Gingrich Divorce Documents Tell New Story

By Eric A. Ballinger

Today, documents were released to the media regarding Newt Gingrich's first divorce from Jackie Battley Gingrich.  The documents seem to show that the first Mrs. Gingrich fought the grant of the divorce because her husband would not admit that the marriage was irretrievably broken.  This contradicts statements that the Gingrich campaign has made indicating that his wife sought the divorce.  

While snippets of the pleadings filed in a high profile case can make for some interesting sound bites for the media, they do not tell the entire story.  The statements made can reflect a position taken by a party at one time during the case or could just be a part of some legal wrangling by the Warner's to get a better position with the Court.  Once the entire file is made avaiable to the public, the documents can be placed in thier proper context and wil unfold the entire story of the divorce.  Of course this will not fit into a 15 second sound bite or even a newspaper article.

Divorce and the Family Business

   While every divorce case comes with its own challenges, those cases involving people who own their own business have a unique set of challenges. The challenges come in the computation of income as well as the division of the business as an asset of the marriage. In handling the small business as a issue of a divorce, there are a number of methods that experienced lawyers use and experts to employ in order to insure that their clients interests are served.

    The income of a small business owner is a difficult issue that is often fraught with a great deal of emotion. Unlike a wage earner, there is no single document or series of documents that a party can point to support income of a small business owner.  While most small business owners pay themselves a salary, there profits of the business, over and above the salary, are taxed to the owner as income as well. This can be a sore subject because many business owners plow these profits back into the business in order to build the enterprise instead of taking this money home.  Another issue of contention with the small business owner is the benefits that a owner receives.  Most owner operators will pay their vehicles, cell phones, fuel and other reasonable related expenses from the business and write them off as company expenses or shareholder disbursements to be taxed at a lower rate. The main issue with regard to income in a business is the uncertainty. 

    While most successful business do show a track record of increasing revenues, expenses and incomes, the future holds a level of uncertainty that nobody is willing to predict.  This is especially true when those predictions are being used to assess child support and alimony.  Another issue that comes into play in determining the income of a family business is taking into account how much of that income is reflective of the efforts of the entire family member and not just the efforts the spouse that is taxed on the income as the, "front-man". In a divorce, a family business will lose the efforts of a spouse who has provided a critical roll in that business. 

    This raises several questions that will need to be answered. What sort of income should be attributed to the "unpaid" spouse leaving the business, what is the cost of replacing the efforts the former spouse put into the business and what is the loss to both the profitability and the value of the business due to the loss of a spouse who is also a key employee? The answers to these questions are just as important as the income of the owner but another critical piece of information is the value of the business.

    The significance of accurately determining income can not be underestimated. While income is the most significant factor in determining child support and alimony, mere tax documents and wage documents will not give a clear picture. Under Georgia law, income is calculated by a different formula than that used by the Internal Revenue Service to calculate taxes. In many cases, the deductions allowed for the purposes of Federal taxation are not allowed in calculating child support. The income the family business generates is most important for setting support as well as detaining the value of the enterprise as well.

    Determining the value of a family owned business is critical part of the dividing the assets of a marriage that owns a business. In many cases, the business can be the largest asset of the family, even greater than the house. The opinions of the value of a family owned business will vary greatly especially between the spouses who are vying for a favorable split of the marital assets. While most family businesses are service based and the value rests in the reputation of the owner as well as the ability of the business to generate a cash stream, some family businesses do have significant assets in property, equipment and customer base that can be transferred for value. Of course this presupposes a balance between transferable value of the business versus the income the business generates for its owner.

    While the value of the business is important, there are issues that arise out of that value. Is there any personal debt of either spouse attributable to purchase or investment in the business? Is that debt secured to any other assets of the marriage, such as the house? Does either spouse have a non-marital interest in the business as either an ownership acquired prior to the marriage or through inheritance? The answers to these questions are critical in insuring a good and equitable division of the business. 

    The issues raised here are the same issues that a judge will need the answers to in order to render the most accurate decision with regards to all of the major issues, child support, property division and alimony in a divorce where the is a small business. Yet, despite this need for financial details, many people choose to proceed with this complicated type of divorce on their own and try to answer these questions for the court based on emotion, opinion and biased speculation. Evidence of this caliber is not very helpful to a judge making these complex decisions and the court will choose err against the side that has the most access to the information it needs. To best present your position regarding a family business, it takes a qualified team.

