Lifson Law: Blog

Notes from the Courts: Know Your Marital Assets & Say it Clearly in Writing

The recent decision by the Maryland Court of Special Appeals in Baker v. Baker reminds us that in order to avoid differences in the interpretation of an agreement, it is crucial for an agreement to expressly contain the complete articulation of each and every element of the agreement.  If a clear and complete articulation of the terms of an agreement is absent, the court will look to principles of law and regulation to resolve an issue. The Baker case involved the allocation of a marital asset that was not specifically addressed in the marital settlement agreement signed by the parties.  The language of the agreement of the parties required Wife to relinquish to Husband any interest she might have in any jointly titled investment or bank accounts.  At the time of the divorce, the parties had a capital-loss carry-forward that resulted from losses in their investment accounts, but this specific asset was not discussed in their agreement.  The carry-forward came about because the Internal Revenue Code limits the amount of a capital loss that taxpayers may use to reduce their tax liability in any given year, but allows taxpayers to defer (or carry-forward) the excess loss to reduce tax liabilities in future years.  After the divorce, Ms. Baker used about 50% of the capital-loss carry-forward to offset the gains she had realized from the sale of a parcel of real property. Mr. Baker argued that because their agreement stated that Wife was required to relinquish any interest she may have had in any jointly titled investment account, Husband was entitled all of the capital-loss carry-forward asset.  While the trial...

Notes from the Desk of Cynthia Lifson: Priorities

As each new year begins, we refresh goals and identify new worlds to conquer.  Our true objective fueling the new year’s burst of energy , is our heartfelt hope that this year we will faithfully join the crowd at the gym, avoid the pattern of junk food indulgences that  can follow in the wake of the Super Bowl, and bring sunshine to our days no matter what the ground hog has predicted.  In other words, deflect the routine hum-drum hibernation we experienced during last year’s cold weather — Blah! So, to that end, this year, I am trying a modest approach.  In 2015, my personal Goal #1 is managing my most precious resource, my time, both productively and meaningfully – for myself and my clients.  Trying to be both conscious and mindful is not always an easy thing to do given our competing pressures.  However, this year I am determined to better manage time, doing what is most important for the people and projects that matter. To save my clients’s time this year, I have created an informational brochure on family law topics such as divorce, separation and estate planning, in response to the questions we are most frequently asked.  These are designed as a resource to share; if you or someone you know needs information on family law, please just contact us, and we will send you a...

Notes from the Courts: Court Prevents Husband’s Shell Game with Marital Money

When are the proceeds from an employer loan considered a “debt,” or “income,” or “marital property”?  This is one of the questions faced by the Maryland Court of Special Appeals in the recent case, Troy T. Bryant v. Roxanna K. Bryant. In this case, Husband was a successful employee of a financial institution, UBS.  Husband and UBS entered into an agreement where Husband received what was characterized in the employment agreement as a “cash loan” or “transition loan” in the amount of $1,305,000.  Unlike a more conventional loan, UBS made “payments” to Husband by forgiving one-ninth of each loan on Husband’s anniversary dates with the company as long as he worked there with the total “loan” being forgiven in nine years. Husband argued that the “loans” were in fact loans, not signing bonuses or compensation, because after the divorce he would remain responsible to repay them.  He also argued that this money could not be considered “property acquired during the course of the marriage” because he would have not done the work entitling him to forgiveness until after the divorce.  Husband not only received the loan proceeds, but he also earned a commission-based salary from UBS. Not surprisingly, Wife argued that the payment of $1,305,000 was really a “retention bonus” that UBS structured for tax purposes as a loan with payments due over a period of years.  Wife added that UBS paid Husband over $2.2 million between November 2010 and February 2013.  After construing the employment agreement between Husband and UBS, listening to the testimony of the parties and dueling experts, the Court of Special Appeals affirmed the decision...

Notes from Annapolis: Criminal Records

As a school child, you may remember a teacher’s threat to place a poor grade, bad behavior, or otherwise undesirable piece of information on your “permanent record.” As mature adults we can now appreciate that the “permanent record” referred to by a frustrated educator probably did not have a lasting or meaningful impact on our lives.

Notes from the Desk of Cynthia Lifson: Pie

As the year comes to a close and the holiday season gets into full swing, I find myself thinking of all of the many tasks that I need to accomplish before the end of this month. I also find that I am very distracted by all of the many sweets that surround me during this time. If you are like me, managing the appropriate consumption of all of these desserts is hard to do! In particular, I find pie to be very challenging. I simply adore all pies: apple, coconut, chocolate cream, pumpkin, and pecan. Can I have all the pies or must I choose among all these fantastic offerings? Well, of course, for me, it simply isn’t all about the actual pies. As I assist my clients, I am always thinking about “dividing the pie” or “growing the pie” or which “part of the pie.” And as I have learned over the years, as a general matter, we really can’t have all the pies we want – we must make choices. It is so important to think carefully to ascertain what is important for myself and to listen carefully to each of my clients when making choices. Some folks simply want more of the pie than the opposing party; some want the crust while others want the filling; and others may truly prefer cake instead of pie. There is no right or wrong here – just preferences and the limitations imposed by the law and by our general circumstances. I hope that you all find your special piece of the pie this season, enjoy it completely, and get...

