Kurt Cobain’s Daughter Hoping to Protect Her Massive Inheritance by Leslie O’Neal

Although many may not know Frances Bean Cobain, her late father Kurt Cobain emerged as a household name after his band, Nirvana, became the poster children for the grunge movement in the 1990s.  Following his tragic death in 1994, the bulk of his estate, which is rumored to be in excess of $400 million, was left to his only daughter, Frances Bean, who was only 20 months old at the time.   Now 23 years old, Frances Bean has just filed for divorce from her husband of less than two years, citing irreconcilable differences.  In her initial petition, she clarifies that she intends to preserve her inheritance from her father’s estate and believes that her spouse should not be entitled to any of it.  Perhaps in an effort to ensure that her husband does not make a play at this asset, Cobain’s divorce petition hints that she is willing to pay him spousal support despite the brevity of the union.

In Georgia, the law is relatively clear that inheritance that one spouse receives from a parent or third party either prior to or during the marriage is characterized as “separate property” and is not considered marital property subject to equitable division in a divorce case.  Likewise, property brought into the marriage by one spouse that was generated by or acquired by that spouse prior to marriage is “premarital property” and is also not subject to equitable division in a divorce.

Things become less clear, however, when one party either receives an inheritance, or owns an asset from prior to the marriage, and then either comingles those separate or premarital funds in an account with other marital funds, or invests the separate or premarital funds in an asset that is jointly titled.  Georgia used to recognize the “source of funds” rule, which allowed for the return of a separate or premarital portion of an asset so long as the party seeking preservation of that asset could clearly trace the pre-marital or separate funds.  However, in 2005, the Georgia Supreme Court made a substantial change to the manner in which Georgia viewed separate or pre-marital funds that had been comingled or jointly titled.   In Lerch v. Lerch, 278 Ga. 885 (2005), the Court ruled that when a spouse places a premarital or separate asset into an investment that includes the name of the other spouse, that act manifests an intent to gift that separate or premarital asset to the marriage.   So unless there is some definitive evidence of a contrary intent (such as a Last Will & Treatment or a Post-Nuptial Agreement), it is now far more difficult to convince a court to classify any portion of a jointly titled asset as separate or premarital property.

In Cobain’s case, her inheritance falls under both categories because she not only inherited the funds from her father’s estate, making it a separate asset, but she also acquired the funds prior to the marriage, making it pre-marital asset as well.  If this case were being litigated in Georgia, the issue of her inheritance would hinge on how she titled that inheritance during her brief marriage.  Hopefully for Cobain’s sake, she was careful to do this since it appears she neglected to have a Pre-Nuptial Agreement signed.

 

DICK & JANE “FINAL TRIAL: PART II” by Justin O’Dell

As we continue to look at Dick and Jane and the topic of divorce, we have moved through a temporary hearing, looked at their discovery issues and we are now headed for a showdown.  Mediation – a final settlement conference – has failed.  The parties are preparing for a bench trial which presents the question, “What happens in a divorce bench trial?”

Many litigants don’t realize it, but a divorce is a civil action.  For example, when polling a jury, a lawyer might ask “Has anyone ever been a party to a lawsuit?”  Many potential jurors often say “no” even when they have been through a divorce.  Divorces generally follow the same rules of evidence and trial procedure as other civil cases.

The first bit of confusion surrounding a trial is the process of having the case set for a final trial.  Compounding the confusion is the fact that every County and every Judge within every County controls his/her calendar differently.  Some Judges specially set all of their hearings and cases, some Judges schedule a handful of matters for the same one or two day calendars and some Judges publish lengthy multi-week trial calendars and place cases “on call” for 2 or 4 hour advance notice of their trial start date and time.  In complicated or lengthy cases, the lawyers will endeavor to have the Court specially set the case as the only matter for consideration and commencing at a certain date and time.  This gives the lawyers the ability to arrange for witnesses and arrange their schedules.  However, special settings are problematic to the Court.  If the case runs longer than announced, the Court has to start bumping other matters.  If the case suddenly settles or is continued, the Court has an empty day with no cases to move.  As the case nears a final trial, it becomes all the more important that Dick and Jane have lawyers familiar with the local rules (written and unwritten) and procedures (written and unwritten) for getting a hearing and have a relationship with the Court staff and personnel to help schedule.

The second aspect of trial that is often most surprising to litigants is that the “aha” moments so often presented on television and in movies rarely occurs.  By the time the case is being finalized, the parties have conducted discovery, exchanged documents and evidence and perhaps even taken depositions.  Each side is very well versed in the arguments and positions that the other side will take and should be prepared to counter the same.

The trial process moves much like any other civil case.  Each lawyer will stand and make a brief opening statement.  The opening statement is not evidence, but is designed to outline to the Court the facts that the evidence will show.  In domestic cases, Judges most often want the opening statements by both lawyers to provide them with the following information:

  • Names and number of children affected and each party’s position on custody;
  • Assets of the parties and desired split for each;
  • Debts of the parties and desired split for each;
  • Income of each party and positions on child support and alimony;
  • Conduct and other factors which each party will ask the Court to consider in making a decision.

Often times, the Court will interrupt or engage in discussion with both lawyers during the opening statement in an effort to make sure that the list above is accurate and agreed upon (even if the division of the same is not) and to try and determine the number of items upon which the parties have agreed.  For example, by the time a case is being presented for a final divorce, it is not uncommon that the parties have already separated smaller bank accounts, begun using separate credit cards, divided up most personal property and will agree that each party can receive the automobile that he or she is presently using.

From a strategy standpoint, the presentation of the case is very different.  Jane is going to most likely try and present a “rear-ward looking” case while Dick will be presenting a “forward looking” case.

Jane is going to focus on the length of the marriage, the amount of time she spent outside of the workplace raising children and building Dick’s career and new business.  Jane is going to try and build a case that Dick’s affair and extramarital conduct was the cause of the divorce.  Her arguments will center upon maintaining the similar “standard of living enjoyed during the marriage” as justifying alimony and a high level of child support.  Jane’s arguments will also push that her contributions to the marriage have caused Dick to not only realize a high income now, but also to realize high income in the future.  As a result, Jane will argue that she should share in that which she helped to build.

Dick’s case is the opposite.  Dick will likely acknowledge Jane’s contributions to the marriage and assert that the division of the assets acquired during the marriage is in recognition of those efforts.  However, Dick is going to point out that Jane is now working or could now be working, able to support herself and maintain her own standard of living.  Dick will also try and show that the marriage had been on the rocks for a period of time before the affair and that the conduct may have precipitated the filing for divorce, but was not the cause of the end of the marriage.  He may point to Jane’s past infidelities as evidence   Dick is going to strive to demonstrate to the Court that his new business is based solely on his efforts and potential and not based upon his past income history.

The case will end and the divorce will be final.  Ultimately, Dick and Jane will be forced to move on.  For couples like Dick and Jane who divorce with minor children involved, the reality is that the divorce only ends the marriage, but the relationship survives.  Dick and Jane will have to learn to co-parent and cooperate.  If they do not, they will find themselves in Court with increasing frequency and could find that the children suffer as a result.

Next month, we will move off the topic of family law and look at some post-divorce estate planning issues that Dick and Jane will need to consider.