San Diego Divorce Attorneys Blog

In a previous San Diego Divorce Attorney blog post, I discussed the factors the court looks at when a party is requesting to move with the children.

In two recent San Diego divorce cases, the court of appeal determined that the trial court misapplied the applicable legal standard when denying move away requests.

In both Mark T. v. Jamie Z. and F.T. v. L.J., the trial court was reversed for failing to assume that the move by the parent requesting the move will take place, and then under those circumstances, make a decision about with whom and under what circumstances the child should live. Instead, in both cases, the court denied the move-away and made its orders on the assumption that if the move was denied, the custodial parent would not move.

In Mark T. v. Jamie Z., Mother who had primary physical custody of Child, requested to move to Minnesota with the Child because she was unemployed and could not find work in San Diego, despite receiving child support and emergency state aid she was borrowing money from relatives to make ends meet, and she had family in Minnesota with whom she could live and provide child care assistance, the cost of living was lower and she planned to return to school part-time and had an internship in Minnesota. Although the FCS mediator recommended that Mother be allowed to move, the child psychologist believed the move should not be permitted because it was in the Child's best interest not to remove him from a loving and capable Father. The psychologist's recommendation assumed Mother would remain the primary care-taker with Father's time increasing from 30% to 50% when the Child turned 5 years old. The court denied the move-away and adopted the psychologist's recommendations, assuming that if the move-away was denied, that Mother would remain in San Diego with the child. The court of appeal reversed holding that the court misapplied the legal standard and avoided the ultimate question - what custody arrangement would be in the Child's best interests, assuming Mother moved. The court also did not base its decision on all of the move-away factors and the one's that were used, such as finding the move "suspect", were without a basis for the findings.

In F.T. v. L.J., Father, who had primary custody of Child, requested to move Washington state with the Child because he was marrying a Washington state resident. Father originally obtained primary custody after Mother abused the Child, and Mother was convicted for battery against the Child. Mother had supervised visitation, which was later modified to unsupervised visitation. Both FCS and the psychologist recommended against the move. FCS proposed alternative child sharing schedules depending on whether Father remained in San Diego or moved. The court denied the move-away, finding that the move was not in the Child's best interest and made an order assuming that Father would remain in San Diego. The Court of Appeal reversed holding that the court misapplied the legal standard, did not treat the Father's plan to move as serious, erroneously required Father to show the move was necessary, only considered impact on Child's relationship with Mother instead of all the move-away factors and failed to apply Family Code Section 3044's rebuttable presumption that Mother should not be awarded custody because of her criminal conviction for battery of the Child.

The court must apply all of the move-away factors, including:
• Reason for the move;
• Whether the move is to frustrate the other parent's contact;
• The child's interest in stability and continuity;
• Distance of the move;
• Age of the children;
• Child's relationship with both parents;
• Current child sharing.
• Child's Existing contact with both parents;
• The relationship between the parents;
• The wishes of the children if mature enough;
• Child's community ties;
• Child's health and educational needs;
• Child's circle of friends; and
• Child's sports/academic activities.
and make orders based on the assumption that the party requesting the move will move regardless of the court's decision. The court can also make conditional orders, stating what the parenting plan will be effective upon the party actually making the move.

Continue reading "Revisiting Move-Aways" »

Few people would agree that there is a good time to get divorced. It can be a long, drawn out process and complex. Not only that, but it can lead to overwhelming stress and problems with other family relationships if not handled well.

A new article published on MSNBC.com by Investopedia looks at the best and worst times to consider a divorce in San Diego. Many people are struggling financially right now because of the effects of the Great Recession. Some people have the desire to get a divorce, but feel as if they can't afford it and stay together in order to save money.

That can lead to volatile situation that can lead to domestic violence issues as tempers flare, egos are bruised and feelings hurt. Even if you think your finances prohibit you from getting a divorce, it would be prudent to set up a consultation with an experienced San Diego Divorce Lawyer to discuss your options and talk about your situation.

Here are some events that can impact a divorce:

An up and down real estate market: At one time, a house was a major asset that couples might fight tooth-and-nail to obtain, but times have changed. According to foreclosure tracking site Realtytrac, every zip code but one in San Diego has "high" foreclosure activity level, with nearly 1 in every 147 housing units in foreclosure.

