Billionaire Hamm’s is one of the biggest divorce settlements in history, but is it big enough?

American entrepreneur Harold Hamm, best known for his position as CEO of Continental Resources, has been ordered to pay his ex-wife, Sue Ann Hamm, $995.5 million in what has been referred to as one of the biggest divorce settlements in history. Although an enormous figure to most, it is only a fraction of Mr Hamm’s $14 billion empire and Sue Ann plans to appeal the decision on the grounds that it is inequitable. For this reason, the ruling invites an intriguing question – is the Oklahoma County Court’s decision reasonable compared to the conclusion that a court in England and Wales would have reached?

Note also you can see our new guide to some of the best divorce lawyers in the US here.

Oklahoma is an equitable distribution state when it comes to the division of property on divorce. This means that any settlement must be just and reasonable. In order to achieve this, a judge must take into consideration the contributions of each party during the marriage, as well as deciding what each ex-spouse needs in order to move forward following the separation. Also to be considered is the standard of living enjoyed by the ex-couple whilst they were married and any factors that are clearly relevant – such as a spouse’s ability to pay. As the 24th richest man in the United States, it is fair to assume that Mr Hamm wouldn’t exactly struggle to make payments to his ex-wife. One would also be forgiven for suspecting that the ex-couple enjoyed a rather comfortable standard of living.

Whilst equity is central to property division in Oklahoma, its synonym fairness is the main consideration of judges making financial orders following marriage breakdowns in the UK. But what exactly is fair? And would Lord Nicholl’s famous ‘yardstick of equality’, together with the S25 factors of the Matrimonial Causes Act 1973, place Sue Ann Hamm in a better position? Let’s consider the facts. Harold 68 and Sue Ann 57 were married from 1988 until Sue Ann filed for divorce in 2012. Although Harold made mention of the fact that the couple had been separated since 2005, in England and Wales a marriage of 17 years could be considered long for the purposes of financial distribution. The affair that Sue Ann alleged Harold to have had would be irrelevant in an English court, as only conduct with the ‘gasp factor’ would be taken into account. The ex-couple have two children together: Jane, 23, and Hillary, 20. Although a UK court would investigate their financial needs together with their earning capacities, the reality is that this would not be a huge consideration due to the fact that they are both over the age of minority.

In Oklahoma, a significant factor for consideration was how Mr Hamm acquired his fortune. Just your ‘regular’ multi-millionaire when he married Sue Ann, Harry went onto purchase one million acres of land leases, which saw Continental Resources become a major oil producer and in turn propelled him into billionaire’s territory. Oklahoma law states that money earned during a marriage can form part of a divorce settlement if made through skill, as opposed to ‘luck’, or a change in the economy in which case it cannot. Mr Hamm’s argument that he had ‘stumbled across’ his additional wealth fell short when Judge Haralson stated that Harold’s skill, effort and leadership had been the driving force behind the success of Continental Resources.

Although Mr Hamm’s argument was unsuccessful, looking at how wealth has been generated in this way would be completely alien in the UK. Whether by luck or skill, this amount of wealth would fall into the pot for consideration.

A consideration of the UK court would be the needs, obligations and responsibilities of both Harold and Sue Ann. Due to the extreme wealth of the couple, this factor is likely to be reviewed in conjunction with the standard of living enjoyed by the parties before the breakdown of the marriage. This is because the ‘needs’ of a party are extremely subjective and will therefore be very different depending on the lifestyle a party has become accustomed to. A UK court would be looking to ensure that Sue Ann would be able to continue living comfortably; however, the difficulty arises when trying to decide how much money she will need to do this. Realistically, the almost $1 billion that she is set to receive in Oklahoma would allow her to have a life of luxury beyond anyone’s wildest dreams.

Also relevant is the fact that Sue Ann Hamm was not a lady of leisure throughout her marriage. She was a lawyer in Harold’s company when the couple married, playing a significant role negotiating the company’s land deals. Her work could be found to be a significant contribution to the family, alongside Harold’s contributions. Also, if she stopped working to take care of the children (which is currently unreported), she could have an argument to be compensated for the loss of her career.

Taking all of the above factors into account, it appears that there could be a strong argument in the UK in favour of Sue Ann receiving an equal distribution. After all, she had a long marriage and contributed to the family’s welfare. In addition, Harold certainly has enough money to fund an equal split. However, the ruling of Cowan v Cowan[1] throws a significant curve ball into the equation. In this case, the Court of Appeal held that a stellar contribution by one spouse is enough to justify a departure from the yardstick of equality. Charman v Charman[2] seems to confirm that Harold’s $14 billion business could be viewed as stellar, hence creating a shift in his favour.

