Vera: Good afternoon everyone. Welcome back to the show. I am very pleased to have my colleague, Attorney Russell D. Knight, with us again today. He is an expert in international family law. He owns two law firms, one in Chicago and one in Naples, Florida. He has handled hundreds of cases in all areas of family law. I am very glad you are back, Russell. Thank you very much. I hope you had a wonderful week.
Russell: I am glad to be here again. I had a wonderful week, thank you.
Vera: Great. In this episode we are talking about several very important topics in family law: division of assets, mediation, spousal support and child support. Let us begin with the division of assets. What does “asset division” actually mean? Are there differences between Florida and Illinois?
Russell: Yes. In almost all states the question begins with: is an asset marital or non-marital? Most of the time that means: was the asset acquired before or after the marriage? If it was acquired before the marriage, the court has no authority to divide it. That remains the individual’s property. That is also what most prenuptial agreements state. However, if something was earned or saved during the marriage, it is considered marital and should be divided.
Russell: The division policy differs depending on the state. In Illinois the principle of “equitable distribution” applies. That means: it is divided as seems fair. For example: if one partner never worked and the other travels by private jets and earns millions, a judge can say that a 50:50 split would not be fair. He could award 60 or 70 per cent to the economically weaker partner. In Florida, on the other hand, the rule is 50:50, unless the court exceptionally justifies a deviation.
Russell: Many of my clients live partly in Illinois and partly in Florida. We then analyze which law is most favorable for the divorce. That definitely plays a role.
Russell: That is why I recommend everyone, whether in the USA or Europe, to conclude a prenuptial agreement. That protects both sides. The economically weaker partner could also inherit during the marriage while the other does not. If you have no prenuptial agreement and the circumstances change, that can have serious consequences.
Vera: What would you say to people who think they do not need a prenuptial agreement because they agree on everything?
Russell: I would say: you already have one. The Illinois Marriage Act is your default prenuptial agreement. If you get divorced, these rules apply automatically. It is therefore wiser to agree on something individual, especially since prenuptial agreements often also regulate which law should apply. If you move between states or countries, that has major implications.
Vera: What is the difference between equitable distribution and equal distribution?
Russell: With equitable distribution the court takes all circumstances into account. If, for example, one partner has a high income or a large inheritance, the court can say: it is not fair to divide only 50%. Perhaps the other person receives the entire house and more than half of the retirement account. In Florida, on the other hand, division must be 50:50, unless the court clearly justifies why not.
Vera: How many divorces actually go to appeal?
Russell: A vanishingly small percentage. Why? Because 95 to 98% of all family law cases are resolved by agreement. And those who reach an agreement usually waive the right to appeal. Family law is not particularly deep, but extremely broad. There are many topics simultaneously. In a criminal trial it may only be a question of whether the police had reasonable suspicion. In family law you have ten accounts, marital and non-marital assets, support, custody and so on. Hardly anyone wants to go through that again.
Russell: A major difference also lies in the costs. Those who reach an agreement save high legal and court costs. Most attorneys charge by the hour. It quickly becomes expensive. That is why you should reach an agreement if at all possible.
Vera: Many people think that settlement and mediation are the same thing. Is that correct?
Russell: Not quite. Mediation is a process, often voluntary. In Florida mediation is mandatory for matters involving children and is strongly recommended for financial matters. In Illinois it is barely common for financial matters. I prefer the so-called five-party mediation: both parties, one attorney each and a mediator. The mediator is like a real estate agent: he simply wants to achieve a deal, not the perfect outcome for one side. That is why you need an attorney who says: “That is a good deal” or “You will get a better result in court”.
Russell: I am in favour of mediation, but you should not think that everyone sits peacefully in a circle. There are arguments, people leave the room, there is shouting. But that is alright, because in a courtroom that would not be possible.
Vera: In Europe mediation is often voluntary. That is why it is difficult to convince clients. If it is not required by law, many see no point in it. But those who want a good settlement should try it. In Florida it is mandatory, so you have to go through it anyway. And often more comes out of it than in court.