San Diego, like many parts of the country, has seen housing prices drop as foreclosures saturate the market, leaving many people upside down on their mortgages. For that reason, a house in a divorce may be less of an asset and more of a debt that must handled. While in past divorces, one spouse may be awarded the house and the other spouse would be awarded other assets in exchange, now the other spouse may have to give up assets if an ex agrees to take on an upside-down house.

A shaky economy: With the economy slowly recovering (and some would argue slowly is an exaggeration), many people are hurting financially. Going through a divorce at this time can be difficult.

A poor credit score: A bad credit history coupled with a divorce can be bad news for a person going through the process. Having to obtain a car loan or perhaps rent a house on your own can be more difficult without the added security of a second income or a house that may already be paid off in full. Again, a trusted attorney will be invaluable in assisting you in avoiding the common pitfalls of the divorce process.

If one of the two spouses has a bad credit score, negotiating to keep the car or house to avoid having to venture out for a loan may be prudent.

Minor children: Divorce is more complex and stressful when children are involved. Child custody in San Diego divorces can make a divorce more contentious and more financially difficult. With two sets of living expenses instead of pooled money, each parent will have less to give to college funds and other expenses, but financial aid may be easier to obtain.

Continue reading "Is There a Good Time to Get Divorced in San Diego?" »

A recent study conducted by Ohio State University researchers found that women are more likely to gain weight after they get married, while men tend to add the pounds after a San Diego divorce.

Divorce can be a difficult time in the lives of many spouses, as they have come to realize that they aren't as compatible as they once believed. Perhaps infidelity has caused the once-proud couple to split. Finances are often a bone of contention. Whatever the reason, consulting with an experienced San Diego Divorce Lawyer who is also a certified family law specialist should be the first step. Certified Family law specialist is a designation obtained by less than 2 percent of California divorce attorneys and represents the profession's highest degree of professional excellence.

The process of divorce can have long-lasting effects and can take a mental toll on the spouses. Having to adapt to living alone, perhaps being split up from children and dealing with the financial stress of separated life can all be stressful. That stress can lead to health problems, including weight problems.

According to a story reported by FOX in Los Angeles, the Ohio State study found that men tend to gain weight after a divorce, while for women, the weight is put on after marriage. The two events are called "weight shocks."

The most drastic weight changes came for people over 30, the study found. The study followed 10,071 people from 1986 to 2008 to determine weight gain in the two years following a divorce and a marriage, taking into consideration factors such as pregnancy, socioeconomic status, education and finances.

The researchers made their determination that because women still tend to have a bigger role in household matters, they have less time to exercise. Partly because of that benefit, men are more fit in marriage and add on weight once they are divorced.

Many things go through the minds of people who are considering a divorce and among the biggest issues is child custody in San Diego divorces. Where a child lives and who gets to make key decisions that affect their lives are among the most contentious issues that divorcees struggle to handle.

In California, a family court judge will take many things into consideration in determining where a child will live and with which parent. The judge will look at what is best for the child. Involvement with the children, incidents of domestic violence or use of drugs or alcohol will likely come into play.

While the stress of this particular decision and others, such as property division, support payments and other issues, can cause a client to have negative physical side effects, an experienced San Diego Divorce Lawyer will be able to shield the client from as much stress as possible. Everyone wants to get on with their lives and therefore the least amount of stress the divorcee is exposed to, the better. An experienced attorney can help take some of the emotion out of the equation.

Continue reading "San Diego Divorce and Weighty Matters" »

You have just received a court stamped copy of your Judgment from your San Diego divorce attorney. Everything has been resolved - custody, visitation, child support, spousal support, division of assets and division of liabilities - there is nothing left to do, or is there?

In a recent arbitration case, Husband who had been through a bitter divorce, did not change the beneficiary on his IRA, which listed ex-Wife as beneficiary. When he died 10 years later the IRA money went to his ex-Wife. Husband's Widow sued to collect on the IRA money. The arbitration panel denied Widow's claims. The panel found that Husband opened an IRA in 1994. Husband and Wife divorced in 1999. Husband remarried several years later. Husband was an attorney who made his own business decisions. Husband changed the beneficiaries on several of his other accounts, but not the IRA account. Although Husband probably did not intend for the IRA money to go to his ex-Wife, it was Husband's responsibility to change his IRA beneficiary.

