June 29, 2010

Equitable Division and the Declining Real Estate Market

As we have discussed on previous blogs, Georgia is an equitable distribution state, which means that a division of marital assets does not have to be equal, but merely a fair division of property dependent on the particular circumstances of the case. A major asset to be divided in many cases is the marital home. The options for equitably dividing the marital home are complicated by the declining real estate market.

If neither wants to nor can afford to remain in the marital home, an option is for the parties to put the house on the market. In this case, the parties can work together with an agent, or alternate, with one party being in charge of the sale for 6 months and then the other party being in charge for the next 6 months. Of course, this option presupposes that the house will sell in a reasonable period of time, which, in this market, may not be the case. During the time the house is on the market, the parties will continue to be responsible for mortgage payments, etc., and must work out who will live in the house and pay utilities.

Another option is for one party to keep the house and refinance to take the other party’s name off the loan(s). This seems simple enough, but the refinancing party must be able to take on the entire loan. Since all of the marital assets will be split incident to the divorce, each party will most likely end up with only half of what the parties had as a married couple. In addition, in the case of dual income families, the parties likely qualified for the mortgage with combined incomes. Both of these issues may make it difficult for the party who wants to remain in the house to qualify to put the entire loan amount into his/her name.

Finally, no matter which option the parties choose or the judge orders, there is the very real possibility that the house is worth less than the amount owed on it. In this situation, the parties may be faced with the possibility of having to come to the table with money upon the sale of the house, or possibly foreclosing.

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May 18, 2010

Settlement Agreement Enforced Over Party's Objection

Recently, the Georgia Court of Appeals affirmed the enforcement of a divorce settlement agreement over the wife/mother's objection. In that case, the father filed for divorce and sought legal and physical custody of the parties’ children. Martinez v. Martinez, 301 Ga. App. 330 (2009). While the divorce proceedings remained pending, the father filed a motion to enforce a settlement agreement. He contended that the parties had reached the agreement wherein he would be the primary custodial parent and the mother would have visitation rights. Id. The trial court granted the father’s motion and entered a “Final Order on Custody and Visitation” in accordance with the terms of the settlement agreement. Id.

The mother appealed, alleging that the trial court erred in enforcing the settlement agreement “because she did not assent to the terms of the settlement and lacked capacity to contract at the time in question due to her medical condition,” and argued that the trial court “refused to receive any evidence from the parties” at the hearing on the father’s motion. Id. at 332. The mother’s allegations regarding evidence at the hearing, however, were disputed by the father and inconsistent with the trial court’s order on the motion. The Georgia Court of Appeals, therefore, affirmed, citing well established case law stating that “'[i]n order for the appellate court to determine whether the judgment appealed from was erroneous, it is the duty of the appellant to include in the record those items which will enable the appellate court to perform an objective review of the evidence and proceedings.'" Atwood v. Southeast Bedding Co., 236 Ga. App. 116 (1) (511 S.E.2d 232) (1999). Id. at 332-333. Further, "'where the proof necessary for determination of the issues on appeal is omitted from the record, an appellate court must assume that the judgment below was correct and affirm.'" Enchanted Valley RV Park Resort v. Weese, 241 Ga. App. 415, 417 (1) (c) (526 SE2d 124) (1999). Id. Because there was no transcript or other evidence in the record on appeal, the Georgia Court of Appeals was bound to presume that the trial court was correct.

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April 27, 2010

Custody and the child's choice

A judge can sometimes consider the child's choice in making a custody decision. In any contested custody case, the judge hearing and deciding the issue of custody has a duty “to exercise discretion to look to and determine solely what is for the best interest of the child and what will best promote the child's welfare and happiness and to make his or her award accordingly.” O.C.G.A. 19-9-3(a)(2). A factor that the judge will consider, as appropriate, is the child’s election as to which parent he would prefer to live.

In a custody case in which the child is 14 or older, “the child shall have the right to select the parent with whom he or she desires to live,” and “[t]he child's selection for purposes of custody shall be presumptive unless the parent so selected is determined [by the judge] not to be in the best interests of the child.” O.C.G.A. 19-9-3(a)(5).

In a contested custody case in which the child is between 11 and 14 years of age, “the judge shall consider the desires and educational needs of the child in determining which parent shall have custody,” and “shall have complete discretion in making this determination.” O.C.G.A. 19-9-3(a)(6). For this age group, “the child's desires shall not be controlling.” The judge is to consider the child’s desires and has discretion in how to do so, but “the best interests of the child standard shall be controlling.” O.C.G.A. 19-9-3(a)(6).

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April 22, 2010

How long do I have to pay child support?

According to the child support guidelines, a parent has a duty to support a minor child “until the child reaches the age of majority, dies, marries, or becomes emancipated, whichever first occurs.” OCGA 19-6-15(e). In addition, the court has the discretion to order a parent or parents “to provide financial assistance to a child who has not previously married or become emancipated, who is enrolled in and attending a secondary school, and who has attained the age of majority before completing his or her secondary school education, provided that such financial assistance shall not be required after a child attains 20 years of age.” Id. Thus, parents are required to support their children until the children reach 18 years of age, so long as the child is living, and not married or emancipated. However, the court has the option to extend the support obligation. For example, if a child turns 18 in March of his senior year of high school and continues to be enrolled in school, the court can require the child support to continue until the child graduates high school, but not past the age of 20. Parents have the option of including this extension in any settlement agreement as well.

