June 2011 Archives

The Impact of Cohabitation and Remarriage on Child and Spousal Support

After a divorce, one party may decide to cohabit or remarry. As a San Diego divorce attorney, when this occurs, clients (or former clients) ask questions about the impact of cohabitation or remarriage on child support and spousal support.

What is Cohabitation?

Everyone know what remarriage means, but what about cohabitation? Does staying overnight qualify as cohabitation?

Cohabitation is on the rise. California cases have defined cohabitation as more than a sexual encounter or relationship. It requires living together, sharing day to day life, so that where one lives and dwells, the other lives and dwells. Based on case law, having a significant other stay overnight, even several nights per week, probably would not qualify as cohabitation.

The Impact on Child Support when Either Party Cohabits or Remarries

In general, new spouse or non-marital partner income is not considered when calculating guideline child support.

The court may inquire into a new spouse's income for the purpose of seeing how it would impact the remarried party's tax filing status and tax bracket when calculating guideline child support - is the remarried party filing taxes married filing separately or married filing jointly with the new spouse; how many deductions are claimed; and if filing jointly, does the new spouse income push the party into a higher tax bracket? The guideline calculator applies these factors in its calculation, but does not add in the new spouse's income.

There are always exceptions to rules. In "extraordinary cases" the income of the subsequent spouse or non-marital partner could be considered where excluding that income would lead to an extreme and severe hardship the child(ren). Such "extraordinary cases" include when the remarried parent quits work, reduces income, or intentionally remains unemployed or underemployed, and relies on their new spouses income. This means that a party who remarries well (i.e. the new spouse is so rich that they do not have to work), cannot just quit their job and expect to receive guideline child support based on zero or reduced income. The court would either impute income to the remarried party, or consider the new spouse's income.

However, before including some or all of the cohabitee or new spouse income, the court would also have to consider whether including that income would lead to extreme and severe hardship to any child supported by the remarried party, or by either party's subsequent spouse or non-marital partner. This means that the new spouse or cohabite income may not be considered if they have a child or children from a prior relationship, or with the new spouse.

The court makes its decisions on these issues a case-by-case basis.

Impact on Spousal Support when the Paying Party Cohabits or Remarries

The family code prohibits the income of a supporting spouse's subsequent spouse or non-marital partner to be considered when determining or modifying spousal support.

Impact on Spousal Support when the Receiving Party Cohabits

The first place to look is the parties Marital Settlement Agreement to see if there is a provision automatically terminating or reducing spousal support if the receiving party is cohabiting.

Sometimes parties enter into a Marital Settlement agreement that provides for non-modifiable support. In such cases, unless support is specifically terminated or reduced upon cohabitation, then the non-modifiable support provision precludes modification if supported spouse cohabits.

If there is no cohabitation provision regarding spousal support, then the Receiving Party's cohabitation is a change in circumstances triggering the Family Code presumption of decreased need for spousal support. Because this is merely a presumption, the cohabiting spouse can present evidence to prove to the court that he or she has a continued need for support despite the cohabitation. If the cohabitating spouse does not meet this burden, then the court may modify or terminate spousal support.

Impact on Spousal Support when the Receiving Party Remarries

The parties Marital Settlement Agreement controls. If there is a provision automatically terminating spousal support if the receiving party remarries, then the remarriage automatically terminates spousal support.

If there is a provision providing for non-modifiable spousal support despite remarriage, then spousal support continues as set forth in the Marital Settlement Agreement.

Schwarzenegger is paying for private school tuition; might a court order you to too?

As the details of our former Governor's extramarital indiscretions continue to emerge, it is somewhat surprising that neither party has filed for divorce. But while the parties have yet to file for divorce, it appears they are already addressing an issue that arises in most divorce cases involving children: child support.

Radar Online reports that Schwarzenegger is already paying child support to Maria Shriver. In fact, according to the online source, it's been reported that Schwarzenegger is paying "a significant amount of child support" and that he is "also paying for his sons, Patrick and Christopher's private school bills."

While in this case it appears that Schwarzenegger is voluntarily paying for the parties' son's private school tuition, will a court ever order a party to do so absent their agreement? The short answer is yes, under certain circumstances.

Family Code Section 4062 authorizes the court order what family law attorneys often refer to as child support "add ons" (i.e. additional child support). Some of these "add ons" are mandatory, meaning that the court must order them, while others are discretionary, meaning that the court has the option to order them. The mandatory add ons are (1) child care costs related to employment or to reasonably necessary education or training for employment skills and (2) the reasonable uninsured health care costs for the children. The discretionary add ons are (1) travel expenses for visitation and, relevant here, (2) costs related to the educational or other special needs of the children, which would include private school tuition.

So, Family Code Section 4062 authorizes a court to order a parent (or parents) to pay private school tuition. Now the question is: When will a court do so? Generally, courts look to whether there is a history of private school attendance, and for evidence of a child's need for private school or any benefit to the child beyond that which would accrue to any child from a private education. If these circumstances exist, and if an award of private school tuition is appropriate to the parent's income, a court will generally order payment of private school expenses.

Interestingly, it is possible that a court will order a parent (or parents) to pay private school tuition for one child of a family, but not for another child of the same family. In In re Marriage of Aylesworth (1980) 106 Cal.App.3d 869, the Court did just that. The Court ordered payment of private school tuition for the son, who had special needs that were shown to be better met by private school, and who had previously attended private school, but did not order payment of private school tuition for the daughter who had never before attended private school, and for whom a need for private school or any benefit to her beyond that which would accrue to any child from a private education was not shown.

