By of Duff & Kronfeld, P.C. posted in About the Law on Wednesday, December 12, 2012.
For those of you who have not met Sally (a fictional character) and Henry (also a fictional character), from my last blog, these characters have been married for 12 years and have three young children. Henry is a partner in a prestigious D.C. law firm and Sally is a stay-at-home mom. Henry met an associate, Cassandra, at his law firm and has decided to leave Sally for a more exciting lifestyle. To pay for his new found freedom, Henry starts diverting funds from joint accounts into accounts titled solely in his own name.
Sally retains me and pays The Duff Law Firm an advance fee deposit of $10,000.00 with a joint credit card. We know this case is going to be expensive due to the issues involved, as Sally will need to retain a business valuator to value Henry’s interest in the law firm, as well as a property appraiser to value the marital home. We may also need to employ a forensic accountant if we are unable to locate the marital funds that Henry had diverted.
I advise Sally to make copies of all her financial documents and bring those to me. This includes the following:
· Bank statements;
· Tax returns with all the schedules including W-2s and 1099s;
· Henry’s leave and earning statements;
· Investment statements;
· Retirement statements;
· Credit card statements;
· Loan statements, including the mortgage statements and vehicle loan statements;
· The house deed including the Hud-1;
· Jewelry and art appraisals; and
· Vehicle titles.
On Sally’s behalf, I file a complaint for divorce on the grounds of adultery and file a pendente lite motion. A pendente lite motion asks the Court to award interim relief until such time as we have a complete written agreement on all issues or we go to trial. There are several issues I want the Court to rule upon at Sally’s pendente lite hearing, which include the following:
· Interim spousal support;
· Interim child support;
· An advancement of attorney and expert fees; and
· A “no dissipation” provision, preventing either party from diverting or using marital funds, without a written agreement or court order.
From the financial documentation I have gathered, I can see that Henry diverted over half a million dollars from joint accounts into some “unknown” accounts that Henry opened. I am asking the Court to order Henry to write The Duff Law Firm a check from one of these unknown accounts for $100,000.00. Henry argues that those funds were his separate monies that he had prior to the marriage. Sally’s response is that if Henry can prove that these funds are his separate property at the equitable distribution trial, then he can receive credit for the $100,000.00, as there are other marital assets to cover this advancement of attorney fees.
In my experience, the Court will order an advancement of funds from this fact pattern, but may not necessarily award the entire $100,000.00 that we requested. This being the case, the Court may allow us to return a second time for an advancement of additional attorney fees and expert witness expenses.
Stay tuned for my next blog, how does the Fairfax County Circuit Court award pendente lite spousal and child support?
When we get closer to the equitable distribution trial, we will discuss the filing of an alternate valuation date and what that means with respect to the funds Henry diverted from the marital accounts.