Month: August 2017

Broder & Orland LLC – Connecticut Law Tribune’s Litigation Departments of the Year winner in Family Law, Small Firm Category, August 22, 2017

As part of the 2017 Professional Excellence Awards program, the Connecticut Law Tribune has selected its Litigation Departments of the Year winners.  Broder & Orland LLC wins for the Family Law, Small Firm category.  The firm will be honored at the Professional Excellence event on October 3rd, 2017.

See CT Law Tribune site.

 

Considerations in high income/high net worth divorces

All divorces are not created equal. Although the laws are universal, facts and circumstances in high income/ high net worth divorces, require special consideration.

In Greenwich and Westport and other cities and town in Fairfield County and Connecticut, there is an unusually high concentration of wealth. In our practice at Broder & Orland LLC, we are experienced in the intricacies of the sources and value of this wealth and its impact in divorce cases.

Most commonly, family fortunes have been amassed in the financial sector. This includes investment banking, bond trading, hedge funds, private equity, alternative investments, stock options, and business transactions. It may also have been derived from beneficial trust interests, gifting and inheritances. In some instances, wealth has been passed down to the generations however, much of what we see in our practice, is new wealth, especially that created prior to 2008.

So what happens when couples in this financial stratum get divorced? Connecticut is an all property state, which means any assets owned by either or both of the parties at the time of divorce, no matter how titled, are marital property and subject to equitable division. In determining the share of the marital estate it awards to each party, a Court will consider the numerous factors set forth in CGS sec. 46b-81. The statutory factors that most typically come into play in high income/ high net worth divorces are: the length of the marriage; the causes for the dissolution; the age and health of the parties; their occupation, earning capacity, amount and sources of income; the opportunity of each for future acquisition of capital assets and income; and the contribution of each party in the acquisition, preservation or appreciation in the value of their respective estates. Most cases end up with something close to a 50-50 division, but in cases of significant wealth that statistic is often skewed based on the source of that wealth.

If the wealth was entirely created from compensation of one or both of the parties during the marriage, the chances are it will be equally divided. Marriage is a partnership and the law recognizes each party’s economic and non-economic contributions to the marriage. While the hedge fund or private equity husband might have earned the dollars, his wife’s responsibility of taking care of the children and the home, has recognizable value as well. Where the wife spent years as an investment banker traveling the globe doing mergers and acquisitions, her husband’s small business close to their home provided security and constancy for their family, and thus, value.

On the other hand, there are divorce cases where the source of wealth might create a disparate property division. This may be true if the money flowed to one party from trusts, gifts or inheritances. Or where one party brought significant assets to the marriage or received assets other than those from compensation. The division of those assets will depend on their value, use of and reliance on these funds, whether they were segregated, and the global asset picture at the time of divorce. There is no clear cut formula in these cases. Again, the Court will look at the many statutory factors in making its determination.

Valuation of the asset classes described above may be complicated, especially in the case of hedge funds, private equity, alternative investments and business ventures. The nature and effect of carried interest on the Court’s financial orders is often the subject of litigation. In our practice, we typically add to our team a forensic valuation expert whose job it is to determine and substantiate value of assets and income streams. That expert works with us and our client to not only establish the value of our client’s interests but to analyze and in many cases refute the opposing expert’s opinion of value.

How does alimony and child support come into play in high income/ high net worth divorces? The answer is, it depends! At some level of wealth, alimony disappears although that threshold is not a fixed number or necessarily the result of any mathematical formula. The amount of child support at upper income becomes more discretionary. Experienced counsel can provide you with some likely parameters based on the statutory factors, case law and prior trial court decisions.

While the discussion above is premised on trial outcomes, most cases are settled without the need for trial. This allows divorcing parties to be as creative as they want in dividing assets, determining the need for alimony, and establishing child support. But settlement, particularly in high income/ high net worth cases, is always informed by the likely outcome had the case gone to trial.

Modifying an Existing Custody Order during and/or after a Divorce Proceeding

Once the court enters an order of custody, a parent always has the legal right to return to court to seek to modify the original parenting plan.  Contested custody proceedings, including modification proceedings, can present some of the most challenging and contentious situations for parents and for their children whether the proceeding occurs during the divorce or after a final judgment.