This arbitration case highlights how important it is to follow up on items stemming from your divorce. Not doing so may result in your ex-spouse receiving monies you do not want them to receive, and could also subject you to enforcement motions, attorney fees and sanctions for not following the terms of the Judgment.

Here are a few things to review once you receive your Judgment back from the court:

Equalizing Payments. Is there an equalizing payment set forth in the Judgment? If so, make the payment. I had a client whose ex-spouse was ordered make an equalizing payment forthwith. The ex-spouse decided to "play games" - writing the first check to the wrong name, not signing the second check, claiming the third check was "lost in the mail" and wiring funds to a closed account. The ex-spouse ended up paying the equalizing payment after 45 days, but was required to pay a month of interest and sanctioned by the court, which found the delay intentional.

Beneficiaries. As illustrated in the arbitration case above, review, and if necessary, change the beneficiaries on all of your retirement accounts, bank/financial accounts, and disability/life insurance policies. Be careful though, your Judgment may require you to keep your ex-spouse as a beneficiary on a life insurance policy in order to protect the children/ex-spouse if you die before child or spousal support terminates. If you receive support and your ex-spouse is required to keep you as the beneficiary, periodically check that you are still the beneficiary. If you have an insurance agent, meet with the agent to go over any changes you may wish to make that are consistent with the Judgment.

Financial Accounts. If financial accounts need to be divided, be sure to do so pursuant to the terms of the Judgment. Contact your bank and financial institutions to ensure that your ex-spouse cannot access or make charges to accounts awarded to you. This may require closing the account and opening it in your name alone with a new account number.

Credit Cards. Contact your credit card companies to ensure that your ex-spouse cannot charge to credit cards awarded to you. You may need to close the credit card account and open a new one to ensure that an ex-spouse is not able to charge to credit cards he or she could previously charge to.

Retirement Accounts. Are retirement plans or pensions being divided and is a Qualified Domestic Relations Order required for the division? Although you and your ex spouse may be able to divide some retirement accounts, like IRA's, fairly easily, a QDRO specialist is often retained to calculate and divide the community interest in retirement/pension plans. Check with your attorney to determine how to best proceed with the division of retirement assets.

Real Property / Vehicle Title and Loans. Were you awarded or did you buy out your ex-spouse's interest in community real property? If so, discuss with your attorney changing title into your name alone. If your former spouse refuses to sign the title change documents, the court can appoint an elisor to sign for your ex-spouse.

Also be sure to change title on any vehicles awarded to you. This can usually be done through the DMV with forms available online.

If you were ordered to refinance real property loans, be sure you do so. Even if you are only required to make your best efforts to refinance (it is difficult to qualify for re-financing in this economy), make your best efforts by applying with several lenders, and keep trying. If you do not do so, depending on the Judgment language, you may lose the property!

Wills and Trusts.

Meet with your estate planning attorney or advisor to prepare a new will/trust as well as other estate planning documents like Powers of Attorney and Health Care Directives. Although the divorce may automatically cancel your former spouse's rights under a will, trust and power of attorney, it is important to meet with your estate planning attorney to update or prepare these documents to ensure your current intent is accurately reflected.

Internet / E-Mail. Be sure to change the passwords and answers to security questions for all of your e-mail accounts and for any internet websites you visit (Facebook), purchase from (Amazon) or use for finances (Banks). Make sure the new password something that your ex-spouse cannot easily guess. Many websites let you write and answer your own security questions. This can help prevent your ex-spouse hacking into your online accounts and e-mails.

Continue reading "Your Divorce is Final, Now What?" »

The Toronto Sun reports a woman is suing her divorce attorney for $14 million, claiming the attorney failed to adequately identify assets.

Division of property and valuation of property are among the primary responsibilities of a San Diego divorce lawyer. Too often, people think that a property division in a divorce must be equal because of California's no-fault divorce law. In reality, spouses can and do walk away with far less (or far more) than an equal division of assets.

You can tell a lot about how seriously an attorney takes the obligation by the time he or she has put into acquiring the knowledge and skill that will allow for the best possible legal representation of clients. Nancy J. Bickford is a certified family law specialist -- a distinction earned by less than 2 percent of California attorneys -- who also holds an MBA and is a licensed certified public accountant through the State of California.

