In a recent Maryland Court of Appeals case, Rose v. Rose, the parties entered into a Separation Agreement which resolved all of their outstanding issues, including alimony.  The Agreement provided that Jonathan would pay non-modifiable alimony for a term of eight years beginning January 1, 2012, and ending December 31, 2019. The Agreement further provided that Jonathan’s alimony obligation would terminate “upon the earlier of (a) Jonathan’s death; (b) Andrea’s death; (c) Andrea’s remarriage; (d) Andrea’s cohabitation (as defined by Gordon v. Gordon, 675 A.2d 540 (1996)), or [(e)] December 31, 2019.”  On December 14, 2011, a Judgment of Absolute Divorce was entered which incorporated but did not merge the parties Agreement. 

In 2016, Jonathan filed a Motion to Terminate Alimony based on the terms of the parties’ Agreement alleging that Andrea was cohabitating with a man as defined by Gordon and therefore alimony should terminate.  Both sides presented evidence as to the factors courts may consider as established in Gordon 342 Md. at 308-09:

1. establishment of a common residence;

2. long-term intimate or romantic involvement;

3. shared assets or common bank accounts;

4. joint contribution to household expenses; and

5. recognition of the relationship by the community.   

The Gordon court emphasized that the list was non-exhaustive and that no one factor should serve as an absolute prerequisite for finding cohabitation exists. At the conclusion of the hearing, the trial court determined that the evidence was insufficient to establish cohabitation and denied Jonathan’s request to terminate alimony.

On appeal, the Court considered the fact that the trial court noted that the parties expressly incorporated Gordon’s definition of cohabitation as one of the terminating events for the payment of alimony and that the trial court considered each of those factors.  The trial court found evidence as to the first two factors; establishment of a common residence and a long term intimate relationship.  However, the trial court also found that there were no shared assets, common bank accounts, or joint contributions to the household. Additionally, there was no evidence as to how the two were recognized by the community. The trial court judge stated that “I’m not convinced that there was cohabitation” as defined in Gordon and “I just don’t believe that there was a de facto marriage here.”  The Court of Appeals concluded that the trial court’s factual findings were not clearly erroneous or arbitrary and affirmed the decision denying Jonathan’s request to terminate alimony.  

Because the parties agreed to the definition of cohabitation as defined by Gordon, the court had no option but to apply the factors as set forth therein.  If the Agreement did not tie the definition to the Gordon case, the end result may have been different.  This is why details matter.  It is important to have an experienced attorney such as Geraldine Hess and Hess Family Law when negotiating a settlement so you can make sure you fully understand the terms of your Agreement.

When the rich and famous get divorced their divorce settlements usually involve millions.  Slice.ca lists 20 of the costliest celebrity divorce settlements of all time.   For example, according to The Guardian, media mogul Rupert Murdoch's divorce from his second wife Anna Torv cost him $1.7 billion.  The Daily Mail reported that Mel Gibson’s wife and mother of their seven children received approximately $850 million as part of their divorce settlement.   Wondering what other celebrities had to pay large settlements, click here.

Many of the celebrities cited in the article were married before they became rich and famous.  Those that married after their financial success may have avoided some of the emotional and financial fallout of their divorce if they had entered into a Prenuptial Agreement prior to their marriage.  It appears that all of these famous couples did enter into settlement agreements, enabling the couples to decide on the terms of their marital dissolultion rather than letting a judge decide the terms of their marital dissolution during a public trial.  

Attorney Geraldine Hess, and Hess Family Law can assist clients with the negotation and preparation of Prenuptial Agreements or Settlement Agreements.

Couples who do not have Substantial Pre-Marital Assets can Benefit from a Prenuptial Agreement.

Most people believe prenuptial agreements are only for the wealthy. However, even couples who do not have substantial pre-marital assets can benefit from a prenuptial agreement. Jason Marks posted an article on Huffington Post, Prenups: Not Just for the Wealthy, where he outlines reasons couples should consider a prenuptial agreement.

1. Protect Future Earnings: A well drafted agreement can protect future earnings of a spouse’s business should the marriage fail.

2. Avoid Future Debts: A prenuptial agreement can address the parties’ respective liabilities and ensure that the debts of one party do not become the responsibility of the other.

3. Provide for Children from a Previous Marriage: Because spouses have certain rights to IRA accounts, life insurance policies and other assets, a prenuptial agreement can provide that these assets be left to the children, rather than to the spouse.

At Hess Family Law we believe that there are additional reasons couples should consider having a prenuptial agreement. Should the parties decide to separate, an artfully drafted prenuptial agreement can address who will move out, the conditions of the move, and the timing of the move. Such a provision will protect the party wanting a divorce so he/she will not be hindered by the other party refusing to separate. If the parties decide to use one party’s non-marital residence as their marital home but the intent is for the home to remain non-marital property, an agreement can state that any payments made by the other party toward the mortgage, maintenance, and/or improvement of the property will be considered a gift and not cause the property to become partly marital.

At Hess Family Law we can help you determine whether a prenuptial agreement is right for you, and if so, we can draft an agreement that will protect you and your assets should your marriage end in divorce.

(06/24/13)