February 17, 2014

What happens to the marital home after a divorce?

In Georgia, marital assets are subject to equitable division in a divorce action. The martial home is an asset subject to equitable division, but deciding who will retain the home after the divorce is often not as simple as deciding how to divide a bank account or furniture.

Sometimes, neither party wants to keep the house. In that case, the house should be sold with the proceeds divided equitably between the parties. This may be easier said than done, as the parties must agree upon a list price, use of an agent and final sale price, but the end result will be the same. In addition, if the house is going to be sold, the parties must agree upon who will live in the house until it sells and who will pay the associated bills such as mortgage, insurance and utilities.

If one party wants to keep the house, he/she must determine whether he/she can afford to do so. This determination includes the ability to pay the mortgage, insurance and associated bills on his/her own, as well as the ability to buy out the other party. If the party cannot afford to keep the house, regardless of his/her desire to do so, it must be sold. (See above.)

If the party desiring to keep the house can afford to do so, the parties must then agree on the value of the home so that the party keeping the house can buy out the other party. The best way to determine value is by obtaining a professional appraisal on the house. The parties may agree on an appraiser, or each may obtain their own appraisal. If the parties still cannot agree on the house value after obtaining an appraisal, the court will have to take up the issue at the divorce trial.

See here for a flowchart illustrating this process. Every case is different so, if dividing a marital home is an issue in your divorce action, I recommend consulting with an experienced divorce attorney for advice on the most effective way to do so in your specific case.

December 2, 2013

Dividing Personal Property in a Georgia Divorce

Upon a divorce in Georgia, martial assets are subject to equitable division. This means that the assets are divided equitably/fairly under the circumstances, but not necessarily equally. Though people usually think of bank accounts, retirement accounts, cars and houses as being divided in a divorce, personal property (such as clothes, furniture, jewelry, etc.) must be divided as well.

Believe it or not, dividing personal property is an issue that can make even the simplest divorce into a highly contested one. If the parties do not have a lot of money, for example, they may fight tooth and nail over furniture or even kitchen utensils. If lawyers are involved and must help the parties negotiate over every item in the marital home, the cost of the divorce will be driven up significantly.

If you think dividing personal property may be a hot button issue in your divorce, it will likely help to sit down with your spouse and make an itemized list of all personal property in the house. You may find that you don’t even want the same items. The more you can narrow down the contested items before involving your lawyers the less time and money it will take to work everything out.

Keep in mind that, in Georgia, pets are considered personal property – they are subject to equitable division, rather than the best interest standard used for child custody. Therefore, if it is very important to you to keep your dog after the divorce, you may have to give on other personal property in order to make that happen.

September 20, 2013

Equitable Division in a Divorce- Celebrity Hair?

When one thinks about equitable division in a divorce action, one usually thinks of dividing assets like a marital home, cars, bank accounts, and furniture. Sometimes people also have to divide pets, jewelry, boats, and other personal possessions.

One of the strangest assets I have ever seen mentioned as part of equitable division is celebrity hair. Black Keys Divorce. Wife Gets $5 Million...and Bob Dylan's Hair, August 22, 2013, tmz.com. Black Keys singer, Dan Auerbach, and his wife recently settled their Tennessee divorce. In their settlement agreement, the wife received a large sum of money, a car, one of the family homes…and Bob Dylan’s hair. Obviously, this asset was of particular importance to the couple (or at least the wife) if it was specifically mentioned in the settlement agreement.

Though odd, the specific mention of this asset in the parties’ settlement agreement highlights an important thing to think about in writing your settlement language: If something is important to you, no matter how strange in may be, put it in the agreement. If you really want a particular item, no matter how small or seemingly insignificant, make sure the settlement agreement specifically mentions it so there is no cause for conflict after the fact.

June 28, 2013

Georgia Divorce - What happens to the cars?

Georgia is an equitable division state. This means that, upon divorce, the parties’ assets are divided equitably, according to the circumstances of the case, not necessarily equally. So what does this mean for the car(s) that each party is driving?

