Can he do this?

[Epiphany]

What is the name of your state? Arizona

1. Husband (who is an attorney) signed disclaimer deed at the purchase of the home that I live in (no community funds were used for down payment as there was no down payment). Home purchased in 2004 as my sole and separate property.

2. Husband (who is an attorney) signed disclaimer deed at the refinace of a second home(community funds were not used for down payment as there was no down payment), at the time of the refinance, all available equity was pulled out and used to pay a Child Support debt of his.

3. Since the purchase/refinance, payments have been made from a joint account, however, where I am the primary and he is secondary. The ratio of monies deposited is 75% mine; 25% his....all of my sole and community debt was paid out of this account. He maintained his own accounts; on which I was a secondary signer, none of my bills were paid out of this account.

4. Since our separation/divorce, I have paid for both mortgages, property insurance, and upkeep solely.

5. During the trial, husband said he didn't intend for the property to be mine sole and separate and that he only signed the disclaimer deeds (which are recorded) for better interest rates.

6. Court issued ruling ignoring the disclaimer deeds and stating that the properties are community and are to be divided 50/50. In addition, court assigned specific amounts of equity of each home based on figures that were provided more than a year ago not based on what an actual sale might bring.....

First, has anyone else experienced this?? Second, does anyone have any suggestions??

 

[seniorjudge]

Here's what killed the disclaimer deeds: "...3. Since the purchase/refinance, payments have been made from a joint account...."

 

[Epiphany]

Here's what killed the disclaimer deeds: "...3. Since the purchase/refinance, payments have been made from a joint account...."

Thank you....I have learned quite an expensive lesson on community property. The funny thing is that he also gets 50% of my 401K (which I expected)....but I didn't get any part of his legal practice (not incorporated), which is something that still puzzles me.

Ah well, hopefully he has filed his last motion and the hearing in August regarding child support (he wants to pay less than the minimum) and spousal support (short term - if any based on the property ruling....he doesn't want to pay any.....even though I worked and supported him and our children while he went to college and to law school).

 

[Ohiogal]

Thank you....I have learned quite an expensive lesson on community property. The funny thing is that he also gets 50% of my 401K (which I expected)....but I didn't get any part of his legal practice (not incorporated), which is something that still puzzles me.

Ah well, hopefully he has filed his last motion and the hearing in August regarding child support (he wants to pay less than the minimum) and spousal support (short term - if any based on the property ruling....he doesn't want to pay any.....even though I worked and supported him and our children while he went to college and to law school).

A lawyer is not allowed to own a law practice with a non lawyer. There are major problems with that. Why should that puzzle you? Also if he is a sole practioner then the only business he has is what HE himself gets. You are entitled to part of the marital income he earns.
Regarding child support -- why does he want to pay less than the minimum? When did he graduate from law school? HOw long has he been in practice for himself? And spousal support is NOT an entitlement. How much do you earn? How much does he earn? How much are the expenses?

 

[LdiJ]

What is the name of your state? Arizona

1. Husband (who is an attorney) signed disclaimer deed at the purchase of the home that I live in (no community funds were used for down payment as there was no down payment). Home purchased in 2004 as my sole and separate property.

2. Husband (who is an attorney) signed disclaimer deed at the refinace of a second home(community funds were not used for down payment as there was no down payment), at the time of the refinance, all available equity was pulled out and used to pay a Child Support debt of his.

3. Since the purchase/refinance, payments have been made from a joint account, however, where I am the primary and he is secondary. The ratio of monies deposited is 75% mine; 25% his....all of my sole and community debt was paid out of this account. He maintained his own accounts; on which I was a secondary signer, none of my bills were paid out of this account.

4. Since our separation/divorce, I have paid for both mortgages, property insurance, and upkeep solely.

5. During the trial, husband said he didn't intend for the property to be mine sole and separate and that he only signed the disclaimer deeds (which are recorded) for better interest rates.

6. Court issued ruling ignoring the disclaimer deeds and stating that the properties are community and are to be divided 50/50. In addition, court assigned specific amounts of equity of each home based on figures that were provided more than a year ago not based on what an actual sale might bring.....

First, has anyone else experienced this?? Second, does anyone have any suggestions??

Did you have an attorney? If not, why? If the judge has made orders, then the only option to change anything is an appeal....and for that you need the judge to have made errors of law. Its possible that the judge did, if inaccurate valuations were used, and if you properly challenged those valuations.

Personally, I don't think that legally, someone should be able to sign a disclaimer deed and then make a claim on the property later if that person is an attorney who knows perfectly well what they are signing. That is simply fraud in my opinion. The mortgage company requires those disclaimers to be signed to protect the mortgage company's interests in just this type of scenario. Its different if the person does not understand the impact of what they are signing, but an attorney certainly does. However, obviously the judge did not agree and perhaps correctly under community property law since any equity gained was gained during the marriage and was paid for from community assets.

