Jan L. Warner & Jan Collins
Question: When my parents divorced after almost 40 years, my mother got the house and some money, and dad got the farm that he leased and a condo on a lake. They have both since died and left everything equally to my sister and me. We have decided to sell the property, and that’s why we are writing you.
We were able to sell everything except the farm that had been used to raise hogs. After environmental studies were done, we were told that the people Dad had rented to had been polluting the stream that runs through the property. The potential liabilities here are huge. The lawyers tell my sister and me that we are responsible for the cleanup. We thought someone should have brought this up at the divorce and that the people who leased the farm should have been made to pay, but the lawyers don’t agree. Why should we be responsible?
Answer: Under a complex series of federal and state environmental laws, anyone who is defined as an "owner or operator" of a property may be held liable for toxic waste clean up.
While most folks think these laws only apply to large companies, as you see, small businesses such as cattle ranches, gas stations, dry cleaners, and even hog farms can also be held responsible. There are very strict laws in effect when it comes to how close hog factories can be to residences, schools, wells, and waterways. In some states, pork producers that own hogs have been held liable for these violations.
We assume that because the transfers were made between your mother and father at the time of the divorce, we are sure that no one thought much about raising the potential problems you are now facing. However, it is very clear that if environmental problems exist, the value of the property affected should have been reduced.
As sellers of these properties, you, your sister -- not to mention your real estate broker -- may be sued for not disclosing these types of problems. Since this new and evolving area of the law is so complex, we suggest that you retain an environmental lawyer to fully advise you of your rights and obligations. Given the potential liabilities, we believe that environmental issues will be given more and more attention in divorce cases in the future.
Question: Given the emotional upheaval in my life, I am having a very difficult time coping with my divorce. I know the financial aspects are important, but I just can't seem to bring myself to deal with them. How can I begin to face what I know is important?
Answer: Faced with tough decisions, some tend to procrastinate and avoid the hard questions. Others make decisions while they are uninformed, unprepared, and influenced more by emotions than common sense. When divorce or separation enters your life, you must become economically literate in a very short time to protect your future and that of your children. Terminating a marriage is much like the end of a business relationship. If you and your spouse can't agree on how the future income, assets, and liabilities will be divided, a third person -- generally a judge -- will make the decisions for you. The last thing you want is to be forced into making important decisions without being informed -- only to find out later that you have made irreversible mistakes. People who understand the rules of the game generally come out better than those who sit back and hope for the best.
