The Law Office of Michael J Cummins, Lake Forest, IL

Phantom Stocks

3/11/2019

Is your spouse in a senior management position with a corporation?

If you plan to dissolve your marriage, make certain that your attorney thoroughly investigates the possibility that your spouse may be the beneficiary of a phantom stock plan.

As the name implies, there is no actual stock involved. Phantom stock is separate and wholly different than stock options.

With phantom stock, a corporation on, say, day one grants an employee in effect “x” number of shares in the corporation at its going market price. At a time agreed to in the future, a target date kicks in (usually 2-5 years) and the employee is awarded the value of the “x” shares on the date of the award.

Phantom stock awards can be very flexible. Particular attention must be paid when the
employer is a closely-held corporation and is not publicly traded on the stock exchanges.

Take care and be vigilant. There can be a lot at stake. Questions, as always, are welcome.

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Wiretap Act

2/21/2017

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Is it Legal to use Intercepted Emails as Evidence in Divorce Case?

In mid-December, the U.S. Court of Appeals for the 7th Circuit (Chicago Federal Court) issued an opinion that is worth attention. In that case, the wife suspected her husband of serial infidelity, so she put what is called an automatic rule on his email account. The effect was that all emails received by the husband and all emails he sent went to the wife’s email server. This was discovered by the husband when his wife’s lawyers produced a series of the transferred emails from the husband to other women and from them to him.

The appeals court ruled that the wife was in trouble with The Wiretap Act if the transfer of the emails from her husband’s account to hers was contemporaneous with their being sent or received by her husband.

The automatic rule may be totally effective; however it can be completely illegal. It sent the divorce action of the parties in the Epstein v. Epstein case to Federal Court (while the divorce pending in the Cook County Divorce Court). The husband sued the wife and her attorney for violating The Wiretap Act. It quantitatively expanded the attorney’s fees in the matter.

This case is still alive, and its result will probably be based on whether the appearance of messages to or from the husband and others on the wife’s computer did so concurrently with their being sent or received by the husband. The wife is in jeopardy. Be careful.

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DISSIPATION OF ASSETS: SELFISH SPENDING BY ONE’S SPOUSE

3/18/2016

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Divorce cases are litigation. As such, the discovery rules of the Illinois Supreme Court allow the parties to divorce cases to compel their spouses to produce bank records, credit card records, and other evidences of spending. If a spouse does not comply with the spending record requests, the Court will Order them produced, or the records can be subpoenaed. All financial records need to be scoured for signs of suspicious or selfish spending. The reason for doing so can be found at Section 503(d)(2) of the Illinois Marriage and Dissolution of Marriage Act. That section directly addresses Dissipation of Assets.

In sum, a spending spouse dissipates assets when the spending is for the sole benefit of the spender for a purpose unrelated to the marriage at a time when the marriage is undergoing an irretrievable breakdown.

As a spouse, you have every right to know exactly how your spouse has spent and is spending money. You need to watch for evidence of possible gambling expenses, or spending on a paramour, or for drugs, alcohol, or expenses wholly personal to the spender.

I have been the attorney in cases in which the dissipation amounted to six figures. In one case, the amount of dissipation soared to seven figures due in part to the purchase of a Lamborghini for a paramour.

The amount of dissipation can constitute a very large bargaining chip in a divorce case. Once the amount of dissipation is established, the total amount (already spent) is logged in on the spender’s side of the asset ledger, and the spender gets that much less of the available assets. They have not only spent money from what would have been his or her share of the assets, the spender has used money that would be earmarked as assets for the other party.

Illinois Law mandates that written claims for dissipation of assets must be filed within 30 days of the close of discovery in the case or 60 days prior to the trial date, whichever is later. The claim must be made in writing, and must, as best as possible, give the date assets were dissipated, the amount, and, if possible, what the spending was about. That makes it critical to start the discovery process as soon as possible to gain the spender’s records, or to allow time to subpoena them.

Once the spender is served with a dissipation claim, it is incumbent on the spender to prove that each item is not dissipation by clear and convincing evidence. Clear and convincing evidence means that degree of proof which, considering all of the evidence in the case, produces the firm and abiding belief that it is highly probably that the proposition on which the spender has the burden of proof is true.

Section 503(d)(2) does provide that no dissipation shall be deemed to have occurred prior to 3 years after the party claiming dissipation knew or should have known of the dissipation but in no event prior to 5 years before the filing of a petition to dissolve the marriage.

The law mandates that we very carefully gather spending records in divorce litigation and make certain that we analyze the records carefully.

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JUSTICE?

3/5/2016

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Domestic Abuse and Dissolution of Marriage

The Constitution of the State of Illinois commands that:

“Every person shall find a certain remedy in the laws for all injuries and wrongs which he [she] receives to his [her] person, privacy, property or reputation. He [she] shall obtain justice by law, freely, completely and promptly.”
-- The Illinois Constitution Crime Victim’s Bill of Rights

If you walked out your door and your neighbor hurt you or threatened to hurt your person, you would have access to the Illinois Courts for an economic remedy against your neighbor.