Russell: One advantage: it forces disclosure of assets. Those who want an agreement must, for example, disclose their retirement accounts. Many who previously refused then hand over the data.
Vera: Finally on the topic of support: what does “alimony” mean? Is that only for children or also for spouses?
Russell: In Illinois there is a formula: one third of the net income of the higher earner minus 25% of the net income of the lower earner. The lower-earning person may reach a maximum of 40% of the combined income with support plus their own income. That is fairly fair.
Russell: In Florida the question is: how much does the higher earner have left after all expenses? If someone earns 1 million and spends 500,000, 500,000 remain from which support could be paid. However, that often leads to tactical behaviour. The paying party suddenly declares high expenses in order to pay less. The recipient reports higher needs. That encourages manipulation.
Russell: In Illinois the duration of support depends on the length of the marriage. In Florida the judge has more discretion. There are also conditions: the recipient must make progress, improve their professional situation. That can create pressure. The paying party constantly enquires, the recipient may not want to make an effort in order not to lose the payments. That is unhealthy for both sides.
Vera: What would you advise a client who earns much more than their partner?
Russell: Pay upfront. Many people would rather have one dollar today than two tomorrow. A settlement via a lump sum payment saves doubly: it is often tax-free (when structured as a property transfer in the divorce agreement) and avoids subsequent monthly burdens. Alimony, on the other hand, is taxable.
Russell: Many complain that it is unfair that they have to pay. But often they chose the marital model themselves: “Stay at home, take care of the children”. If the wife then has not worked for 10 years, it is not “unfair” when the judge says the husband must pay more.
Vera: Another topic is child support. In Florida the 50:50 model was introduced. That means: both parents should spend an equal amount of time with the child. That changes a lot. Mothers can no longer simply say: “I have the child, so pay me support.” If the father contributes enough time, no one has to pay support.
Russell: I think that is good. It gives fathers the opportunity to take on responsibility. Those who fail pay more. But generally child support is not a huge amount that destroys one’s finances.
Russell: In Illinois there are tables, similar to Florida. But there is no 50:50 presumption. Usually what was customary before the separation applies. Many fathers make the mistake of getting a bachelor flat and spending little time with the child. They then only receive every other weekend as visiting time and have to pay.
Russell: It is difficult to achieve more than 40% parenting time. Seven days a week is a prime number. To get above 40% you need six out of 14 days. Five days are not enough. That is why you should honestly ask yourself: how much time do I really want to spend with my children? And accept the support that results from that.
Vera: Last question: do children have a voice in the divorce process?
Russell: In Illinois a guardian ad litem is often appointed. Children have a voice, but no choice. The guardian speaks with them and gives the judge a recommendation. In Florida the 50:50 model applies as standard. Statements by children count for very little. If one parent says: “The child wants to live with me”, an objection immediately follows: hearsay. Children are not allowed to testify in court. No judge permits that.
Vera: In Germany it is similar. From the age of 13 a child can be heard, but does not decide. One speaks with social workers, the guardian and so on. But children are susceptible to influence. It is merely an additional assessment, not a decision.
Russell: Children usually want to please both parents. They tell Dad: “I want to be with you”. And Mum the same. It is cruel to put them in that position. They should not have to make decisions. They are not adults. You must not burden them with that.
Russell: If someone says: “I want my child to tell the court that it wants to live with me”, I advise against it. It harms the child. Perhaps it will need therapy later. The child loves both parents. It should not have to choose sides.
Vera: Excellent. We have only touched briefly on this topic. One could talk about it for hours. If someone thinks: “That is exactly my case”, how can they reach you?
Russell: You can visit my website: rdklegal.com. The site for Florida is divorceattorneynaplesfl.com. Or call my office: 773-334-6311.
Vera: One more tip for clients?
Russell: Google “Illinois divorce” and I am among the top three results. I have written over 700 articles that I continually update. I read the appellate decisions every week. Even if I do not immediately know the answer, I give you a framework for understanding the situation. It is best to read my articles beforehand.
Vera: Thank you very much, Russell. That was a wonderful conversation. Stay tuned for further exciting topics on international family law. Russell will be glad to represent you with his experience in Chicago and Naples, Florida.