Divorce involves a number of financial decisions from both of the parties involved. The only issue that may consume more time than property division is child custody. In some instances, the decisions made by a trial court end up being appealed all the way to the Kentucky Supreme Court.
In one such case, the Kentucky Supreme Court recently handed down a ruling that affects attorneys in the state who are going through a divorce. Many attorneys take on cases on a contingency fee basis, and you may be one of them. If that is the case, you may want to pay attention to this particular ruling.
The attorney getting the divorce in this case argued that his contingency fee contracts were not marital property since they had not yet been earned. The trial court agreed, as did the state’s Court of Appeals. However, the state’s highest court disagreed. Instead, it held that those contracts are part of the marital estate and should be dealt with just as any other “delayed-distribution” asset. In its ruling, the court determined that contingency fee contracts fall under the definition of marital property since the attorney can initiate a lawsuit to collect those fees if applicable.
This may change the way that divorcing attorneys here in Kentucky approach property division. When negotiating a property settlement, your contingency fee contracts will need to be taken into consideration. All of the potential ways in which you would deal with other marital assets that fall under the delayed-distribution theory may be utilized. More than likely, divorce law attorneys across the state are currently reviewing the opinion in order to determine how to best represent their clients in light of this new decision.