Does Your Prenuptial Need an Infidelity Clause?

Infidelity clauses in prenuptial agreements have been in the news lately, largely because of the relationship woes experienced by Tiger Woods and his ex-wife, Elin Nordegren. Can property division after divorce be facilitated through infidelity clauses in prenuptials? Experts say that most couples should avoid such stipulations in their premarital agreements, but some pairs could benefit from an infidelity clause.

Infidelity clauses are primarily useful for those whose prospective spouse has a history of extramarital affairs or other cheating. These stipulations provide additional financial relief for the spouse who is victimized by the affair. Most infidelity clauses are requested by the female partner who suspects her soon-to-be husband may have stepped out of a relationship before.

Attorneys give several examples of instances in which infidelity clauses are inappropriate. One woman wanted to include a provision that would have awarded her ownership of the man’s restaurant if she determined that he had cheated. Another sought to have potential alimony doubled in case infidelity was proven. Both of these women ultimately agreed to strike the provisions from the prenuptial agreement because there was no indication that either man would cheat; both men’s past was ostensibly clean.

If you do decide to pursue an infidelity clause in your prenuptial agreement, you should address several specific concerns. First, you and your prospective spouse need to create precise definitions for infidelity. While some people may define infidelity as going to a strip club, others consider anything less than sexual intercourse acceptable. The agreement must include clear guidelines for determining whether a spouse has cheated. Furthermore, both parties must agree on measures that can be used to determine whether a spouse has been unfaithful. The nature and amount of proof required to establish a spouse’s infidelity must be detailed in the prenuptial.

Remember that prenuptial agreements are contractually binding. People who enter into the agreements are rarely excused from them, so the agreements must include all necessary provisions when they are drafted.

Source: Huffington Post, “Infidelity clauses: Protecting marriage with fear of financial fall-out,” Barry Finkel, March 26, 2013.

World’s Most Expensive Divorce Pending

In one of the most expensive property division cases ever recorded, one billionaire’s soon-to-be ex-wife is slated to receive about $5 billion in their divorce settlement. The information was revealed recently by Reuters reporters conducting an in-depth look into the breakup between oil mogul Harold Hamm and his second wife; unlucky for him, she is both an attorney and an economist.

The woman, Sue Ann Hamm, is Harold’s second wife. Since she filed for divorce last year, the woman has been alleging that Harold cheated on her. In the absence of a prenuptial agreement — or if the agreement is voided because of infidelity — Sue Ann stands to nab a majority share in Continental oil, the company Harold founded in 1967. In other words, the self-made billionaire could lose about 68 percent of the company to his ex. With the woman’s projected shares in the company adding up to more than $5.3 billion, the divorce settlement would easily be the most expensive on record, even among the super wealthy.

It is still not entirely clear whether the woman will actually end up with an even half of the man’s financial holdings; after all the pair has two children, a factor that could substantially increase the price of the divorce if Sue Ann gets primary custody and child support. The courts will also factor in the 25-year span of the marriage, along with Sue Ann’s time spent as an executive at Continental, where she was responsible for marketing units and other key activities.

The record-breaking potential settlement dwarfs even Rupert Murdoch’s recent divorce, which cost him about $1.7 billion in 1999. Financial magazines have had difficulty proving that Murdoch in fact paid that much, though, considering the quality of his legal representation.

Property division is largely dependent on the presence of a prenuptial agreement. High-asset couples who are pursuing divorce should first consult their prenuptial requirements before seeking other legal alternatives.

Source: Forbes, “Oil billionaire Harold Hamm’s divorce could be world’s most expensive at over $5 billion,” Clare O’Connor, March 23, 2013

Study: Children of Divorce More Likely to Light Up

Public health professionals are always looking to find correlations between health behaviors and social influences. From the foods we eat to the cars we drive, our environment affects our health choices and outcomes. Now, new information from the University of Toronto shows that teens with divorced parents are more likely to start smoking than kids whose parents are still married. It is not clear whether this new research will have child custody implications.

Researchers found that men with divorced parents were about 48 percent more likely to start smoking than their counterparts, whose parents stayed together. Women whose families split were 39 percent more likely to start smoking.

