23rd May, 2022
I have recently had an influx of calls from people who have had their bank accounts emptied right before they get hit with a Complaint …
I have recently had an influx of calls from people who have had their bank accounts emptied right before they get hit with a Complaint for Divorce.
It’s a damn shame, and worse yet- it is not illegal.
After you file a complaint for divorce, the State of Georgia says that neither party can transfer money or property while the divorce goes on (except to pay bills and the like). The intent here is to make sure no one decides to sell the house & car, or deplete all their savings & checking accounts, and make themselves look broke AF during the divorce, and then post-divorce go back to living high on the hog. Most people don’t do that anyway, in my experience.
However, there is a growing trend to deplete anything of value BEFORE filing divorce.
I will provide 2 recent consults as loose examples and change the names to protect the innocent.
Example 1: Sally Smith. Sally Smith went away for a weekend, and came home to find her husband gone, all their joint bank accounts emptied, and the house empty. He used the car to move out while she was away. She came home to nothing but heartbreak. A week or so later, Sally was hit with a complaint for divorce. Being that there was nothing in their joint bank accounts, she had a hard time finding a lawyer and paying bills (even though she was employed) because now she had to open new banking accounts, find a new place to live that she could afford, and buy a car. Did I mention Sally is a single mom caring for a young child? They also had to forfeit the closing amount on the house in escrow because he disappeared and filed for divorce. To put in harsh, reality terms: what he did was a total dick move, but I went before a judge armed with cases to say he can’t do that, but the judge was adamant that because all of the devious behavior happened while they were married, the judge’s hands were tied. Essentially, Sally had just learned a painful and expensive lesson about trust.
Example 2: Judy Jones. Judy is currently battling cancer, which entails chemotherapy. For those of you not familiar, chemo causes “chemo brain,” and fatigue among other side effects. Needless to say, Judy was more focused on survival than anything else, even planning her upcoming wedding. One day, Judy’s fiancé disappeared from the home they were sharing and cleaned out her accounts. He moved back into his old place and left her high and dry. Their shared bank accounts were bereft of funds (fancy way of saying empty). He had access to the money, so he had every right to take it all. He also had every right to end their engagement. I assure you there is a special place in Hell for anyone who would take advantage of someone going through chemo to save their life from cancer. Regardless, nothing he did was illegal, either.
In short, think of it in terms of the opposite: if he had won the lottery and dumped all the proceeds into the shared account, would the women be complaining? Of course not! If they had to empty the accounts for medical emergencies but did not divorce or split up, would their be a lawsuit? Of course not. It is only because the taking of money was directly before a split that it causes a bad taste in peoples mouths (as it should).
Here are the cases I found and a brief synopsis of what the case says.
Thomas v. Thomas 377 SE 2d 666 (1989)– This case was deciding how to classify as marital or non-marital certain property which has characteristics of both. The subject of this particular inquiry involves the proceeds from the sale of the marital home and from the sale of stock in the company which employed the husband. The house was in the wife’s name and had been purchased by her shortly before the marriage but marital funds had reduced the mortgage debt against the house. The stock was purchased during the marriage as the result of stock options obtained by the husband before the marriage. The stock was paid for by a combination of separate and marital funds. The trial judge awarded the wife almost all the proceeds from the sale of the house and awarded her what amounted to one-half the proceeds of the stock sale, conceded by the court to be, in part, separate property of the husband. This was done in order to restore to her a portion of sums which she had given to the husband before the marriage. In order to divide marital property on an equitable basis, two things must be done. First, the property must be classified as either marital or non-marital. Second, the marital property must be divided, not necessarily equally, but equitably under the principles elucidated in Stokes v. Stokes, 246 Ga. 765 (273 SE2d 169) (1980). The classifying of property as either marital or non-marital is not a discretionary function but is based on legal principles. The second part, the division of marital property itself, is of course discretionary based on a consideration of various equitable factors. The court was not permitted to treat a portion of the husband’s separate property as marital property in order to satisfy his perception of the equities of the case. In doing so, he in effect imposed an equitable trust upon those funds to the extent of the wife’s premarital contribution.
