Billionaire’s divorcing wife wants at least $1 million per month

Posted March 6, 2015 in Family Law by Lonich and Patton.

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March 6, 2015
Billionaire’s divorcing wife wants at least $1 million per month
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How difficult would it be to spend $1 million dollars per month? In divorce proceedings that initiated last July, the wife of hedge fund manager Ken Griffin says that is precisely the amount that she requires to maintain her standard of living.

What are some of these expenses? They include:

-          $2,000 a month for stationary

-          $6,800 a month for groceries

-          $7,200 a month for restaurant meals

-          $8,000 a month for gifts

-          $60,000 a month for an office and professional staff

-          $160,000 a month for hotels

-          $300,000 a month for a private jet

She makes this claim despite the presence of a prenuptial agreement that she signed in 2004. Ms. Dias-Griffin is seeking to have the prenuptial agreement nullified on the basis of duress and coercion. Mr. Griffin argues that she was fully aware of what she signed. The terms of the prenup included that she received $25 million upon signing the document, $1 million every year thereafter and Ms. Griffin had the advice of independent counsel – namely three prominent law firms – when signing.

In papers filed in Illinois state court, Mr. Griffin claims he already paid Ms. Dias-Griffin some $37 million in payments under the premarital agreement, in addition to giving her a 50% stake in the couple’s $11 million Chicago home. Ms. Dias-Griffin claims that this would only leave her with 1% of Mr. Griffin’s net worth and should be voided since she signed it under duress.

“Anne failed in her initial effort to obtain these things from Ken in the name of maintaining the ‘status quo,’” the filing reads, according to CNBC. “Now she claims that these same expenses are in fact ‘child support.’”

If you don’t know who he is, Ken Griffin is one of the world’s wealthiest men. As the founder and CEO of Citadel, a global investment firm, Forbes estimated his net worth at a value of $5.5 billion in 2014.  Mr. Griffin married Anne Dias-Griffin in July of 2004. Ms. Griffin is also a founder of the Chicago-based hedge fund firm Aragon Global Management. Together, they have three children each less than 10 years old.

Typical Components of a Prenuptial Agreement

A prenuptial agreement can be a powerful tool in limiting property rights and alimony. A properly drafted prenup may be impossible to set aside. While the requirements for properly drafted prenuptial agreements vary from state to state, some of the general requirements in California for a valid prenuptial agreement under the California Premarital Agreement Act are:

-          They must be executed voluntarily;

-          Each party had independent legal counsel (or properly waived that right);

-          Had legal capacity to enter into the agreement;

-          There was no fraud, duress, or undue influence;

-          A seven day waiting period between being presented with the agreement and signing it;

-          Any other factor a court deems as relevant.

These are not all of the requirements, and each of the above mentioned requirements have elements that must be met in-and-of themselves. The Certified Family Law Specialists at Lonich & Patton have decades of experience handling complex family law matters.  If you are interested in learning more about prenuptial or post-nuptial agreements, please contact the Certified Family Law Specialists at Lonich & Patton for further information.

Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results.  While this post may include legal issues, it is not legal advice.  Use of this site does not create an attorney-client relationship.

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Question: What happens to your Facebook account when you die?

Posted February 20, 2015 in Estate Planning, Probate by Lonich and Patton.

Answer: Now, you can designate someone to control your Facebook account with the legacy contact option.

As estate planners, we see people each day who think about what happens to their personal effects when they pass away. We write wills in order to designate who should receive a client’s material possession upon their death and answer questions like; where do my assets go? Who will maintain control of my estate when I pass away? But more and more of us are starting to consider what happens to our digital possessions such as our Facebook accounts when we die. Facebook has responded by creating what they call a “Legacy Contact.”

Up till now, when Facebook learned that someone died, they would offer only a basic memorialized account that other people could view but couldn’t manage. It would be frozen, angering heirs who wanted to edit the deceased’s online presence. When Alison Atkins died in 2012 after a battle with a colon disease, her sister and parents wanted access to her digital assets. Slowly, these accounts began shutting down in order to protect Alison’s privacy, per the websites’’ terms of service. Later that year when her Facebook account disappeared, her family felt like they were losing another part of Alison.

However, starting this Thursday, you can assign a legacy contact who can have more room to manage an account when the user dies.

