There is so much to cover. I am not able to summarize these next couple of pages so I will just have to type it up word for word. I am going to skip the valuation dates and appraiser information. Once I go word for word on these couple pages I will type up the last concluding paragraph and then I will be moving on to Chapter 3 called The “Best Interest of the Child”.
From the words directly from Jed Abraham
“Discovery” lies at the heart of equitable distribution.
Soon after filing for divorce, your wife will demand complete disclosure of all your business and financial dealings. She’ll demand all recent tax returns, especially those filed after your separation. She’ll demand all other relevant documents, no matter how confidential.
You’ll be forced to complete long, detailed questionnaires. You’ll be grilled intensively, under oath, by your wife’s lawyer. You’ll be pressed to produce mounds of personal papers.
These ordeals will consume an enormous amount of time. They’ll generate fat fees to your wife’s lawyer and to yours. They’ll take you away from making the living you have to make in order to pay your ex, her lawyer, and yours.
After reviewing the discovered documents, your wife’s lawyer may charge you with “dissipation”.
The doctrine of dissipation prohibits you from spending marital money on matters not related to the marriage after the marriage has begun to break down. It’s designed to conserve marital property so that the court can give it away to your ex.
Funding a new trust for your children’s college education is dissipation; so, too, is paying your mother’s emergency medical bills, unless, of course, your wife gives you prior permission. Conversely, if you purposely work less and reduce your income so as not to produce marital property for your wife during your divorce, that’s also dissipation.
When you are accused of dissipating “missing” property, the burden shifts to you to prove you didn’t dissipate. If the court finds you did, it will add the dissipated amount back into the marital pot as a phantom value and then distribute the phantom value to you. That is, the court will count as part of your share of the marital property the funds it found you to have spent already.
A gambling binge or a stock market fling to which your wife objected and which resulted in losses is dissipation. You will get the losses as part of your share of the marital property. But your wins are marital property. Your ex will get her equitable share of them addition to her share of your other property. Heads she wins, tails she wins, too.
Before your marital property can be distributed by the court, it must be valued. This presents little problem in the case of cash, bank accounts, and traded securities. Some properties, however, don’t have easily ascertainable values. Small properties, however, don’t have ascertainable values. Small businesses, professional practices, antiques, even the family home have to be appraised before their values can be ascertained.
Valuation, in the absence of an active market, is largely a matter of opinion. Professional appraisers purport to approximate a property’s value, but there is often no independent way to verify an appraiser’s opinion.
The court will be presented with conflicting appraisals. Your appraiser’s will favor your position. Your wife’s will favor hers. The court will likely make an evidentiary finding somewhere between the difference. The difference could be substantial.
Skipping to the Final Paragraph of the Chapter
Equitable distribution creates a strong incentive to cave in to a “Rambo” – an abusive wife’s attorney. Better to pay up now than go through the torment of an intensive discovery and the torture of an extended trial. Better to cut your losses now that pay more in attorney’s fees and time off from work later. Better to settle now than risk an off-the-wall decision by the court…
Next summary will be on Chapter Three The “Best Interest of the Child”.