Perhaps Your Biggest Asset Following Divorce: The Bank Account of Emotional Capital

Alan R. Feigenbaum

A necessary part of every divorce action is financial disclosure in the form of a “Statement of Net Worth,” in which a client details their assets, liabilities, and monthly expenses. When clients send the form back, we attorneys are laser-focused on whether each and every asset and liability has been disclosed: bank accounts, business interests, real estate, whole life insurance, loans, mortgages, etc.

What you will not find on any Statement of Net Worth is what I have come to call the Bank Account of Emotional Capital. I’m sure you’re wondering how we go about defining this mysterious, intangible asset. Very simply: what you have in this invisible but quite essential account represents your ability to transition to the next chapter of life—after divorce.

Each divorce case is unique. Everyone’s familial circumstances are unique. There will always be divorce cases that do not lend themselves to a resolution prior to trial. That said, in many divorce cases, the time will come when the attorney can see an “Exit” door for their client, meaning a path to resolving the dispute, well before trial is on the horizon. When that happens, the opportunity to make a sizeable deposit to a client’s Bank Account of Emotional Capital is there for the taking. Continue reading

Coronavirus Reality Checks: Surviving Divorce or Separation during the Pandemic

Marilyn B. Chinitz

Amid these unusual times, everybody has on their minds the ripple effects of COVID-19 because we know it has infected everything. Divorcing individuals are not immune. Those contemplating and those in the middle of divorce need to know that COVID-19 will impact their lives in previously unimaginable ways. It will affect your marital estate, investment portfolio, real estate, retirement assets, business assets, and your most important asset—your children.

Underlying conflicts often emerge when couples are together in close proximity of each other for long periods of time. The abrupt and drastic lifestyle change of staying home may have caused more harm than good for couples already dealing with conflict in their marriage. Social distancing, working from home, having limited mobility, and caring for children full time without traditional support systems have become the norm, and it seems that it’s going to be for the foreseeable future. While quarantine is hard on everybody, it’s even harder on those whose marriage have already cracked. It’s not COVID-19 that’s ruining your marriage, but it can cause a divorce to happen a lot sooner.

In my recent webinar, Lunch & Learn: Successfully Navigating Divorce and Separation Amid COVID-19, I was joined by the dynamic family therapist Dr. Kathryn Smerling as we highlighted potential solutions and strategies for unprecedented financial issues, custody and visitation, and family mental health during these challenging times.

If you’re considering divorce, you must examine your options and have reality checks:

Reality Check #1 ‒ Assemble Your Team

While everybody is at home there is an opportunity to contact different attorneys, speak to them, and do your research. Given that a lot of people are working from home and practicing social distancing, you have more time to do your research online, including looking into potential divorce attorneys, therapists, financial experts, and financial advisors.

Whoever ends up on your team, it takes a village to successfully navigate your way through a divorce. You must work collaboratively with your team to decide which battles are worth fighting and what is best to let go of.

Reality Check #2 – Obtain Financial Records & Know Your Financial Picture

A significant part of divorce hinges on dividing assets. Because most of us are home more often than ever now, your spouse is likely at home working as well. Chances are the mail that was going to the office is coming to the home. That mail could include brokerage account statements, financial statements, and other financial documents that are now being sent to your home.

This is an opportunity.

Don’t view it as being a snoop. Instead, look at it as becoming educated on your own financial situation. This is an appropriate time to learn your income from all sources, what debts you have, and get familiar with your expenses. Look for bank statements, canceled checks, credit card statements, tax returns, and life insurance policies. Remember that you’re free to open the mail when it’s addressed to you. And in some cases, go into your spouse’s home office, and even before uttering any word about “divorce,” say you’re concerned because there’s a pandemic going on and want to know what we have.

Reality Check #3 – Get Acquainted with a Forensic Accountant & a Financial Wealth Manager

Couples who are contemplating a divorce or are in a middle of one, have a lot of questions about the COVID-19 economic crisis’ impact on support requirements, property division, and the valuation of assets. Virtually every individual worldwide who has money invested in the markets has now seen their accounts fluctuate dramatically from the February 2020 high (on Valentine’s Day, believe it or not).