Often, each party keeps the car that he/she currently drives and is responsible for all debts, maintenance, repairs, insurance and other expenses associated with that car. While this may seem simple on its face, it can be complicated depending on how the cars are titled and the name on the car loan.

Consider a situation where, upon their divorce, Wife will keep Car A. The title for Car A is in both parties’ names, but the loan is in Husband’s name only. In order to sign full title over to Wife, Husband only has to sign the back of the title document. This is the simple part. Since the loan is in his name only, it would be prudent for Husband to ensure that he is no longer responsible to the bank for the amount of the car loan. Husband should insist that Wife refinance the vehicle to remove his name. (This requirement should be included in their divorce settlement agreement.) That way, the obligation for the debt is removed from his name and he will not be responsible, or suffer damage to his credit, if she fails to make payments on the car. It should be noted that Husband should insist that Wife refinance even if both names are on the car loan.

If the Wife does not refinance as required by the settlement agreement and then fails to make payments, the Husband will likely be liable to the loan company for the amount of the loan. Unfortunately, the bank will come after the person whose name is on the loan. They care about their loan document, not the divorce decree. The Husband will then have to file a contempt action against the Wife to recover his losses.

June 10, 2013

If my husband and I get a divorce, will I get 50% of our home if he purchased it before we were married?

The short answer to this question is possibly, but 50% is not a guarantee under any set of circumstances. Georgia is an equitable division state, which means that assets are divided equitable, not necessarily equally. What is "equitable" depends upon the specific facts and circumstances of each case.

One of the factors to look at is how much in the way of marital funds have been put into the house, including mortgage payments. In other words, if he bought the house with no money down, but made all the mortgage payments while you were married, then you have an argument that all of the equity in the house is marital because he invested marital funds into the house. However, if he made a down payment on the house when he purchased it (before the marriage), the situation gets trickier. In that case, you would not be entitled to the portion he put down, but you may be entitled to an equitable portion of the remainder, assuming you could prove that the mortgage payments were made with marital funds. If you are in a situation requiring a potentially complicated calculation such as this one, I recommend consulting with an experienced family law attorney.

By Patrick L. Meriwether, Partner, Meriwether & Tharp, LLC

May 10, 2013

Separate property in Georgia

Georgia is an equitable division state. This means that, upon a divorce, the property of the parties is divided equitably between them (though not necessarily equally). The exception to equitable division is separate property. In Georgia, “the separate property of each spouse shall remain the separate property of that spouse.” OCGA §19-3-9. Basically, this means that any separate property is not included in the marital estate and, thus, is not subject to equitable division.

Some examples of separate property include an inheritance, gifts, real property or bank accounts. One must be careful, however, to keep separate property separate, or it may convert into marital property subject to equitable division. Consider, for example, if a spouse inherits a large sum of money from a deceased relative. If the spouse puts the money into a separate account bearing only that spouse’s name and does not commingle the funds with marital funds, the account will continue to be treated as separate property, and that spouse would take the entire account upon divorce without any offset to the other spouse. However, if the spouse adds the inherited funds into a joint account in the names of both spouses, or opens a new account but adds the other spouse’s name to that account, he/she is treating the funds as marital, rather than separate, and they will likely be treated as marital upon divorce. In addition, if it is a separate account, but both spouses subsequently deposit funds into it, a portion of the account may be treated as separate and a portion treated as marital.

Separate property can be a complicated issue during a divorce, particularly if funds have been commingled. The calculation for figuring out how much is separate and how much is marital can be complex and, if not done correctly, can result in the entire asset being treated as marital and subject to equitable division. It is important that you speak to an experienced family law attorney if you are dealing with this issue in your divorce.

April 10, 2013

Debt and Divorce in Georgia, Part 2

As described in Debt and Divorce in Georgia, Part 1, many divorcing couples have significant debt issues. These debt issues may be in the form of credit card debt, home mortgages, or multiple home equity lines of credit. Regardless of the type of debt, one thing is clear – although debt can be a significant issue for married couples, it becomes a much bigger problem to deal with upon divorce.

