inheritance

[pincushion]

What is the name of your state (only U.S. law)? NY
Background: I have filed for divorce. 14 year marriage. I'm 52 years old. He abandoned. No issue. It's been almost 3 mos. since he left. STBX has not been smart w/finances or fair with me at all. Infidelity on his part. Proof of lavish vacations and dissipation of marital assets on new partner rather than pay our household expenses. I have a good attorney. Haven't worked for wages 14 years; worked for him as homemaker and wife. This was a mutual agreement at his insistense. He makes 180k/yr. Seeking Non-durational spousal support. Seeking his payment of my attorney fees. Also had to file for pendente lite. Received pendente lite judgement for just barely enough to get by. I start school full-time next week. We are now onto the discovery phase of the divorce.
Question: 10 mos. ago my mother passed away and a small interest in her house fell to me and my brother. My brother had an attorney draw up some papers to transfer this interest I have in the house to him and his wife which my husband (stbx) and I agreed to do. I have not payed any attention to papers I have signed and forwaded to his attorney for months. Obviously, since all this happened my husband left and we are now in the throws of this divorce as stated above. I have just received final papers to sign on behalf of this business with my mother's house and my brother. I have shown my attorney these papers. He wants to discuss with brother's attorney. I don't want this to hurt my chances of getting attorney fees paid. The actual value of this interest in the house is small, maybe around 10k. My brother can't buy me out and I don't want him to. He's already helping me with retainer fees, food, etc. On my Net Worth Stmt. I did not mention this small inheritance because I thought it had already transferred. Since it was inherited from family I did not mention the transfer. Was I a Liar? And now what? Brother wants me sign the papers and get them back to his attorney so he can refi. at the favorable rates that are out there. I should just sign and send these papers on to him because I agreed to that long ago. Right? But my attorney has the papers and I'm confused. I can't sleep and will call my attorney Next week but wondered if anyone here can give me an idea of what's going to happen with this. (So I can get some sleep this weekend.) I've been posting here since this all began and you have been very informative. Thanks for everything.

 

[mistoffolees]

Don't worry about it - financial papers get revised all the time. As long as you weren't obviously hiding assets, you'll be OK. Since you say you have a good attorney, they'll take care of it.

The infraction is a minor one, anyway. While you should have disclosed the asset on your financial forms, your stbx would have had no claim on it, anyway. And since you're turning it over to your brother in exchange for his support during the separation period and payment of your legal expenses, it shouldn't have any bearing on future support. Not to mention that in today's real estate market, it might not be worth much, if anything.

Let your attorney handle it and get some sleep.

 

[pincushion]

mistoffolees: Thanks again!

 

[Ohiogal]

Don't worry about it - financial papers get revised all the time. As long as you weren't obviously hiding assets, you'll be OK. Since you say you have a good attorney, they'll take care of it.

The infraction is a minor one, anyway. While you should have disclosed the asset on your financial forms, your stbx would have had no claim on it, anyway. And since you're turning it over to your brother in exchange for his support during the separation period and payment of your legal expenses, it shouldn't have any bearing on future support. Not to mention that in today's real estate market, it might not be worth much, if anything.

Let your attorney handle it and get some sleep.

It could impact spousal support as she had these funds at her disposal that she WILLINGLY GIFTED to her brother. That is a transfer of 10k which should have been put in her asset column and could cause a change in spousal support. Albeit a minimal change but still a change.

 

[pincushion]

Could it's impact be a matter of timing? When the paperwork transferring ownership to brother started we were still married and not separated. This started back in Jul 08 and he abandoned me Nov 08. When is it legally transferred? At the time it's filed in county clerk office? Because if it's a matter of timing I have had no clue as to when this interest actually transferred. I never had any cash money in hand. It's in the value of the property and my brother and wife inhabit it and always have. I have not been paying attention to any papers I've signed and mailed back and was surprised to get another wad of papers to sign from his attorney last week. This was not in a will. It's the way the deed was written. Thank you smart people.

 

[mistoffolees]

It could impact spousal support as she had these funds at her disposal that she WILLINGLY GIFTED to her brother. That is a transfer of 10k which should have been put in her asset column and could cause a change in spousal support. Albeit a minimal change but still a change.

Yes, that's right - and I thought I hinted at that possibility. However, since she had the paperwork drawn up while they were still married, the transfer should have occurred before the divorce filing.

More importantly, she claims that she transferred title to the brother in exchange for support and legal fees. Both of those are legal uses of marital funds, so if she can substantiate that claim (did he spend more than the value of the home equity on support and legal fees), then it would no longer be an issue (other than the technical reporting issue).

Either way, it will be a minor issue at best and not worth losing sleep over.

 

[Ohiogal]

Yes, that's right - and I thought I hinted at that possibility. However, since she had the paperwork drawn up while they were still married, the transfer should have occurred before the divorce filing.

More importantly, she claims that she transferred title to the brother in exchange for support and legal fees. Both of those are legal uses of marital funds, so if she can substantiate that claim (did he spend more than the value of the home equity on support and legal fees), then it would no longer be an issue (other than the technical reporting issue).

Either way, it will be a minor issue at best and not worth losing sleep over.

