Defining your Marital Lifestyle in Divorce Post-Pandemic: Longing for (or Moving on from) the Life that Once Was

Alan R. Feigenbaum

In one of its hallmark songs, the Rock and Roll Hall of Fame band AC/DC proclaimed, “money talks.” For better or for worse, those two words find a way of ringing true in many facets of life, and contested divorce litigation is no exception. Yet during the year-long, or perhaps longer now, pandemic, if you find yourself in the middle of a divorce proceeding you might be questioning whether or not money talks anymore or has instead been tucked away until a time when normal life resumes.

The subject of your lifestyle during a marriage is bound to come up in divorce when you are quarreling over issues of child support and/or spousal support. For example, in the child support arena, when considering whether or not to award support above New York’s statutory cap for combined parental income, the law in New York considers the standard of living that a child would have enjoyed had the family unit not dissolved.

Then there is spousal support, which your lawyer will tell you, if being up front can be an ocean of uncertainty. You may have heard that New York, some years ago, established formulas for determining spousal support. But in high-net-worth cases, with incomes above and beyond the statutory cap for spousal support, those formulas can quickly give way to a focus on many factors including, you guessed it, the marital lifestyle (a fancy way of describing how you and your family lived economically during your marriage).

What do we mean by living, or lifestyle? What type of residence do you have and in what neighborhood? Do your children attend public or private schools? Does your family vacation, and if so, how many times per year and at what cost? Where do you dine out, and how frequently? At which stores do you buy clothing for you and your children? Do you belong to a gym or other private club, and if so, is it “high end”? Or, maybe you have a personal trainer at home?

Continue reading

Promoting Peace during the Holidays

Stacy D. Phillips

There is almost nothing else that brings underlying family tensions to a head quite like the holidays. For separating, separated, divorcing, and divorced families, this time of year can be highly emotional and stressful. The primary reasons that personal relationships break down—mismatched value systems and power struggles over things big and small—are often on display at the Thanksgiving table or when planning Christmas/Hanukkah gifts for your children or in deciding which side of the family to visit at which time.

We can anticipate that, much like everything else 2020 has impacted, this year’s family in-person and virtual gatherings may be uniquely high on tension and disagreement. Many people are anxious about their health amid another rise in COVID-19 cases or uncertainties surrounding their personal financial situations in the current economy. Add in the political and social unrest in this country and you have a recipe for feeling like you have a lack of control over what is happening in your world.

Like addressing the emotional, psychological, and legal wars of separation and divorce, finding peace during the holidays often requires responding rather than reacting, positive thinking instead of negative strategies, and finding new peaceful solutions to ongoing differences. Despite the political, cultural, and public health uncertainties, there are many opportunities to making the 2020 holiday season a peaceful one.

Reach Out & Be Kind

At the beginning of the COVID-19 lockdowns, people were more likely to empathize with each other, make sacrifices, and reach out to each other with a heightened sense of humanity to say: “we are in this together.” Now that we are nearly nine months into the pandemic, many people, especially those that are separating and divorcing, are fighting over things that are not quite earth-shattering and hating each other with a vengeance.

This holiday season remember that people are struggling, whether impacted by COVID-19 or those who lost work. In addition to focusing on what you can do for others by making that extra donation to the food bank and expressing gratitude to doctors, nurses, first responders, and essential workers, call and check in on family and friends. They may be having a tougher time with loneliness than anyone realizes. When you look back on this time many years from now, you will want to remember the holidays as a positive time when you could focus on others and set aside the strife.

Cooperate to Make New (or Simplify Old) Traditions

If there was ever a year to be flexible and cooperate with your ex for the good of your children, 2020 is it. Many of us will experience frustration that, because of COVID-19, we cannot have the same large family gatherings or have our children easily split time between both parents.

Although nobody knows when the pandemic will end, we will all have to find patience and adapt to the current circumstances. That does not mean old traditions need to end and we should resign ourselves to being alone. Instead, there are new opportunities to see relatives from both your and your ex’s families via Zoom and find creative ways to share time with old friends and family members and carry out old traditions together virtually. Make time for your ex’s family and in-laws if you can, even if only online. When deciding who to have at your table (safely!) or which relatives to invite to Zoom, be as inclusive as possible.

Take Care of Yourself COVID-19 has taken a heavy toll on us physically and psychologically. Not only has the disease directly impacted many of us, but we have all been hit with fatigue and stress. Many of us have been rightfully concerned about others and may be caring for someone else during this time, but do not forget that your physical and mental health matters too. Find time to engage in more of what you love about the holidays. Continue to get regular and proper exercise to vent frustration, tune up your mind and body, and give yourself more energy to face challenges. When you have taken care and control of yourself, it is that much easier to let the happiness and positive energy from the holidays happen.

Mediation for Family Law Disputes—Is It a Cure-All, a Band-Aid Precursor to Litigation, or Something in Between?

Alan R. Feigenbaum

If during the ongoing COVID-19 pandemic you, and/or your spouse, have made the decision to part ways, then there’s a good chance you have considered or read about mediation as a potential way forward. Mediation, including online mediation, is seemingly all the buzz right now. It has become an integral part of the judicial systems in California, Florida, New Jersey, Pennsylvania, and New York.

