Family Case (Tel Aviv) 31661-07-16 Anonymous v. Anonymous - part 35

  Aggregate value in millions of dollars Percentage change 2012 Arizona

Nevada 19.6 - 2014 Arizona

Nevada 21.1 7.5%

(Over two years - some of the subsidiaries under the trusts only) 2015 Arizona

Nevada 24.1 14%

(over a year)

150. Although the figures are only partial (as mentioned above, the increase in recorded value between 2012 and 2014 is relative to only some of the companies registered under each of the two trusts, so it is likely that the actual increase was higher) - it can be clearly seen that the value of the trusts has increased significantly over the years. It is very important to note that the reports from which the data for 2014 were produced indicate different companies under the two trusts from the companies listed under the same two trusts in the reports from which the data for 2015 were produced.  Hence, the estimated full value of the Arizona and Nevada trusts in 2015 was approximately $45.2 million.
151. As you may recall, the man admitted that seven trusts were established during the parties' marriage. Since we know that the name of the Nevada trust is different and that it currently exists under two names (Washington and Tennessee), the valuation of $45.2 million refers to three of the seven trusts: Arizona, Washington and Tennessee.  Hence, we do not actually have data about the value of the remaining four trusts - the Alaska Fund (this is the value of the residence under the Alabama company registered under the man's claim), Utah, Arizona, and Virginia.  Of course, it is reasonable to assume that there are additional trusts in addition to those seven trusts, with a value on their side, which the woman has not been able to locate.  The woman claimed in her summaries that the man had taken an additional sum of no less than $30 million from her, which I will address below.
152. After being exposed to the extensive evidentiary material in the court file, and after turning again to the man's convoluted and even false testimony, I am of the opinion that the valuation that the woman mentioned in relation to the hidden funds ($30 million) does the man a great favor, since if only three trusts are worth more than $45 million, then it is easy to estimate the value of all seven trusts that the man established during the marriage at at least $100 million. It is the total amount that the woman stated in her statement of claim - and it even included the value of the residence that she estimated at about $25 million.
153. As stated above, the man was given all the opportunities in the world to discover and detail about the status of the common property, but he consciously and deliberately chose not to do so. The man knew very well how much the woman valued the value of the joint property, and this valuation did not cause him to provide details to contradict her claims.  Experience shows that parties often refrain from providing details about property and/or income they have, inter alia, because the other party underestimated that property and/or income.  It is not impossible that the man's mindset was such that, at most, the court would award the woman the amount derived from the valuation she provided, and this ruling is preferable to a ruling based on true data that he would have provided.
154. As part of a legal proceeding, each party is given the opportunity to present its arguments and, among other things, contradict the claims of its opponent. A party that consciously decides to forgo the possibility of providing data that is only in its possession, it expresses its opinion that it has taken into account a ruling based on the data provided by the other party, and it is not so important whether the true data is less or identical to the data of the other party.  The main thing is that the litigant consciously chose not to tell the truth and not to provide details, and under these circumstances, the ruling that will be based on the data of the other party will be bound by reality.
155. Therefore, and in view of the man's systematic refusal to produce information and documents under his exclusive control, the attempts to conceal, breaches of the duty of disclosure, influence on a witness (Mrs. Jennifer) not to provide information, the refusal to testify witnesses with vital information, and the heavy evidentiary damage caused to the woman during the proceeding, I found to accept the woman's full version according to which the scope of the family property, not including the residence (which was estimated by the woman at approximately $25 million as of 2016), It stands at a total of $75 million.
156. As stated above, between me and myself, and after delving into all the materials in the court file, as well as the conduct and concealment, I am of the opinion that the man's wealth far exceeds the amount stated by the woman, and to the extent that the man had disclosed his full wealth - and as he had not done so in the past, only an innocent person would think that he would be willing to do so in the future - it is not at all impossible that his fortune was significantly higher than the capital stated by the woman.
157. At the same time, since there is no ruling in favor of a plaintiff beyond what he demanded, I will not rule beyond that.