The other important note about this case is that it references the “Source of Funds” rule which originated out of Maryland. In Harper v. Harper, 448 A2d 916 (Md. 1982), the Court of Appeals of Maryland made a detailed survey of its sister states to determine the appropriate method, under equitable division, of a marital home brought as separate property to the marriage, but paid for, at least in part, from joint funds. In a source of funds state the property is considered both separate and marital in proportion to the contributions (monetary or otherwise) separately and jointly provided; and others follow a “transmutation of property” theory, where separate property is converted to marital property whenever there is any contribution of marital property. The Maryland court analyzed each treatment with an eye toward developing its own policy on equitable division of this sort of property and adopted the “source of funds” rule. That rule holds that:
[A] spouse contributing nonmarital property is entitled to an interest in the property in the ratio of the nonmarital investment to the total nonmarital and marital investment in the property. The remaining property is characterized as marital property and its value is subject to equitable distribution. Thus, the spouse who contributed nonmarital funds, and the marital unit that contributed marital funds each receive a proportionate and fair return on their investment.
Harper v. Harper, supra at 929.
Fundamental to the adoption of the source of funds theory is the recognition that property is not necessarily “acquired” on the date that a legal obligation to purchase is created.
[I]n order to apply the source of funds theory … it is necessary to adopt … an interpretation that defines the term `acquired,’ … as the on-going process of making payment for property. [Cit.] Under this definition, characterization of property as nonmarital or marital depends upon the source of each contribution as payments are made, rather than the time at which legal or equitable title to or possession of the property is obtained.
Stokes v. Stokes, 273 S.E.2d 169 (Ga. 1980) – The decisions of this court have approved the equitable division of personal property. The equitable division of personal property as an incident to divorce and alimony cases as provided by our Code has been approved by this court. In [other] cases this court has approved the award to a spouse, either husband or wife, of property, both real and personal, held in the name of the other spouse, not as alimony but as equitable division of property. This is just to say that division of property in Georgia is equitable, not equal. This means that a wife’s contributions as a homemaker and mother are not to be negated because she does not have a material income course, for example.
Lerch v. Lerch, 278 Ga. 885, 608 S.E.2d 223 (2005) – In this case, the trial court failed to properly treat the entire home as marital property. Normally, a gift to one spouse becomes the separate property of the recipient spouse. When a gift is given to the marital couple, however, the property will become marital property absent evidence of a contrary intent by the donor. It’s interesting to note in this case there was a prenuptial agreement, but the court said once he deeded property to them both, it stopped being his separate property that was considered “safe” in the event of a divorce from a prenuptial agreement.
Coe v. Coe, 684 S.E.2d 598 (Ga. 2009) – In this case, the court ruled that the marital home should be divided equally (as opposed to equitably). The trial court entered a final judgment and decree of divorce which required husband to obtain a new loan on the marital home, or appraise and sell the home, in either case dividing the net proceeds equally with wife after paying the balance owed on home loans. I share this case because this is normally how courts divide marital property- you can either sell it and split the profit, or one spouse can “buy out” the other spouse’s portion of the home. In order to “buy out” the other spouse, the spouse wanting to keep the home must obtain a mortgage in their name only. This usually requires a refinance at a minimum.
Walton v. Walton, 681 S.E.2d 165 (2009) – The trial court awarded Husband the marital residence and lot, and ordered him to pay $319,000 to Wife for her equity in the home. The trial court also awarded Wife one of Husband’s businesses, and ordered Husband to pay off the debt that had been used to finance the business. The evidence showed that the down payment on the home was made with funds from Husband and Wife’s joint account, and from funds shared by Husband and Wife that Husband had transferred into his own personal account. The transfer of the couple’s funds to Husband’s account did not make the funds Husband’s separate property. Here’s the important rule: an equitable division of marital property does not necessarily mean an equal division. The purpose behind the doctrine of equitable division of marital property is to assure that property accumulated during the marriage be fairly distributed between the parties. Each spouse is entitled to an allocation of the marital property based upon his or her respective equitable interest therein. Thus, an award is not erroneous simply because one party receives a seemingly greater share of the marital property.