According to her timeline however it started in July 2008 and separation didn't occur until November 2008. That should still have been considered an asset for her.

 

[LdiJ]

According to her timeline however it started in July 2008 and separation didn't occur until November 2008. That should still have been considered an asset for her.

In a way I can see both points of view on this. Yes, it was an asset for her, but it was an asset that was spent in legal fees and support.

Yet, at the same time her husband clearly knew, months before separation, that the asset was being handed over to her brother, therefore there would be a reasonable expectation that it would not be included as an asset to her.

In any case, its still nothing to lose sleep over.

 

[pincushion]

Yes, that's right - and I thought I hinted at that possibility. However, since she had the paperwork drawn up while they were still married, the transfer should have occurred before the divorce filing.

More importantly, she claims that she transferred title to the brother in exchange for support and legal fees. Both of those are legal uses of marital funds, so if she can substantiate that claim (did he spend more than the value of the home equity on support and legal fees), then it would no longer be an issue (other than the technical reporting issue).

Either way, it will be a minor issue at best and not worth losing sleep over.

There was no exchange. I agreed to transfer my share in house to him months ago. He only offered to help me out when stbx abandoned in Nov. Not because I transferred anything. Does it matter? I, of course, was unaware at the time I agreed to transfer, that my husband and I would be divorcing in the new year ahead. I love my bro and wanted him to have my share in the house. Period. Later, he proved he loved his sis and agreed to help me when I needed money food, gas, etc., and for a retainer. Like one good deed deserves another? Here's what looks bad to me. If this money is still in my name, so to speak, and my bro wants to refi the house would or could the opposition demand that he refi my share to hand to me in cash and therefore I would pay my own attorney fees so stbx won't have to. It seems like it's all up to when a legal transfer actually took place. When I agreed to do it last summer or when it is finally filed in county clerk office? Am I way out in left field with this? We are asking for stbx to pay attorney fees not my brother.

 

[mistoffolees]

There was no exchange. I agreed to transfer my share in house to him months ago. He only offered to help me out when stbx abandoned in Nov. Not because I transferred anything. Does it matter? I, of course, was unaware at the time I agreed to transfer, that my husband and I would be divorcing in the new year ahead. I love my bro and wanted him to have my share in the house. Period. Later, he proved he loved his sis and agreed to help me when I needed money food, gas, etc., and for a retainer. Like one good deed deserves another? Here's what looks bad to me. If this money is still in my name, so to speak, and my bro wants to refi the house would or could the opposition demand that he refi my share to hand to me in cash and therefore I would pay my own attorney fees so stbx won't have to. It seems like it's all up to when a legal transfer actually took place. When I agreed to do it last summer or when it is finally filed in county clerk office? Am I way out in left field with this? We are asking for stbx to pay attorney fees not my brother.

The rules are fairly straightforward. The interpretation can get complicated.

If there were an exchange - that you gave your brother the house in exchange for support and attorney's fees, that would be a legitimate use of marital funds and it could not be an issue (assuming that the value of your share of the home was in the same ballpark as the amount he paid in support and attorney's fees.

If, OTOH, you gave the house to him while you were married, it would be a legitimate gift. One member of a married couple is free to give gifts to family members. I would imagine that there are some limits on this, but I don't know what they are. What you've described would certainly be OK if the transfer were accomplished while married-particularly since it was an inheritance and therefore a separate asset, not a marital asset.

Now, it gets complicated. If you transfer assets to a friend, family member or anyone AFTER one party has filed for divorce, that's a no-no. In most (maybe all) cases, when one party files for divorce, you get a packet of information with the rules you have to follow. One of those rules involves not squandering marital assets. If the house were marital property and you gave it to your brother after filing for divorce, you'd be in trouble. Since it's separate property (inheritance), you won't get in trouble for giving it to your brother, nor will it affect the division of marital property. HOWEVER, if the judge determines that you had that extra $10 K in equity and chose to give it away, the judge would be within his rights to consider you has having an extra $10 K when it comes to determining spousal support. So, the worst case would be that the judge adds $10 K to your asset list and recalculates marital support on that basis - which probably wouldn't make a huge difference anyway.

The issues here are:

1. The transfer was started while you were still married, but not completed until after the divorce was filed (if I understand the timeline properly). Does that mean you made the gift while married (which would be fine) or after the divorce filing (which creates the issues above)? It may come down to whether the gift could have been revoked when the divorce was filed. That is, was it already too late for you to get the house back or could you have told your brother "sorry, I can't afford to give it to you now".

2. What consideration did you receive in return? As explained above, if the brother had paid your support and legal expenses in return for the gift of the house, then your stbx would not have any say in the matter. You're allowed to pay those expenses out of marital assets, and certainly out of separate assets.

Talk with your lawyer about it so you can get it resolved, but basically, the worst case scenario is a minor reduction in your support. (actually, it is theoretically possible that your husband could choose to try to have the whole agreement thrown out over the issue, but that would be unlikely - and it would be unlikely that the judge would grant it).

 

[pincushion]

mistoffolees...well said, well put. Now that took some explaining and I again Thank You. This forum really has helped me talk with my attorney and it helps with my nerves, indeed.