In the case out of Canada, the woman claims she is out at least $3 million worth of assets she should have received in a split from her common-law husband. The suit claims her divorce law firm failed to fully investigate and identify the availability of assets and to determine the appropriate value of those assets.

"As a result of the defendant lawyer's breach of contract and negligence, this has resulted in the plaintiff receiving substantially less property than she should have received," the lawsuit states.

Distinguishing separate property from community property can be more complex than many realize. What if a spouse owned a house before marriage but both have made mortgage payments for years? What about retirement accounts? Year-end bonuses? Inheritance? A business that began prior to marriage but was built up significantly during marriage? And don't forget liabilities -- those can be community property as well. Too often, a party to a divorce believes just because a former spouse is responsible for a car payment or house payment according to the terms of a divorce agreement, that a bank cannot come after the freed party in the event of missed payments. Banks don't care what your divorce agreement says. Your attorney will work with you to sever such ties and protect you to the fullest extent possible.

The identification and evaluation of community property can be particularly challenging in marriages where one spouse is the major wage earner and keeps the books. In such cases, you may be best served by speaking to an experienced family law firm in San Diego before announcing your intentions to your spouse. The ability to gather evidence and taking other steps to protect your rights can be easier before relations turn hostile on the homefront.

Continue reading "Suit over Identification of Marital Property Highlights Need for Experienced Divorce Lawyer in San Diego" »

A federal court has ruled against Continental Airlines in a fight over whether it could sue pilots it claimed faked their divorces in order to tap into retirement funds.

The ruling in Brown et al. v. Continental Airlines was upheld by the U.S. Court of Appeals for the Fifth Circuit. The Associated Press reports Continental had accused nine pilots of sham divorces so their ex-spouses could tap their lump sum pensions while they still worked for the airlines. The pilots then remarried their former spouses. The court ruled that employers cannot decide whether a divorce is genuine. The original lawsuit by Continental had been dismissed.

San Diego divorce attorneys understand the importance of determining how retirement funds are divided in a divorce. For many couples, retirement funds represent their biggest asset. Failure to properly secure your share of retirement funds during property division can impact the rest of your life. Too many spouses will not have time to rebuild adequate funds to maintain their standard-of-living in retirement.

An attorney for the pilots called the decision "a victory for employee privacy rights -- nobody wants their employer looking into their divorce." The pilots were fired or resigned and are now suing Continental in federal court in Houston, claiming wrongful termination and interfering with their pension rights.

The airline claimed it paid out as much as $11 million in distributions that the pilots had assigned to their spouses. The airline claims that the pilots -- seven men and two women -- got divorced in states that assigned nearly all of the retirement benefits to their former spouses, who then demanded payment.

Continental is now owned by United Continental Holdings Inc. The airline claimed the pilots were worried the airline might turn over pension obligations to the government -- as many airlines have done in the past decade -- leaving them with reduced benefits.

The ruling noted a pension plan might be able to recover payment if a court ruled a divorce was a sham -- but that did not happen in this case.

There are other important division-of-property considerations aside from retirement funds. In many cases, the marital home is a large asset, although that is an issue that has become more complex since the economic downturn. Obtaining a valuation of marital home is also critical. Is a home valued at the purchase price or the current market value? The former may leave a spouse with a paper asset while the latter provides only a liability in cases where the marital home is underwater.

Year-end work bonuses and taxes are two other often overlooked issues. Inheritance and the value of a college degree earned during the marriage may also warrant your San Diego divorce attorney's careful attention.

Continue reading "Brown et al. v. Continental Airlines Highlights Importance of Retirement Funds in San Diego Divorce " »

It is becoming increasingly common for at least one member of a married couple to carry a heavy student loan debt. The price of a college education has soared in recent years. As more people go back to school to obtain college or graduate degrees, or additional training, they have been forced to apply for federal and private loans to cover the costs. Since these loans come with high interest rates, paying them off can become a real burden over time. One recent study found that more students were defaulting on their loans than ever before.

Many clients worry that they will be stuck having to bear the burden of their soon-to-be ex-spouse's student loan debt. The following are some questions that clients typically ask a San Diego divorce attorney.