Scientists associated with the study acknowledge that divorce is not the only determinant that could cause people to start smoking. Still, divorce can lead to a variety of societal conditions that encourage poor health behaviors; children of divorce may have lower levels of education, mental disorders, or traumatic emotional events in their past. Even after accounting for all of these confounding factors, though, smoking rates still appear to correlate with family break-ups.

The researchers in the study postulate that the children of divorce were more likely to smoke because of elevated stress levels. Smoking may be used as a coping mechanism to ease some of the emotional strain that is placed on these youngsters.

The study creates several questions that could have implications for child custody in America. First, it is important during a divorce to choose a custody situation that will be healthiest for the family’s children. The researchers did not take into account children who had been raised under the modern divorce model, which pushes for joint custody and increased parental involvement. These changes in custody may have a significant impact on kids’ likelihood to light up.

Ultimately, child custody arrangements need to accommodate the children’s physical and social needs while maintaining their health status. This new information could provide additional support for social programs aimed at assisting children of divorce.

Source: Huffington Post, “Divorce research: Study finds that children of divorce are more likely to smoke,” March 14, 2013

State Nets Record Child Support Collections

The Department of Human Resources, the embattled agency responsible for collecting child support in Maryland, is making significant progress toward fixing the problems identified in a recent audit. The department had been investigated by the Office of Legislative Audits, which questioned its ability to oversee the Child Support Enforcement Administration (CSEA). A 2011 report showed that the department had 15 serious deficiencies that were preventing it from maximizing its child support collection processes.

Now, the administration says it has remedied 11 of the violations and will fix the remaining four by the end of next month. The department had not been using all of its resources to recover overdue child support, but that seems to have changed since the remedies have been adopted. An aggressive collections campaign has resulted in record-high child support payments, according to local media outlets.

The department’s current leader took the helm in May 2011. A full audit of the system showed that the Child Support Enforcement Administration was plagued with shortcomings that were preventing the organization from recovering many overdue bills. Collectors were failing to seize money from parents’ bank accounts, for example, and they were also withholding insufficient wages in many cases. Some checks were also issued to deceased custodial parents; those checks were often fraudulently cashed.

To fix the problems, the new department leader created several database systems and reform initiatives. CSEA now has renegotiated contracts with collections agencies that are required to meet high performance expectations. Furthermore, the organization has established assistance programs to help noncustodial parents make their child support payments on time.

This is great news for the thousands of parents who depend on child support every year in the state of Maryland. The new system has yielded a $25 million increase over the previous year, setting a state record of $544 million in collected child support. Supporters are optimistic that the families who most need the funds are finally receiving help.

Source: The Daily Record, “Child support agency makes progress on reforms,” Llana Kowarski, March 6, 2013

Know The Value of Your Home Before You Divorce

Many Maryland couples find themselves arguing over who will keep the family home when they divorce. As such, it is important that couples truly understand the value of the property they are attempting to divide. Rather than simply guessing about the value of your home, experts provide a variety of options that can help during property division negotiations.

The most accurate way to determine the value of your home is to spring for a full home appraisal. Professional appraisers are able to estimate the home’s value by factoring in special features of the home, as well as the value of nearby establishments and other investments. Appraisers tend to be more expensive, however, with fees for some professionals costing several hundred dollars. Divorce attorneys say that money is generally well-spent, though, because it can save financial trouble in the future.

A home that is not correctly valued could cost one of the partners a significant amount of money; if the home is undervalued, the person who keeps the home will not receive a fair payment for the property’s equity. If the house is overvalued, then the person paying for the equity will be financially compromised.

If you choose not to enlist the services of a home appraiser, you can consult a real estate agent to obtain a comparative market analysis. This is a quicker and less expensive method, though it tends to be less accurate. Your real estate agent will estimate the value of your home based on the sale prices of other similar homes in the same area. Again, this method does not take the condition of your home into account.

Finally, you can agree to do your own research in order to determine your home’s value. This is generally not encouraged unless both partners agree to the independent research option.

The value of your home is important information to have during your property division proceedings. Be sure that you are adequately informed so you can protect your financial health during the divorce.

Source: Huffington Post, “Three ways to value your home in a divorce,” Joseph E. Cordell, March 1, 2013.

