Should she stay or should she go? Dealing with the other women in your divorce (Part 3)

By Jennifer M. Paine

other woman

Attorney, Cordell & Cordell, P.C., Detroit office

Note: This is Part 3 of a three-part series. Click here to read Part 1 and click here to read Part 2.

Insiders and Property Division

Faced with a sizable loss if forced to divide an investment account, sell a vacation home or otherwise divide property acquired during the marriage, some spouses divert their assets to friends and family. They quip, “I don’t have to divide it if I don’t have it.” A blank stare, mouth open, face white, falls across them when their attorneys say the property still counts and, worse yet, they might have committed a crime. 

 

 

Take the case of Mr. Wiand in Wiand v Wiand, 178 Mich App 137; 443 NW2d 464 (1989), as an example. He and Ms. Wiand acquired a sizable estate over their ten year marriage. The estate included homes, investments and Mr. Wiand’s interests in formulas, trade secrets and closely held businesses. These assets were worth, in the divorce court’s guesstimate, nearly $1 million alone. But that was truly a guesstimate, because the court did not have the assets before it to value. Anticipating a large loss to his wife if he divorced owning them, Mr. Wiand sold them to his brother in what appeared, on paper, to be an arm’s length transaction. The divorce court found, however, that Mr. Wiand and his brother conspired to deprive Ms. Wiand of her rightful share of the marital estate. Therefore, the court awarded her one-half the value of “the brother’s” assets. The appellate court affirmed the award, holding that a court may divide property held by a third party if one spouse and the third party conspired to deprive the other spouse of it by awarding the value of the property to the innocent spouse.

Mr. Wiand had to pay his wife over $300,000 for assets he no longer owned.

If you are concerned about the effect divorce has on your property rights, be sure to discuss your rights with an attorney in your area. Discuss what rights you have while married, during divorce, and when newly single. Consult with a tax specialist to learn what tax advantages and disadvantages you face if you pay alimony or transfer property as part of a written separation instrument. Avoid extravagant purchases. Document all of your purchases and sales, and keep receipts to substantiate them. If you question your spouse’s spending, take advantage of the discovery period to subpoena third parties, obtain documents and investigate to prove a case of unexercised ability to earn, waste or fraud.

Most of all, know that if a deal sounds too good to be true – e.g., your brother will “sell back” the classic car you “sell” him (for nothing) after your divorce so you do not have to give it to your wife – it is.

As a practical matter, the outcome of each case depends on its facts and the laws in the jurisdiction. No two cases are the same, although Mr. Irvin’s, Mr. Stewart’s, Ms. Ward’s and Mr. Wiand’s might remind you of yours. You should consult a lawyer in your area to learn more about the laws applicable to your case and how other women in your life feature in them.

Nevertheless, there are some lessons (and a little humor) to gain from those who have gone before you.

Note: This is Part 3 of a three-part series. Click here to read Part 1 and click here to read Part 2.

 

Jennifer M. Paine is an Associate Attorney in the Detroit, Michigan office of Cordell & Cordell P.C. She is licensed to practice in Michigan, and has been admitted pro hac vice in Illinois, Ohio, and the United States Court of Federal Claims. Ms. Paine received her BA in English and Mathematics from Albion College and graduated Summa Cum Laude. She received her Juris Doctorate from MSU College of Law and graduated Summa Cum Laude.

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