UK Supreme Court Pierces the Corporate Veil in Landmark Ruling

Posted on June 14, 2013 by Jon Fields

This week, in a landmark decision by UK’s Supreme Court, the ex-wife of a Nigerian oil tycoon won a potentially game-changing divorce settlement.  It was argued that Michael Prest tried to conceal assets from his wife by hiding property in an offshore company.

The decision to uphold an appeal by Prest’s wife was unanimous – with seven justices ruling in favor of Yasmin Prest, who sought a share of seven properties held in trust by Petrodel Resources Ltd., a company under Prest’s control.

At a previous hearing, Yasmin was awarded a lump sum of £17.5m (around $27 million dollars). Prest claimed that he could not pay this amount because he was £48m in debt.  Yet, Petrodel Resources and multiple related endeavors were found to be registered in the Isle of Man.  This case brought up issues of piercing the “corporate veil” which treats companies and their shareholders as separate entities.  Prest argued that because of this, his properties shouldn’t be considered as part of a divorce settlement.  Yet, because Prest knowingly hid their existence, controversy surrounded his actions and motives.

This groundbreaking decision shatters the potential loophole offered by those trying to protect their assets from a partner through businesses.  It was ruled that, because Prest intentionally tried to conceal the existence of companies from the court, it appeared that he was purposely trying to protect his own assets from a divorce settlement.

The ruling is a game changer for divorce proceedings among the wealthy because assets cannot be protected through corporate structures.  If this decision had gone in favor of the husband, there would have existed an looming threat of assets being hidden away to avoid the repercussions of a lawful divorce settlement.

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Hollywood Divorce Sparks $10 Million Battle

Posted on June 11, 2013 by Jon Fields

Demi Moore and Ashton Kutcher have been tabloid fodder for years now, and yet it seems they are still making waves in the media, this time for their forthcoming divorce.  While Moore and Kutcher first announced their split in 2011, they are not yet divorced.

Their divorce filing cited “irreconcilable differences” and Moore was originally seeking spousal support and for Kutcher to pay her legal fees.  Although Moore is wealthier than her younger, less-established spouse, Moore is also seeking payment for projects that they worked on together that have continued since their separation.

This week, it has been revealed that Kutcher and Moore are tied up in a battle over $10 million — 50% share of one investment Kutcher made in 2010, while they were married, that Moore feels entitled to.

The A-Grade investment fund, of which Kutcher owns 20%, has been valued at $100 million, making his share $20 million.  According to Moore, her share should be $10 million.  A TMZ source reports that Kutcher has agreed to pay some amount in order to finalize their divorce, but he is not agreeing to all of her demands.

This is not Moore’s first divorce.  She was also awarded a large amount of money in her divorce from Bruce Willis in 2000, and was recently awarded even more money from this divorce.

Their decision to divorce, like all decisions to divorce, was not an easy one.  In Kutcher’s announcement of their divorce on Twitter, he tweeted, “Marriage is one of the most difficult things in the world and unfortunately sometimes they fail.”  Similarly, in a statement, Moore said, “It is with great sadness and a heavy heart that I have decided to end my six-year marriage to Ashton. As a woman, a mother and a wife there are certain valued and vows that I hold sacred, and it is in this spirit that I have chosen to move forward with my life.”

Hopefully they will soon come to a financial agreement so that they can both do just that.

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The Importance of Keeping Beneficiaries Updated

Posted on June 7, 2013 by Jon Fields

The importance of updating your beneficiary designations, specifically for policies which fall under Federal Employees’ Group Life Insurance (“FEGLI”)  for life insurance policies has just been highlighted by the Supreme Court’s 9-0 decision in Hillman v. Maretta.  During the marriage of Mr. Hillman and Ms. Maretta, Mr. Hillman named Ms. Maretta as the beneficiary of his FEGLI policy.  They later divorced and Mr. Hillman remarried but failed to change the beneficiary of his FEGLI policy.  At the time of Mr. Hillman’s death, Ms. Maretta was still named as the beneficiary and received the benefits for the FEGLI plan, an amount in excess of $120,000.00.  The current Mrs. Hillman brought an action to claim the benefits under Virginia law, which states that divorced spouses cease to be the designated beneficiaries of each other’s life insurance policies.  Instead, the statute appropriately directs that decedent’s widow or widower at the time of death, or if none, descendants, become entitled to the benefits.  Unfortunately for the widow Hillman, the Federal statute provides that the benefits follow in the order of precedence, with the designated beneficiary as the first person in line to receive the proceeds of the policy upon the employee’s death.  The Federal law preempts the state law and the benefits go to the ex-wife. No matter if it is a divorce, death or simply a change of mind or heart, it is important to know whom you have designated as the beneficiary of not only life insurance policies but IRA accounts, 401(k) accounts, 403(b) accounts, defined benefit plans, defined contribution plans and any other accounts you may possess.  An estate planning attorney will review these designations with you to ensure they are as you desire and not in conflict with your estate planning documents and your desires.