Notes from Annapolis: The Commission on Child Custody Decision Making

For those of us who follow changes in Maryland’s family law, December 2014 is an important month. On December 1, the Commission on Child Custody Decision Making released its final report to the General Assembly. As suggested by its name, the Commission took a comprehensive look at the topic of child custody in our state. Born of repetitive introduction of clashing bills on the topic of child custody, the Commission came into being following the passage of legislation by the General Assembly, effective in July 2013. The members of the Commission included individuals who have expertise or particular interest in this topic, and the members of the Commission represented a variety of perspectives and constituencies. To accomplish its mission, the Commission divided into six distinct committees, met over 90 times, and identified issues raised at five public hearings. The December 1 report marks the fulfillment of the Commission’s responsibility to study the child custody decision-making process and to report its findings and recommendations to the General Assembly. The Commission’s entire report of over 300 pages can be found on-line. While all of the findings and recommendations contained in the Commission’s report are too numerous to be listed here, the influence of the report prepared by this Commission may be significant. Previous reports by Commissions on domestic relations law–particularly with respect to alimony and marital property– have set the stage for major statutory initiatives in family law. An initiative on the topic of child custody in Annapolis in the coming year is likely. Included in the Commission’s report is a proposed draft custody statute. The proposed draft custody statute neatly...

Notes from Annapolis: A New Day in the New Year

As we all know, in the month of November, Marylanders went to the polls and elected a new governor, new members of the General Assembly, new local government officials, and a new Congressional delegation. While the faces representing Marylanders in the federal system have remained the same, in January 2015 there will be significant changes in the composition of the officials in state government. While Democrats still dominate the Maryland General Assembly, the Republican Party has made major gains. Aside from the victory of Governor-elect Larry Hogan, there is a huge turn-over in the membership of the House of Delegates and the Senate with more Republicans who have been elected to the General Assembly than in previous years. At present, the Democratic leadership team in the General Assembly (under the aegis of Senate President Mike Miller and House Speaker Mike Busch) is organizing to fill slots in the various committees of the General Assembly. As of the date of this edition of the Lifson Law E-Newsletter, the first round of chairs of certain standing Senate Committees was announced. The new chairs for the 2015 session of the Maryland General Assembly include the following people: Sen. Bobby Zirkin, Baltimore County, Judicial Proceedings; Sen. Jamie Raskin, Montgomery County, Executive Nominations and Joint Committee on Legislative Ethics; Sen. Edward Kasemeyer, Howard and Baltimore Counties, Budget and Taxation; Sen. Joan Carter Conway, Baltimore City, Education, Health and Environmental Affairs; and Sen. Katherine Klausmeier, Baltimore County, Rules. So far, only Del. Maggie L. McIntosh of Baltimore City has been officially chosen to be the chair of the House Appropriations Committee. In addition to the...

Notes from the Desk of Cynthia Lifson: Grounds for Absolute Divorce in Maryland

As we all know, for a married person to resume his or her status as a single person, a divorce action must take place. A divorce cannot occur unless one spouse successfully asserts a legally sufficient reason that will entitle him or her to a divorce. This legally sufficient reason is called a ground for divorce. Title 7 of the Family Law Article lists the grounds for divorce in Maryland. The available grounds for divorce depend on the state where the divorce action takes place. Many people are surprised to learn that the ground of “irreconcilable differences” has no application in Maryland. In Maryland, there are several alternative grounds available when seeking an absolute, or final, divorce. The ground that is most frequently pled in Maryland is the one year separation. This is a no-fault ground and before filing a claim, the spouses are required to live separate and apart (in two different homes) for one year without interruption, without cohabitation (sexual relations), and without any expectation of reconciliation. The elements of this ground, along with the elements of other grounds for absolute divorce, must be corroborated with independent evidence, most typically through the testimony of a third party witness. With Maryland’s embrace of same sex marriage through referendum, an interesting interplay between Maryland’s statutory scheme and its case law arises when addressing the ground of adultery. While infidelity by one marriage partner with a same sex paramour is not a new form of human behavior, at the present time, Maryland’s case law does not recognize adultery to occur when a spouse in a heterosexual marriage engages sexually with...

Notes from Annapolis

Soon, the people will speak! For those of us who follow politics, this month and next marks the time when the citizens again get to send a message to Annapolis, along with our local county jurisdictions as well as Washington, by voting for the men and women who will represent us in the executive and legislative branches of government in Maryland, in some of our local county boards and government agencies, and in Congress in Washington, DC. Marylanders will also be voting on two amendments to the Maryland Constitution. Fortunately for us in Maryland, this year we are not experiencing some of the confusion associated with new voter ID laws in other states that have been the subject of recent U.S. Supreme Court rulings. So while our voting procedures in Maryland remain pretty much the same, it is worth remembering that this year, voting will be different for many of us because of changes in legislative districts. Redistricting occurs regularly in the wake of the census that is required every 10 years by the U.S. Constitution and reflects changes in the population. Many Marylanders will be situated in a new federal or Maryland legislative district with new boundaries from the previous 10 years. Many of us will be considering candidates for office that are not familiar to us. With the amount of information circulating about voting procedures (including information about polling places and early voting or absentee voting before Election Day) and various candidates for office, it can be daunting to get trustworthy information to make an informed decision. Of course, we have the world wide web, local newspapers,...