Uncertainty will be ongoing, causing values to seesaw for a very significant time and making it difficult for attorneys to predict exactly what’s going to happen. There’s no question that negotiating your financial settlement during this turmoil is going to get more difficult and complex. For business owners, timing may be important in asking for appraisals while those assets have lower values, but they will also have resources available such as the Paycheck Protection Program and Federal Reserve lending programs.

Markets have historically bounced back from deep declines, so we need to brace ourselves for a significant period of low valuations before the markets fully recover. However, like everything else, this is an opportunity for rebalancing and tax planning opportunities. Find the best financial experts you can if you want to maximize the amount you will walk away with in a divorce.

Reality Check #4 – Expect Modifications Aplenty Going Forward

In the post-COVID world, I anticipate there will be more custody and support modifications. There will likely be quite a few cases where a modification of custody will be justified when a parent has intentionally withheld a child from their ex-spouse. In pending cases, where an ex-spouse may have lost income, there will be support modifications. It’s important to realize that merely losing your job doesn’t mean you’ll be entitled to a downward modification of support and relief from your obligations. If you have other assets sitting somewhere, you’ll be required to use those them to support your children. Many valuations will likely need be redone as well.

And as courts begin to emerge with large backlogs, there are opportunities to work collaboratively with other attorneys. With difficulties getting judges on the phone, instead attempt to first work out the issues that come up with other attorneys. Given the backlog, judges won’t want to hear mundane issues—only important things impacting peoples’ lives.

I invite you to watch and share the recording from the recent webinar for further details on these vital topics and concerns, and to hear Dr. Smerling’s perspectives on handling pandemic anxieties and difficult situations involving children during these treacherous times. Contact me if you have questions about navigating the challenges of separation or divorce amid COVID-19.

Please click here to listen to the recording of our Lunch & Learn webinar.

Amid the Pandemic: Families Coming Together … and Coming Apart

Marilyn B. Chinitz

In times of crisis, families typically come together. People decide to avoid unnecessary battles. Arguments are fewer. But that is not the case for unhappy and divorcing couples, many of whom now are experiencing extraordinarily challenging times. Family tensions are exacerbated as COVID-19 continues to impact lives in previously unimaginable ways. Some form of social distancing, working from home, limited mobility, and caring for children full-time without traditional support systems, are all now the norm and will be for the foreseeable future.

Concerns for Our Children.

Children of all ages are experiencing tremendous anxiety from the significant changes in their daily lives—the isolation, the new cleaning/sanitizing routines, and fears created by the pandemic. Limited access to parks, playgrounds, and friends coupled with distance learning, media consumption, and time-filling crafts and games can be sustained for a few weeks, but not for months on end. In divorced or separated families, many children are not spending time with their non-custodial parent because it would present too much of a risk for contracting the virus. Children are understandably confused, upset, depressed, and unfamiliar with how to process their feelings.

Parents’ Challenges.

Parents are juggling and multitasking like never before. They are expected to work from home while at the same time providing full-time care for their children, cooking, cleaning, shopping, and supervising online studies and extracurricular lessons. Some parents are doing this alone, without help from anyone—no tutor, spouse, or domestic helper. Simply put: parents are stressed and overwhelmed. They, too, are socially isolated and cannot depend on their normal diversions. Activities they once took for granted—dinner with friends, in-person meetings with a therapist, workouts in the gym, or myriad other traditional methods of dealing with stress—are now out of reach. Additionally, isolation presents parents with some of the unhealthiest of options for dealing with stress: binge eating and alcohol consumption. Moreover, many non-custodial parents find themselves in the untenable position of missing their children as a result of the coronavirus prohibiting travel and visits.

Divorcing Couples.

Those in the middle of divorce litigation are in uncharted waters. Their dispute resolution forum is not available to them. The courts are, for the most part, closed or only hearing cases involving an emergency, such as danger to a child. While some judges are conducting conference calls/Zoom sessions with attorneys, the fact of the matter is that the family courts are not available and will not be for the near future.