Your legacy contact will have limited control

There are limits, however, to what a legacy contact can do. A legacy contact can:

  • Write a pinned post for your profile (ex: to share a final message on your behalf or provide information about a memorial service)
  • Respond to new friend requests (ex: old friends or family members who weren’t yet on Facebook )
  • Update your profile picture and cover photo
  • Download a copy of what you’ve shared on Facebook (this is an additional option that you can add/decline)

There are several things your legacy contact cannot do, and you should be aware of them. A legacy contact cannot:

  • Remove or change past posts, photos and other things you’ve shared on your Timeline (regardless of how embarrassing they might be)
  • Read messages you’ve sent to other friends
  • Remove any of your friends

Choosing your legacy contact

Once you have decided who your legacy contact will be, selecting them is easy. A concern that is coming is what if you select your spouse but you both travel frequently together? What if you both die? At this point in time, you can only select one person with no back up.

Estate planning has always been a complex field and the digital era is adding new complexity to this process. Facebook and other tech companies are starting to realize this, prompting changes to their terms of service. In 2013, Google began allowing people to assign beneficiaries of their Google accounts as well.

Whether you are concerned with devising a plan for either a family estate or that of a business, it is important to get good advice. The attorneys at Lonich & Patton have decades of experience handling complex estate planning matters including business succession plans, wills, and living trusts. If you are interested in developing an estate plan or reviewing your current estate plan, contact the experienced estate planning attorneys at Lonich & Patton for further information as we are happy to offer you a free consultation.

Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results.  While this post may detail general legal issues, it is not legal advice.  Use of this site does not create an attorney-client relationship.

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How will proposed tax reform affect your estate plan?

Posted January 30, 2015 in Business Law, Estate Planning, Probate by Jennifer Mispagel.

On January 20th, 2015, President Obama stood before a joint session of Congress and delivered the annual State of the Union address. Some of the topics discussed were the current State of the Union, College Savings Plan reform, his legislative agenda as well as several White House proposed tax reforms for the upcoming fiscal year.

While many of his new policies will affect all Americans in some way, several of his proposed tax increases will particularly affect upper-income persons and financial corporations. One in particular is a proposed change to the tax on appreciated estate property, otherwise referred to as the “trust-fund loophole.”

Taxation on Appreciated Estate Property

The term Capital Gain stands for the profit realized on the sale of a non-inventory asset that was purchased at a cost amount that was lower than the amount realized on the sale.  In the United States, individuals and corporations pay U.S. federal income tax on the net total of all their capital gains just as they do on other sorts of income. “Long term” capital gains are generally taxed at a preferential rate in comparison to ordinary income.

Currently, the law states that property which has appreciated in value that is owned by an estate is generally not subject to tax at death. Under this tax scheme, children and other heirs typically receive and sell property with little or no capital gains tax since most property receives an increase in basis to fair market value. For example, a parent who dies can pass along a valuable asset to their child or heir with no capital gains tax being due. When the child or heir eventually sells the asset, the current law limits the eventual tax bill by figuring the taxable gain only since the parent’s death. While this is a feature commonly known as a stepped-up basis the administration refers to this as the “trust fund loophole” and is looking to change it.

The White House proposal is to tax this appreciated estate property. The proposal states that the tax will be at 28% if the difference between the cost of the property and the fair market value at death exceeds $100,000 per person. There would be a separate exclusion for a personal residence of $250,000 per person. The proposal would not include clothes, furniture and most other personal items.

In arguing its case for revising this aspect of the tax code, the White House claims that all of the gain on valuable property or assets that occur prior to the death of a parent unfairly escapes tax. The White House claims it is in good company. Critics of the current tax code say that it is outdated. They claim that while the current policy reduces disputes over prices paid for assets long ago, they acknowledge that revision to the tax code would unlock capital by removing an incentive for holding valuable assets for generations.

Many experts, such as USC tax expert Edward Kleinbard, agree. Mr. Kleinbard notes that the capital gains tax is our only truly voluntary tax. Taxpayers can defer it for a considerable amount of time simply by withholding on the sale of their taxable assets. He argues that if you’re rich enough to hang onto your stocks and bonds, or can utilize financial strategies to enable you to exploit their value without selling them, you can defer paying capital gains tax your entire life.

Whether the White House prevails in passing this legislation remains to be seen. It seems clear, however, that negotiations on tax policy will continue in attempts by the current administration to eliminate tax loop-holes. Eliminating the lock-in effect, where holders of appreciated assets avoid selling because of the taxes imposed on the sale, could have a major impact on estate planning strategies and should prompt concerned individuals to look more closely at their estate plans, which should be revised periodically to ensure the best treatment of ones assets.

