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Category: Divorce & Matrimony

We have distilled decades of experience at the intersection of law, business and finance into a suite of articles to help our clients make sense of business valuation, forensic accounting, and litigation support. Please visit our site regularly for our latest content.

The Joint Appraiser's Role in a Divorce Action

Posted in Divorce & Matrimony, on Feb 2011, By: Mark S. Gottlieb

In these economically challenging times, parties are increasingly seeking ways to reduce the cost and conflict of divorce. Many attempt to streamline the process by retaining a joint expert/valuator to appraise the marital business and/or business interests. Indeed, there are numerous benefits. Consider, for instance, that without a joint appraisal, many non-business owning spouses or those without direct access to marital funds would not be able to afford any expert in the case. In addition to the added financial benefit of retaining a joint expert, The evaluator is also likely to get better access to documents and other evidence than an expert who has been retained by one party or another, The evaluator can often take on the role of creative problem solver, coming up with financially efficient, resourceful solutions, The parties and their attorneys frequently view the joint appraiser as more independent and objective, and can use the joint expert to expedite mediation and settlement. Attorneys avoid any pitfalls by clearly explaining to their clients the differences between retaining a sole expert and a joint expert. This will help clients from feeling “betrayed” later on in the case—when, for example, the appraiser may spend more time with the business-owning spouse to obtain information and financial records; or when the appraiser’s opinions conflict with the owner’s perception of the business’ value. It is important for the legal practitioner to become acquainted not only with appraisers who have experience as joint experts, but also those who also have some mediation or […]


  December is an exciting month for sports fans, particularly New York sports fans. The area’s football teams are both bidding for playoff berths; basketball and hockey fans are settling in with mixed feelings about their team’s early performance; and major league baseball’s “hot stove” league is a buzz with the potential of free agent signings. This year’s biggest baseball free agent star is pitcher Cliff Lee. And to no surprise the New York Yankees are among the few teams bidding for his affection. The Angels, Rangers, and Yankees have all reportedly “pitched” Cliff Lee and have offered him a king’s ransom to play for their team. Each of the three teams courting Mr. Lee has something different to offer. California has beautiful weather; Texas has no state income tax; and New York has an opportunity to earn millions of dollars above a baseball contract in endorsements and sponsorships. There is little doubt that in addition to his agent, family, and friends Mr. Lee is getting plenty of advice from a variety of marketing, legal, and tax professionals. Even though I have not been asked, I thought I would give my two cents to Mr. Lee’s quandary. Cliff, stay away from New York. It could be your financial ruin. Assume Cliff Lee signs with the Yankees for seven years at $25 million per year and contracts for an additional $5 million per year for marketing. It doesn’t take a forensic accountant to compute that during the next seven years he will earn $210 million.   But suppose Lee, A-Rod, and Jeter go out […]


There may be no glory in being a family law attorney these days, especially when it comes to dealing with the often challenging economic consequences in a divorce action. Clients may initially contact you with one issue related to their potential divorce, but often these concerns can quickly manifest as emotions and pressures begin to develop. Perhaps the questions attorneys resist the most or feel least comfortable in answering pertain to divorce-related tax matters. Many individuals, including those contemplating divorce, will be reaching out to you for answers to a variety of tax-related divorce questions. So, this may be the best time to revisit some of the questions you may be faced with. Here are ten divorce-related tax issues that all matrimonial and family law attorneys should know. 1.       Taxability of Assets Distributed Incident to Divorce In many instances one of the most disputed issues in a divorce is the distribution of the marital assets. This is commonly referred to as “equitable distribution” or “ED”. Under the Internal Revenue Code (IRC) Section 1041 (a), no gain or loss is recognized on the transfer (acquisition or distribution) incident to divorce provided such transfer occurs within one year after the divorce or related to the ending of the marriage. The ending of the marriage is defined pursuant to a divorce or separation agreement and occurs within six years after the date on which the marriage ended. Practice Tip: Often, one of the most significant marital assets is the marital residence and/or a business. The values […]


