Suzanne Griffiths Blog

In divorce, there is no winning, just different degrees of loss.  This is particularly relevant in divorce litigation.  Fighting over petty details, small issues, attorney fees or pieces of property often ends up costing more than its worth.  Litigation is difficult, uncertain and most of all, expensive.  Litigating when there are uneven incomes and financial resources is even more complicated.  The spouse with more income and more financial means often has access to better and more experienced attorneys, and may drag out the battle, while the party without funds cannot continue.  In some cases, the poorer spouse can request an award of temporary attorney fees from the other, and in fewer cases, they are awarded those fees.  There are significant obstacles in the way of obtaining attorney fee orders.  There is a substantial burden of proof in order to be awarded attorney’s fees, but more than that, the party without funds to litigate, must go to court to get the fees awarded.  All these obstacles make it common for the poorer party to be out-litigated and outdone.

Legal Issues on Attorney Fees

In a divorce proceeding, attorney fees are awarded primarily to equalize the financial positions of the parties.  Case law and the legislature, however, have laid a heavy burden of proof on the party seeking to be awarded attorney fees.  The statute which addresses this matter says that the “Intent is to equalize the status of the parties by ensuring that neither party is forced to suffer unduly as a consequence of the termination of the marriage” (C.R.S. § 14-10-119) however, the courts have been somewhat sparing on their interpretation of equalizing the parties.  The implementation of the law requires that there be a major disparity of income and means between the parties to grant attorney’s fees.  The award is at the discretion of the court; one court may choose to try to equalize the parties completely, comparing incomes and apportioning fees accordingly, while another court may simply ignore the problem and leave the poorer spouse to struggle on as best they can. This raises the next major problem.

Getting Help

Divorce litigation is time consuming, expensive and requires the best quality legal representation. The problem is that a good divorce attorney is hard to find without funds.  Lawyers in divorce cases are not permitted to work on a contingency fee basis, so most lawyers work on a retainer basis.  To hire one of these lawyers, you have to have money up-front and the higher end attorneys will also require an indication that you can continue to pay for ongoing litigation.  Furthermore, the best attorneys are generally unwilling to take on a case where the client has inadequate funds to pay the costs as needed. Provision often needs to be made for experts such as business appraisers or parenting evaluators and attorneys look to their clients to pay these costs in addition. Good trial lawyers have many clients who can afford their fees and costs and they cannot afford to finance their client’s expenses or carry substantial credit. Litigation for the poorer spouse therefore becomes more difficult because the pool of talented lawyers available for their cases is limited.

 An award of attorney’s fees is just that, an award given by the court.  This award requires a legal argument, witnesses and more attorney fees.  A person who needs attorney fees and expert costs has a harder time getting those which often reduces their resolve to hold out for a fair settlement in many cases.

 The Courts

An award of attorney’s fees is entirely at the discretion of the court.  Despite many court decisions making an award of attorney’s fees difficult, a recent appellate court decision has set a precedent for the award of substantial attorney fees and costs to be paid in advance to cover anticipated costs. See In re Marriage of Rose,  04CA2160 (Colo.App.2006.) Here the Court of Appeals stated that allowing prospective fees and costs would diminish the advantage that one spouse may have over the other in litigation because of their respective financial circumstances. In this case the Wife was awarded $75,000 for current and anticipated attorney fees and $75,000 for anticipated appraisal costs.  This new precedent is very empowering for disadvantaged spouses and will hopefully signify a move towards more equality in divorce litigation.

Litigating with uneven incomes has unfortunately often resulted in the poorer party being out-litigated and outmaneuvered.  The law may intend for the courts to equalize the disparity between parties, however courts rarely achieve this objective on a temporary basis while the case is proceeding. The Courts are overburdened and their dockets do not permit substantial time being set aside for attorney fee disputes, when there are urgent child related matters needing attention. An award of fees involves time in court, which judges are short of, and further, some courts take the position that awarding attorney fees means that litigation will be encouraged to continue.

Options for the Disadvantaged

Many lawyers will accept credit cards which do allow spouses to obtain credit until their settlements are received at the Permanent divorce hearing or upon settlement of the case. Spouses borrow funds from family members that are paid on settlement. Anyone considering divorce would be wise to set aside funds in an account that can be used to litigate if needed. Some attorneys will agree to wait for partial payment upon settlement. The danger in doing that is that the bill sometimes runs up without the client fully appreciating that this will have to be paid at the end. Clients who are not funding their attorney fees as the case progresses, often fight more battles and increase litigation, because they are not required to face the reality of writing checks on an ongoing basis.