However, I still think that an attorney should be held to higher standards...and if an attorney signed a disclaimer deed, then they should be held to that....because doing it to get a lower interest rate is perpetuating fraud on the mortgage company.

However, again, if the valuations were incorrect, and you properly challenged them, then that is a potential error of law.

 

[Epiphany]

Did you have an attorney? If not, why? If the judge has made orders, then the only option to change anything is an appeal....and for that you need the judge to have made errors of law. Its possible that the judge did, if inaccurate valuations were used, and if you properly challenged those valuations.

Personally, I don't think that legally, someone should be able to sign a disclaimer deed and then make a claim on the property later if that person is an attorney who knows perfectly well what they are signing. That is simply fraud in my opinion. The mortgage company requires those disclaimers to be signed to protect the mortgage company's interests in just this type of scenario. Its different if the person does not understand the impact of what they are signing, but an attorney certainly does. However, obviously the judge did not agree and perhaps correctly under community property law since any equity gained was gained during the marriage and was paid for from community assets.

However, I still think that an attorney should be held to higher standards...and if an attorney signed a disclaimer deed, then they should be held to that....because doing it to get a lower interest rate is perpetuating fraud on the mortgage company.

However, again, if the valuations were incorrect, and you properly challenged them, then that is a potential error of law.

Thank you for your comments, and yes I am represented by an attorney, who is telling me it is the worst ruling he has ever seen. With that being said, my only option at this point, because we are still pre-decree is to do a motion for reconsideration. If the motion for reconsideration is denied and the ruling stands as it is, an appeal is not cost effective at this point, even if it is an error of law.

Thanks again to all who have offered their thoughts!!

 

[Ohiogal]

I asked questions for a reason. If you don't answer them how is anyone here actually supposed to give you anywhere near an accurate answer?

 

[nextwife]

The disclaimer deed WOULD have been valid- had the poster not then co-mingled the asset by paying for it from joint assets/marital funds. Once the poster did that, their spouse had every right to claim an interest.

AS to spousal support, you imply that putting him through law school should then entitle you to spousal support? Many divorcing spouses supported their other spouse for a great many years, and not only did not then themselves get spousal support for doing so- they were then ordered to PAY spousal support.

 

[Bali Hai]

The disclaimer deed WOULD have been valid- had the poster not then co-mingled the asset by paying for it from joint assets/marital funds. Once the poster did that, their spouse had every right to claim an interest.

AS to spousal support, you imply that putting him through law school should then entitle you to spousal support? Many divorcing spouses supported their other spouse for a great many years, and not only did not then themselves get spousal support for doing so- they were then ordered to PAY spousal support.

I agree and SS is slowly becoming a two edged sword. When enough people are ordered to pay, there will certainly be a change. But we are a long way off getting justice in this area.

The womans movement wants equal rights and by golly I for one am going to work hard to ensure they get equal rights in all areas.

 

[Epiphany]

I asked questions for a reason. If you don't answer them how is anyone here actually supposed to give you anywhere near an accurate answer?

My apologies...I missed your questions.

A lawyer is not allowed to own a law practice with a non lawyer. There are major problems with that. Why should that puzzle you? Also if he is a sole practioner then the only business he has is what HE himself gets. You are entitled to part of the marital income he earns.
Regarding child support -- why does he want to pay less than the minimum? When did he graduate from law school? HOw long has he been in practice for himself? And spousal support is NOT an entitlement. How much do you earn? How much does he earn? How much are the expenses?

I understand that ownership/partnership within a law firm is limited to attorneys; however, based on the valuation of the practice, there should have been some equalization as the business itself is considered a marital asset. He graduated from law school in 1998 and has been licensed since 1999. He has been in practice for himself for a majority of that time.

And while I understand that spousal support is not an entitlement, it is warranted in some cases. I put my education on hold to work full time to support him and our children and allow him to pursue his education (without working) with the agreement that when his practice had reached a certain level of success, I would be afforded the same opportunity. Per the court, his education may be considered a marital asset as well.

As to our earnings....so much of his income is "hidden" within the practice for tax purposes as it is with most businesses, it is very difficult to do a comparison at that level. As for expenses, I am not sure what you are asking for on this one? Expenses tied to the household or the business?

 

[Ohiogal]

My apologies...I missed your questions.

No problem.

I understand that ownership/partnership within a law firm is limited to attorneys; however, based on the valuation of the practice, there should have been some equalization as the business itself is considered a marital asset. He graduated from law school in 1998 and has been licensed since 1999. He has been in practice for himself for a majority of that time.

Here is the thing. His practice is worth nothing without him. His practice is worth what income he earns. There is nothing to own in a sole practice. The value of the business is basically what he earns from it which is marital income. What do you think he OWNS?

