouse were married for longer than ten years and paid into the Social Security Trust Fund, your ex-spouse may be able to receive Social Security Retirement benefits on your account when he or she reaches the age of 62. However, this is no way effects the amount of Social Security Retirement benefits you are entitled to upon your retirement. To learn more about Social Security Retirement benefits for divorced individuals, or for information concerning the amount of retirement benefits you may be entitled to receive once you retire, contact the Social Security Administration online or by phone at (800) 772-1213.

 

Do Non-Economic Contributions Matter in Georgia Equitable Division Cases?

Wednesday, July 30th, 2014

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Georgia law does not provide a formula when it comes to equitably dividing marital property upon divorce. Alternatively, Georgia law gives judges and juries discretion to determine what is a fair or equitable division of a couple’s marital property. In deciding equitable division cases, judges and juries rely on certain factors outlined in Georgia case law to determine how a couple’s property should be divided. These factors include, among others:

  • Each party’s contribution to the acquisition and maintenance of the marital property;
  • The purpose and intent of the parties regarding the ownership of the property;
  • The separate estate or non-marital property of each of the parties;
  • The length of the marriage;
  • Any prior marriage of either party; and,
  • The service contributed by each spouse to the family unit.

Stokes v. Stokes, 246 Ga. 765 (1980); See also Rooks v. Rooks, 252 Ga. 11 (1984) (concurring opinion)( “Stokes simply recognized that a spouse’s non-economic contributions to a marriage might be reflected in an ‘equitable division’ of property, notwithstanding the incidence of legal ownership,[…]”).

Thus, the question posed above can be answered in the affirmative. Yes, non-economic contributions, such as the service contributed by spouses to the family unit, do indeed matter in Georgia equitable division cases.