 Uneven incomes cause imbalances in divorce outcomes. The Rose decision will assist in providing some remedy against this injustice for families and children.

 Suzanne Griffiths is a family law attorney with Gutterman Griffiths PC. She can be reached at (303) 858-8090, or through the website at http://www.ggfamilylaw.com

Heav’n has no rage like love to hatred turn’d

Nor Hell a fury, like a woman scorn’d.

Extramarital affairs create feelings of betrayal that can result in very complex, conflicted and expensive divorce proceedings. If one spouse has been unfaithful, the trust between the partners is destroyed and this impacts every aspect of the settlement negotiations, investigations and the court proceedings. Getting divorced is an emotional time for anyone; both partners may feel a sense of loss, depression, and anger towards one another, but add an affair into the mix and logic and rationality sometimes disappear.

Spouses assume sexual exclusivity to one another and infidelity is seen as one of the most serious violations of the marriage. The realization of being cheated by a loved one creates feelings of shame, hostility, outrage and resentment. An angry spouse, who has no trust in the other, often vents their anger and revenge during the legal process.

 Cheats, Liars and Assets

 Once a spouse concludes that their partner has lied and cheated on them, expect a difficult financial investigation. Sometimes it is necessary to go back for years to look at every credit card statement, bank statement, frequent flier award and hotel award statement to piece together what happened, when the betrayal started and what marital assets have been spent on the extramarital affair. The victim imagines that there have been other affairs, that large sums of money have been hidden, and the level of suspicion knows no bounds.

 Settlement negotiations, which should have focused on splitting assets and allocating parenting time may now be focused on revenge and making the  divorce as protracted and difficult as possible.

 The No-Fault State

 Colorado is a No Fault state for divorce. That means that anyone can divorce for any reason at all. An extra marital affair should not have an effect on how assets are divided. That being said, affairs still have a significant impact on the attorney fees and the ability to settle the case in an amicable and constructive manner.

 Planned Emotional Withdrawal versus the Shock Factor

The unfaithful spouse has usually spent a great deal of time separating emotionally and planning for an eventual divorce. The other spouse is frequently oblivious to what is happening and news of the affair takes them completely off guard, as though attacked by an unseen enemy. The victim often feels very disadvantaged in the divorce process, which prolongs the resolution.

What about the Children?

 More complications arise because the faithful spouse has to deal with the emotional grief of an affair, and must also cope with the impact of a divorce on their children. The spouses struggle with what to tell the children about the reason for the divorce. Oftentimes the spouse who is caught up in the exhilaration of the new relationship loses their good judgment, and feels that their children need to meet and accept this new person in their lives. This behavior creates serious problems in many cases for the other spouse and the children, who are grieving and simply don’t share the excitement and enthusiasm for the new relationship.

 No matter how reasonable your spouse normally is, or how much you want to settle your divorce quickly and in the best interests of your children, flaunting an affair will anger your spouse beyond rationality and will not be helpful.

 The effects of angry spouse’s feelings are felt in skyrocketing legal fees. Sometimes the legal fees alone will be used as a means to punish the other spouse for their infidelity. Spouses who feel betrayed will on occasion go on spending sprees that would never have been contemplated during the marriage, simply to feel better and to “get even.”

 Most divorces don’t happen only because of infidelity, but rather due to a group of factors such as lack of communication, financial issues, general disagreements and loss of attraction to one another.

When the Affair is out in the Open

 The key to an amicable divorce is discretion, good judgment and fairness. Remember that your spouse is suffering from the divorce and flaunting a paramour will complicate your divorce and turn it into a battleground.

 Do’s and Don’ts

 Do not introduce your new crush to the children until the divorce is finalized if at all possible. This shows respect for your partner and your children and will ease the transition and hurt feelings.

Do not use marital assets to fund your new relationship. This will create very angry feelings. It is not unusual to find significant purchases of jewelry, spa visits, travel, etc. on the credit card statements of the unfaithful spouse. These discoveries create havoc in the legal process and any attempts to settle the case.

Do provide adequate family support. This is not a time to cut off reasonable funding, as this simply makes spouses feel more angry and victimized.

Do try to maintain the best possible relationship with the children. Give them one on one time and realize that they may not appreciate spending all their time with you in the presence of a significant other.

