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NewsDay: The New Divorce Law: How

Which of the following stands to profit from New York’s new divorce law, which went into effect in July?

  • A. The husband?
  • B. The wife?
  • C. The lawyers?
  • D. The accountants?
  • E. The appraisers?
  • F. The private investigators?
  • G. The Internal Revenue Service?

There is some debate about A and B, but very little about C through G. Judging from experiences in this state and longer experiences in states with similar laws, the cost of a divorce is likely to be double or more what it would have 

been under the old law, particularly if it goes to trial. It also may take considerably longer now to get a divorce, because of the extra work involved, say many lawyers. In addition, many lawyers feel that more couples are settling out of court because they cannot afford the high costs of trial. The reason for the complications is that the new law provides for “equitable distribution” of marital property, regardless of who owns title or who went out and earned the money. It is designed to help, in particular, the woman who has stayed at home during a long marriage raising children and keeping house.

“We’re more cautious 

,said Lake Success attorney Ken Koopersmith. “We need more detailed financial information than before,” particularly because the transfer of assets from husband to wife can trigger capital gains taxes. He added, “It’s going to have to cost substantially more.” In one complicated case, he has insisted that his client, a husband, “obtain separate tax counsel for which I will not be responsible.” However, according to lawyers in states that have had similar divorce laws for longer periods that is, the vast majority of states this method of splitting up property has many advantages for both parties, as well as for all the people being hired to help. Although a judge may still grant alimony, now called maintenance, a division of property allows for a “clean break” and avoids the frequent messiness of extended alimony. Another new feature is that a judge may also now order limited-time maintenance, until one spouse-usually the wife who had not been working—has time to establish herself in the job market. “This is an important step up for women who were at the mercy of husbands who didn’t want to pay alimony and could not be compelled by the courts to share the marital property,” ‘said Harriet N. Cohen of the New York firm of Golenbock and Barell, who chairs the Matrimonial and Family Law Committee of the New York Women’s Bar Association. “The law will particularly help women who had marriages during which considerable property was acquired but placed in the husband’s name only.” 

 New York had been a “title state” where, with few exceptions, whoever had title ended up with the property. In cases where a jointly owned home is a family’s only asset, probably nothing will change. “Some people feel lawyers have benefited [from the new law],” said Assemb. May Newburger (D-Great Neck), who helped get the measure passed. “But I really do feel it’s a distinct step forward. The law now recognizes a woman’s contribution as spouse and parent.” The new law means that judges must decide what the assets in the marriage are worth and how they can be divided, as well as what “equitable” (not necessarily equal) share each spouse is entitled to-based on the contribution each made to the marriage, the length of the marriage and other factors and the possible tax consequences of these actions.

As a result, lawyers on each side hire accountants, appraisers, paralegals, investigators and other professionals to protect their clients. Even if the matter never reaches a judge, attorneys for each side must work out solutions to these same problems, and the research involved could be just as extensive. One appraisal firm, R.J. Smythe and Co. of Manhattan, has added a special divorce division of 30 appraisers, experts in anything from jewelry to real estate. “I think it’s a much-needed law,” said the firm’s vice president, Kurt B. Edelhofer Sr. “Certainly we’re happy about it.” Fees approached $7,000 in one case, he said.

For private investigators, such as Vincent Parco of Manhattan, tracking down assets has nearly replaced “trying to catch people in motels.” Since the divorce law took effect, Parco has traced yachts and condominiums that husbands attempted to hide, as well as a phony partnership used to cover up assets. “It’s taking longer than usual because the lawyer has to think not only of what he can do to protect his client but what sorts of things might change, so the client can’t come back and say, “Why didn’t you protect me?'” said Richard Neumann, who heads Hofstra Law School’s Community Legal Assistance Corp. In California, he said, a divorced woman successfully sued her lawyer for $100,000 because he overlooked the value of her husband’s pension. 

After her divorce, the California Supreme Court had decided that pensions may be included as as-sets. Many New York lawyers have been waiting for court cases in this state to use as guidelines before they resolve their clients’ cases out of court. The state’s first trial was finished only last’ month in Nassau County Supreme Court. It took eight weeks, and the judge, John S. Lockman, later wrote in the New York Law Journal that more streamlined methods must be found to resolve the financial aspects of divorce cases such as using Attorney E. Allan Riebesehl says courts must consider tax repercussions of judgments. – By Aileen Jacobson

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