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Art Student Aces Exam with Divorce Paper Wedding Dress

Posted on May 15, 2013 by Jon Fields

A fifteen-year-old student in the small town of Crawley, England recently created an art project that has gone viral on the internet.  Hoping to symbolize the tendency of people to rush into marriage and end up divorced, she created a wedding dress completely out of divorce papers.  The dress used divorce papers, arranged in a puffy, princess-style gown.  In fact, unless you look close at the flat front panel, you may not even realize that the dress is comprised entirely of divorce papers.  In order to get the material, she printed a divorce form from the internet and photocopied it 1,500 times. The one-of-a-kind dress was completed in the span of a ten hour art exam.

The girl unintentionally became an internet sensation when she posted a photo of the project online last Saturday as a way to show her cousin in Italy the creation.  She was surprised the next day by the pictures apparent popularity and far-reaching exposure.

Shortly over a week later, she has acquired over 46,000 likes and the photo has been shared by over 2,000 people.  It has also been posted on Tumblr, where it received over 130,000 hits there, as well.

While the girl is clearly creative and quite talented, she admits that, “It was quite a challenge.”  Barnes hopes to someday work in the fashion industry, but for now her work is being shown proudly in her school’s hallway… and worldwide on the internet.

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MA Family Law: Inconsistency Standard v. Material Change of Circumstances

Posted on April 30, 2013 by Jon Fields

What standard must a Probate and Family Court use when faced with a modification of a child support order when the case is within the Child Support Guidelines?  The trial judge in this case dismissed the modification complaint because, although the ex-husband’s income had increased, she found there was not a “substantial and material change in circumstances.”  Notably, the judge’s decision did not mention the “inconsistency standard” in G.L. c.208, s.28 which states that a modification is appropriate “if there is an inconsistency between the amount of the existing order and the amount that would result from applying the Guidelines.”  Nevertheless, the Appeals Court affirmed her judgment.  The SJC, however, reversed; it held that the “inconsistency standard” rather than the “material change in circumstances” applies where modifications of child support within the Guidelines are concerned.  Morales v. Morales, 464 Mass. 507 (March 12, 2013)

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MA Family Law: Modifying Age of Emancipation of an Out-of-State Child Support Order

Posted on April 29, 2013 by Jon Fields

As mediators and lawyers, we are often confronted with out-of-state divorce judgments.  Since Massachusetts has the most generous emancipation statute in the country, those out-of-state judgments often provide that support ends long before a child’s 23rd birthday, depending on the state.  Steve and Mary Ellen Freddo had four children and were divorced in Florida.  Following the divorce, they both moved to Massachusetts. Mr. Freddo brought a complaint for modification in Massachusetts when all of the children were over eighteen.  Mr. Freddo’s argument was (1) that under Florida law, children are emancipated at age eighteen, with exceptions not relevant here, and the age of emancipation is a non-modifiable matter and (2) under the Uniform Interstate Family Support Act (UIFSA), if an obligation is non-modifiable in the “issuing state” (Florida, in this case), then the “responding state” (Massachusetts) cannot modify it.  The Probate and Family Court found Mr. Freddo’s complaint frivolous and dismissed it, relying on the “post-eighteen” provisions of G.L. c.208 s.28.  In this significant case of first impression, the Appeals Court reversed, holding that Massachusetts could not modify the age of emancipation where it could not have been modified in Florida.  Acknowledging the inconsistency between G.L. c.208 s.28 and UIFSA, the Appeals Court found that the latter takes priority; both the “full faith and credit purpose” of UIFSA and the fact that it was enacted after G.L. c.208 compel this conclusion.  Freddo v. Freddo, 83 Mass.App.Ct 353 (February 26, 2013)

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MA Family Law: Imputing Income: Reasonable Efforts to Find Employment

