The marriage of Schnabel was a divorce case that illustrated what one spouse could gain over the other during a divorce, if a corporation was involved. The Schnabel case spoke to family courts about joinders, sanctions and attorney fees charged to spouses who conspired with business partners, and their divorce lawyers, to avoid tax and support obligations.
Three appeal victories left Mrs. Schnabel legally correct, however the numbers indicate her husband still likely got away with far more than half of the community property, assisted by his lawyer and business partners.
In one of three appeals, the Supreme Court noted:
"Women ... face greater financial obstacles than men in gaining access to the courts because they lack funds to retain appropriate legal and expert counsel. The Nevada task force reported that a divorcing woman must 'beg [the court], piecemeal, for a few dollars which she must prove is "needed" to prosecute her action or defense' whereas 'the husband spend[s] freely from community funds for his own legal needs' ...." (See Schafran, Gender Bias in Family Courts (Aug. 1994) 17 Family Advocate, No. 1, p. 26.)
22 years later, family court files indicate that innocent spouses, or the " out spouse" fairs no better when one spouse continues to dominate in corporate ownership, management and board control during a divorce. Behind the corporate veil husbands have the ability to conspire to defer their income, inflate their business expenses, draft phantom contracts and take advances to shareholder equity " off the books", claiming all is the " general necessities of business". Family lawyers of an " out " spouse, usually the woman, have no idea how to protect their clients as a result.
Women continue to be oppressed by being forced to wait for the measly morsels of " support " determined by statutory schedules, where they often wait months for courts to compel payments or discovery on which support payments are based. Meanwhile men enjoy padded business accounts and financial access that courts never consider.
Employers aren't allowed to forgo payments to workers, but in family law cases spouses can go years without paying the statutory required support amounts. Fees for support arrearages are so nominal, they encourage non-compliance. Women who can not afford to hire a lawyer may go without support altogether, or may miss legal filing windows that establish when support is due, letting a represented spouse off the hook completely.
When it comes to dividing assets during a divorce, women fair no better. House equity is easily determined, but can be manipulated by courts that often order property sales at less than optimal times. Business income and equity is so complex and foreign, that family courts don't dive into this area, leaving women subject to a final report of an unscrupulous accountant, usually paid by the men looking to hide assets from spouses and the taxing authorities.
Expense accounts, deferred income, and complex financial entities all still a man's game, and out of view in family court. Courts still live in a W2 working wage world , despite the fact that over 50% of Americans now earn their income , or support their lifestyle through business ownership.
Not much has changed since 1994. Wage disparity for women remains in full force in the workplace and sexist support orders in family courts continue to create disparity for women who are engaged in divorce. These facts show the continued economic suppression the majority of women and children in California face , 22 years after the Supreme Court noted the problem.
Jane and John Q Public is currently investigating the sexism in traditional support payments and disparity in division of assets in divorces involving businesses. The conduct of fiduciaries including lawyers and accountants who perpetuate this reality is also being evaluated. As more women become lawyers and CPAs, slight changes are occurring , but not fast enough. Research is being done in collaboration with the media, universities and non-profit groups dedicated to correcting the economic disparities that still face women and children engaged in family law matters.
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