The summer of 2010 may be remembered by many Family Law practitioners as the “Historic Summer of Legislation” that will forever change how matrimonial law is practiced in New York State. There have been five major changes of legislation; new laws that many in the legal community have strong views about.  These changes include significant financial implications. These five major bills address the following: Significant changes effectuating child support modification (Bill # A8952); effective October 13, 2010, “No-Fault” Divorce (Bill # A3890); effective October 12, 2010,  The new Counsel Fee Bill that addresses payment of attorneys’ fees (Bill # A4532) on behalf of the less monied spouse; effective October 12, 2010, New procedures for setting awards of temporary maintenance while a divorce is pending (Bill # S08390); effective October 12, 2010, and Limiting the grounds by which orders of protection may be denied, or applications for such orders may be dismissed; effective August 13, 2010. For those of you that have been following our blog throughout the summer, you are very much aware of how the legal community has been intensely interested in these and other changes. For instance, on our podcast Forensic Perspectives, we interviewed the Honorable Sondra Miller on the topic of No-Fault Divorce. In addition, I recently participated in a panel discussion with three prominent attorneys on New York State’s Current Legislation to Develop Maintenance/Alimony Guidelines. Additional information regarding these programs are available on our website. According to Governor David Paterson, in addition to bringing New York’s divorce laws into the […]


Since our last blog was published, the New York State Assembly gave final passage on July 1st to no-fault divorce, clearing the way for New York State to allowing couples to end their marriages quickly when one spouse believes the union is over. The new measure, which requires one spouse to swear under oath that the relationship has broken down irretrievably for at least six months, is the final piece of a legislative package enacting the most sweeping changes to the state’s divorce laws in 40 years. This final legislative approval comes after what one member of the Assembly called “an awfully long and hard battle.” The bills now await Governor Paterson’s signature. No-fault divorce has long been opposed by the Catholic Church, with the view that the legislation would make divorce easier; feminists argued that no-fault did not address the concerns of poorer women. The National Organization for Women of New York State has found itself on the same side of the issue as the Church, although the New York City chapter of NOW supports the legislation. Marcia Pappas, president of the New York State chapter of NOW, has written recently, “No-fault can take away the bargaining leverage of the non-moneyed spouse—and that is usually the woman….In fairness, any partner to a marriage should be provided with notice that the other partner wants a divorce and given an opportunity to negotiate the terms for the divorce. Often, there is fault with ‘divorce on demand,’ not only can the more moneyed […]


Forty years ago, no-fault divorce was a controversial topic. Among the arguments made against it was that the full-time homemaker would lose leverage if unilateral divorce became a reality. But the American household has changed considerably over the years: more and more, two-parent earner households are the norm, and the working mom/stay-at-home dad model has become commonplace. Since 1969, when Gov. Reagan signed the nation’s first no-fault divorce law, the country has gradually fallen into place with no-fault divorce legislation—except for New York State. But that seems about to change. On Tuesday, June 15, the State Senate’s Democratic Majority passed a legislative package that seeks to finally end New York’s status as the remaining state without no-fault divorce. The No-Fault Divorce bill restructures New York State’s matrimonial law to streamline the process and improve the outcome of divorce for New Yorkers. The bill, approved 32-29, would allow no-fault divorce after a marriage has “irretrievably” broken down for six months or more and after all financial and custody issues are resolved. The legislative package must still pass the State Assembly, which is considering two bills that would adopt some version of no-fault divorce. Senator Ruth Hassell-Thompson, a Democrat from Westchester and the Bronx who was chief Senate sponsor of the bill, said after the vote, “What I’m hoping is that because the Assembly now has a partner in the Senate, that will give impetus to help the Assembly move along.” Under current law, New York couples who want to divorce must fault […]


On Wednesday, June 9, 2010, John Jay College, the New York State Council on Divorce Mediation, and the Family & Divorce Mediation Counsel of Greater New York sponsored a panel discussion on the Proposed Maintenance Guidelines. The panel was comprised of three attorneys, Steven Abel, Esq., Alton L. Abramowitz, Esq., Emily Ruben, Esq. and forensic accountant and business valuation expert, Mark S. Gottlieb, CPA. The program was moderated by Rod Wells, CFP. While the panel and the audience primarily agreed the intent of the proposed legislation has merit – there was some concern whether the proposed legislation addresses the need of a mechanism to calculate maintenance awards. Emily Ruben, Esq. (Attorney-in Charge of the Brooklyn Neighborhood Office of The Legal Aid Society) pointed out that many couples going through a divorce do not have substantial assets to divide and that their greatest asset of the marriage is frequently the income of the more-monied spouse.   That being said, moderate and low-income spouses usually cannot afford the often costly litigation required to establish a right to maintenance. Considering the unpredictable and inconsistent climate of maintenance awards, the less-monied spouse will usually settle, albeit under some pressure, to avoid costly litigation. The New York legislative houses are each considering possible legislation to establish guidelines for post-marital income sharing not dissimilar to the Child Support Standards Act. By establishing guidelines for both the amount of maintenance to be awarded and the duration of the award, post-marital guidelines would provide the consistency and predictability for spousal support […]