Since California is a community property state where the division of property is split evenly, will I be responsible for paying off half of my ex-spouse's student loans?

Not necessarily. While it is true that most debts that are incurred during a marriage are subject to equal division between the spouses, a debt incurred for education debt may be an exception. Pursuant to California Family Code section 2641, the spouse who takes out the loans can be the one responsible for paying for them, depending on how long ago the loan was taken out, and other facts.

What if I have already helped pay for part of the loans? Will that money be returned to me?

Spouses often do have a right to reimbursement for "community" funds paid toward one spouse's education. Any income earned during the marriage, by either spouse, is considered part of the community fund. So if one spouse uses his or her earnings to pay for the other spouse's education, his or her income would be viewed as community income that was used as a community contribution to education.. In this case, the community may be entitled to reimbursement if the education enhanced the other spouse's earning capacity. Whether the community is reimbursed, however, depends upon a variety of circumstances, including length of time that has elapsed since the loans were taken out.

Are there circumstances where I would not be repaid for the money I paid for part of my spouse's student loans?

There are two typical circumstances where the spouse might not be reimbursed. One is if 10 years have passed since the degree was awarded. Then the other spouse might successfully argue that you have already benefited from the increase in wealth that resulted from the advanced degree. If you cannot successfully refute that argument, you will not be reimbursed. Some of the other circumstances would be whether you also obtained an advanced degree, education or training during the marriage that your spouse paid for out of his or her community income. The two degrees, would then, in effect, cancel each other out. You will also not be repaid if you and your spouse have an express written agreement to the contrary.

What if I have benefited from my spouse's advanced degree, but never helped pay back the loan? Would I be responsible for repaying it after the divorce?

No. The spouse who took out the debt would still be responsible for paying the debt in the event of a divorce. "Benefit to the community" is only weighed when the non-debtor spouse helped pay off part of the debt during the marriage.

Does it make a difference whether my spouse took out his loans during the marriage or before the marriage?

No, the circumstances remain the same. The debt would still be your spouse's to pay off, whether he or she took out education loans before or during your marriage, although if he or she took out loans before the marriage, and many years elapsed before your divorce, you might have trouble proving that you deserved reimbursement because your spouse would argue that the "community" had already benefited.

If you live in California and are considering a divorce, contact an experienced San Diego divorce attorney and learn the facts about student loan debt, other debts, and division of property laws.

Continue reading "Do I Have to Pay My Ex-Spouse's Student Loans?" »

Many San Diego clients come from marriages where one spouse was the primary wage earner, while the other stayed home to raise the children. The stay-at-home spouse now worries that the divorce will leave him or her without long-term security. Even though in California, spousal income is community property and distributed equally, there is still a question of whether the division of property entitles the stay-at-home spouse to a share of the other spouse's pension benefits or stock options. Below are some questions that clients often ask a San Diego divorce attorney.

Am I entitled to a share of my spouse's pension benefits if he joined the pension plan before our marriage?

Generally, yes, per California Family Code section 2610. What matters is whether your spouse's retirement benefits continued to accrue during the years you were married. If at the time of divorce, your spouse was eligible to retire, the court would use proration formula to determine your share of the benefits. The proration formula divides the years you were married and your spouse's benefits accrued by the total number of years your spouse was part of the pension program. The result is a percentage that represents the community's share of that pension.

Thus, if you were married to your spouse for 15 years and during thos 15 years your spous's benefits were accruing, and if your spouse was employed and also accrued benefits from that same employer for a total of 30 years, the community's share would be 15/30, or one half of the pension benefits, and you would be entitled to half of that, or one fourth.

What if my spouse is eligible to retire, but chooses not to? Does that affect how much I receive?

No, because your spouse's pension benefits mature at the time he is eligible to retire, not when he actually retires.

What if my spouse is not eligible to retire at the time of our divorce?

You would still be entitled to receive half of the community's share of your spouse's pension benefits. Tthe court could issue an order for you to receive your share when your spouse is eligible to retire. Some divorcing parties may agree that the spouse with the pension may "cash out" the other spouse, but a court could not make this type of an order.

Do stock options work the same way as pension benefits?