One of the most concerning aspects in all of this is the decrease in the value of marital assets—in some instances having decreased by as much as 50‒70 percent. Ongoing negotiations about the division of assets will need to be re-examined. Updated appraisals will be required, including revised business valuations and/or re-calculations of the transfer amounts from one spouse to the other.

And it does not stop there. Historic levels of unemployment, now a reality, are impacting the ability to pay support for the benefit of the children as well as spouses. Unexpected unemployment or the shuttering of businesses are examples of substantial changes in circumstances that will likely prompt countless applications to the court for downward modification of support obligations.

Considering Divorce.

If a marriage was falling apart and on the edge before this pandemic hit home, undoubtedly things will get worse with spouses together in a “lockdown” situation. We could be hopeful that cooler, wiser heads will prevail and that couples having problems can put their emotions and fears aside and either present a united front against these very challenging times or work out their custody and financial issues amicably. But this is unlikely to be the case. Although new divorce proceedings are generally not being instituted because the courts are focusing on emergency issues in the cases already proceeding, people are still at war with one another. Even in jurisdictions where filings are being accepted, do not expect to get any relief from the court soon. We are receiving multiple calls from prospective clients who want to understand what the next best steps are to terminate their marriage and divide assets during an unpredictable, unsettling economy.

Moving Ahead.

Many lawyers are now working with their colleagues to negotiate settlements and resolve issues in the interest of moving cases along, even though the courts are not available. More than ever before, it is incumbent upon the attorneys to assert leadership—and to step in since the judges cannot—to try to work with their adversaries to take a position that is fair and reasonable to both sides and build consensus. Otherwise, everybody loses.

For more on this important topic, please join Marilyn for her May 27, 2020, webinar:

Lunch & Learn: Successfully Navigating Divorce and Separation Amid COVID-19

Two Legal Eagles Discuss Representing Professional Athletes

Stacy D. Phillips

For the past two years, I have enjoyed sharing with you my perspectives on many aspects of family law as they relate to high-net-worth individuals. In this advisory, I want to give you a bird’s-eye view into a conversation I had recently with nationally renowned sports law attorney Jay K. Reisinger, partner at Farrell & Reisinger LLC in Pittsburgh, PA. Jay’s practice focuses primarily on sports law, white collar criminal defense, and complex litigation. It turns out that our areas of legal specialty intersect frequently, as divorce and custody issues present thorny challenges when professional athletes are our clients.

Stacy D. Phillips Jay, how are professional athletes different from C-suite executives in the work you do?

Jay K. Reisinger First and foremost, pro athletes (whether in baseball, hockey, basketball, or football) have exceedingly short earning spans. Unlike top executives whose careers can move upward and outward for many lucrative years, the majority of players make significant dollars for just six to eight years. Not surprisingly, the average pro football player’s career lasts no more than two years. Continue reading

Noteworthy Nuances of High Profile and Celebrity Divorce (Part Two)

Stacy D. Phillips

Part Two: A Particular Kind of Tug-of-War

In dissolutions of high-net-worth and celebrity marriages or domestic partnerships, intellectual property rights, profit participation, residuals, and royalties often represent the most valuable of all the assets. They frequently become a battleground for control. Contracts are typically made over long periods of time, and are constantly renegotiated and amended. Valuing such assets can quickly become a hotly contested issue. These assets require a sophisticated and experienced family law attorney, working with a top forensic accountant, who understands the nuances involved.

The matter of support is often a particularly difficult challenge when the major earner of the couple is a professional sports figure. Because their ability to play and earn at the highest levels is limited to a finite time period, support (both spousal and child)—and custody, for that matter—could change dramatically when the professional’s career ends. The lifetime of an entertainer’s career can be similarly brief or span decades, presenting equally complex implications. These are nuances that must be managed when the income of the earning spouse/parent exceeds the couple’s marital standard of living and/or the reasonable needs of the children.

