stock sale during pending divorce

[giftedsanta]

My stbx's attorney has requested me to put the proceeds of a stock sale in a trust. If I dont agree to that, he threatened to request the court to make an order to do so and he would also request attorney's fees for having to file the motion when this is a reasonale request in order to preserve community assets pending their ultimate division. We have previously agreed that this as a community property.

My questions are:
1) Do I have to agree to his request.
2) Can I respond saying that I would mail him 1/2 the amount immediately upon receipt of the proceeds.
3) Will the judge likely to grant attorney's fees for filing this motion?

[socrateaser]

>My questions are:
>1) Do I have to agree to his request.

No.

>2) Can I respond saying that I would mail him 1/2 the amount
>immediately upon receipt of the proceeds.

Yes.

>3) Will the judge likely to grant attorney's fees for filing
>this motion?

Yes.

Comment. If you agree that the funds are community assets, then you are both "presumed" to each have an undivided one half interest in the whole amount. If you provide 1/2 of the funds to the other party now, you may lose bargaining leverage later, should you disagree about the distribution of some other asset or liability, because you will have already relinquished 1/2 of a substantial asset.

Just because an asset is presumed community property, doesn't mean that the presumption cannot be overcome and the court persuaded to distribute the money differently than 50/50. And, you may agree to some other outcome.

So, set up the trust -- it ain't no big deal, except that neither of you will be able to reach the asset without the other's approval -- which should enhance everyone's desire to settle fast, so as to reach the asset.

[giftedsanta]

Thanks for responding.

75% of our community liquid assets are in her solo accounts which was declared as community property. In this case, if dont agree for moving the proceeds to a trust, how can the judge grant attorney fees?

It looks to me that this is not a reasonable request for the judge to grant attorney fees.

[socrateaser]

>Thanks for responding.
>
>75% of our community liquid assets are in her solo accounts
>which was declared as community property. In this case, if
>dont agree for moving the proceeds to a trust, how can the
>judge grant attorney fees?
>
>It looks to me that this is not a reasonable request for the
>judge to grant attorney fees.

In a community property jurisdiction, every asset is entitled to an equal distribution. Aggregating assets and then dividing by two is not a fair distribution, because if one piece of property is a family home on a lake and another is cash in the  bank, the two are simply not equivalent to the parties.

So, you could suggest that if you put your dough into a trust, that she should do the same with her dough, as well. And, if they refuse to stipulate to that arrangement, then you can say, "see ya in court, because I will make the same reasonable request to the judge that you are making, and your refusal to cooperate will negate the judge's rationale to order attorney fees in your favor."

But, if you just refuse, and they take you to court, then you'll lose, because you never attempted to negotiate in good faith, and your opponent will not have had an opportunity to demonstrate bad faith towards you.

[giftedsanta]

1) Do I have to request all the liquid assets which are with me and her. to be put in a trust? I have some other liquid assets (20%) with me apart from the stock sale.

2) Until we reach an agreement or a court order on the division of finances, how will the interest accumulated on the liquid assets from the date of separation be divided. She will have 3 times compared to my interest accrual.

[socrateaser]

>1) Do I have to request all the liquid assets which are with
>me and her. to be put in a trust? I have some other liquid
>assets (20%) with me apart from the stock sale.

A community asset is an asset in which you both have a joint interest pending dissolution. You both have a fiduciary duty to safeguard each other's interest, and a breach may permit the court to give the other party the entire value of any benefit received.

So, just bite your lip and put the money in a trust for both of you pending divorce and demand that your spouse do the same. If she refuses, then you take HER to court and ask for attorney fees -- that will give you the high road in the judge's view, which will pay benefits, if this goes to trial.

>2) Until we reach an agreement or a court order on the
>division of finances, how will the interest accumulated on the
>liquid assets from the date of separation be divided. She will
>have 3 times compared to my interest accrual.

If an asset is community, then it remains community until final judgment of dissolution. Thus, whatever value is accrued during pendancy of the disso, will be split 50/50 by the court.

[giftedsanta]

1) Any tax consequences/complications due to placing funds in a trust?
Or am I better off letting them keep 100% of stock sale proceeds until final dissolution?

I had to sell the stock, because it was about to go worthless. I had consent from the other party for the sale.

[socrateaser]

>1) Any tax consequences/complications due to placing funds in
>a trust?

None, unless you are exchanging out of a retirement account. I think you're making an unnecessarily big deal out of all of this. You don't need to create a legal trust document. Just turn the proceeds over to your attorney and have him/her hold them in trust until the case is complete. Or, set up an account at a brokerage with instructions that no funds can be released without the signatures of both you and your spouse. Then deposit the assets.

>Or am I better off letting them keep 100% of stock sale
>proceeds until final dissolution?

That's up to you, but I'm not a big fan of giving my opponent money to hold in trust for me.

>
>I had to sell the stock, because it was about to go worthless.

Good, then you're not in breach of fiduciary.

>I had consent from the other party for the sale.

Good, then you're not in breach of fiduciary.