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May 14, 2009

Child Custody: Joint Custody vs Sole Custody in Georgia

Simply put, joint custody means that both parents share equal input and/or spend equal amount of time with the child/children. Sole custody is essentially the opposite – when only one parent has the decision making power and the child or children live almost all of the time with that one parent. Custody is actually broken into two categories (physical and legal) and then labeled joint or sole within each category. Physical custody describes where a child lives most of the time and what parent will have visitation, whereas legal custody describes access to records and major decisions such as to schooling, religion, extracurricular activities and non-emergency health procedures.

It is most common to see joint custody in the category of legal custody. Joint legal custody means that both parents have input and should be involved in major decisions. Per O.C.G.A. § 19-9-1, (Georgia parenting plan law) there must be a designated tiebreaker or final decision maker if the parties cannot agree (usually the primary physical custodian). This prevents the parties from needing the Court’s intervention every time there is no agreement on any one issue.

In the category of physical custody, the parties must designate a primary physical custodian and typically do not label physical custody under the “sole vs. joint” designation. The primary physical custodian is the person the child/children live with most of the time and the noncustodial parent has visitation or parenting time. According to O.C.G.A. § 19-6-15 (Georgia child support law), even if the parties share equal amount of time with the child/children, the Court must still designate a primary custodian.

Continue reading "Child Custody: Joint Custody vs Sole Custody in Georgia" »

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April 13, 2009

Divorce Settlement Agreements - Georgia Case Law Update

On January 29, 2009, the Georgia Court of Appeals reversed the decision of the trial court, which held that the Husband’s claim for indemnification under the divorce settlement agreement was barred by res judicata. In Stone v. Stone, (A08A2020), the parties separated on August 28, 2005 and the Husband filed for divorce shortly thereafter. During the pending divorce, the Wife obtained five cash advances from an equity line of credit on the marital home and used the money for her own personal expenses. The Wife disclosed this action prior to finalizing the divorce and the parties’ settlement agreement reflected that the Husband would retain the marital home, but that the Wife would be responsible for, indemnify and hold Husband harmless from any liability arising out of this debt.

After the trial court entered a final decree incorporating the terms of the settlement agreement, the Husband sued the Wife for indemnification on the equity line of credit. The trial court dismissed the action after the Wife argued that Husband’s claim was barred by the prior divorce action because it could have been resolved at that time. The Court of Appeals disagreed, stating that “the breach allegation was not – and could not have been – adjudicated in the divorce proceeding, which concluded when the parties settled the case…” The Court of Appeals did not reach the merits of the Husband’s claim, but reversed the trial court’s dismissal.

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March 20, 2009

Georgia’s Domestic Relations Financial Affidavit

Georgia’s Domestic Relations Financial Affidavit (DRFA) is a sworn financial statement required by most counties in divorce and other family law cases in Georgia. The DRFA is an itemized list of your monthly income and expenses, and a list of your assets and debts including bank accounts, retirement accounts, houses, and credit cards.

The DRFA is extremely helpful for a number of reasons in family law cases. First, it is a good overview of the financial situation of the parties and of the marital estate. Second, the DRFA is extremely helpful in determining alimony. Alimony is awarded on a need vs. ability to pay basis and the DRFA quickly shows how much expendable income or deficit a person has on a monthly basis. Third, the DRFA requires the parties to think through the expenses for their children which they should receive credit for on the child support worksheets.

As a sworn statement, the DRFA is often relied upon in Court as a snapshot of your financial circumstances so it is important to be as honest and accurate as possible. Look at monthly bills and expenses and put the actual numbers on there. We recommend keeping all documents on which you based your DRFA numbers so they are easily accessible if your numbers are later challenged in Court.

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October 30, 2008

What is the difference between a contested and uncontested divorce?

If you are thinking about filing for divorce and you contact an attorney, one of the first questions they will ask you is whether your divorce is going to be contested or uncontested. Often, the answer to that question is not so simple.

Generally speaking, when we ask that question we are trying to determine whether you and your spouse have discussed some (or all) of the issues that may be involved in your divorce and how far apart the two of you have been in those discussions. If you and your spouse have worked out all of the issues, such as equitable division, alimony, and child support, prior to contacting an attorney, then your divorce will most likely be uncontested. From an attorney’s perspective, in an uncontested divorce, an attorney for one of the parties will draft a settlement agreement reflecting the agreement, both parties will review it, there will be minimal, if any, changes to the agreement, and then it will be ready for the parties to sign and file with the court.

A contested divorce, on the other hand, generally refers to a situation where you may not have spoken to your spouse about the issues in your divorce or that you have been unable to come to an agreement upon the terms of the settlement agreement. In this type of matter, your attorney will negotiate the terms of the settlement agreement (if possible) with your spouse or, if applicable, the opposing attorney. While certainly some of these types of cases ultimately lead to litigation and eventually a trial, it is important to understand that the vast majority of these “contested” cases result in the parties ultimately resolving their differences outside of a courtroom.

Sometimes, it is difficult to determine whether a divorce is uncontested or contested in the beginning and what may seem to be an uncontested divorce can ultimately turn out to be contested in the end. The key question is whether you perceive that you and your spouse can work things out over the course of a divorce, but whether you have already done so. Hopefully this blog gives you a little better idea of what an attorney is really asking when he/she asks if your divorce is contested or uncontested.

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