When spouses choose to settle the issue of debt division between themselves, there are typically three viable options for the couple to choose from:

1. Agreeing to pay off debts prior to divorce - If you and your spouse have cash, or if you have property that you can sell for cash, paying off your debts prior to divorce is simpler and safer for both of you. If you can work together to solve the credit issues, sometimes that is the best way. If this route is chose, there will be no uncertainty about the eventual cost of the debt, and you both will know exactly what you have as you begin your new independent lives.

2. Agreeing for one spouse to take primary responsibility for the debt - If you agree to be responsible for a debt, you need to know exactly how much debt you are responsible for, and what you need to do to get the debt satisfied. This may necessitate you communicating with your soon to be ex-spouse concerning how to contact creditors or how much certain monthly payments will be. Be sure to obtain all the information you can about any debt before agreeing to take responsibility for it upon divorce. On the other hand, if you agree that your spouse will be responsible for a debt that the two of you share, be warned that you are still vulnerable. Although your attorney may insert some type of indemnity clause in your agreement in which your spouse agrees to hold you harmless for the repayment of the debt, this indemnity clause is only binding between you and your spouse, not on third parties. This means that even when your spouse agrees to pay off the joint credit card debt and agrees to indemnify you for it, if your spouse later does not pay off the debt, the credit card company could come looking for you and make you pay the debt. If this were to occur, you would indeed have a claim against your ex-spouse for payment of the debt, but enforcing your marital dissolution agreement in this regard would necessitate you initiating a completely new legal action. This is why many choose to take the above mentioned option, if at all possible.

3. Agreeing to take equal responsibility for the debts - Agreeing to share equal responsibility for payment of a debt is potentially the worst option. Not only do you increase the extent to which you have to continue communicating with your ex-spouse about money after the divorce, but you still run the risk that your ex-spouse will default on the debt that he or she is responsible for, thus leaving you vulnerable to third party creditors.

Your goal upon divorce is to limit your entanglement with your ex-spouse, no to increase it. Thus, instead of agreeing to share a given debt equally, divide up your individual marital debts some roughly equal fashion according to how the debts was incurred and according to who logically should be responsible for the debt. Your goal is to finish with a list of debts for which you have sole responsibility, and a separate list of debts for which your spouse has sole responsibility.

By A. Latrese Martin, Associate Attorney, Meriwether & Tharp, LLC

April 3, 2013

Debt and Divorce in Georgia, Part 1

As a young divorce attorney in the blossoming stages of my career, I have noticed a pattern in many of the cases that I have come across: more and more divorcing couples have significant debt issues. These debt issues may be in the form of credit card debt, home mortgages, or multiple home equity lines of credit. Regardless of the type of debt, one thing is clear – although debt can be a significant issue for married couples, it becomes a much bigger problem to deal with upon divorce.

How much do you owe?

This may seem like a simple question, but it is an essential one. Georgia is an equitable distribution state, meaning that upon divorce both assets and debts will be divided equitably or fairly. However, before any division is made, it is essential to know exactly what is being divided. This is so, especially regarding marital debts, because without full disclosure by both spouses of all the marital debts, one spouse could potentially be left liable for a debt that he or she did not accumulate and did not even know about during the marriage.

In fact, if your spouse has been secretive about your joint financial affairs, you may be totally unaware of how much debt is involved. If this is the case in your situation, your first step should be to try to determine exactly what you are dealing with. Consult with a knowledgeable divorce attorney so that he or she may help you determine the amount of debt that you are aware of and to implement tools like the discovery process to ascertain the amount of debt possibly accumulated by your spouse without your knowledge. Only when you are aware of your complete marital financial picture will you be able to determine how the debt should potentially be shared between you and your spouse upon divorce. For example, it is common for debts that are secured against an asset, like mortgages and car loans, to be retained by the spouse retaining the associated asset. However, unsecured debt, like credit card debt, is often more difficult to deal with.

How should marital debt be divided?

