In our previous post, we began a discussion about the growing popularity of prenuptial agreements. More couples in Pittsburgh and elsewhere are realizing that these documents are not just for the very wealthy or for couples of vastly different ages.
Valentine's Day occurred earlier this week, and the dust may be just starting to settle for many Pittsburgh residents. There are few occasions which illicit such contrasting emotions, and most people either love or hate this holiday depending on their expectations and previous experiences.
The end of a marriage not only takes an emotional toll on those involved, it also poses significant financial challenges. During divorce proceedings, spouses must determine what to do with a variety of assets, including the house. Given the financial consequences related to dividing this significant asset, decisions made regarding the house may be some of the most important aspects of any given divorce settlement process.
Celebrity divorce settlements are absorbing for many reasons. Beyond the gossip, it can be intriguing to consider, from a legal point of view, what issues may arise during the divorce when substantial income and assets are involved. Even though the divorcing couple may be quite wealthy, however, the division of assets for higher net-worth individuals and couples during divorce follows a similar process to that which anyone seeking a divorce would find. There are some additional issues, of course, such as the valuation of the assets and the determination of what earnings should be shared in the long term. Those extra steps can also add to the cost of the divorce itself.
In the previous blog post, we began to talk about the issue of dividing a closely-held business in the process of a divorce. The first matter discussed was whether the business would be considered marital property under Pennsylvania law. If the business was established before the marriage, then the more salient issue is going to be what the value of the business was before the marriage (when it was separate property), and what the value of the business was during the marriage (when it was marital property).
Many people invest heavily, in different ways, in their marriages and in their businesses. When one of those investments fails, it can start to drag the other one down. In this blog post and the next one, we will look at ways to protect a closely-held business from being lost when a marriage breaks up.
Mortgages are considered to have gone underwater when the debt owed on the loan is more than your house is worth. This is a complicated financial situation often arising from refinancing done on your mortgage, and it can take time to build back equity and bring the mortgage above water. But if you carry an underwater mortgage into divorce proceedings, you may be pressed into taking action on the dividing the mortgage debt, and this can be complicated.
Prenuptial agreements aren't only for the rich and famous. It's a good idea for all individuals carrying assets into a marriage to use a prenuptial agreement as a means of protecting assets in the event of a divorce. These contracts can make the division of assets easier by clearly assigning certain assets to one spouse, reducing the time a couple spends in litigation.
Even in Pittsburgh, the story of the divorce between the owners of the L.A. Dodgers Major League Baseball club has been making the news (including this blog). Frank and Jamie McCourt have been in the divorce process now for three years, and are said to have paid millions in legal fees. Most people would never have such a drawn-out process or ever come close to paying so much in fees in a divorce case. However, the McCourts have more than the average person when it comes to marital assets to fight over. They have hundreds of millions of dollars at stake in their property division.
For couples facing divorce in Pittsburgh, there are already enormous emotional burdens to deal with. It can be overwhelming to think of all of the financial details that need to be attended to in a divorce, especially if a divorcing spouse does not have an experienced property division attorney.