If a parent wants to modify an existing custody order the moving parent bears the burden of establishing that there has been a substantial change in circumstances since the original order. In determining whether there has been a substantial change in circumstances, the court must consider the rights and responsibilities of each of the parents, as well as a number of other statutory criteria, including whether the modification serves the children’s best interests.  No single statutory criterion is controlling nor is the court limited to the criteria specified by law.  Factors considered by the court include, but are not limited to the following:

(1) The developmental needs of the children;

(2) Each parent’s ability to meet and understand the needs of the children;

(3) The past and current interaction(s) and relationship(s) of the children with each parent, the children’s siblings and/or other significant contacts to the children;

(4) The children’s adjustment to his or her home, school and community    environments;

(5) The length of time that the children have lived in a stable and satisfactory environment and the             desirability of maintaining continuity in such environment, provided the court may consider favorably a parent who voluntarily leaves the children’s family home during a divorce proceeding in order to alleviate stress in the household;

(6) The stability of the children’s existing or proposed residences;

(7) The willingness and ability of each parent to facilitate and encourage a continuing parent-child relationship between the children and the other parent; and

(8) Any coercive behavior of the parents in an effort to involve the children in parental disputes.

There are many reasons why a parent may seek to modify an existing custody order.  Sometimes the parenting plan schedule may no longer work for one or both of the parents as a result of a change in work and/or the children’s school schedules.  Other times the children’s developmental and/or psychological needs may have changed or the children may not have adjusted well to an existing home, school and/or community environment.  There is no single wrong or right reason to modify a parenting plan.

At Broder & Orland LLC we understand that parenting time arrangements can be complex and sometimes must be modified to meet each family’s changing needs. We are adept at advising our clients on the strategies involved in establishing a parenting plan and understand the multitude of factors considered by a Court during a modification custody proceeding. We also recognize the emotional stresses and challenges that contested custody matters can pose on parents and on their children and we are empathetic to our clients’ needs.

Post Judgement – Motions for Contempt

During your divorce proceeding, you and your attorney will work diligently to ensure that your final Separation Agreement is as detailed as possible. But what happens when after the agreement is signed and your divorce is finalized, your spouse decides to disregard your carefully crafted Separation Agreement? Perhaps your spouse failed to pay you the correct amount of alimony or child support, or perhaps he or she failed to abide by the parenting plan that you tirelessly negotiated. This is the time to consider filing a Post Judgment Motion for Contempt.

During your divorce proceeding you may have heard the phrase “Pendente Lite,” meaning during the litigation. All motions filed before the date of divorce are considered Pendente Lite motions as they are filed before a final judgment is entered into. Any litigation that occurs after the date a final judgment is entered into is referred to as “Post Judgment”.

Once your separation agreement is signed, it can feel devastating and overwhelming to be confronted by a spouse who chooses not to abide by the agreement that the two of you entered into. Fortunately, the Connecticut Courts are well equipped to handle such matters and the attorneys at Broder & Orland, LLC are well versed in all areas of Post Judgment litigation.

A Motion for Contempt, whether filed Pendente Lite or Post Judgment, requires a specific burden of proof to be met by the moving party. In order for the judge to make a finding of contempt you will need to show by clear and convincing evidence, the following: that there is a clear and unambiguous court order, that the order has been violated, that the party who violated the order acted willfully, and finally, you must clearly explain the relief you are seeking from the court.

If for instance, your Separation Agreement states that your spouse is obligated to pay you a set amount of money as Unallocated Alimony and Child Support on the first and fifteenth of each month, but your spouse begins paying you an incorrect amount one time per month, say on the twentieth, you may consider filing a Motion for Contempt re: Unallocated Alimony and Child Support, Post Judgment. The first prong of your burden of proof will be met by your Separation Agreement so long as the agreement is a court order and clearly and unambiguously outlines your spouse’s obligation. To meet the remaining prongs, that your spouse violated the order and acted willfully in doing so, you will want to make sure that you have kept diligent records. At a Hearing, you will want to present the judge will as much information as possible regarding the payments you have or have not received from your spouse and any information regarding your spouse’s willful conduct. You will need to show that your spouse acted deliberately and intentionally when they failed to pay you.

Some other common issues that Post Judgment Motions for Contempt address are failure to properly divide marital assets, failure to abide by parenting plans, and failure to cover or pay for mutually agreed upon children’s expenses.  No matter what issue arises after a final judgment is entered into in your action for dissolution, the attorneys at Broder & Orland, LLC can provide the necessary support and knowledge to remedy the situation.

