On December 7, 2010, the Los Angeles Superior Court found that Jaime McCourt co-owns the Los Angeles Dodgers with her ex-husband, Frank. The court set aside a signed marital agreement indicating that Jaime surrendered her rights to the Dodgers upon divorce.
Jaime and Frank married in 1979 and divorced in 2009. Their most valuable asset was ownership of the Dodgers, currently valued at over $700 million.
In 2003, Jaime and Frank purchased the Dodgers from News Corp. The next year, Jaime and Frank signed a post-nuptial agreement relating to their property rights: Jaime would own the couple’s real property as her separate property, while Frank would own the couple’s business interests as his separate property. An agreement to change the character of a property, from separate to community property or vice versa, is called a transmutation agreement. (Family Code section 850.)
Both agreed that they entered into a marital property agreement to protect their assets. Jaime claimed that she did not read the agreement and she did not know that signing the agreement meant that she would have surrendered her rights to the Dodgers if they divorced. Frank countered by stating that Jaime was an MIT Business School graduate and former family law attorney, and she knew the legal consequences of signing the agreement.
The understanding of the parties is further complicated because the attorney who drafted the agreement actually drafted TWO agreements which were identical except for one crucial term: one agreement stated that the Dodgers were Frank’s separate property, and the other represented that the Dodgers were co-owned by Frank and Jaime.
In setting aside both drafts of the marital property agreements, since the team was purchased while Frank and Jaime were married, the court found that the Dodgers were community property, meaning that at divorce both Frank and Jaime had an equal interest in the team. (Family Code section 760.) This means that, if one party cannot buy out the other’s interest, the parties may be forced to sell the team.
Generally, property acquired during marriage is community property, while property acquired before marriage is separate property. At divorce, each spouse has an equal interest in the community property, but separate property belongs solely to one individual spouse.
If you are interested in marital asset protection, whether in the form of a prenuptial agreement or transmutation, it would be wise to consult an attorney to assist you. Agreements that define marital property must meet certain requirements to be legally binding, and a lay person drafting an agreement may not be able to keep all these requirements in mind.
If you are married and are interested in an asset protection, you will need an experienced Los Angeles County family law attorney to review your options and come up with a plan to protect you and your family. Wallin & Klarich has practiced family law for over 30 years, and we have a great deal of experience in a variety of family law matters. Call us today at (888) 749-7428. We will be there when you call.
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