Think before you act. All else being equal—if you were asked whether you prefer to “mediate” or “litigate,” you probably would choose the former. What you should consider, carefully, is whether or not your family dynamic and your relationship with your soon-to-be ex-spouse is suitable for mediation.

What are the factors to consider when you make your decision? What due diligence should you undertake before saying “yes” or “no” to mediation? Cost is an obvious factor, but let’s dig deeper. Start by asking a simple question: how did your spouse treat you during the marriage—emotionally, financially, as a parent, as a partner? If the answer to all of these categories is resoundingly awful, then think twice about mediation. It may be emotionally taxing to dredge up what has played out during your marriage when you make this calculus, but the alternative is to dive right into the process, cold. 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

It’s All About Control

Stacy D. Phillips

As a family lawyer specializing in high net worth and high profile cases for more than 35 years, you can imagine that I have seen it all. Representing many celebrities—often involving complex, high conflict matters—I have observed that whatever the salacious headlines, particular facts, and circumstances of each case, there is one important commonality: control.

It is a given that every case I handle will have its share of “issues,” many of which go beyond the division of assets. Frequently, some urgent situation or chronic problem creates a dispute involving the need/desire/obsession of one party to dominate the other. Neither gender has exclusivity when it comes to pursuing, possessing, and asserting control, whether during the marriage, the divorce, or its aftermath. The reality is: Control is prevalent in any relationship. And, when couples are jockeying for it, a legal case becomes a contest. All too often, contests escalate to wars because, by nature, human beings are competitive. Continue reading

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.

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

Stacy D. Phillips

Part One: Control is the Common Denominator

As a family lawyer specializing in high-net-worth and high profile cases for more than 30 years, you can imagine that I have seen it all. Representing many celebrities—often involving financially complex, high conflict matters—I have observed that whatever the salacious headlines, particular facts, and individual circumstances of each case, there is one important commonality: control.

It is a given that every case I handle will have its share of “issues,” many of which go beyond the division of assets. Frequently, some urgent situation or chronic problem creates a dispute involving the need/desire/obsession of one party to dominate the other. Neither gender has exclusivity when it comes to pursuing, possessing, and asserting control, whether during the marriage, the divorce, or its aftermath. The reality is: Control is prevalent in any relationship. And, when couples are jockeying for it, a legal case becomes a contest. All too often, contests escalate to wars because, by nature, human beings are competitive.

Control is a fickle power. It can change hands at the flick of a need or want, or due to external forces (such as employment or health problems), or internal circumstances (such as falling in love with someone else). The battle for control is amplified in most personal relationships that fail, and may not be limited to the former couple. It can also include various personal and business associates and advisors.

Celebrity clients often face the same issues as other divorcing individuals; however, there are important nuances at play. There are issues of income, support, child custody, and legal fees, of course, but not of the garden variety. Often it is precisely these complications that can cause the Control Wars, leading to prolonged litigation and negotiations. There are no cookie-cutter solutions.

Many wealthy individuals, and especially celebrities, face paternity suits. In these cases, innocent children often become a lever for control. Moreover, if paternity is established, the father could have substantial child support responsibilities, considerable legal fees, and too often, personal and professional images can be tarnished by leaks to the media from the party trying to gain leverage. Sadly, after the dust settles in these battles, the children of such relationships frequently become collateral damage.

Next month, in Part Two of this article, I will share some interesting nuances particular to high profile, celebrity, and high-net-worth divorces and child custody matters.

Ch-ch-ch-Changes! Preparing for Trump’s Tax Code Reforms

Michelle Piscopo and Mary Vidas

Donald Trump was sworn in as our country’s 45th President on January 20 and, prior to his inauguration, he vowed to immediately set into motion many of the promises he made during his campaign. One of the promises made by President Trump during his campaign was to reduce taxes across the board—especially for working class and middle class Americans.

Currently, there are seven different individual tax brackets ranging from 10% to a maximum of 39.6%. Under the plan proposed by President Trump, there would only be three tax brackets:

  • 12% for individuals earning less than $75,000;
  • 25% for individuals earning more than $75,000 but less than $225,000; and
  • 33% for individuals earning more than $225,000

President Trump’s plan also proposes raising the standard deduction from $6,350 to $12,000 for single tax filers and from $12,700 to $30,000 for joint tax filers, and eliminating the head of household tax filing status. Under President Trump’s plan, the corporate tax rate would be reduced from 35% to 15%.  While Trump alone cannot change the tax code, the proposal put forth by House Republicans is quite similar to the Trump proposal. The House Republican plan agrees with Trump’s three tax brackets—so changes in tax rates are inevitable.

How will this impact you?

Lower taxes means higher net income. And, that higher net income could impact you if you are paying or receiving child support, spousal support, maintenance, or alimony. For example, under the current tax code, an individual who earns $500,000 per year would be in the 39.6% tax bracket, which results in net income of $302,000. Under President Trump’s proposal, an individual who earns $500,000 would be in the 33% tax bracket, which results in net income of $335,000. That additional $33,000 of net income will impact your support calculation. Depending on whether you are the party receiving support or the party paying support, this could be good news or bad news. We expect quick changes from the new administration and are keeping a close eye on any changes to the tax code. As this issue develops, if you have any questions about how new tax laws could affect your support order, the attorneys in all states of our matrimonial group are prepared to answer them.