Yes, in the sense that you receive a share of your spouse's stock at the time it matures, or "vests," based on the number of years you were married. The difference is in the way your share is calculated. The portion of community property is based on the intent of the employer who granted the option. If the court finds that the employer awarded the stock option to reward your spouse for past services, then it uses the Marriage of Hug formula, which calculates community property based on the date your spouse started working. If the court finds that the employer awarded the stock option to encourage your spouse to stay with the company, it uses the Marriage of Nelson formula. Marriage of Nelson calculates community property based on the date the options were first granted. While both formulas can be a little confusing, what matters is that the stay-at-home spouse is entitled to a portion of the stock option.

If my spouse receives severance pay, would I be entitled to a share?

There is no clear-cut rule for severance pay. Some have argued successfully that it is not community property because it replaces lost income the spouse would have earned after the divorce. Others have argued successfully that it is community property because it was paid for by employment during the marriage.

If you are in the middle of a divorce and have questions about pension benefits, stock options, and other retirement issues, find a knowledgeable San Diego divorce attorney who can prepare you for what to expect.

Continue reading "Do I Still Receive Part of My Spouse's Retirement Benefits?" »

Premarital Agreements ("PMA") can be very tricky. As experienced San Diego family law attorneys, we work hard to keep up with changes to the PMA rules. The rules for "PMA's are contained in California Family Code Sections 1600-1617. In addition to parties essentially creating their own agreed upon law (within the boundaries set by the PMA Act) for what is to occur in the event a marriage ends, the rules and the courts interpretation of the rules are constantly changing.

PMA's may cover the following subjects:

• Property rights and obligations, property management and control, and disposition of property;
• Making wills, trusts or other arrangements to carry out the premarital agreement provisions;
• Life insurance ownership rights and disposition of death benefits;
• Choice of law; and
• Any other matter, including personal rights and obligations that do not violate public policy or statutes imposing criminal penalties.

Although PMA's may not limit child support, spousal support may be limited if certain conditions are met. One of the conditions for limiting spousal support in a PMA is the "7-Day Rule," which requires that PMA's be presented at least seven calendar days in advance of signing.

California Family Code §1615(a)(1) states that a PMA is not enforceable if the party did not execute the agreement voluntarily. §1615(c)(2) states that a PMA was not executed voluntarily unless the court finds that the party had not less than seven calendar days between the time that party was first presented with the agreement and advised to seek independent legal counsel and the time the agreement was signed.

The California Court of Appeal recently decided a case interpreting the "7-Day Rule" for PMA's. In the case In re Marriage of Cadwell-Faso & Faso, the Court of Appeal held that the seven-day waiting period mandated by FC §1615(c)(2) does not apply to parties who are represented by counsel.

In Faso, both parties wanted a PMA. In December 2005, Husband's attorney drafted the PMA. Husband provided it to Wife and advised her to obtain her own attorney, which she did. Wife requested her attorney prepare an Addendum to the PMA providing money to her in the event of divorce. Husband rejected four different versions of the Addendum. On May 17, 2006, Wife called off the wedding because they could not agree to terms for the PMA/Addendum. The parties subsequently spoke, agreed to terms, and Wife's attorney prepared a new version of the Addendum. The revised Addendum was faxed to Husband on May 19, 2006 and forwarded to his attorney. The parties signed both the PMA and the Addendum. Prior to signing, Husband was advised by his attorney that the Addendum was not enforceable because it was not being signed seven days after he received it (it was being signed 6 days after). Wife was not told this information. Wife signed the PMA/Addendum and married Husband believing the Addendum was valid. Husband signed the PMA/Addendum believing it was invalid.

Although the trial court condemned Husband's behavior finding that he "shrewdly" maneuvered Wife to the alter "in a manner that frustrated her desire to reach a mutually acceptable agreement," it ruled that the Addendum was unenforceable due to the seven day waiting period. The fifth version of the Addendum was not presented to Husband seven days in advance of signing.

Wife appealed and the Court of Appeal reversed, holding that the Addendum was enforceable and that the seven day waiting period only applies to unrepresented parties.

This reinterpretation (or clarification) of the Family Code is just one of the many pitfalls clients and their attorney's face when preparing, enforcing or disputing PMA's.