So what would all this mean for Sue Ann here in England? All the factors certainly point to potentially more than the 1/14th share she has been awarded. Some might say it’s no wonder she is trying her luck on appeal!

[1] [2001] 2 FCR 332 [2] [2007] EWCA Civ 503

New online survey shows significant rise in popularity of Marital Property Agreements (MPAs)

With the Law Commission proposing that marital property agreements (MPAs), covering pre and post-nuptial agreements, should be legally binding only last month, it is a fitting time to publish the results of a survey that has been undertaken (by Alex Porter, who announced the statistics first in full here) which analysed the work of legal professionals involved with MPAs. This project is part of a major study led by Dr Laure Sauvé from the University of Essex, School of Law. Her project will analyse the latest report by the Law Commission using a comparative approach. She is currently exploring the differences between English and French laws.

Increase of 73% in use of Marital Property Agreements UK

The online survey has shown that the popularity of MPAs is on the rise with an increase of 73% in their use over a 20 year period. In the last year 79% of respondents completed between one and five MPAs per month.

Little Application of MPAs in Court

It also revealed that very few MPAs are applied in full once they get to court: just 5% of respondents said courts applied the details of the MPA in full; 76% said courts applied the details of MPAs in part; and 19% said courts had not applied any details of MPAs. In terms of how many cases actually end up in court 40% of participants said they did not represent any MPA cases in court per annum, and 40% said they represent between 1 and 5 per annum. The level of litigation is therefore quite low against how many MPAs are being completed.

Those completing MPAs are mostly very wealthy. Looking at levels of capital and starting with women, the majority, 37% had between £25,001 and £100k, 23% had between £100k and £250k and 10% had over £250k.  Men completing MPAs had a substantially more capital, 30% had between £100k and £250k and the majority, 53%, had over £250k.

This means that 33% of women had over £100k in capital but 83% of men had over £100k. It is no surprise that most cases that go to court are big money cases as the majority of those who want MPAs are very wealthy.

The Law Commission is recommending qualifying MPAs be put into statute and the participants of this survey mostly agreed. 69% thought that MPAs should be binging on the courts so long as there were adequate safeguards. Only 7% thought they should not be binding and 24% were undecided. However an interesting anomaly is that 55% of participants thought there would be more litigation on the basis of misrepresentation or undue influence if MPAs were binding, so for law firms it is a win win situation, especially as the price of a MPA ranges between £350 and £20,000.

Not unsurprisingly 72% said they now advertise MPAs as they have become more popular. The use of MPA will no doubt continue to rise and whether or not there is a rise in litigation will surface in due course. Either way the extra revenue will be a welcome relief for family lawyers with the recent legal aid cuts.

The full results are available at: http://internschooloflaw.wix.com/mpasurvey#

 

Image credit: Richard G via Flickr

Division of Property in a Divorce: Is Equitable Distribution More Equitable?

division property usa divorce(US family law) One of the first things a couple in the process of divorce will need to know is if the state you live in is a community property state or an equitable distribution state. A community property state allows for all of the property acquired during the marriage to be, loosely speaking, divided in half. An equitable distribution state differs in that it aims to provide a fair and balanced approach based on many different facts about the marriage and both parties.

Not mandating equal split of the assets, but rather an informed and possibly unequal distribution can be the best way to decide these issues in some cases, which is why some most states practice equitable distribution instead of community property. Your divorce attorney should help you understand how the law works in your area, whether you live in a community property or equitable distribution state.

Community Property

Community property states include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Alaska allows couples to opt in for community property, and Puerto Rico is also considered community property jurisdiction. For couples who get married in a Community Property State, whatever they earn or acquire during the marriage is co-owned equally by both husband and wife, and will therefore be split up equally in the event that the marriage dissolves.

The only exemption to this equal split is property inherited by one party, which would stay with that party completely in the event of a divorce.

The principle behind community property states lies in the collective family unit.

While two people are married, the fruit of their labors should go toward bettering the family unit, a community pool that exists for this very reason. In this sense, the community property states do have a valid argument. Let’s examine the typical scenario that some people might think of in the event of marriage dissolution.

Consider Bob and Sally

Imagine a husband Bob with a high paying job; he is the primary financial provider. Imagine the wife Sally also has a good job, but she only works part time due to the care she provides their one year old son Bobby Jr. Sally not only spends quality time taking care of Jr., she also cooks, cleans and acts as a sort of assistant to the ever forgetful Bob. If, over the course of the marriage, Bob manages to pay off his mortgage and save some money for a total asset value one million dollars. Suppose Sally was only able to contribute 30,000 to savings over the years. What little money she made she spent on clothes and entertainment, but it didn’t matter much to the family at the time because Bob was making more than enough for the both of them. Bob really appreciated the “feminine touch” Sally brought to the house, the home cooked meals and that Bobby Jr. didn’t have to spend most of his time daycare being raised by some stranger.