    First, you need to have a lawyer who is experienced in business matters as well as family law. It is not recommended that the corporate attorney handle the divorce. In fact the corporate attorney may have a conflict of interest in representing both the business and one of the spouses. The best lawyer to handle the divorce needs to have some corporate experience, family law experience and experience handling divorces involving family owned businesses. Second, the team needs a forensic accountant who is experienced in business valuation.

    A forensic accountant can not only help to present the financial information the court needs to best set an accurate income, the accountant can run projections to establish an income for the non-compensated spouse and project the costs involved in replacing the productivity of losing that key employee. A forensic accountant can best place a value on the business both as of the date of the divorce as well as at the time of the marriage. Most importantly, a forensic accountant can accomplish this using Generally Accepted Accounting Principles (GAAP) that will be more credible with the court than the opinion of either party.

    In the event a family that owns a small business is going through a divorce, it is necessary to have the right team to represent the interests of each party. These cases present complexities over and above the divorce for a wage earner. It is important to pay special attention to the needs that this sort of case presents and have a team that can deal with these needs in addition to the other issues that the divorce case presents. This means having and experienced lawyer and a forensic accountant on the team.

Military Legal Assistance Program: The Bar Helping Heroes

On Veterans Day we take pause to remember those who have served and those who serve our country and defend our freedom. The State Bar of Georgia remembers our veterans every day through the Military Legal Assistance Program. Was created in 2009 out of the research and efforts of a committee of volunteers committed to help service members with legal issues reach out to qualified lawyers who can help them, in many cases on a pro-bono or reduced fee basis. Since that time, the program has gown to a cadre of lawyers throughout the State who stand ready to help out when called on.

Lawyers from the Military Legal Assistance Program handle hundreds of referrals in the areas of family law, debt relief, landlord tenant, employment law, disability and Veteran's benefits claims. These lawyers are located all over the State of Georgia and have a wide variety of practice concentrations. Many of the volunteer lawyers have prior military service or a loved one who is serving. Still many more are just willing to help serve our heroes. It is important that we all support our heroes who have committed and even laid down their lives to give us the freedom we so richly enjoy. Remember today that freedom is not free and we all need to help share the cost.

If you know of a service member or a veteran who has a need for legal services, please contact the Norman Zoller Military Legal Assistance Program Coordinator at normanz@gabar.org

Retirement Accounts and Divorce: Protecting Your Rights with a Qualified Domestic Relations Order

For most families, their retirement accounts are their largest asset. While Wall Street is showing signs of recovery, the housing market still suffers from losses. So, while most people are upside down in their house, their retirement accounts are increasing in value. For families going through a divorce, retirement assets can be the most sought after property of the marriage. Protecting this asset is critical.

Retirement accounts, such as 401(k)s are comprised of pre-tax dollars and are titled only in the name of the employee who has built the retirement account. What this means is that there are substantial penalties for removing these funds before reaching the age of fifty nine and a half. On the other hand, Georgia law provides that retirement accounts are subject to division in a divorce. Federal law recognizes that retirement accounts can be divided in a divorce and has created special provisions that allow for the division of the retirement accounts without incurring penalties.

In general, Federal Law provides that a retirement account may be divided in a divorce by a Qualified Domestic Relations Order, or QDRO for short, and avoid the tax penalties. A QDRO works by allowing the retirement plan administration to roll out of the employees retirement account and set up a separate account for the spouse. The retirement plan participant does not incur any tax penalties and the spouse has a retirement account of their own which they can roll over to a retirement vehicle of their choosing. If the spouse elects to take the money out of the retirement account, the spouse incurs the tax penalty.

A QDRO is a separate order from the actual divorce decree and is drawn so exacting specifications that identify the dates of marriage and divorce as well as identify the plan participant and the spouse. If these orders are not drawn to the specifics required by the Internal Revenue Service and the plan provider. If the order does not meet the specifications, the plan provider may reject the order. Many plans have specific forms they require over and above the Federal regulations. It is important, in order to protect this valuable asset to consult your attorney. There are also many lawyers who specialize in drafting QDROs and have experience with the many peculiarities of each individual plan.

