The asset freeze has become de rigeur for these Wall Street Tycoons and their beleaguered wives. What is a posh wife to do when this happens? i.e. the Feds come in and freeze up everything and then her marriage hits the skids?
Well, to begin with, anything earned during marriage is marital property. As a general rule. And is subject to equitable distribution. But lately, the Wall Street boys have been playing all these cute ponzi games that have been forcing the rest of us to re-define exactly what marital property is. The line has become so blurred, that I have no choice but to suggest that it is easier to explain what marital property isn’t, than what it is.
It’s very simple. The marital estate does not include any assets that the FBI freezes when a spouse purports to defraud investors and violate SEC rules the way Bernie Madoff and Arthur Nadel did.
While a frozen asset can theoretically become unfrozen, in both Madoff’s and Nadel’s cases, that is very unlikely to happen. Or if it does, the spoils will not go to Nadel or Madoff or their wives Ruth and Peg respectively. These assets, when unfrozen, will go to investors. And why? Because, in actual fact, these assets are not marital property at all. These properties belong to third parties and were basically pilfered and/or embezzled.
That is also true of Michelle Schrenker – the Indiana housewife whose husband tried to fake his death by parachuting out of a plane. Their assets are all frozen as well. The fact that Marcus Schrenker had the wherewithal to put the million dollar house on the Geist Resevoir in Indiana in Michelle’s name is not going to save the house from the Federal Freeze.
All threefour of these women who were probably used to living the high life – Ruth (and perhaps her daughter in law Deborah Madoff), Michele Schrenker and now Peg Nadel will likely come out of these marriages with nothing but the clothes on their backs – cause there are no marital assets.
One cute piece of detail in the Nadel case is that he was alleged to have left a handwritten note which his employees found, telling his wife Peg to “take out as much cash as you can” because everything is going to get frozen.
If Peg was dumb she would have followed that idea. Which means she would now be an accessory to his crimes. And she would have her passport confiscated just like Ruth Madoff, in addition to facing the loss of everything she has held dear that Nadel’s money bought.
The truth is, when the feds come in and freeze up everything, there’s nothing a wife can do but stand by her man. She can file for divorce. But she needs to understand there will be no equitable distribution cause, as I said, the property is not “marital”, but, rather, is the embezzled property of third parties. It’s a real mess.
Read these related posts if you’ve got the time: http://www.divorcesaloon.com/ruth-and-debbie-madoff-bernies-girls-another-look-at-14-blog-posts-about-these-2-power-wives