These are issues that make estate planning a complex field. Whether you are concerned with devising a plan for either a family estate or that of a business, it is important to get good advice. The attorneys at Lonich & Patton have decades of experience handling complex estate planning matters including business succession plans, wills, and living trusts. If you are interested in developing an estate plan or reviewing your current estate plan, contact the experienced estate planning attorneys at Lonich & Patton for further information as we are happy to offer you a free consultation.

Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results.  While this post may detail general legal issues, it is not legal advice.  Use of this site does not create an attorney-client relationship.

 

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Divorce Month is Half Over

Posted January 16, 2015 in Family Law by Lonich and Patton.

This coming Monday, January 19, 2015, has been marked as “blue Monday” or the unhappiest day of the year. Experts predict the following factors contribute to blue Monday: weather conditions, debt level, time since the holidays, time since failing our new year’s resolutions, low motivational levels, and the feeling of a need to take action. On a similar note, every January also experiences a noticeable increase in the number of individuals seeking divorce advice and ultimately filing for divorce. The president of the American Academy of Matrimonial Lawyers says the number of divorce filings is one-third more than normal, starting in January and continuing until early March. Like blue Monday, this trend is rather melancholy but makes sense for a couple of reasons.

First, an unhappy spouse may want to wait until the new year to file for divorce in order to avoid the associated social stigma. Most spouses probably do not want to explain why their spouse was served with divorce papers right before the holidays, a time traditionally for family. Additionally, waiting until January avoids “ruining” Christmas for the children and keeps the status quo until the children return to school.

Further, a new year comes with new year’s resolutions, most of which are aimed at achieving personal happiness. If a spouse is in an unhappy marriage, then a divorce may be an appealing option.

Lastly, it may be logistically easier to wait to file until the holidays are over. This may streamline the divorce process, making it more likely that the divorce will be finalized before the end of the year. Courts often experience backlog during the holiday season, as spouses rush to finalize their divorce before January for tax purposes (they want to file as single for the new year).

Whatever the reason, if you are in an unhappy marriage right now, you are probably not alone. On a positive note, many spouses have completely different and new lives in front of them after divorce. Hence, January is also the busiest time of the year for online dating websites, which experience a similar 38% increase in registrations from December through February. According to a study published in the National Academy of Sciences, around one-third of American marriages now begin online and are less likely to end in divorce than those who did not meet online.

If you are considering filing for divorce at any time of the year, the Certified Family Law Specialists at Lonich & Patton have decades of experience handling complex family law matters.  Please contact the Certified Family Law Specialists at Lonich & Patton for further information.  Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results.  While this post may include legal issues, it is not legal advice.  Use of this site does not create an attorney-client relationship.

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Your Holiday Child Custody Visitation Schedule

Posted December 12, 2014 in Family Law by Lonich and Patton.

December is a holy time of the year, encompassing the celebration of many religious holidays and spiritually significant days. December may also, unfortunately, be the time of year that religious differences arise between ex-spouses, which may not have been present during marriage. When parents have divergent religious beliefs, it may be difficult to come to a visitation agreement during the holidays.

The general rule is that the custodial parent has the authority to make decisions relating to their child’s religious upbringing. For example, a Jewish father who is the custodial parent has the right to raise his child as Jewish and to celebrate any related religious holidays, such as Chanukah, with the child. At divorce, this may raise some concerns if the parents do not agree on what religion to raise their child. Courts will not prohibit the noncustodial parent from discussing religion with the child or from involving the child in his or her religious activities, in the absence of a showing that the child will be harmed.

Further, courts are unwilling to get involved in religious disputes between parents because of the potential for interference with the First Amendment’s guarantee that the government shall not prohibit the free exercise of religion. Thus, courts will never make any ruling based solely on religion. Courts will, however, uphold child custody visitation agreements between the parents that concern religious issues.

If religious differences may become an issue during or after divorce, it is important that you and your ex-spouse discuss the importance of all religious holidays and how they will be incorporated into your visitation schedule. Parents will usually alternate custody between holidays each year, but this is not always the case if one parent values certain holidays more than others, or if parents of different faiths want to celebrate holidays that fall on the same day. Whatever you and your spouse agree on with regards to the custody schedule, it should be determined well in advance and with the child’s best interests in mind. Additionally, any custody agreement should detail exactly what will happen in these situations.

The Certified Family Law Specialists at Lonich & Patton have decades of experience handling complex family law matters.  If you have any questions about your child custody visitation schedule, please contact the Certified Family Law Specialists at Lonich & Patton for further information.  Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results.  While this post may include legal issues, it is not legal advice.  Use of this site does not create an attorney-client relationship.

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