And while I understand that spousal support is not an entitlement, it is warranted in some cases. I put my education on hold to work full time to support him and our children and allow him to pursue his education (without working) with the agreement that when his practice had reached a certain level of success, I would be afforded the same opportunity. Per the court, his education may be considered a marital asset as well.

His education? Not really. He is putting his education to use and has been since 1999. You supported him so therefore you may owe him spousal support. Has his practice reached a certain level of success.

As to our earnings....so much of his income is "hidden" within the practice for tax purposes as it is with most businesses, it is very difficult to do a comparison at that level. As for expenses, I am not sure what you are asking for on this one? Expenses tied to the household or the business?

Prove that his income is hidden. Seriously prove it. He may not earn a whole heck of a lot. He has to pay for CLEs -- 24 credit hours every two years (and they average roughly $100 a credit hour and that does not include transportation and accomodations), malpractice insurance (what it costs is based on the length of practice -- the longer in practice the more expensive; the type of practice and what not), utilities and rent for office space, mileage, licensing fees, books, computer programs and access to networks such as Westlaw and Lexis Nexis (these can cost $3 to $5 a minute), assocation memberships (anywhere from $100 to 1000 a year), salary for a secretary if he has one as well as for paralegals. Unless he owns the building where he is there may not be much value to the business. An attorney can easily have $25k in deductions before they pay their own income taxes -- state, federal and local if any, social security, medicare and retirement.

 

[Bali Hai]

His education? Not really. He is putting his education to use and has been since 1999. You supported him so therefore you may owe him spousal support. Has his practice reached a certain level of success.

I would pay to see her reaction when she reads this!

 

[LdiJ]

His education? Not really. He is putting his education to use and has been since 1999. You supported him so therefore you may owe him spousal support. Has his practice reached a certain level of success.

I think that one is a little unfair....because it could unfairly put her into a panic. The odds of a judge ordering her to pay spousal support are incredibly slim to none. He has an education that allows him to fully support himself, and well.

Its also not unfair of her to want him to honor their marital contract that she would be able to go back to school after he started reaping the benefits of his education, It may not fly legally, but its not unfair. That's a personal contract that people make between each other, and it should be honored. Anyone's sense of personal "honor" should require them to live up to that. Knowing you, I think that you would have lived up to that personal contract had you been in that situation. However, I know that it is unlikely to fly legally.

And....as a last note...and please do not take this personally.....it is not directed at you, but as a tax professional I won't take on attorneys as clients....because any tax professional will tell you that as an industry "whole" they are some of the worst cheaters when they are in private practise.

 

[Ohiogal]

I think that one is a little unfair....because it could unfairly put her into a panic. The odds of a judge ordering her to pay spousal support are incredibly slim to none. He has an education that allows him to fully support himself, and well.

They are slim but it is possible -- about as possible as her husband being forced to pay her SS.

Its also not unfair of her to want him to honor their marital contract that she would be able to go back to school after he started reaping the benefits of his education, It may not fly legally, but its not unfair.

Moral fairness is not the same as legal fairness and you know we discuss legal fairness here. IT is also not part of the marital contract. No where in the marriage vows or the law does it say that anyone OWES their spouse further education.

That's a personal contract that people make between each other, and it should be honored. Anyone's sense of personal "honor" should require them to live up to that. Knowing you, I think that you would have lived up to that personal contract had you been in that situation. However, I know that it is unlikely to fly legally.

Yep it is a personal contract MAYBE. She would need to prove that all the elements of a contract are present and that the contract should be upheld. Can she do that? I don't know.

And....as a last note...and please do not take this personally.....it is not directed at you, but as a tax professional I won't take on attorneys as clients....because any tax professional will tell you that as an industry "whole" they are some of the worst cheaters when they are in private practise.

Why do you say that? I ask because I know the deductions I have and that I can legally take and that amounts to quite of bit of what walks in my door. I would have even more business deductions but I majorly consolidate expenses.

 

[LdiJ]

Why do you say that? I ask because I know the deductions I have and that I can legally take and that amounts to quite of bit of what walks in my door. I would have even more business deductions but I majorly consolidate expenses.

Like I said, I didn't direct that at you at all. Its not about you...nor about anyone else who strictly accounts for business expenses vs personal expenses. Its about people who take personal expenses and make them business expenses for tax purposes. Private practice attorneys are notorious for that....and enough of them do it that, that a large number of tax professionals decline to handle their returns.

And on a totally unrelated issue....my brother is a custom home builder. None of the custom home builders in our area will agree to build a home for an attorney. Why? because every one of them has been seriously burned by doing so. No matter how inonclad the contract was, the cost of the attorney choosing to litigate (for free because they represented themselves) screwed over the builder.