Broder & Orland, LLC prevails in precedent-setting case allowing for the decanting of trust assets to protect them from a party’s reach in a divorce

On August 8, 2017, the Connecticut Supreme Court issued a decision in the matter of Powell-Ferri v. Ferri, in which it upheld the trial court’s decision dissolving the parties’ marriage and making alternate property distribution and alimony orders.

The Husband, who was represented in the divorce action by Carole Topol Orland and Sarah E. Murray of Broder & Orland, LLC, was the beneficiary of a trust that had been established prior to the parties’ marriage.  The Husband had the right to withdraw principal from the trust when he reached certain ages, though he had not exercised this right except under limited circumstances.  During the dissolution action, without the Husband’s prior knowledge, the Trustees decanted the trust assets into a new spendthrift trust and filed a civil action requesting a ruling that their actions were proper.  The trial court found that the decanting was improper.  The Trustees appealed that decision.

Because an appeal of the trial court’s decision in the civil action remained pending during the divorce trial, the trial court issued alternate orders: if the decanting was found to be invalid, then the Husband was to pay $12 million in lump sum alimony to the Wife in light of the trust assets (and periodic alimony would cease), whereas, if the decanting was found to be valid, no lump sum alimony order would issue and the Husband would only have to pay periodic alimony of $25,000 per month.  The Wife, who had requested at trial an award in excess of $50 million, appealed the decision.  Carole Topol Orland and Sarah E. Murray assisted appellate counsel in defending against this appeal on behalf of the Husband.

The Connecticut Supreme Court, after deciding in the companion civil case that the decanting had been lawful, affirmed the trial court’s dissolution orders.  The trial court’s alternate order of periodic alimony only, with no lump sum alimony award, will be the effective order in the dissolution action.

Waive 90: The Elimination of Connecticut’s Mandatory Waiting Period to Divorce

A common inquiry that divorce lawyers in towns such as Greenwich and Westport receive from potential clients is, “How soon can I be divorced?”  Notably, the answer to this question changed only recently.  Prior to October 1, 2015, divorcing spouses in Connecticut were required by statute to wait at least ninety days after the commencement of an action for divorce (often referred to as the “cooling off” period) before a divorce could be finalized.  The purpose behind the “cooling off” period was steeped in public policy considerations.  Specifically, the idea was that the mandatory waiting period would afford potentially divorcing spouses a period of time to reflect on whether they truly wished to divorce, and avoid making a quick decision on such a significant life-altering event.  A second, and related purpose of the mandatory waiting period was to help ensure that divorcing parties would have sufficient time to gather and analyze information relevant to their divorce (including any necessary financial discovery), so as to reduce the risk that either party might “rush” into a potentially inequitable deal without proper consideration of all relevant information.

This mandatory waiting period, albeit well-intentioned, was often a source of great annoyance and frustration for spouses who had otherwise resolved all of the issues emanating from their marriage and wanted to put their divorce in the rear view mirror as quickly as possible.  This roadblock to a speedy divorce was eliminated with the enactment of new legislation (in the form of an amendment to the prior statute pertaining to the mandatory waiting period), which became effective on October 1, 2015.  This amendment, codified in Connecticut General Statutes section 46(b)-67(b), provides as follows (with reference also made below to the pertinent portion of subsection 46(b)-67(a) for purposes of providing context).

  • Following the expiration of ninety days after the day on which a complaint for dissolution or legal separation is made returnable, or after the expiration of six months, where proceedings have been stayed under section 46b-53, the court may proceed on the complaint, or whenever dissolution is claimed under cross complaint, amended complaint or amended cross complaint, the case may be heard and a decree granted thereon after the expiration of the ninety days and twenty days after the cross complaint, amended complaint or amended cross complaint has been filed with the court…

 

  • If the parties attest, under oath, that they have an agreement as to all terms of the dissolution of marriage or legal separation and wish the court to enter a decree of dissolution of marriage or legal separation prior to the expiration of the time periods set forth in subsection (a) of this section, and file a motion seeking the waiver of said time periods, the court may waive the provisions of subsection (a) of this section.

Pursuant to the foregoing amendment, where parties have reached an agreement as to all of terms of their divorce, they can submit a simple motion to the Court attesting to their respective waivers of the ninety day waiting period and ask the Court to finalize their divorce at an uncontested divorce hearing on the soonest possible date.

At Broder & Orland LLC, where a speedy resolution to a divorce is desired by a client and appropriate under the circumstances, we are adept at bringing cases to conclusion quickly via negotiated settlements.  The new “Waive 90” legislation allows us to get clients to the finish line as soon as an agreement has been reached.