If your spouse does the same in Illinois, you can have your spouse arrested. Most likely the police would recommend that you see a lawyer and/or get an order of protection. You could file a petition to have your marriage dissolved and ask that your spouse be enjoined from such conduct or be punished for contempt of Court. Those are the remedies available to an abused spouse.

The Illinois Legislature and the Governor have passed and signed into law, as of January 1, 2016, a new Illinois Marriage and Dissolution of Marriage Act. As far as physical and/or emotional abuse are concerned, nothing in the new act has made any changes concerning abuse. In Illinois, the doctrine of interspousal immunity prevents an abused spouse from getting financial recompense for acts of physical or emotional abuse inflicted by a spouse.

The new divorce law, like the old, mandates that when it comes to awards of maintenance (alimony) or the division of the property of the parties, the Court “SHALL NOT TAKE FAULT INTO ACCOUNT.” That is to say the law enjoins Courts from considering the physical and emotional abuse done to one spouse by the other when it comes to support and property division.

Is that really fair? What the law does is prevent Judges from doing what they do best – make decisions on questions of fact.

You might hear someone say that the purpose of the law is to take the animosity out of divorce. And they are not kidding - they are dead wrong, but they are serious.

An arrest of an abusive spouse provides no economic recompense to the abused. An Order of Protection is good, but again the abused spouse receives no compensation from the abuser. A Contempt of Court ruling might – but rarely does – result in some time in jail and a reimbursement of some of the attorney’s fees run up by the abused in the process.

It is not radical to insist that Illinois divorce law comport with the guarantees of the Illinois Constitution. At present, the Illinois divorce law plainly contradicts constitutional guarantees.
The law calls for a fair and equitable division of the assets and debts of parties in a divorce action. So why should not an abused spouse be awarded a greater share of the marital assets? Why should not an abused spouse be awarded more money in maintenance? Why should not an abused spouse be assigned less of the marital debt than the abuser?

Illinois is not a community property state, but it’s a somewhat rare case that marital assets are divided other than 50/50. When the property division is otherwise it is because one party has substantial non-marital assets and that the non-marital property (generally property owned before the marriage, inheritances, and gifts) has been assigned to the party who owns them.
By and large, domestic abuse is aimed at women. Having practiced divorce law for decades, however, there have been instances of physical and emotional abuse directed at men, thought that is rarely the case.

It would be worth your while to ask your State Representative why the law is as it is. They might say it saves time in divorce cases – that will not even rise to the level of a bad joke.

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Considering Stock Options

10/13/2015

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Let's talk stock

Senior employees of publicly traded corporations are often awarded options to buy stock in the company. Options are set a price to be paid for the stock by the employee by a certain date, for a specified number of stock shares. If the strike date arrives and the stock of the corporation is selling for an amount higher than the option price, the employee will exercise the option and his profit will be the price at which the stock is trading less the option price. The option is said to be in the money.

If the strike date arrives and the stock of the corporation is selling for an amount the same as the strike price, the option holder might exercise his option and take the stock. The option is said to be at the money.

If the strike date arrives and the stock of the corporation is selling for an amount less than the strike price, the option will be left to expire. The option is said to be out of the money.

Stock Options in Divorce

In Illinois, by statute, stock options vested or otherwise are considered to be marital property if they are acquired during the marriage.

Attention must also be paid to the possibility that the stock option is awarded for past and future work performance. Often times, as the dissolution case moves to an end, the option holder will be holding options that have a strike date after the dissolution, the argument will be advanced that the options should be divided because they were granted during the marriage. An argument can be made that a stock option for future, as well as past work by the employee should not be divided as marital property because it forecasts work that will be done after the divorce litigation is concluded.

Given the statutory provision for stock options, they are factoring more and more into settlement talks. There worth needs to be determined, and your attorney might ask your approval to hire a valuation expert. Make certain that these expert’s bills go to you as well as to your attorney. It never hurts to monitor the work of retained experts. They are generally quite proficient and will not mind a client’s overview.

If you'd like to learn more, feel free to contact me directly.

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Phantom Stocks

Wiretap Act

DISSIPATION OF ASSETS: SELFISH SPENDING BY ONE’S SPOUSE

JUSTICE?

Domestic Abuse and Dissolution of Marriage

Considering Stock Options

Let's talk stock

Stock Options in Divorce

Family Law Blog & News

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Phantom Stocks

Wiretap Act

​DISSIPATION OF ASSETS: SELFISH SPENDING BY ONE’S SPOUSE

JUSTICE?

Domestic Abuse and Dissolution of Marriage

Considering Stock Options

Let's talk stock

Stock Options in Divorce

Family Law Blog & News

Browse Categories

Archives

Top Posts

Tweets

DISSIPATION OF ASSETS: SELFISH SPENDING BY ONE’S SPOUSE