I do wonder if the decision would have been different if the trial court did not find that Husband was the "bad guy", who hid his belief the Addendum was invalid from Wife and shrewdly maneuvered her to the alter. Under different facts in a future case, the court very well may "clarify" the statute to arrive at a different result, particularly to protect a more innocent party. Also, this "represented party" exception to the seven day rule may not apply to PMA's signed prior to January 1, 1986, when the Uniform Premarital Agreement Act became effective.

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.

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.

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.

Continue reading "Problems That Could Affect a Couple Divorcing After a Long Marriage" »

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.

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" »

A San Diego client recently asked me if the court could seize control of the parties community property business, which was started during marriage and is managed by his spouse.

His question was prompted by what recently happened to the Los Angeles Dodgers. The owners of the Dodgers, Frank and Jamie McCourt, are involved in a very public divorce. Ms. McCourt claimed the Dodges are a community property business. Mr. McCourt clamed they are his separate property. In December, the court threw out a post-marital agreement making the Dodgers his separate property. Although Mr. McCourt is appealing that decision and the parties are trying to negotiate a settlement, chaos now reigns in Dodger-Ville. Mr. McCourt borrowed $30 million to meet the Dodgers payroll obligations. Shortly thereafter, Major League Baseball seized control of the team and installed a trustee to oversee business operations. The team may not meet its May payroll obligations and Mr. McCourt may file for bankruptcy to keep control of the team.

Back to my clients question. While the divorce is pending, the managing spouse of a community property business usually has primary management and control of the business subject to fiduciary duties to the non-managing spouse. However, the court does have the power appoint a receiver to protect the non-operating spouse's interest in the business. Where the parties jointly manage the business, they can keep jointly managing the business, or if unable to do so, either party may request the court order one party manage the business. Whomever the court orders to manage the business would have fiduciary duties to the other party.

If the parties cannot agree how to divide the business, the court may award the business on any conditions it deems proper to make a substantially equal division of the community estate. The court usually does one of the following:

(1) Awards the business to the managing spouse. This may even be done over the objection of the party the business is awarded to.

(2) Awards the business to the non-managing spouse. In one case, a Burger King franchise was awarded to the non-managing spouse over the objection of the managing spouse.

(3) Divides the business in-kind. In one case, shares of stock of a business were divided in-kind. However, the court will not make an in-kind division if it would impair the business.

(4) Orders the business sold.

Continue reading "Can the Court Seize Control of Your Business like Major League Baseball did to the Dodgers?" »

As a San Diego attorney, clients with premarital agreements often ask whether the spousal support waiver provision in their premarital agreement is enforceable. Whether my client wants to enforce the agreement or have it not enforced, the answer is - it depends.

The Premarital Agreement Act applies to premarital agreements executed after January 1, 1986. For a spousal support waiver to be valid, it must pass the "representation by counsel" and "not unconscionable" requirements.

If the party against whom enforcement of the spousal support waiver provision was not represented by independent counsel at the time the premarital agreement was signed, then the spousal support waiver is not valid. This means: (1) if the parties prepared the agreement themselves without legal counsel, the waiver is not valid; or (2) if Party A wants to enforce the waiver against party B, and Party A was represented by independent legal counsel but Party B was not, the waiver is not valid.

If the representation by counsel requirement is met, then the court determines as a matter of law whether the spousal support waiver is "unconscionable". Factors the court considers in making its decision include: (1) whether there was a fair, reasonable and full disclosure of the property or financial obligations; (2) whether the parties waived in writing any right to disclosure of property or obligations beyond what was disclosed; (3) whether a party did not or could not have had adequate knowledge of the other party's property or financial obligations; and (4) other current circumstances that make the waiver unconscionable at the present time.

Even if all these requirements are met, a court can set aside the entire premarital agreement if it was not executed voluntarily. Factors for whether a premarital agreement was voluntarily executed include: (1) if the agreement was first presented at least seven days before it was signed; (2) any duress, fraud, or undue influence; (3) whether both parties had capacity to enter into the agreement; and (4) any other factors the court deems relevant.

An example of other factors / current circumstances that might make a spousal support waiver unenforceable is if one party recently had an accident, is now paralyzed and cannot work or support himself or herself, the court could find the provision to be unconscionable.