Try to end a bad marriage with the dignity it deserves before launching into the next relationship.  Remember that the thrills and the passion of the illicit affair do not usually continue once the affair is out in the open and the reality of paying spousal support, supporting two families and adapting to parenting stepchildren can be a very challenging experience. If you find yourself involved in an extramarital affair, think very carefully before you set off a nuclear explosion with your announcement, which will certainly have adverse consequences in any divorce process.

 Suzanne Griffiths is a family law attorney with Gutterman Griffiths PC. She can be reached at (303) 858-8090, or through the website at http://www.ggfamilylaw.com

Have a Tiger living in your house? Read this before you chase him out with a golf club.

Too often we read shocking details of powerful men who have cheated on their wives. However, the tendency to cheat is not reserved for the rich and famous. Depending on the study you read, infidelity strikes, conservatively, 25 percent of all heterosexual marriages. Why is this happening? There are many reasons: the Internet gives opportunities never seen before to find lovers. More women in the workplace provide opportunities for men and women to cheat. Cell phones and text messaging makes it easier to have conversations on the sly. Stress and mundane lifestyles cause people to opt out and risk their marriages. The affair provides that emotional high, the excitement of the chase and the exhilarating intense feelings that become addictive. I’m a divorce lawyer and see the cheaters and the cheated in my office on a daily basis.  

What do you do when you find your spouse is cheating on you?

Option 1: Throw the bum out!

Before you go that route, ask yourself: is this infidelity part of a pattern? Or is it out of character for your partner? The answer will tell you whether or not this marriage can – or should – be saved.

In my experience, most cheaters can be placed into two dominant categories: The compulsive adulterers and the midlife crisis adulterers. The compulsive cheater is someone who has consistently cheated, and someone who will always be on the lookout for the next affair. Compulsive cheaters are often literally addicted to the thrill of the chase. They need and want those feelings of euphoria, exhilaration and obsession associated with the brain producing sex chemicals that compel them to have a new relationship. They are generally very charming and charismatic, and their wives forgive them over and over again. There is not much that can be done about these people. They will not control themselves and will continue to have one affair after another, despite promises to change.

If you find yourself married to one of these, dump them no matter how hard that may be. Staying in the relationship will simply cause you to be hurt and abused. Not only are you being subjected to risks of sexually transmitted diseases, you should also expect to be cheated financially. It is expensive to have affairs…the flowers, dinners, jewelry, gifts and travel all add to the hidden costs.

Option 2: Hang In There: Don’t get Drawn into His Drama

The midlife crisis affair is different and will usually happen between the ages of 35 to 50, to both men and women. They are thrown into a total turmoil they never imagined would happen. It hits people who have a very stressful life, with too much responsibility and too little fun and leisure time. The daily grind with work, financial stress, responsibilities to children and family becomes too much and they simply opt out and try to “find themselves.”

They look at their lives and wonder if there is more to life than this; they “escape” and find someone who is often “different” and then they behave like teenagers again.  For the husband it may be someone he meets on the Internet or at work.  For the wife it may be the child’s karate instructor.  The wonderful perfect husband is now somebody that just cannot be recognized, who is so different, who loses interest in the kids and tells his wife  “I never loved you. I have found my soul mate.”  What nonsense. What was a man doing married to her for 20 years and then saying he never loved her. Of course he loved her. He’s just lost his judgment while he heads into outer space.

If you married the perfect doting husband who is now going through a midlife crisis, hang in there, as he may return to earth with a hard landing. If you had a bad marriage in the first place, chances are the infidelity crisis will be the final blow. How do you survive while his sole focus becomes the new attraction and the clandestine sex?

Tactical response:

• Accept the fact that you have a new moody adolescent in the house.  I said to one client: “You had three children at home. Now you have four.”
• Take control of you and put all the energy back into yourself. If you’ve become boring and frumpish, been focused on taking children to basketball games and ballet performances, turn right around. You can control what you look like, what your hair looks like, what your figure looks like. You can control your day-to-day living. The smart woman will buy new clothes for herself; she’ll take control of her own situation and try to be calm and balanced, no matter how hard that may be. In the midlife crisis, he is looking to escape, but also values strength and stability to balance his own crisis. Like a naughty kid who comes back to his mother, he’ll come back to his wife, if she gets her own life together and he can have fun with her. If she wants to, if she can handle it. Some can’t handle it and just want out, which ends the marriage.
• Trying to control a man going through a midlife crisis is a hopeless cause. However, the wife has always got a huge advantage in that she represents the memories, the family, the traditions. Sometimes the man turns around and says, “Wow, she’s looking pretty good. She’s really together and she is the mother of our kids. I want that.” At that time she has bargaining power in the relationship and they can go to counseling and set forth conditions for continuing the relationship.
• Dig in for the long haul. Surviving a midlife crisis is like living on a rollercoaster.  The guy comes home and says ok, he’s very committed and he cries and says he’s dropping the girlfriend. So now he’s back home; he lies on the couch and he’s in a state of depression because he’s dreaming of the sex and the bikini underwear. He sits at home like a bear with a sore head. Now the wife’s stuck with this lot, but she has to remain grounded and not go overboard or be punitive.  The guys will swing from wanting to be with the wife and then want the girlfriend. This can go on until one of the women kicks him out. Accept this is going to be a crisis, but in some cases the husband returns home and comes to the realization that secret hotel rooms and string bikinis don’t really provide the answers that he needs.