Drafting Your Will: The Devil is in the Details

When putting your will together, going in to detail is the only way to truly insure your intent, protect your estate and prevent a hardships for your family and chosen executor. The market place is full of options for putting together a will such as forms from office supply stores, software packages and even online solutions. Most of these forms are legally sufficient and will accomplish your basic intent, so long as that intent is very basic. Many people make the mistake of believing that there estate is too simple to warrant a will with any detail. Most people figure that their executor is knowledgeable about their intentions and can carry them out.

The problem is that once a person dies, each heir has their own idea as to what deceased would have wanted. Much of your personal property will have some sort of significance to your relatives. Many times, the death of a loved one brings out the worst in people and relatives will squabble over the division of every stick of furniture in the house and every dime of the estate. These relatives will challenge your chosen executor every step of the way. Since the estate has to satisfy the fees of the executor as well as the legal expenses. If the will merely provides that the estate is to be divided between the heirs, then the executor may end up having no choice but to sell every item and split the cash.

Here are some ways to try to litigation-proof your will:

1. Choose a good executor: Your executor needs to have good head for business. While it may hurt some feeling of your relatives for not being chosen, the executor will be called on to make some very important business decisions in disposing your estate. This person also needs to be able to stand up to all of your heirs to make sure your written intent is carried out. This person needs to have the strength and stamina to decide when to go to court or how to best settle your estate. Further, resist the temptation to name more than one person as executor. It is nearly impossible to manage by committee and the same holds true for an estate. While it might seem diplomatic to spread the power out amongst the heirs, if they cannot agree on how to handle the estate, the legal battles that will ensue between them can drain the estate before it is even divided.
   
2. Carefully select a guardian for your minor children: The person you name in your will is the person who may very well raise your children. If you do not select a guardian one may very well be decided by the State or the Courts. The person you select should be willing and capable of raising your children the way you would like to see them raised. Do you want your children to go to college, do you want them to be nurtured in the arts. Make sure your guardian is somebody who will insure your wishes. Make sure your guardian is willing to insure your children have a relationship with their entire family. The death of a parent is a huge loss for a child at any age, but the loss of the rest of the family can only serve to compound the problem.
   
3. Set up trusts: Under Georgia law, assets left to minors must be placed in a trust or a conservatorship. While the law does provide some direction as to how those assets are to be used before the child reaches the age of majority, those directions are broad and do not take into account what the minor will be able to do with the assets when they reach the age of eighteen. Most eighteen year olds are not equipped to handle large sums of money or assets. However, with a carefully drawn trust, you can direct how the money is to be used and when, if at all the money is to be disbursed. With careful drafting of the trust, you can insure that your wishes are carried out with specificity. Furthermore, trusts are not just for minors but can be set up for persons who are not wise with money or even to shelter heirs from other consequences.
   
4. Make specific bequeaths and devises: Do not trust your executor to make sure that your personal property and real property is going to get into the hands you want to see it go. The best way to insure that happens is to put it in your will. Making a list is not enough, even with the best intentioned executor. If the list is not a part of the will, then it is not legally enforceable. If the heirs end up in a dispute, the Probate Court may have no other choice but to order all of the property sold.
   

The most important thing is that a will should be a specific document that clearly spells out your desires with regard to your estate. The best way to do this is to sit down with a lawyer who is trained and experienced in not only drafting wills but has handled disputed estate cases. An experienced lawyer can point out the possibilities of problems and can lead you to draft a will that will insure your intent is carried out and prevent your heirs form having anything to dispute.

Flag Flap

While I was walking the Saturday morning when I grabbed my copy of the newspaper and noticed that for the first time in my life the words, "Solicitor General" were in the banner headline. If asked, most people do not even know what a Solicitor General does. For all he has done in the community, David Cannon, Jr. has never made the top new. Not for the drunk drivers he gets off the streets, not for the closure he brings to the families of vehicular homicides, not for his work starting a accountablity court for drunk driving and drug offenders. He never makes the papers for improving the efficiencey of government, cutting costs or saving money for taxpayers. He didn't grab a headline when the Supreme Court gave him an award for community service nor a single photograph for the countless hours he spends performing thankless menial tasks for the citizens of this county.