Psychologist Under Fire After Father Murders Son

A Fairfax County, Virginia, woman whose son died while on an unsupervised visit with his father has filed a wrongful death suit against the psychologist who approved the visitation. The woman’s 15-month-old son was drowned by his father during the October 2012 visit, which was part of a court-ordered change to the family’s child custody agreement.

Authorities report that the boy’s father had taken out more than $500,000 in life insurance policies on his son before allegedly killing him. The man has been charged with murder.

The boy’s mother contends that the man would have never been granted the visitation if a different psychologist had been used. The couple had been negotiating a custody dispute at the time of the evaluation, and the man was ordered to obtain a mental evaluation. He was, however, permitted to choose his own psychologist, and he paid for the evaluation himself.

As a result, said the woman’s attorney, the psychologist provided a biased mental-health evaluation that minimized many of the father’s previous problems. The psychologist is accused of skewing her evaluation to suit the man who paid her, but she should have been protecting the best interests of the child. Previous psychological evaluations showed that the man had engaged in sexually aberrant behavior and pulled a gun on a former girlfriend, for example.

The report was an instrumental piece of information used by a judge to grant the father’s unsupervised visits. Ultimately, the boy’s mother claims the psychologist ignored all warning signs and violated professional ethics by allowing the boy an unsupervised visit with his father. Supervised visitation would likely have prevented any misconduct by the boy’s father, but this option was dismissed.

Child custody agreements are admittedly difficult to craft, even under normal circumstances. If you suspect that your spouse should not be granted unsupervised visits because of unbalanced mental health, you should contact your divorce attorney immediately.

Source: The Daily Record, “Mother sues psychologist following toddler’s death,” Feb. 19, 2013

Keep Your Nest Egg Safe Through Divorce

Women are generally the financial victims in divorce. They tend to lose as much as 41 percent of their income after the property division is complete. In comparison, men only experience a 25 percent drop. Women should be better prepared to negotiate for their financial futures during divorce, so experts are now releasing strategies that can promote financial success for female divorcees in Maryland and elsewhere.

Even though divorce and family changes put a significant amount of worries on your plate, you should remain focused on keeping beneficial assets and seeking fair property division. Experts say that women often settle for undervalued holdings that will do little to help them in the long-term. 

Instead of looking to secure the family home, for example, push to get a percentage of the retirement funds you have both been establishing. Houses require capital to repair and maintain, while most retirement funds are relatively inexpensive. That illiquid asset could weigh down a woman’s financial future while taking away her safety net.

Take care of your portfolio choices by converting pensions and 401(k) funds to IRAs. This generally gives you better investment options. Remember that you can still wisely invest even without your spouse’s help. 

If your husband has been managing the investments, you may feel as though you are experiencing a steep learning curve. Never fear, because investment professionals are available to help. Consider investing in a fixed-date fund that would allow you to consider other investments while still earning.

Finally, if you decide to remarry, you need to draft a prenuptial agreement to protect your assets for your own children. Prenups tend to be more common in second marriages for just this reason. Even though you may be preparing for your children’s financial needs, you can still work together as a couple to benefit the family.

Experts also advise that recent divorcees take time to evaluate their investments. Do not rush into any investment or asset management plan. Instead, take several months to deal with the emotional and financial impact of the loss before you decide how to manage your money.

Source: CNN Money, “Rebuild your nest egg after divorce,” Beth Braverman, Feb. 21, 2013

How Food Relates To Your Post-Divorce Health

When considering your co-parenting arrangement, your child’s diet might be one of the few things you neglect to consider. Food just does not seem as important when you are in the throes of hashing out a child custody agreement. Some experts say, however, that food can be an important factor and indicator of wellness in the aftermath of a divorce. Children’s eating habits, and even those of parents, can show emotional health status like few other indicators. Learning to let go and relax about your child’s diet is one sign that you are becoming an effective co-parent.

One woman relates a story about her child wanting sunny-side up eggs, something he had never eaten at her house. When she asked him where he had tried sunny-side up eggs, he quickly told her that his father’s girlfriend made them at that house all the time. The woman said she was more surprised that her son was willing to try a different type of egg than she was about her ex-husband’s girlfriend; she took that as a sign that she was proceeding well as an effective co-parent.