Posted on April 29, 2013 by Jon Fields

The Probate and Family Court imputed income to an ex-wife based on her present ability to obtain employment.  On appeal, the Appeals Court reminds us that the test for imputing income is a two-part inquiry: (1) whether the person has a present ability to obtain a particular job and (2) whether the person exercised “reasonable efforts” in the job search.  Here, the trial court made no findings regarding the second requirement.  Accordingly, the case was remanded to the trial court for further fact finding on the “reasonable efforts” issue.  Ulin v. Polansky, 83 Mass.App.Ct. 303 (February 19, 2013)

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MA Family Law: Court Must Consider Tax Consequences if Presented

Posted on April 26, 2013 by Jon Fields

Court Must Consider Tax Consequences if Presented.  Under the Internal Revenue Code, alimony cannot be contingent on a child-related event lest it be re-characterized as non-deductible support.  Here, the Probate and Family Court entered a judgment requiring the Father to pay alimony until the youngest child graduated from high school at which point it would be reduced.  The Father sought post-judgment relief from the Probate and Family Court to no avail and appealed the denial. The Appeals Court affirmed the trial court judgment, and the SJC reversed, holding that because the law requires a court to consider “income” when determining alimony and property division, that court must consider income tax consequences as well when such evidence is presented.  L.J.S. v. J.E.S., 464 Mass. 346 (February 8, 2013)

From the Family Mediation Quarterly

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Family Mediation Quarterly: President’s Letter

Posted on April 26, 2013 by Jon Fields

Dear Mediators:

The most recent professional development meeting, “Collaborative Law and Mediation Tools and Techniques: A Common Ground” was a product of the joint committee of the MCFM and the Massachusetts Collaborative Law Council chaired by our own Lynn Cooper.  The panelists, in addition to Lynn, were Dan Finn, Kate Fanger, Karen Levitt, and Lisa Smith.

The committee was created in order to foster close reciprocal relationships between the organizations – and we are succeeding.  As a result of the committee’s efforts, for example, we are now cross-promoting each other’s events.

Being trained in the two disciplines has informed the way I practice both.

What can Collaborative Law teach the mediator? Collaborative Law taught me to provide summary notes to the clients following each mediation.  Although some mediators have been doing this for years without any influence from Collaborative Law, it wasn’t until I was trained in Collaborative Law that I understood the effectiveness of this procedure. One of the panelists suggested discussing with mediation clients their goals for the process, a staple at the beginning of the first Collaborative meeting.  I haven’t done this yet but I’m considering it.

What can Mediation teach the Collaborative Practitioner? Mediation skills such as listening and reframing are critical for the Collaborative practitioner; in fact, I believe that every Collaborative Practitioner should be required to take a course in mediation.

In any event, I think all of us can agree that the communities have a lot to teach other.  I look forward to more of these joint ventures in the future.

From the Family Mediation Quarterly

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Attorney Jon Fields Elected to the Board of Directors of the MA-AFCC

Posted on April 24, 2013 by Jon Fields

On Friday, April 5th, Attorney Jon Fields was elected to the Board of Directors of the Massachusetts Chapter of the Association of Family and Conciliation Courts (MA-AFCC).  Mr. Fields has always been deeply involved in the family law arena, and he has over 22 years of experience representing clients.  Family law can be a complex area, but one that Mr. Fields is passionate about handling with compassion and innovative solutions.

The Association of Family and Conciliation Courts is an interdisciplinary and international association dedicated to family conflict resolution.  Members of the AFCC include judges, lawyer, mediators, psychologists, academics, psychiatrists and social workers, among others.

The Massachusetts Chapter was created in 1993.  Its purpose is to provide an opportunity to open up a dialogue and exchange ideas on ways to improve the procedures in place to help families in conflict.   It seeks to improve court procedures by introducing more collaborative system of dispute resolution. One of the main goals of the AFCC and the Massachusetts chapter is to protect the interests of children in all facets of family law.

Since 2008, Mr. Fields has regularly written a well-regarded column for the Family Law Quarterly about Massachusetts family law and its impact on divorce mediation.  He has spoken at various conferences and panels on the topic and his expertise has also been consulted for a major television network show dealing with matters of family law.  His background in the area is wide ranging and we are very pleased to announce his new place on the Board of Directors of the Massachusetts Chapter of the Association of Family and Conciliation Courts (MA-AFCC).

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