No, my friend made the headlines for the most ridiculous news flap of 2011. David asked his community service workers to remove some three thousand flags that were scattered about square in Downtown Canton. While the task proved to be bigger that expected and storing all those flags posed a logistical nightmare, the publicity stunt that followed from the so-called patriots who are outraged has blown this incident way out of proportion. It is safe to say that this flap has gotten more press, air time and bandwidth than the original tribute and certainly more than the "retirement ceremony" that was canceled.

It is real easy to wrap yourself in the flag, post one on your Facebook page and call yourself a patriot. It takes no courage to use a pseudonym to snipe at a public figure that had a bad day. It takes real courage to walk out in front of a television camera or to grant an interview with a critical press, to admit you made a mistake and applogize for taking action in hopes to serve the community. This is why David Cannon is a leader in the community and why I am proud to call him my friend

Decision Fatigue: What You Need to Know About Court Before You Go to Court.

The New York Times
Do You Suffer From Decision Fatigue?

Thinking about taking that case to the Judge? Before you step foot in the Courtroom, be sure to read a most recent article by John Tierney in the New York Times Do You Suffer From Decision Fatigue? This article highlights the wear and tear that the act of making decisions through the day has on the mind. While we are all called on to make various decisions through the day, however making difficult is at the heart of a judge's job description. The article makes a case study of judges hearing Israeli parole cases. The writer shows that the outcome of the hearings in very similar cases produced very different results as the day wore upon the judges hearing the cases. Tierney shows that the act of making a decision actually drains the mind of energy during the day, even if the body cannot tell it is getting tired. The more decisions the brain is called on to make, the mind begins to take shortcuts. One shortcut is the brain becomes more reckless producing bad decisions such as e-mailing that tirade to all 140 co-workers. The other shortcut the brain takes is to avoid making decisions by either procrastination or maintaining a perceived status quo. Either way, the results are less than desirable and get worse as the day wears on the brain. The study further shows that blood glucose levels have an effect on decision making. So the lower the blood sugar level of the decision maker, the more the decision maker suffers from decision fatigue. In other words, those decisions made after meals and snacks were much better reasoned.

So what does this have to do with going to court? Judges are ultimately decision makers called on to make tough decisions every day. In today's litigious society, the typical docket is packed with cases for the Court to hear on that given day. This is especially true in domestic relations calendars where it is common for there to be more cases scheduled than hours during the day. From the get go, the Judge is called on to make decision in a rapid fire setting. Normally the court will hear the short and more routine cases first and handle the longer more complex cases later in the day. That means by the time the Court gets to hear the complex divorce and custody case, the Judge has made many decisions. Once the hearing begins, the court will be called on to make decision about evidentiary and procedural rulings so that by the time the judge is actually deciding the ultimate issues in the case, the judge has been taxed to make hundreds of decisions during the day. Decision fatigue can set in.

But aren't judges educated professionals? How can they let this effect the outcome of a case? There is no escaping the fact that judges are human as well and are subject the same fatigue as everybody else. The study in this article comes as no surprise to judges. The Court routinely and repeatedly advises and encourages people to resolve their cases before the need of having a hearing. Parties need to understand the effects that wear and tear that court has on the judge hearing their case. The best way to deal with the possible effects of decision fatigue on judges is to resolve their case while they are still in control.

Alternative dispute resolution is one means to avoid the effects of decision fatigue. While mediation takes the wear and tear of decision making off the judge and places it on the parties, mediation is scheduled for a time when all involved can be well rested and ready to handle the multiple decisions needed to resolve their matters. Also, mediation usually takes place in a relaxed atmosphere that allows for snacks to replenish those crucial blood glucose levels. Arbitration is like having a judge that you can schedule at the convenience of the parties. This means the decision maker can go straight into hearing that complex case without deciding array of smaller cases first. Arbitration is also less formal that court, allowing for more frequent breaks and rests.

There are also a number of things that can help to reduce the strain brought on by decision fatigue. Parties and counsel can reduce the levels friction, thus reducing the number of times the judge has to rule on preliminary issues. The parties can also narrow the issues for hearings in order reduce the number of issues left for the judge to decide. Finally, the parties may wish to allow the court to take the ultimate issue under advisement, allowing the court to delay actually making the decision to a time when the judge is more refreshed and producing a better result. While decision fatigue is humanly impossible to eliminate, it is something that all concerned should take into consideration before stepping foot into a courtroom.