158. During the proceeding, the woman claimed that the man could easily withdraw the funds from the trusts if he wished, while the man argued that the funds could not be taken out of the trusts because they were managed independently and independently of him. As discussed at length above, the man controls the trusts and directs them according to his changing needs and desires and through a number of different constructions that allow him to manipulate the capital within each trust, transfer it from one place to another, appoint and dismiss officials in the trusts - all for his personal needs.  However, in order to prove their contradictory claims on the matter, both parties submitted to the New York State Law Opinion on whether or not trusts are joint property of spouses that is about to be divided.
159. Admittedly, I have determined above that our hearing will be in accordance with the law of the State of Israel and I have not found in the law any prohibition to share funds in any trust, beyond necessity, and for academic reasons only - I will refer to what was stated in the opinion submitted by both parties as to the ability or inability to view the assets in the non-permanent trust as divisible assets in the light of the law in the State of New York.
160. The opinion on behalf of the woman was submitted by Adv. Gideon Rothschild of Moses & Singer (hereinafter: Moses & Singer's opinion). The Moses & Singer opinion was prepared under a factual assumption set by the woman, according to which the trusts were established and financed through joint property of the parties.  In this opinion, it was determined that in accordance with the New York State Family Relations Law, the Domestic Relations Law (hereinafter: DRL), there is a statutory assumption according to which all the property accumulated by one of the spouses during the marriage, unless it is expressly separated, is joint property, and the party seeking to overcome this assumption has the burden of proof that the conference in dispute is separate property.  In addition, it was noted in the opinion of Moses & Singer that according to the rulings of the New York courts, this provision should be interpreted extensively in order to give validity to the concept of 'economic partnership' of the marital relationship.
161. Thus, according to the opinion of Moses & Singer, if the irrevocable trust contains joint property, there is a rebuttable presumption that the monetary value of the trust assets constitutes joint property that must be divided equally. In addition, in a situation where the status of one of the spouses as a beneficiary of the trust is revoked as soon as a divorce proceeding is initiated, while the status of the other spouse remains the same, the New York court will rule that the monetary value of the assets in the trust must be divided equally between the spouses.  Moreover, in the opinion of Moses & Singer, it was held that this legal conclusion does not depend on the question of whether it will be possible to reach the specific assets of the trust and whether these are under the jurisdiction of the court, since the monetary value of the trusts, and not the assets of the trusts themselves, will be determined within the framework of an equal division of property.
162. The opinion on behalf of the man, which referred to the opinion of Moses & Singer, was submitted by Adv. Jed Graifer of Cohen Clair Lans Greifer Thorpe & Rottenstreich (hereinafter: the Graifer Opinion). The Graeper opinion was prepared under factual assumptions made by the man, according to which the trusts were established and financed with the knowledge and consent of the woman and with the help of the man's property that preceded the marriage.  In the Graeper opinion, it was determined that contrary to what was stated in the Moses & Singer opinion, in accordance with the DRL, assets transferred to an irrevocable trust during the marriage will generally be exempt from division or balancing of resources in a future divorce proceeding in the absence of evidence of improper conduct in the establishment of the trust.  This is even assuming that the trusts were financed by property accumulated during the marriage, as the woman claims, and not only on the assumption that the trusts were financed by assets that preceded the marriage, as the man claims.
163. Thus, in the Graeper opinion, it was argued that the management of trust assets, including a decision to make a distribution to the beneficiaries, is subject to the sole discretion of the trustees, and that in the absence of evidence of improper conduct in the establishment of the trust, assets transferred to an irrevocable trust for legitimate purposes (estate planning, tax considerations, asset protection, etc.) will not be subject to division or balancing of resources, even if the terms of the trust ostensibly favor one of the spouses over the other. This is especially true when the other spouse was aware of the relevant terms of the trust and agreed to them, and when there is no evidence that one of the spouses acted in an attempt to defraud the other for his own benefit.  It was also noted in the Graeper opinion that the burden of proof regarding such improper conduct lies with the party claiming the inclusion of the trust assets in the framework of the distribution or balancing of resources.