While it appears that Schwarzenegger has agreed to pay 100% of the children's private school tuition, the allocation might be different if a judge were to decide the issue. Family Code Section 4061 provides that any amounts ordered to be paid under section 4062 must be divided one-half to each parent, unless either parent requests a different apportionment and presents documentation which demonstrates that a different apportionment would be more appropriate, for example a significant disparity in the parents' incomes. Family Code Section 4061 further specifies how the expenses are then to be apportioned.

Problems That Could Affect a Couple Divorcing After a Long Marriage

Many San Diego clients make the decision to divorce after decades of marriage. This means not only a painful separation after years of their lives being intertwined, but also facing a thicket of different property laws. First and foremost are California's current community property laws, which get more complicated if the couple once lived out of state. Then there could be property laws from other eras that determine the division of property for each spouse.

If the couple lived in California throughout the marriage, their home, employment income, and any purchases made with the employment income would belong to each spouse equally. Only a gift, inheritance, or property owned before the marriage would be considered separate property. By contrast, in separate property states, the person whose name is on the title owns the property. If the couple were to divorce in one of the 40 separate property states, the result would be known as "equitable distribution": a property distribution that is not equal, but based upon what each spouse contributed to the marriage. Yet if the couple moved to California and later divorced, our state treats much of the separate property as quasi-community property. Quasi-community property is simply property that would have been community property if the couple had lived in California. During the marriage, it is treated as separate property; but once the couple divorces, it is divided equally between the spouses, like community property.

This is the basic concept behind quasi-community property, but in reality, it is not so clear-cut. Couples who accumulated property over several years in another state may have lost or misplaced documents establishing the nature of the property -- whether it was kept entirely separate, or was used for the family. Separate property used for family purposes has often been ruled to be community property in California. If it cannot be properly identified, one spouse risks losing significant assets that he or she would otherwise be entitled to. Without proper documentation, the only evidence of the couple's history in their previous state comes from their own statements and those of family and friends. These statements may be based on faulty memory, or be otherwise biased and unreliable. In these situations, couples need an experienced San Diego divorce attorney to piece together as many records as possible until the most accurate situation emerges.

Couples divorcing after a long marriage may also be affected by laws that no longer exist today, but were relevant during the marriage. One such law involves transmutation of property. Transmutation is an agreement between spouses that community property will become one spouse's separate property, or that separate property will become community property. Today, sections 850 through 853 of the California Family Code require that all transmutations must be expressly stated in writing by the spouse whose interest is adversely affected. However, until 1985, transmutations could be oral. That means that community property could have become separate property without any evidence other than one spouse's declaration. Confusion over the true nature of the property could lead to battles between spouses over what was separate and shared, based on inaccurate memories. Some marriages may also be affected by the Married Women's Special Presumption, which has not been valid since 1975. Property purchased in the woman's name before 1975, without any indication of her marital status, was presumed to be her separate property.

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Schwarzenegger Case Illustrates Issues of Marital Property, Child Custody, Alimony in San Diego Divorces

FOX News and other media outlets continue to report that the divorce of Arnold Schwarzenegger and Maria Shriver could be among the most expensive celebrity splits on record.

Some estimates say Shriver could get more than the $100 million Tiger Wood's ex-wife Elin Nordegren received.
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Division of marital property in a San Diego divorce, or a divorce elsewhere in California, is supposed to be equal under the state's no-fault divorce law. In practice, one party to a divorce can end up with significantly more than half the assets for a number of reasons.

What constitutes community property is one potential area of contention. Property owned before marriage and inheritance to one spouse are both examples of separate property. Valuating community property is another area where a San Diego divorce lawyer will focus attention. For instance, is the marital home valued at current market value? After the economic downturn, a couple's primary residence is often a liability -- with more owed on an upside down mortgage than the property could bring at sale.

With Schwarzenegger and Shriver, there are more complications -- and more assets -- than in many marriages -- even celebrity marriages. And, with allegations about Arnold's infidelity continuing to surface, he may find an unsympathetic judge on the bench. And, with four children and the majority of the earning power, several media outlets have reported child support and alimony could easily top $100,000 a month.

Typical couples should understand the tax implications of alimony and child support as there may be opportunities to move money in one direction or the other. Alimony is treated as taxable income for the receiver and as a tax deduction for the payer. Child support is tax free for the recipient but not deductible for the payer. One caveat to keep in mind: Courts are much better about helping you collect back child support than they are about assisting with the collections of back spousal support.

In the case of Schwarzenegger and Shriver, their marriage will be seen as long-term under California law, which means she may collect alimony for an indefinite period of time. A short-term marriage is defined as one lasting under 10 years, which is in part why it's not uncommon to see celebrity couples split near the 10-year mark.

Other factors worth considering in this split is Arnold's future income from motion pictures -- particularly sequels to movies made during the marriage. The New York Post reported last year that Diandra Douglas -- the ex-wife of Michael Douglas -- moved to collect on his payday for the making of "Wall Street 2," claiming her divorce agreement entitled her to a portion of the proceeds.

For most couples, similar concerns often involve retirement accounts or the earning power of an advanced degree -- such as a medical degree or law degree -- earned during the marriage.

Continue reading "Schwarzenegger Case Illustrates Issues of Marital Property, Child Custody, Alimony in San Diego Divorces" »