June 29, 2012

Judicially Hosted Settlement Conferences in Georgia

In some Georgia family law cases, the parties may request, or the Judge may order, a case to attend a Judicially Hosted Settlement Conference. A Judicially Hosted Settlement conference is like mediation, however, rather than using a mediator as a neutral party who will pass offers between the parties, a former Judge will serve in a neutral’s role. The Judge’s role is to help the parties agree on a settlement, but the parties are under no obligation to settle the case at the conference (just as parties are not obligated to settle a case at mediation). The conference can be utilized in lieu of mediation in some Georgia counties, and can always be utilized in addition to mediation.

The benefit of using a conference rather than mediation is that the Judge can assess the merits of the case and give the parties a guide as to how the Judge in their case will rule on the issues. The conference can be a “reality check” for both the parties and, for most cases, knowing how a Judge will rule makes the parties more eager to settle outside of the courtroom. However, the Judge’s opinion on the case is not a ruling and not binding on the parties, and the parties have the ability to agree on the outcome of the case, whether or not they agree with the Judge’s opinion. The entire process is confidential, and the parties are not under any obligation to settle. All in all, a Judicially Hosted Settlement Conference can be beneficial as it can be a cheaper and faster way to get your case resolved, and you can have a hand in determining the outcome.

By Elizabeth Doak, Associate, Meriwether & Tharp, LLC

June 22, 2012

More couples choosing to cohabitate, but remain unmarried

In Georgia and in other parts of the country, more and more couples are choosing to live together without getting married. More couples stay happily unmarried, by Gracie Bonds Staples, The Atlanta Journal-Constitution, March 11, 2012. According to a recent article on ajc.com, a New York based marketing communications agency conducted a survey, which found that 45% of never-married women and 68% of never-married men prefer a long term, committed relationship to marriage. This is, in part, due to the fact that moral judgments about cohabitation have largely disappeared. In addition, women’s gains in education and the workplace combined with an economy that values communication and negotiation skills (values more predominant among women) have made marriage non-essential for many people.

Living together without being married can legally mean different things in different states. Unfortunately in some states, such as Georgia, cohabitating partners have no legal benefits. Georgia does not recognize domestic partnerships or common law marriage, unless it was legally entered into prior to January 1, 1997. OCGA §19-3-1.1. Thus, parties in Georgia who choose to live together without legally marrying cannot divorce. What this means, practically speaking, is that neither party will be entitled to alimony or equitable division of assets if the relationship falls apart. A court will, therefore, not get involved and the parties will have to work everything out on their own. This could be particularly problematic if the parties own property together and have other joint assets, such as bank accounts, or if one party was the primary “bread winner” while the other party chose not to work. These are all issues you should think about, and possibly discuss with your partner, if you choose to cohabitate without getting married.

June 11, 2012

Refinancing a Mortgage Loan in Georgia After a Divorce

In Georgia, it often occurs that one party wishes to retain the marital home after a divorce. If the Husband and the Wife’s name are both on the mortgage loan documents as the borrowers, the question then becomes how to remove the name of the party relinquishing their interest in the home so that they are no longer liable for mortgage payments. Even in divorce situations, most lenders are unwilling to remove borrower’s names from loans because it leaves them less recourse in the event of a default or a foreclosure. To remove a party’s name in these situations, the loan either must be satisfied in full or the party wishing to retain the home must refinance.

When a home mortgage is refinanced, the existing mortgage is replaced by a new mortgage that has different terms. This process is frequently used to, among other things, achieve a better interest rate or consolidate debts. In a divorce situation where both party’s names are on the mortgage loan and one party is to retain the home, the party who is keeping the home is often required to refinance the mortgage into their name only. In today’s struggling real estate market, refinancing has become a problem due to the number of people who owe more on their home than it is worth. In these situations, a solution may be the Home Affordable Refinance Program (HARP).

HARP is a federally run program that allows eligible parties with mortgages owned or guaranteed by Fannie Mae or Freddie Mac to refinance their homes to a lower interest rate, even if they owe more on their mortgage loan than their home is worth. Eligibility requirements for borrowers wanting to utilize this program include, but may not be limited to: (1) zero missed payments in the last six months, (2) no more than one missed payment in the last twelve months, (3) a current loan-to-value ratio greater than 80%, and (4) no previous refinances under HARP. To determine if your current mortgage is owned or guaranteed by Fannie Mae or Freddie Mac, visit www.fanniemae.com/loanlookup and www.freddiemac.com/mymortgage.