164. Whether we follow the opinion submitted by the woman, or whether we follow the opinion submitted by the man, the result is the same. The main difference between the two opinions lies in the question of whether or not the property accumulated during the period of the marriage, and as stated above, it was determined by me, inter alia, in light of the man's confession in his interrogation and the supporting evidence presented by the wife, that the seven trusts discussed in this judgment (and it is likely that additional trusts as well) were established during the marriage of the parties.  Hence, if we follow the man's opinion, it will be possible to include the value of the trusts between the parties as joint property if there is evidence of improper conduct in the establishment of the trust and/or that one spouse acted in an attempt to defraud the other for his own benefit.  In the present case, it has been proven by signs and wonders that the man worked tirelessly in repeated attempts to deceive the woman for his own benefit and to exclude her rights in loyalty.
165. Even if you say that the improper conduct should be at the time the trust was established and not at a more unified date, still, the establishment of a trust under rules that only the man can change, according to which only the woman can be excluded from all her property, is established in clear bad faith and under manifestly improper conduct. Beyond that, and as an addition only, it is clear that the establishment of the trusts is all intended to protect property and rights from the tax authorities (and in this regard, see the man's claim at paragraph 16 of his main testimony affidavit that the woman also "benefited" from the fact that the tax authorities in the United States did not "seize" the property in the trusts) - which corresponds with the condition of improper conduct.
166. Therefore, and from all of the compilation, I have not found any change from my conclusion above, and I have even found reinforcements for it in the law of the foreigner.
167. As part of the woman's claims, she argued that an unequal division of the joint property should be made in accordance with section 2 of the Property Relations Law (or alternatively, she should be compensated for the differences in earning capacity between the parties by way of a single payment or periodic payments). The woman also claimed that she should remain in full ownership of the funds in her bank account at Credit Suisse.  Taking into account the man's defective movement, I accede to the wife's demand and order that the funds she owns in the aforementioned bank remain her ownership, in order to constitute a counterweight (albeit reduced) to all those funds held by the man and which were not reflected in this judgment.
168. Taking into account the result of this judgment and the fact that, in fact, the claim was accepted in full with part of the award amount being made by way of an estimate, I chose not to make use of section 8.2 of the Relative Law and not to award additional payment to the woman for earning capacity gaps.
169. Expenses of the Proceeding:
170. Civil Appeal Authority 7650/20 Magic Software Enterprises Ltd.   Firefly In a tax appeal (published in Nevo, December 28, 2020), it was held that: "The basis for awarding expenses is not punitive or tort, but rather an obligation by virtue of the law that grants discretion to the court...  The starting point is that a party who does not win the proceeding will be liable for the actual expenses of the other party who won.  This is intended to prevent a pocket disadvantage of the winning party; to deter prosecutors by force from taking frivolous proceedings; and to encourage defendants by force to refrain from idle defense against a proper lawsuit...  However, awarding expenses at a realistic rate is subject to reasonableness, proportionality, and necessity for the conduct of the proceeding...  The ruling on legal expenses is therefore intended to strike a balance between the right of access to the courts and institutional considerations, including the prevention of frivolous claims, the aspiration to prevent burdensome conduct of the proceeding, or the use of a proceeding in bad faith...  Therefore, the appropriate rate of expenses is determined by examining each case on its own merits, taking into account a number of factors, including: the manner in which the proceeding is conducted; the ratio between the relief requested and the relief received and the amount of expenses; the complexity and importance of the case; the scope of work invested by the litigant in the proceeding; and the fees that were actually paid or that the litigant undertook to pay...  The expenses must be proportional to the proceeding itself and its essence, since this can prevent the imposition of an excessive cost on the loser of the proceeding and encourage proper conduct of the proceeding by the winner..." (ibid., paras.  9-10 of the judgment).
171. Accordingly, Regulation 151(a) of the Civil Procedure Regulations 5779-2018 (hereinafter: the Regulations) stipulates that the purpose of charging a party with expenses is "to indemnify the opposing party for its expenses in the proceeding, taking into account its results, the resources required to manage it, and the conduct of the litigants." In the framework of the expense assessment, the court was required to express "the proper balance between securing the right of access to the courts, protecting the property right of the individual and maintaining equality between the parties" (Regulation 151(b) of the Regulations). In addition, Regulation 151(c) of the new regulations explicitly relates to awarding costs to a litigant who has abused legal proceedings and states that the court "may charge him expenses for the benefit of the injured party or for the benefit of the State Treasury, and in special circumstances even his attorney."