Child custody is another highly nuanced area of family law, particularly when one or both parents are required to be “on location” or travel extensively for business. The amount of time spent with the children, where that time is spent, the level of child support, the ages of the children—all are factors that impact custody agreements. If a parent’s absence is due to filming away from home, for example, is that parent entitled to makeup time? Are the children to visit on location, missing school, friends and their normal routine? Are the children of an age to fly alone? These sorts of custody arrangements are, in many cases, subject to annual renegotiation depending on the working parents’ professional demands. All too often, these negotiations can devolve into contentious Control Wars.

What is especially difficult about most divorce and custody cases is that this tug of war over control does not begin or end in my office or the courtroom. It may go on for years, long after the divorce decree or judgment of paternity is official. I truly believe that a better understanding of how to mitigate control battles would greatly benefit anyone contemplating or in the midst of divorce, and those who suffer from what I term “divorce residue.” Attorneys, even the best ones, cannot be expected to stop these battles or manage the other party. I have seen, however, that if both parties resolve to diminish the legal, financial, and emotional Control Wars, there is hope for the prospect of healing and peace.

Social Media Restrictions in Custody Cases—What Can or Should a Court Do?

Mary Vidas and Michelle Piscopo

Facebook, Twitter, Instagram, Snapchat. The world of social media is ever-evolving. And in the world of divorce and custody litigation, the use of social media is also evolving. We can’t always control what our clients decide to post on their social media accounts—but we can certainly try! We routinely advise clients not to post anything derogatory or defamatory about their ex-spouse. However, what can be done when one parent insists on posting pictures of minor children on his or her social media account that is available for public view? Parents with shared legal custody often do not agree that their minor children should be regularly featured on such accounts. While one might think you would need both parents’ consent to post pictures of a minor child on public social media accounts, that is not always the case. Courts may be reluctant to infringe on a parent’s right to free speech by placing restrictions on his or her ability to feature their children. At the same time, courts may recognize the potential danger of exposing children to child predators when pictures of minor children are posted on public social media accounts.

If you are a parent who does not want images of your children on publicly viewed social media accounts and the court will not impose a restriction on the other parent, you should regularly monitor your co-parent’s account and read the comments. If you see anything alarming and concerning, immediately contact the other parent and request that they remove the post. Take a screen shot of the post and the concerning comments. If the other parent refuses to remove the post, contact your attorney. While the court may not initially be inclined to issue a restriction, if you can show that the postings are receiving disturbing comments, the court may then be inclined to act.

If you are parent who wants to be able to post photos on publicly viewed sites—use caution! Monitor your own account and be proactive in removing photos that garner concerning comments and blocking users who make such comments. You may need to convince a court that you are using photos of your children on public social media in a responsible way. Also, stop and really assess whether it is necessary to have your children featured on a publicly available account and if it is going to be worth the ongoing animosity between yourself and the other parent. If the reason for wanting a public account is so you can share pictures with family and friends, then it may not be worth the battle. Opt for a private account and invite your family and friends to follow you. Children always benefit when parents are able to compromise.

And, as a final note, parents also need to use good judgment when sending sexually explicit private photos over social media. Children should never be included in any such photos. (Yes, Anthony Weiner, we are talking to you!) If your spouse or co-parent comes into possession of “sexts” that show your children, not only could it affect your custody rights, but you could also become the subject of a social services investigation. Adults are free to do as they please, but when it affects children, courts will always act swiftly and harshly to protect them.

Blank Rome Encourages New York Court of Appeals to Safeguard Legal Bond Between Child and Non-Biological Mother

Caroline Krauss-Browne and Margaret Canby

Today, Blank Rome LLP and co-counsel argued before the New York State Court of Appeals on behalf of a non-biological lesbian mother, Brooke Barone, who is seeking shared parenting time and financial responsibility for a child she and her former same-sex partner, Elizabeth Cleland, planned for and raised together. The couple planned to marry but separated before the marriage equality law passed.

Partners Margaret Canby and Caroline Krauss-Browne lead the Blank Rome team representing Ms. Barone.