Many people keep on going another 25 years and have their 50th wedding anniversary after the affair, but it is a catastrophic event. Use a rational strategy rather than an irrational response; you may wind up keeping your family together.

As a divorce lawyer, I’ve seen it all, and I’ve got some relationship advice to share-so that you never end up in my office.

If you’re looking for love, I’m probably the last person you want to talk to. I’m a divorce lawyer. But before you turn the page, consider this: In my 34 years of practice I’ve seen crumbled relationships from all walks of life and I’ve learned something important: Divorce doesn’t strike like lightning. Often there are signs along the way—what I call red flags—that can alert you to trouble brewing in your relationship.

 So if you’re looking for love, save yourself a lot of heartache and a trip to see me. Keep your eyes open for these red flags when you’re just getting to know someone:

 1.    He’s vague about the details in his life. Most people like to talk about themselves. If he doesn’t, that could mean he’d rather you not know his history. Be alert.

2.    He doesn’t want you to meet his friends. Friends are an important source of information for you as you learn about this potential mate. If your date does not want you to meet his friends, that’s a red flag. What is he afraid they’ll tell you?

3.    He hates his mother. I’m not talking about petty annoyances. Everyone has those with family. I mean, he has a poor relationship with his mother. This is a man who may have serious difficulty relating to women in a secure, committed relationship. This is not just a red flag, in my opinion. This is a deal breaker. Shake hands, wish him a happy life, and leave. 

4.    He has an addictive personality. An individual with substance abuse issues may demonstrate addictions in other areas as well.

5.    He comes from a divorced family. While not a deal-breaker by any means, this is something you’ll want to know early on. An individual who experienced divorce as a child may view marriage as a less-than-permanent institution as an adult. You’ll want to explore this issue with him—how has the divorce colored his outlook on marriage? Has he dealt with the issues of his upbringing so that he can be ready to be married?

6.    He experienced abuse as a child. Like the issue of divorce, this is one that you’ll want to explore. What you’re looking for is signs that he has dealt with his trauma – rather than attempted to bury and deny it. Children who are abused often become abusers.

7.    He never apologizes. Ever. For anything, no matter how big or small. He always has a reason why it’s not his fault or it’s your fault. Whether it’s being late for a dinner date, forgetting your birthday or stepping on your toe. If you wonder if he can form the words “I’m sorry” this is a red flag. It’s an indicator that you might be dating a narcissist. Narcissists make terrible partners and hellish exes.

8.    He wants to live together before you get married. This may seem reasonable at the time, but my experience has been that co-habitation before marriage is a red flag. Studies have shown that partners who cohabit before a committed relationship have a higher marriage failure rate. If he has to do a test run, he may not be ready for the long haul of married life. 

9.    He comes from a starkly different background. Often, divorce stems from an inability to merge two very different partners. These differences can be economic, religious, ethnic or educational. Love can’t conquer all and a vast divide between the two of you at the dating stage may signal trouble in the years ahead.

10.  He reminds you of an earlier unhealthy relationship. Keep in mind that the red flag in the relationship may be you. Does this man you’re dating help you to continue old emotionally unhealthy patterns? Remember, if you want a good relationship, the first person you need to fix is yourself.

 The secret to a happy marriage is taking off the rose colored glasses, conducting a careful assessment, having realistic expectations, and avoiding the wrong partners. Often the signs are right in front if you, if you want to see them. You have the power to select the right partner and live happily ever after.

Families rushing to give away assets before the $5.12 million gift- tax exemption reverts to $1 million at year end need to carefully consider the impact on their children in their divorces.

In Colorado any gifts and inheritances are excluded from equitable division in divorce cases provided these assets are kept separate. However, any appreciation on the gifts or inheritances are equitably divided upon divorce.