In the early stages of divorce, it would be easy to beat yourself up for not exposing your children to everything they experience at your ex’s house. Perhaps you would feel guilty because you had never provided them with sunny-side up eggs. As the sting of the divorce fades, though, most people admit that they appreciate the diversity that accompanies their child’s trip to their other parent’s home. Without his dad, the boy in the story would not have tried a new food.

You cannot control what your children eat while they are at your ex’s house; you have to trust that they are feeding your kids appropriately. This is one of the most fundamental aspects of co-parenting. Learning to trust your ex with your child’s diet and welfare is a difficult transition, but it is one that improves over time.

Source: Huffington Post, “What food can tell us about how we’re coping with divorce,” Erin Mantz, Feb. 8, 2013.

Prenups Do Not Spell Doom For Marriage

Couples who are heading for their impending wedding may find prenuptial agreements remarkably unromantic; after all, who wants to plan for the demise of their marriage before it has even started? Still, with the modern divorce rate continuing to skyrocket, couples would be wise to put their property division wishes in writing before a breakup occurs. Prenuptial agreements allow individuals who separate because of death or divorce to remain economically secure.

Prenuptials are increasingly popular among newlyweds because Americans are waiting until later in life to tie the knot. As a result, they have significantly more assets to protect. Most individual property will be held as communal property during a divorce, according to experts, because state laws offer little protection.

Think of a prenuptial agreement as a form of divorce insurance. Newly engaged couples often meet with a lawyer or financial planner at the same time they start their wedding plans. This practice allows the couple to avoid hefty legal fees later in life if they do choose to break up. Even though prenups may be seen as a luxury only afforded to wealthy Americans, everyone can benefit from drafting such a document. Experts say the emotional and social cost of litigation can far eclipse the financial investment in a prenup at the beginning of a marriage. If you are not wealthy, you can still benefit from a prenup. You may own items that have sentimental value, for example, or your retirement accounts could add up to $10,000 or more.

Some couples also draft postnuptial agreements if they reconcile after considering divorce. These documents provide the same protection as a prenuptial agreement, but they allow the couple to decide their property division strategy in advance if the reconciliation fails.

Remember that signing a prenup does not doom your marriage to failure. To make the process smoother, ensure that both people have their own lawyers present. Prenups take about three months to finalize, so give yourselves plenty of time to negotiate.

Source: Fox Business, “Why you should consider a prenup,” Andrea Murad, Feb. 4, 2013.

Elimination of Paper Support Checks to Benefit Families

Maryland’s embattled child support system is making another change designed to save money and improve the ability of the state to collect the money owed to scores of parents. The newest child support change involves a move away from paper checks, which is likely to save the state $1.4 million each year. Instead of issuing paper checks, state agencies will use a new process that requires direct deposit or the use of an electronic payment card. The payment card will be similar to EBT or SNAP benefits, according to state officials.

The state of Maryland collects child support payments on behalf of single parents, distributing the money through its newly revamped system.

Eliminating paper checks will make the system faster, easier, and safer for families. The new program will prevent identities and checks from being stolen, for example. Families will also get their money faster because they will not have to wait on mailed child support checks. The new method is quicker and more secure, which should benefit the state’s children that receive support. Authorities report that check cashing fees are also likely to be eliminated thanks to the new system, which will allow parents to put more money toward their kids.

The state of Maryland distributed more than $544 million in child support during the past fiscal year, which is $25.1 million more than the previous year. Maryland’s child support collection system has come under fire for years of mismanagement. The state’s child support collection has suffered because of poor administrative practices, resulting in legislative changes designed to improve distribution for those who need the money most. Maryland is striving to increase the amount of child support collected while streamlining the process, all in a bid to benefit the state’s youngsters.

The biggest change under the new system will be the creation of Electronic Payment Issuance Cards, which will allow individuals to withdraw cash from ATMs, bank tellers, and credit unions that accept Visa cards, according to state authorities.

Source: The Baltimore Sun, “Md. Eliminates paper checks for child support payments,” Yvonne Wenger, Jan. 23, 2013