“Today, we aim to correct a terrible injustice. Our client, Brooke, must be equally recognized under law as a legal guardian to her son in the same manner as his biological mother,” said Ms. Canby. “This appeal was brought by the attorney appointed for the child based on his steadfast belief that the child longs for a reunion with his mother, Brooke. He argues, and we join him, that the failure to reunite this child with Brooke, based upon a 1991 judicial ruling – not a statute – that defines parenthood in an overly restrictive, outmoded, and discriminatory fashion, is against the child’s best interest and will do him substantial harm.”

Together with Lambda Legal and the LGBT Bar Association of Greater New York, Blank Rome represents Ms. Barone in her effort to continue to parent the six-year-old son she and Ms. Cleland planned to have together. The couple met in 2006, made a home together and became engaged in hopes that they would marry as soon as it became legal for them to do so in their home state of New York. Though not legally allowed to marry, the couple wanted to start their family immediately. They agreed that Ms. Cleland would carry the child, and she became pregnant in 2008 using an anonymous donor.

When their son was born, Ms. Barone was in the delivery room and even cut the newborn’s umbilical cord. They used Ms. Barone’s last name on birth certificate. Birth announcements were placed in the local newspaper listing both parties as the parents of the child. And, the women were held out as the parents of the child at his baptism. From the start, Ms. Barone fed their son, changed him, rocked him, bathed him, and took care of all the responsibilities a mother has to a baby. To his doctor, his day care, the pastor who baptized him, Ms. Barone is one of his mothers. When the couple’s relationship ended in 2010, Ms. Barone continued to parent their son and provided for him financially for the following three years.

In 2013, Ms. Cleland abruptly cut off contact between Ms. Barone and their son, requiring Ms. Barone to file for custody and visitation. The family court determined its hands were tied based on the high court’s decisions in 1991 in Alison D. and in a subsequent parenting case in 2010, Debra H. v. Janice R. The court dismissed Ms. Barone’s petition. The appellate court affirmed the lower court decision. After the attorney for the child asked the Court of Appeals to hear the case, New York’s high court accepted review.

Today, Blank Rome joined in arguing that the prevailing New York legal precedents do not account for the myriad ways that people make families, including same-sex couples, and that to consider non-biological parents “legal strangers” to the children they have cared for since birth is not in the best interest of these children. New York’s passage of the Marriage Equality Act and the U.S. Supreme Court’s 2015 marriage ruling in Obergefell v. Hodges call for greater respect for the families formed by same-sex couples and their recognition as full-fledged parents of their children.

Many prominent legal and child welfare experts have filed friend-of-the-court briefs on the side of Ms. Barone and her son, including the New York State Bar Association, the New York City Bar Association, the National Association of Social Workers, and 45 family law academics on the faculty of every law school in New York State.

In addition to Ms. Canby and Ms. Krauss-Browne of Blank Rome, who represent Ms. Barone on a pro bono basis, the legal team includes Susan Sommer of Lambda Legal and Brett Figlewski of the LGBT Bar Association of Greater New York. The child is represented by R. Thomas Rankin of Goodell & Rankin and Eric I. Wrubel, Linda Genero Sklaren and Alex R. Goldberg of Warshaw Burstein, LLP, who, along with Ms. Barone, also seek reversal of the decisions of the lower courts.

The case is Brooke S.B. v. Elizabeth C.C.

The Many (and Expanding) Ways of Becoming a Legal Parent: Chapter One

Caroline Krauss-Browne and Margaret Canby

Who is a parent? Who is not a parent? How do biology, marital status, assisted reproductive technologies (“ART”), availability of formal legal adoption, and sexual orientation figure into the calculus? Can the deliberate action of one parent create a second functional or de facto parent-child relationship in the absence of biological and adoptive ties? Should it? To what extent are the “rights” of biological parents given priority over children’s best interests when determining who will be called a child’s parent? This series of blog posts will summarize the current state of the law and the changes that are presently being urged before the New York courts when weighing whether to recognize parental rights to children who come into adult relationships in ways outside the traditional paths to parenthood.