172. The wife attached to her summaries a summary of the payments she paid to the attorney general and a rent agreement, according to which the woman has so far paid more than ILS 1.5 million in legal fees and has also undertaken to bear additional percentages that will be derived from the outcome of the judgment (between 4 and 6 percent plus from a tax appeal in accordance with the amounts).
173. I will mention that the result of this judgment entitles the woman to the sum of about $50 million, assuming that the value of the house will be determined to be as estimated by the woman.
174. Taking into account the precedent regarding the ruling on legal expenses and attorneys' fees, and taking into account the man's bad faith conduct from the beginning to the end of the proceeding, and taking into account that the woman was required to have significant resources to which the court would not normally be exposed, I am of the opinion that the ruling on expenses should not, but must, be appropriate to all of the above and give expression to suffering. To the woman's anguish and to the Sisyphean struggle over the years with the man who did everything in his power to prevent this judgment from being issued.
175. After carefully considering the matter and after considering both the sums claimed versus the amounts awarded and mainly the conduct, I found that the defendants, jointly and severally, should be obligated to pay the woman attorney's fees in the total sum of ILS 2,500,000. I am aware that this is not the full amount that the woman paid and/or undertook to pay, and at the same time, I found the aforementioned sum to reflect reasonable fees in the circumstances of the case.  In addition, I found to rule in favor of the woman for witnesses' fees, time loss and fees an additional ₪100,000.
176. Summary:
177. As the Honorable Justice Y.  Amit (as he was then called) said in Civil Case (Haifa) 426/02 Binyamin Leckertz v.  Dekel HaCarmel Consulting Engineers in a Tax Appeal (published in Nevo, February 14, 2006): "Despite the length of our journey, it is possible that there are still a number of stalks left on the edge of the field that the legal sickle has not reached, but the main points have been examined and the time has come to an end" (ibid., p.  60 of the judgment), so too in this judgment.  The proceeding before me was characterized by a multitude of arguments, documents and anything that could be brought before the court.  Naturally, it is not possible and even necessary to give expression to every document and every argument, and in this judgment an effort was made to bring the essence of the matters required for the purpose of ruling on the two principles: the residence and the trusts.
178. As for the residence - as stated above, it is a joint residence of the man and the woman that is fictitively registered in the name of Alabama, and therefore, the registration will be amended accordingly. As a result, an order was issued to dissolve the partnership in the residence and the parties will notify within 7 days whether they wish me to appoint them as receivers for the sale of the house to the highest bidder.  Since this is a joint residence, all the funds received from the rental of the house after the separation are joint funds of both parties, and the parties are presumed to act accordingly and to relinquish additional claims in the matter.
179. As for trusts , as stated above, the woman is entitled to receive from the man a sum equal to $37.5 million. To the extent that the woman realizes the man's shekel right, the dollar rate will be the same as it is today or its rate at the time of realization, according to the highest, but the man will not create difficulties for realization.
180. Before closing, I find it necessary to address the man with the following words: For years he decided to act as he did, in order to thwart and prevent any possibility of a just distribution or any distribution of the family wealth, unfortunately, without success. I hope that once this judgment is rendered, the man will understand that the speedy and honest implementation of this judgment is not only for the benefit of the wife, but also for the benefit of him and the children together.
181. Therefore, and from all that is collected, I instruct as follows:
     1. The claim is accepted and I order as to the residence as stated in section 176 above.
     2. For balance payments, the man will pay the woman a sum equal to $37.5 million, according to the mechanism set out in section 177 above.

• The funds registered in the different appeal of the woman, as stated in section 167 above, will remain in her ownership.

1. The defendants will pay the plaintiff, jointly and severally, attorney's fees in the total amount of ILS 2,500,000, as well as an additional sum of ILS 100,000 for her expenses.
2. The judgment is permitted in publication by omitting identifying details.
3. The case will be closed.

Given today, July 02, 2025, in the absence of the parties.