This Week in Divorce: Valuing Law Degrees; Possession of Pre-Embryos; and Madoff Fallout
There has been a flurry of interesting divorce court rulings lately. Here are three that caught my eye:
1. Esposito-Shea v. Shea: In this case, the court decided that the husband was entitled to 10 percent of the value of the wife's law degree as part of the divorce. To figure out what that number should be, the court relied upon an expert testifying for the wife who stated that the law degree she earned from Notre Dame Law School was not worth the paper it was printed on, so the husband should receive zero. ... Just kidding -- actually the expert concluded that the law degree added $126,000 to the wife's earning power, therefore entitling the husband to $12,600 for his (limited) contributions to her attainment of the degree.
2. Reber v. Reiss: A couple in a post-divorce dispute had 13 frozen pre-embryos in storage that they had previously created from the wife's eggs and the husband's sperm. Due to subsequent cancer treatments, the wife was unlikely to be able to have children and the pre-embryos were arguably her only chance to be a biological parent. The wife therefore wanted possession of the pre-embryos, but the husband, who had since had a child with another woman, wanted the embryos destroyed.
An initial decision in the case went in favor of the husband but an appellate court reversed. The appellate court ruled that while the party wishing to avoid having a child usually wins in such cases, "in this case, because husband and wife never made an agreement prior to undergoing [in vitro fertilization], and these pre-embryos are likely wife's only opportunity to achieve biological parenthood and her best chance to achieve parenthood at all, we agree with the trial court that the balancing of the interests tips in wife's favor."
3. Simkin v. Blank: After 33 years of marriage, husband and wife agreed to split their assets up evenly. Of the couple's $13.5 million in assets, $5.4 million was invested with Bernard Madoff. In the split, the husband kept most of the assets invested with Madoff, while the wife took her settlement proceeds in cash. Keeping the Madoff assets cost the husband millions of dollars, however, when Madoff was revealed to be running a massive Ponzi scheme in late 2008.
After the fraud was revealed, the husband asked the wife to revise the settlement but she refused. The husband sued the wife, arguing that they had made a “mutual mistake” about the existence of the Madoff account. On April 4, the New York Court of Appeals found in favor of the wife, holding that the Madoff account did exist because the husband could have cashed in his account until December 2008, when the fraud came to light. The court found the extraordinary situation to be one that was "more akin to a martial asset that unexpectedly loses value after dissolution of a marriage.”
Posted by Bruce Carton on April 13, 2012 at 04:32 PM | Permalink
| Comments (3)