Many people argue that because Bob and Sally were working as a team for the good of their family, Bob would not have been able to be where he is today without Sally’s many contributions to the family, and there is just no way to put a price tag on that. With that mindset, it should make sense to just split everything in half right? Since Bob’s and Sally’s assets equal one million dollars plus the 30,000, they both should receive $515,000. This is what would most likely occur in a community property state.

This can also be seen as very unreasonable, it really can’t be that hard to figure out that “price tag” to put on Sally’s contributions.

Equitable distribution

Equitable distribution is all about finding a more balanced division of assets based on many factors. Many things enter into the equation such as how long the marriage lasted, what the established standard of living was, and the value of childcare and homemaking that each party contributed. Even whether one party invested in the other’s education or training, and the age, health, income or future earning capacity of both parties should be considered when trying to divide property. The goal here is not to split assets and debts directly down the middle and have Bob and Sally go their separate ways, the goal is to figure out what is most unbiased and fair distribution of property considering the circumstances.

Florida, for example, is an equitable distribution state so the outcome of the divorce might be somewhat different than both receiving $515,000. The court will start at that number (equal halves) and then perfect it based on the many factors stated above. Perhaps Sally would receive a little less, but it will be her equitable share. Sally may get the home to raise Bobby Jr. in until he grows up since she has put so much effort into making the house a home, and being there for Bobby Jr. as he grows.

Florida is also a “no fault” state, meaning that the division of property is not affected by the fact that either party has been unfaithful. It would be a mistake for Sally to assume that Bob’s affair would get her more property than him in the divorce proceedings. A divorce attorney  should be contacted should you have any queries.

There are a lot of factors to consider in the division of property, but ultimately each equitable distribution case will be different.

A Collaborative Divorce Interview: Clients and their Attorneys

In November 2013, Tyler Nelson and Pamela Nelson of Tampa, Florida, sat down for an interview with The World of Collaborative Practice Magazine.  The Nelsons had decided to Divorce using the Collaborative Process, as they did not want to fight in Court and they wanted to focus on the best interests of their daughter.  Tyler was joined by his collaborative attorney, Adam B. Cordover, and Pamela was joined by her attorney, Joryn Jenkins.  The interview was conducted by carl Michael rossi.

You can find the full interview at The World of Collaborative Magazine, and you can find excerpts below.

Tyler: A child needs her mother and father, even if they’re not together…Pamela was the one who found out about the collaborative process and told me about it. You know, you’re always going to have some kind of fear. Is this going to work out like it should? What is everyone going to have to do to make this work out? But as soon as I spoke with Adam about everything, all of my fears were gone. He explained everything and the way it was going to work, how it was going to work. I’m pretty sure Pam felt the same way, as soon as she spoke to her lawyer, she probably went through everything. That’s the one good thing about our lawyers, that they explained everything that was going to happen before it happened.

Pamela: Not everybody knows about collaborative divorce, yet. We really didn’t know until it was explained to us. It was a better process for us, rather than go to court and fight.

Tyler: Everything that needed to be addressed, has been addressed…Everything that we wanted to agree on, we did, and everything that we wanted put down on paper, it was.

Pamela: We also have different visitation rights with our daughter. More than, likely, other people have. We already had that situated, and we just needed to put it on paper. It was kind of different than normal people, where they only see their kids every weekend. We do our schedule every week, and we split the holidays. We had to work that out, and put that on paper.

Pamela: The judge actually said that she agreed that we were doing it the best way and that we were dealing with the divorce in a good way. Instead of people fighting and it being a bad thing, it was actually a good situation.

Adam: It was interesting that, at the end of that final hearing, Tyler and Pamela had their pictures taken with the judge. It was described afterwards as being not so much like a divorce setting, but strangely enough kind of like a wedding setting. They had their picture taken with the officiating person. Judge Lee was fantastic and was praising Tyler and Pamela for dissolving their marriage in a way where they keep their focus on their children and not on fighting. To divorce in a way that
was in the best interest of their daughter.

Joryn: I can’t remember doing another divorce where the judge congratulated the parties afterwards, and I’ve been doing this for thirty years.

Tyler: (regarding an interdisciplinary team) They told me about the financial manager [Monicas Ospina, CPA], and she was great. So was the psychologist [Jennifer Mockler, Ph.D.], she was great. They were all great.

Pamela: [The financial professional and mental health professional] were very helpful. They helped us with our tax returns, to see who should file for dependency exemptions to get the most out of it. And the mental health professional helped us stay on the same page with our daughter to make sure that we were doing the right thing. The psychologist made sure we were on the same page in how we were raising our daughter and determine what’s best for her.