Major Changes in New Jersey’s Palimony Law

Posted in Divorce & Matrimony, on Apr 2010, By: Mark S. Gottlieb

In recent years, we have seen an increasing number of cases dealing with palimony filed in the New Jersey courts. Palimony has long been based on the law of contracts, where an oral promise can be enforced if a party relies and acts on it to their detriment. But a new law came into being during the last days of the Corzine Administration, requiring that in order for a palimony agreement to be enforceable, it must now be in writing and be executed with the independent advice of legal counsel.   Recently, forensic accounting expert, Mark S. Gottlieb,  met with Stephanie Hagan, a Family Law attorney and Partner in the firm Donohue, Hagan, Klein, Newsome and O’Donnell PC, to discuss the enactment of the Statute and its effect on couples. Both of these professionals have extensive experience in matrimonial and family law matters.   Although early palimony decisions found that cohabitation was a necessary element in a palimony action, this concept was eventually overruled by the New Jersey Supreme Court in 2008 when the Court ruled in Devaney v. L’Esperance .  In this case cohabitation was no longer a required factor. The Court found that a marital-type relationship is essential to any palimony claim; however, cohabitation is not essential to a determination of a marital-type relationship.  In many instances married couples may be separated by employment, military, or educational opportunities. Hence, not all married couples live together on a full-time basis. According to Ms. Hagan, there is no doubt that […]


Madoff Scam Hits the Divorce Court

Posted in Divorce & Matrimony, on Apr 2010, By: Mark S. Gottlieb

Over on New Jersey Family Legal Blog, I saw a post that editor Eric Solotoff, a family law attorney at Fox Rothschild wrote that struck my interest. Upon reading the post, Madoff Mess Hits Divorce Court, I knew I had to sit down with Eric for a podcast, to discuss what all this means in respect to forensic accounting.     For context, Justice Saralee Evans in Manhattan recently decided on a case regarding a divorcing spouse who attempted to revise his agreement with his wife. First, some background for our readers who may not be that familiar with the case: After thirty years of marriage, a husband and his ex-wife spent nearly two years debating the value of their home in Scarsdale, The husband’s law partnership, and their Manhattan apartment. The two agreed on at least one thing: an account they opened during their marriage with Bernard Madoff Investment Securities LLC was worth $5.4 million. As part of a 2006 equitable distribution agreement, the husband claimed he paid his wife some $2.7 million, which represented what he thought was his ex-wife’s fair share of their investments with Madoff. But after Madoff’s arrest in December 2008, the husband attempted to redo the agreement, claiming it was based on a “material, mutual mistake” and resulted in a windfall for his ex-wife. After the husband learned that he and his wife had “been tricked by a sophisticated fraudster,” he sought to reform the divorce agreement. The husband claimed the agreement did not accomplish […]


Parenting Plans Considerations When Divorcing

Posted in Divorce & Matrimony, on Mar 2010, By: Mark S. Gottlieb

I recently sat down and did a podcast with Leonard Florescue, a family law attorney at Blank Rome LLP, who advises clients primarily in complex matrimonial matters. We discussed the role parenting plans play in the divorce process.   Among the most important aspects of family law are custody and parenting plan issues. The family law practitioner is expected to take great care to work with his or her clients to create a viable parenting plan, which is an agreement between parents, who are either divorcing or who have never married. In the simplest terms, a parenting plan establishes who will spend time with the children and when and under what circumstances. The parenting plan also determines who makes the major decisions about education, medical care and other important issues. A good parenting plan is necessary in promoting harmony and alleviating stressful situations for both parents and children. There can be serious repercussions when parents have either a poorly though-out parenting plan or no plan at all. In an organizational or government hierarchy, there’s a single person or group with the most power and authority, and each subsequent level represents a lesser authority. Parents must create a “hierarchy” of their own. Time sharing is often a very stressful topic for parents. When outlining shared parenting schedules, parents must try their best to avoid potential areas of stress. It’s also advisable for parents to create a formula for the events they are anticipating for the first years of the parenting plan’s […]