If you are dealing with how to best address the issue of your marital home during a divorce, or are facing contempt action on a Final Judgment and Decree due to your inability to refinance the marital home, we recommend you contact one of our Atlanta Divorce Lawyers to assist you with this process.

By: Courtney H. Carpenter, Associate Attorney, Meriwether & Tharp, LLC

June 4, 2012

The continuing saga of enforcing a pre-nuptial agreement in Georgia

In the past, Georgia courts held that prenuptial agreements made in contemplation of divorce were invalid on the ground that they were contrary to public policy. Thankfully, this is no longer the case. See Scherer v. Scherer, 249 Ga. 635 (1982) overruling Reynolds v. Reynolds, 217 Ga. 234 (1961). Today, prenuptial agreements made in contemplation of divorce are regularly enforced by courts across the state. Though agreements in contemplation of divorce do not necessarily violate public policy, the distinction between agreements made in contemplation of divorce and agreements made in contemplation of marriage has continued.

Several recent cases have attempted to distinguish agreements made in contemplation of marriage from agreements made in contemplation of divorce. The former require attestation by two (2) witnesses under O.C.G.A. § 19-3-63, while the latter do not.

In Dove v. Dove, 285 Ga. 647, 647 (2009), the Court held that a prenuptial agreement settling alimony issues was a contract made in contemplation of divorce and only required the signature of one (1) witness. However, in Sullivan v. Sullivan, 268 Ga. 53 (2009), where an agreement set out property rights, defining each party’s respective estates without defining alimony or division of property in the event of divorce, the agreement was considered one made in contemplation of marriage and required the attestation of two (2) witnesses.

While O.C.G.A. § 19-3-63 requires that contracts made in contemplation of marriage must be attested to by at least two witnesses, this statute does not apply to prenuptial agreements made in contemplation of divorce. Lawrence v. Lawrence, 286 Ga. 309 (2009). In Lawrence, the trial court upheld a prenuptial agreement that was only witnessed by one person. The Wife appealed, claiming that O.C.G.A. § 19-3-63 required the signatures of two witnesses. The Supreme Court of Georgia affirmed the trial court’s decision and stated that an agreement that contemplates that the marriage may end by divorce or dissolution, rather than only death, is an agreement that is made in contemplation of divorce, not marriage. Lawrence at 311-312.

By Connor Alexander, Law Clerk, Meriwether & Tharp, LLC

June 1, 2012

Enforceability of a prenuptial agreement in Georgia

In Georgia, for a prenuptial agreement to be deemed enforceable it must pass a three-part test set forth in Scherer v. Scherer, 249 Ga. 635 (1982). This three-part test, as restated in Blige v. Blige, 283 Ga. 65, 67 (2008), reads as follows:

"[T]he party seeking enforcement bears the burden of proof to demonstrate that: (1) the antenuptial agreement was not the result of fraud, duress, mistake, misrepresentation, or nondisclosure of material facts; (2) the agreement is not unconscionable; and (3) taking into account all relevant facts and circumstances, including changes beyond the parties’ contemplation when the agreement was executed, enforcement of the antenuptial agreement would be neither unfair nor unreasonable."

The party seeking to enforce the pre-nupt carries the burden of demonstrating the above mentioned factors.

Under Adams v. Adams, 278 Ga. 521 (2004), to satisfy the first prong of the Scherer test, the enforcing party must show “a full and fair disclosure of the assets of the parties prior to the execution of the [antenuptial] agreement.” Courts have held that a failure to disclose yearly income may amount to the nondisclosure of a material fact. To avoid such problems courts have endorsed financial statements and statements of income as “the most effective method[s] of satisfying the . . . disclosure obligation in most circumstances.” Blige at 69, n.12.

Satisfying the second and third prongs of the Scherer test requires that the party seeking to enforce the pre-nup demonstrate that the agreement is not clearly unconscionable and that its enforcement would not be unfair.

By Connor Alexander, Law Clerk, Meriwether & Tharp, LLC

May 28, 2012

More Frequently Asked Questions: Georgia Divorce

Question: How do I prevent my ex-spouse from stopping alimony payments?