We have entered a new age in which medical technology and expansive adoption rules have broadened the avenues in New York to becoming a parent beyond the traditional two: the biological “old fashioned” way by two opposite-sex parties who are married to each other or not, and the cumbersome, expensive, and deliberate adoption process by two opposite-sex married persons. In what is certainly a surprise to many people, listing a person’s name on a birth certificate as a parent does not, in and of itself, confer parental status. Problems and inconsistencies arise, especially when applying the existing rules, developed over years by fits and starts, to the new factual and legal landscape related to same-sex couples and their families.

When a child is born to a heterosexual couple as a result of sexual relations, if the heterosexual couple is married, the presumption of legitimacy applies to such child, and no further legal action needs to be taken for both parties to be presumed to have a biological relationship to the child and have equal parental status. If the adults are not married, a paternity case can be filed to establish that the male is the biological father of the child in question and parental rights and obligations, whether voluntarily assumed or not, ensue. Interesting wrinkles and variations upon this rule will be addressed in detail in a future post.

As ART evolved, providing couples the opportunity to have children when one or both of them suffer a biological impediment to doing so the “old fashioned” way, the assumptions about biological parentage conferred by marriage became more complicated. These complexities grew as we entered the age of recognizing the equal rights of same-sex couples to marry and raise families.

In some ways, the New York laws and the cases that interpret them that recognized legal parental status in a changing factual landscape, have been progressive in conferring a status with many rights and obligations and, in other ways, New York has lagged behind the changing times.

For example, New York’s adoption rules now allow for single individuals to adopt, for non-married couples to adopt (both opposite-sex and same-sex), for people who are not in a romantic relationship or shared household to adopt, and for a second person to adopt the biological or previously adopted child of the first person. When the adults seeking to establish a parenting relationship are aligned in their mutual interest to undertake the parenting relationship together, the courts have been liberal in granting the formation of that status, reflecting the public policy that creating more opportunities for legal parent-child relationships to form rather than less generates significantly better outcomes for children.

New York statutes specifically addressing the issue of ART in the conception of a child recognize that it is unfair to children conceived by ART within a marriage to require that the non-biological parent surmount extra legal hurdles for parental status to be created, such as requiring a second parent adoption before the obviously non-biological parent can assert parental status or have such status imposed upon him. The rule now provides for a document to be executed at the initiation of ART procedures, which provides that children born by ART into marriages are the legitimate “birth child” of the “husband” and “wife” for all purposes. But what happens when you have a situation with two “wives” or two “husbands”?

This rule was upheld by a Kings County (Brooklyn) Surrogates Court when a same-sex couple sought a second parent adoption for a child born to one of them during their marriage.  The court found a second adoption unnecessary given New York’s new marriage equality statute, because the presumption of legitimacy applied despite the fact that the statutory language refers to the child as the “legitimate child of both birth parents.” But the presumption of legitimacy has not been consistently applied to same-sex couples. For example, inexplicably and without a full recitation of the relevant facts, a New York appellate court recently held that the presumption of legitimacy did not apply to a same-sex couple for a child born during the marriage, stating that the presumption of legitimacy is only a rebuttable biological presumption of parenthood in the parent who did not give birth—which cannot be the case in a same-sex relationship—and not a legal presumption of parenthood. In seemingly cutting out all same-sex marriages from the presumption of legitimacy that has always attached to children born into marriages, this ruling begs the question of whether or not the old concern about the stigma of “illegitimacy” has been held to be less traumatic for a child, by at least some courts, than the “stigma” of having same-sex parents.

So what happens when the ART form isn’t properly signed or is somehow overlooked?  What if the use of donor genetic material to conceive is informal (via at home artificial insemination) or, as in the case of same sex-couples, a direct biological relationship to both parents, even when married, cannot (it seems) ever be assumed? What if the couple, heterosexual or otherwise, is not married? Can a different standard be applied to opposite-sex parties than to same-sex parties? Can such a different standard possibly pass constitutional muster? Stay tuned as these questions, which are at the very forefront of the emerging law on de facto parenting presently being litigated in New York’s top court, will be discussed in our next chapter.