As mentioned above, Georgia courts divide marital debts and assets and debts equitably or fairly upon divorce. But, what does that really mean? There are several cases concerning the meaning of equitable division in Georgia; however in sum, the division of assets and debts upon divorce depend on the circumstances of each case. Thus, there is no formula or set fraction of marital assets or debts that each spouse is required to be responsible for upon divorce. For this reason, many couples seek to settle the issue of asset and debt division among themselves in order to come to the conclusion that works best for each spouse.

By A. Latrese Martin, Associate Attorney, Meriwether & Tharp, LLC

March 25, 2013

What is a Notice of Lis Pendens and How May it Impact My Georgia Divorce Case?

A Notice of Lis Pendens is a powerful legal tool that may be used in the context of divorce. Although a Lis Pendens may be a very effective legal tool if used correctly, many are not aware of what it is or how it may be used during a divorce action.

Lis Pendens is a Latin word that means “pending lawsuit.” Modernly, Lis Pendens refers to a notice of a pending lawsuit that is recorded in county real estate records. A Lis Pendens may be filed by either plaintiff or defendant and its purpose is to provide notice of a claim involving specific real estate to potential buyers and lenders. As mentioned above, a Lis Pendens is a very powerful legal tool that may be employed by a party to a divorce suit because generally, once a Lis Pendens is filed and properly recorded, any transfer of that property by either party will be subject to the final verdict of the jury in the case. O.C.G.A. § 19-5-7.

The effect of a Lis Pendens may be best illustrated with an example: Husband files for divorce against Wife, and contemporaneously with his Complaint for Divorce files a Notice of Lis Pendens concerning the couple’s marital home. The Lis Pendens is properly recorded. During the pendency of the divorce, Wife places the home for sale and eventually sells the home the Buyer. At the end of the divorce matter, the Court in the divorce case awards the marital home to Husband. As a result, Buyer loses the home to Husband, and Buyer must try to get his money back from Wife.

So, although a Lis Pendens does not technically prevent a sale of or loan on real estate, it does do so practically because most prospective buyers, lenders and title insurers are very reluctant to become involved with property that could be adversely impacted by a pending suit. If a Notice of Lis Pendens has been filed in your case, please note that a valid notice of Lis Pendens remains effective only until a final judgment has been entered in your divorce. Vance v. Lomas Mortgage USA, Inc., 263 Ga. 33 (1993). If you have specific questions about how a Lis Pendens affects your specific case, contact a member of our Atlanta Divorce Team.

By A. Latrese Martin, Associate Attorney, Meriwether & Tharp, LLC

October 19, 2012

Georgia Divorce: Payments on Debt in Spouse's Name

As a family law attorney, I have seen several situations where a party previously entered into a divorce settlement agreement and agreed to take on certain debt and, subsequently, became unable to make payments on the debt. The situation becomes even trickier where one spouse agreed to pay a debt that is in the name of the other spouse.

Consider a situation where, under a divorce settlement agreement, the husband kept a car that was in the wife’s name, and the husband was required to make payments on the car. A couple of years later, the husband is no longer able to afford the car payments. What happens?

One option is the wife can file a Petition for Contempt against the husband to try to force him to resume making the payments. A potential problem with this route is that the husband has to miss a payment before the wife can file the petition. In addition, while a judge can hold the husband in contempt and order him to resume the payments, if the husband is unable to do so, the wife’s credit will continue to take a hit for every missed payment.

Another option the wife may consider is trying to reach an agreement with the husband wherein the husband would give her the car back, and she would resume making payments. Under this option, she will protect her credit. If the parties choose to go this route, however, the agreement must be put into writing. If the wife had a lawyer represent her in the divorce, I would suggest that she go back to him or her to draft a document that clearly spells out a new contract between husband and wife. This is because there is a Court Order that says that the husband received the car in the divorce. The Order does not prevent the husband from voluntarily giving the wife the car at issue, but the transaction needs to be in writing in case an issue comes up later and the husband wants the car back.

By Patrick L. Meriwether, Partner, Meriwether & Tharp, LLC