Answer: If your ex-spouse has a Court Order to may alimony, and a condition has not occurred in the Order that would allow him to terminate the alimony payments (ex: remarriage), then you can file for contempt against your ex-spouse after he stops paying. There is nothing you can do before he stops paying because he has not violated any Order.

Question: Can my attorney of many years, who has seen my mental health records, represent my wife in our separation agreement?

Answer: There is likely a conflict of interest here, especially if your attorney knows information that may impact the divorce proceedings. You may waive this conflict if you would like but, depending on your situation, it may be best for each of you to have separate attorneys.

Question: I want to remove my name from the deed on the house, but how can I make sure that my spouse refinances to remove my name from the home equity loans?

Answer: In this situation, I recommend that the parties arrange to refinance all the loans at once. Both parties can show up to the closing and the quitclaim deed can be signed at the same time the refinance documents are signed. Otherwise, I would not recommend a person signing a quitclaim deed when they still have liability on the house.

May 21, 2012

Service by Publication in Georgia

A problem sometimes faced by individuals in Georgia embroiled in either a divorce or a custody dispute with a spouse out of the state or country is how best to serve notice on the opposing party. The spouse’s whereabouts may be unknown, in which case simply hiring a process server won’t do the trick. However, in order to satisfy the due process clause of the United States Constitution, it is necessary for all parties to be given notice of a proceeding. For persons residing out of state, notice must be given in a manner calculated to give actual notice pursuant to either the laws of the state where service is to occur or the state where the proceeding is to occur.

One way of reaching those who either can’t or don’t want to be found is to make use of service by publication. According to O.C.G.A. § 9-11-4(f)(1)(A), personal service must be attempted before service by publication is proper. The Court in Gaddis v. Dyer Lumber Co., 168 Ga.App. 334, 335 (1983), stated “In order to justify service by publication where the address of the defendant is known, or believed to be known, generally it must be shown that service was attempted unsuccessfully at the defendant’s last known address and that personal service was proven impossible.”

The Court in Abba Gana v. Abba Gana, 251 Ga. 340, 343 (1983), noted that because notice by publication is a notoriously unreliable means of actually informing interested parties about pending suits, the constitutional prerequisite for allowing such service when the addresses of those parties are unknown is a showing that reasonable diligence has been exercised in attempting to ascertain their whereabouts.

However, if the address of an opposing party is known, then according to O.C.G.A. § 9-11-4(f)(1)(A), the Petitioner must supply the exact address of the nonresident to the Clerk. If the Petitioner knows the address of the defendant but does not furnish it to the Clerk of Court for purposes of mailing the notice, the judgment could then be set aside for fraud. Stiles v. Stiles, 183 Ga. 199, 205 (1936).

If you are facing similar issues involving service on an out-of-state spouse, please contact one of our skilled Atlanta Divorce attorneys.

By Connor Alexander, Law Clerk, Meriwether & Tharp, LLC

May 18, 2012

Frequently Asked Questions: Georgia Divorce

Question: My wife left me and took our children with her. I have not seen them for three years. How can I find her to serve divorce papers and seek custody?

Answer: Some lawyers and most private investigators have access to databases that should be able to show where the other party is living. If you are trying to handle the divorce without the help of an attorney, you will likely need to hire a private investigator to find our where she is. Once you find where she is living, you can then personally serve her with the divorce papers to start the divorce process.

Question: Can I legally ask my husband for a separation but not have to leave my home?

Answer: Georgia does not recognize a “legal separation.” When you file for divorce, you assert in the pleadings that you are living in a “bona fide state of separation.” That simply means that you and your husband have not had marital relations (sex) since a certain date. There is an action for separate maintenance that can be filed in certain circumstances, but you should schedule a consultation with an Atlanta divorce lawyer to determine whether your specific situation would fall into this category.

Question: How do I get a divorce if my spouse won’t sign the papers, attend the classes, or follow through with any of the requirements?

Answer: If your spouse won’t cooperate, you may have to schedule the case for a final contested hearing. Before you attend this hearing, however, it is strongly recommended that you consult with an Atlanta divorce lawyer to make sure that you have prepared all your paperwork correctly for a final divorce. If your spouse does not attend a parenting class, some judges will still grant the divorce but may deny visitation to the offending spouse until he/she attends the class.