Pamela:  (regarding the collaborative process) There’s no arguing, you know, there’s not really fighting or going back and forth or going to court or having the records be there out in public. There’s more privacy. I would definitely recommend it to anybody considering divorce.

Tyler: I have to agree with her…If you go and do the collaborative divorce, you have a lawyer there…They are not trying to make us fight. They are just there to write down what we want, and that’s the best thing about collaborative.

Tyler: We all sat down and talked. There was no arguing.

Pamela: The professionals worked around our schedules instead of us being court ordered to go to court on certain times and dates.

Pamela: (regarding going to the state-mandated parenting class) Everyone else was crying and hated their ex and wanted to kill them and I was like “well,
we’re friends, and everything is good.”

Tyler: “If anybody is thinking about doing a divorce, they should look into a collaborative divorce instead of jumping into it and going to court and fighting.”

Adam: “What I found excellent about this process and this couple, as opposed to the court-based divorces that I generally go through, is that when we were sitting around the table together with the mental health professional and financial professional, and we were talking, we weren’t just talking “civilly.”  We were talking in earnest.  We were actually just joking around at a few times and able to communicate in ways that you just couldn’t imagine doing in other divorce processes, even at a mediation table when there is the threat of litigation.

Joryn: “It is a much more protected environment, I think. It freed me up, and I’d like to think Adam, as well, to feel like we were teammates. We didn’t have to be adversaries, even though we were both representing different interests.”

Adam B. Cordover, Joryn Jenkins, Monica Ospina, and Jennifer Mockler are all members of Next Generation Divorce, formerly known as the Collaborative Divorce Institute of Tampa Bay.  Next Generation Divorce is made up of professionals dedicated to respectfully resolving family disputes.

Gay Marriage: The Church vs. State Argument

Gay marriage is one of the most controversial and polarizing issues of the modern era. The increasingly Christian-influenced Republican Party has made gay marriage one of its primary talking points, prompting the Democratic Party to come back at them by re-iterating the importance of the separation of church and state. But in a world where the Republican Party is controlled by the fringe Tea Party, making religion a matter of politics, it becomes difficult to extract one from the other in the modern political arena.

THE TEA PARTY

Beginning as a protest against Obama’s Affordable Care Act and continuing with John McCain’s choice of Sarah Palin as a running mate in his 2008 presidential campaign, the Tea Party has grown in popularity and size, making it an unofficial third party within the Republican Party itself. Lacking a primary agenda, it is often dominated by fear tactics and shock words, appealing to a base that is loyal and predominantly Christian. The group is driven by Christian principles such as a fetus’ right to life, restricted birth control, and strictly heterosexual marriage. The Tea Party votes keep coming in, electing representatives who live by these principles and do not have any desire to change them, either personally or politically, as a change in principle would likely end in relinquishment of their seats in Congress. Thus, the more moderate Republicans often surrender to their demands, resulting in a Republican Party that becomes more and more conservative with each passing year.

THE SEPARATION OF CHURCH AND STATE

One of the founding concepts on which this country was built was the freedom of religion. In Jefferson’s letter to the Danbury Baptists, he writes that legislators should “make no law respecting an establishment of religion, or prohibiting the free exercise thereof, thus building a wall of separation between Church & State.” This concept was incorporated into the U.S. Constitution as the First Amendment, but legislators have historically had a difficult time enforcing it. Because the United States is an unusually religious country for a “first-world” nation, religious beliefs have been a defining force behind many important government decisions. From legislation on abortions to birth control and gay marriage, the First Amendment of the Constitution has been rendered close to obsolete due to the religious convictions of the general population. Thus, politicians are inclined to gloss over the separation of church and state to fight for the religious agenda of their constituents, in an effort to keep their seats in Congress.

THE NOVELTY OF GAY MARRIAGE

Politicians argue that gay marriage is simply a product of modern Western society, a fluke of our societal structure that allows two men or two women to behave as heterosexuals have done since the beginning of civilization. Drawing on this concept, politicians have constructed an argument that says that the purpose of marriage is to procreate and continue the human race. However, countering that argument are studies that have shown an evolutionary reason for homosexuality. The person who does not have children of his/her own propagates the idea of “alloparenting,” that is, creating a buffer and means support to parents, which in turn increases survival rates for infants. Hence, the continuance of homosexuality may indeed be a contributing factor in the survival of the human race after all.

The issue of gay marriage remains a hot topic. But legally, the government should be concerned not with morality but with equal treatment of its citizens. According to the Constitution, the issue of morality is to be left to the church.

Robbie Edison writes on marriage, divorce law, cohabitation, family law, property law and other associated topics. Robbie understands the importance of locating a qualified attorney when going through a divorce; he encourages Houston residents to contact Chernoff Law, Houston Divorce Attorneys with a solid track record.