In order to save estate taxes, efforts are generally made to reduce the value of the gifts made for gift tax purposes.  Gift tax returns are often created using substantially discounted values. When the children get divorced, these values are often looked at for the purposes of establishing the initial value of the gift and calculating the appreciation to be shared with the divorcing spouse.  The result can lead to unintended consequences. Instead of paying the Internal Revenue Service, parents often find that their children are paying substantial amounts in their divorces, due to the appreciation in the gifts made. You cannot have it both ways and what you save in estate taxes can often be made up in divorce settlements.

The other problem that parents may experience when gifting a fractional interest in a family limited partnerships to children, is that all the assets needs to be valued at the time of the divorce. By gifting away assets to children, parents are inviting a complete valuation and investigation of the family limited partnership assets. I have seen many examples of children receiving 1or 2% of a partnership that owns numerous interests in commercial or apartment buildings. The cost of valuing those interests in a divorce and then discounting for minority and marketability discounts can be enormous.

Popular vehicles for estate planning include the following

Grantor Retained Annuity Trusts (GRATS) and Qualified Personal Residence Trusts (QPERTS)

A GRAT is an estate planning tool intended to minimize estate and gift taxes when assets are transferred from one generation to another. An irrevocable trust is formed for a specific period of time. If applicable, the grantor pays a gift tax when the trust is established. Assets are transferred into the trust and then an annuity is paid out every year to the grantor. When the trust expires, the beneficiary receives the assets tax free.

Qualified personal residence trusts (QPERTS) have similar tax savings. If you transfer your home through a so-called QPERT (qualified personal residence trust), you reserve the right to maintain use of the property for a specified number of years. The property is then valued at a discount because heirs don’t get immediate use. However if the Grantor dies during the period in which the Grantor has reserved the right to use the property, the QPERT is dissolved and the residence is then taxable as part of the Grantor’s estate.

There is no clear case law as to what date is used to determine when a beneficiary spouse’s interest in a GRAT or QPERT becomes property and therefore subject to equitable division in a divorce. Some courts have held that the interest in these types of trusts becomes property at the time of the transfer into the trust, while others have held that an interest becomes property when the trust is terminated. The date the beneficiary spouse’s interest in a GRAT becomes property is vital in figuring out to what extent it is marital property subject to equitable distribution and to what extent it is separate property.  The difference in opinion on this matter creates a huge discrepancy for outcomes of beneficiary spouse’s interest in GRATS and QPERTS in dissolution proceedings.

The GRAT or QPERT it is often valued for gift tax purposes at a very low value based on IRS guidelines, resulting in a lot of appreciation at the termination of the trust that may be valued and allocated to a divorcing spouse. This appreciation may be somewhat artificial because it is calculated using very low initial values. It therefore becomes in the interest of the non-beneficiary spouse to argue that the GRAT or QPERT becomes property at the date of creation, at the artificially reduced IRS value, and that all of the associated appreciation is marital in nature.  The beneficiary spouse obviously wants to argue the opposite position.

When is an Interest in a Trust Considered Marital Property?

Would it make a difference if you set up a trust with your children as beneficiaries? It depends if it is revocable or not. Your revocable trusts are not property interests in your children’s divorces.  If the trust is irrevocable then you need to look at whether the beneficiary has a mandatory/vested/remainder interest in the trust, or whether his or her right to receive benefits  is purely discretionary or tied to somebody else’s property.  Discretionary trusts where the beneficiary has a mere expectancy are generally not considered property in a divorce, but may be an economic circumstance. The Colorado Supreme Court has found that when a trustee has uncontrolled discretion to distribute income, that does not give the beneficiary an enforceable contractual right to receive distributions and therefore does not give the beneficiary spouse a property interest. In re Marriage of Jones, 812 P.2d 1152 (Colo. 1991).

Every trust document must be read carefully and analyzed for the key components in determining whether or not a trust is property in any divorce.

Regular gifts from a reliable source may be considered income for Child Support and Maintenance Purposes

If gifts are regularly received from a dependable source, they may properly be used to determine the amount of a child support obligation.  Parents should be aware that regular gifts can be counted as income for child support purposes in a divorce action.

Get good legal advice before you give away the family fortune

Be sure to ask your estate planning attorney how your proposed gift might impact your children’s divorces. If in doubt, ask a divorce attorney.

Suzanne Griffiths is a shareholder and vice president at Gutterman Griffiths PC.

She can be contacted at 303-858-8090 or at http://www.ggfamilylaw.com