May 14, 2012

Divorce and Patents in Georgia

In a divorce in Georgia, the Court has the power to equitably divide property acquired by the labor of the parties during a divorce. For the most part, this means tangible items like houses, cars, retirement accounts, and bank accounts. But what does the Court do with intellectual property—how can they equitably divide an idea?

Georgia Courts have not specifically addressed whether a patent is a marital asset, but they have addressed intellectual property in the form of legal and medical degrees. In Lowery v. Lowery, 262 Ga. 20 (1992), the Supreme Court of Georgia held that the education and degree of the Husband were not akin to real property, and could not be valued as an asset upon divorce. The Court stated that the value of the intellectual property was “too speculative to calculate, being simply the possibility of enhanced earnings they provide. That potential may never be realized for any number of reasons.” The Court went on to state that a degree cannot be transferred and its value terminates upon the death of the Husband. However, unlike a non-transferable asset like education, patents can be sold and there is a thriving market in the sale of patents. Further, patents generate tangible (or otherwise valuable) assets—a patent was behind the creation of every piece of modern technology.

The distinction between a patent and a degree is that a patent is the property of the creator, and the right to intellectual property is one granted by the Constitution, thus it is the right of the creator to sell the patent as he or she chooses. Based on the constitutional granting of these rights, the Georgia courts could take the view that patents are non-marital assets, but include a patent’s potential when considering a party’s ability to pay alimony. Further, the income generated from a patent or intellectual property could be considered income, and a former spouse could receive an entitlement to a percentage of the income generated from the patent as an equitable division of property.

Again, the Supreme Court of Georgia has not addressed this issue in particular, but the Court may look to the case of Goldstein v. Goldstein, 262 Ga. 136 (1992) to determine the value of intellectual property. In Goldstein, the Supreme Court found that the income from an attorney’s contingent fee agreements was not a marital asset due to the fact that it was “nearly impossible” to determine the amount of work and expense that would go into generating income from intellectual property. This would mean that even if the Court determined that a former spouse was entitled to a percentage of the income generated from a patent, the income may never be realized.

The number of international patents filed in 2010 alone totaled more than 160,000, so although Georgia courts have determined that the value of intellectual property is speculative, it is clear that it is an issue that the court will soon have to address.

By Elizabeth Doak, Associate, Meriwether & Tharp, LLC

May 11, 2012

Exit Strategies: Atlanta Divorce and The Marital Home

In more than a few recent cases, the stumbling block to settling the case has been the marital home. As a result of the real estate market meltdown, Atlanta divorce attorneys have had to rethink how they structure agreements regarding real property. So what do you do in a case when neither party wants the marital home? It’s the proverbial hot potato no one wants to be left holding.

When clients are contemplating walking away from a home, our job as divorce attorneys is to eliminate or at least minimize a client’s loss when structuring an exit strategy. The first step in making this happen is to ensure the client has the information necessary to make an educated and informed decision. One of the key pieces of information is how much equity, if any, is in the property. Knowing whether the client would need to bring funds to the closing table if the property were sold allows us to immediately rule out certain options. Other critical facts clients need to be aware of include who is listed as a borrower on the mortgage, how far the mortgage is in arrears and both parties’ financial condition and employment plans.

Several possible alternatives clients may want to consider include bankruptcy, foreclosure, leasing, a short sale and a limited sale. Something I am seeing more often in divorce practice is parties choosing to “walk away” from a property. Although this is not a situation we encourage, in some cases foreclosure is the only option. While “walking away” may not be the best moral decision for some, it may make sense, at least from an economic perspective, to those parties who owe much more than the home is worth. If the parties agree to a foreclosure, the parties need to ensure that the possibility of a Deficiency Judgment is addressed.

Other alternatives to consider are leasing out the property until the market recovers or placing the home on the market in the hope of a short sale. A short sale may not be an option, however, since most lenders won’t even consider an offer on the property for less than the amount owed, unless the borrowers are at least several months behind on the mortgage.

In situations when parties are underwater or facing foreclosure on the marital residence, it is important to have an experienced divorce attorney. Regardless of the situation, an improperly drafted agreement could leave a person with a financial obligation in the divorce case that they cannot even bankrupt. The few hundred dollars a person might save by not having a lawyer draft the agreement can easily be lost if they draft a bad agreement. A knowledgeable attorney can work with you to craft the right agreement, to suit your specific needs and minimize any losses.

By Alyssa Vaughn, Associate, Meriwether & Tharp, LLC