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Reasons to File for Divorce in the New Year

April 28, 2014

new-year-divorce.jpgJanuary is often referred to as "Divorce Month" because of the high influx of divorce filings. Many people look at the New Year as an opportunity for a new, fresh beginning. To many, this may mean more time at the gym, less sweets, or even an honest attempt to quit smoking when the New Year comes around. But for others it means "divorce", or in other words, an opportunity to finally get rid of the baggage from last year that has been weighing them down. Although this might not be the first thing you think of when coming up with your New Year's resolutions, it actually might be a good idea to think about filing for divorce in January. Here are some good reasons to think about putting "Get a Divorce" on the top of your New Year's resolution list.

It's Easier on the Kids: waiting until January to file for divorce will likely be much easier on the kids than doing it in November or December. The last thing your kids want to hear during the holidays is that their parents are splitting. Nothing like being a Scrooge and taking away their holiday cheer. This might even cause them to associate what should be a happy time of the year with something very negative for them. Instead, let the holiday spirit carry you through December and into the New Year if possible before filing for divorce. On another note, you might also appreciate avoiding being hounded with questions or by family members who are visiting during the holidays.

It's Easier on You: November and December are often busy months for many people. They are typically filled with wrapping gifts, baking and spending time with children over their school break. Filing for divorce during that time might prove to be extraordinarily difficult because your divorce attorney will want lots of information from you to begin paperwork. Attending to your divorce paperwork will probably be on the bottom of your to do list. So why not wait until January when all the decorations are put away, the kids are back at school, and your head is clear enough to focus your time and energy on your divorce. Beginning this process in January will give you plenty of time to hopefully get things settled and adjusted before the next holiday season rolls around.

Easier to get into court: the courts tend to be jam-packed right around the holidays due to emergency custody disputes. So if you can wait to file for divorce until January you will have a much easier time getting a court date if need be.

gavel-money.jpgFinancially Easier: Filing for divorce in January might be more feasible because typically people receive a holiday bonus check at the end of the year. Since divorce can be quite expensive, having those extra funds available in January will help you to get your divorce rolling. On another note, if your spouse is due to get a significant year-end bonus, waiting until after that money is in the bank may help to clarify that you are entitled to a share of it (pending other circumstances, of course).

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Is My Spouse's "Book of Business" an Asset Subject to Division?

April 26, 2014

dividing-household-divorce.jpgUntil just recently, there were not any California cases on point regarding whether a licensed professional's book of business (i.e. list of clients) is something of value that should be considered an asset subject to property division during a divorce proceeding. However, the Fourth Appellate District's recent decision in In re the Marriage of Mark and Rhonda Finby finally shed light on this issue.

In other jurisdictions, courts have held that licensed professionals' customer lists generally constitute divisible property during a divorce. In the New York case Moll v. Moll, for example, the Court held that clients serviced by a stockbroker constitute a marital asset because the thing of value is the stockbroker's personal/professional goodwill. Also in the Florida case Reiss v. Reiss, the Court held that clients that were brought to a new securities firm by a stockbroker constitute a marital asset subject to division.

Similar to the holdings in other jurisdictions described above, in the recently published case In re Marriage of Finby the Fourth District California Appellate Court reversed the trial Court's decision and found that a book of business that a financial advisor developed during the marriage constitutes an asset that has value and is thus subject to division during a divorce proceeding.

address-book.jpgAs background, in In re Marriage of Finby, the Wife worked as a financial advisor and developed a list of clients (who owned over $192 million in investments) during marriage that she referred to as her "book of business". Wife left her previous employer and went to work for Wells Fargo, who paid her over $2.8 million as a transitional bonus. Although Wife argued that her book of business did not have value because she could not sell it, the Appellate Court found that it was a valuable asset, reasoning that her book of business was essentially consideration for Wife's transitional bonus. In other words, Wife was granted the option to earn a significant amount of money based on her work during the marriage of acquiring a book of business. The Court further reasoned that Wife's ability to transfer her book of business by bringing her clients to Wells Fargo is similar to goodwill, like that which is found in the business of other professions (e.g. lawyers and doctors). As a result, the Court found that the community had an interest in a portion of the transitional bonus and remanded it back to the trial court to determine exactly how much of an interest should be apportioned to Husband.

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How Divorce May Change Your Retirement Plans

March 12, 2013

Divorce_after_fifty.jpgDivorce can have a devastating effect on both parties' standard of living and finances.
We have previously blogged about the sacrifices divorcing spouses make when they cannot afford to support two separate households at the same standard of living they enjoyed during marriage.
However, in Del Mar, the "gray divorce trend" is resulting in another sacrifice divorcing couples make - retirement.

Read more about division of retirement in divorce

From 1990 to 2010, the number of divorces involving spouses over 50 years old "gray divorcés" doubled. Experts say that one of the causes for the increase in later-in-life divorces is longer life spans. Just like a divorce between spouses in their 20's and 30's will affect the current standard of living for both parties, a divorce past 50 will affect retirement lifestyles. If a couple divorces when the spouses are between 20 and 40 years old, there is plenty of time before retirement for both spouses to re-build any divided retirement funds. However, gray divorcés will experience the following financial roadblocks:

First, the accumulated retirement savings between the parties is usually divided in half upon divorce. When parties divorce, all property acquired during marriage is divided equally. Most, if not all, of a couple's retirement fund is usually acquired during marriage. Thus, each spouse will only end up with one-half of what they planned on retiring on with his or her spouse.

Second, funding two separate retirements can cost between 30% and 50% more than funding one. Post divorce, the parties will take separate vacations, take twice as many trips to visit their children and grandchildren, use two separate cars instead of one, live in two separate houses, etc. In addition, if one former spouse becomes ill, the other will not be there to care for him or her. Therefore, post divorce, a spouse may have to use significant retirement funds to pay for medical care.

Read some frequently asked questions about divorce in Del Mar

Financial planners have a few suggestions to help gray divorcés get through divorce and retirement past 50. They suggest hiring a financial adviser simultaneously with hiring a divorce lawyer. Additionally, they advise against supporting adult children when it is not feasible. Often around the age of 50, a gray divorcé will have a child who is getting married and expecting them to shell out $30,000 for a wedding. These types of purchases are not advisable. Finally, financial advisers suggest reducing spending by living in a smaller home, traveling less and eating out less.

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Can the Court Force Me to Sell My House in Del Mar?

March 7, 2013

Division_Del_Mar_Divorce.jpgFor many Del Mar families, real estate is their most valuable asset. Because the prices of the average family home are so high, many families must invest significant funds into real estate just to live in the area.
However, upon divorce, all community property must be divided equally by the court.
If the parties have no other assets as valuable as the family home, it must be sold and the proceeds divided.


Read more about Divorce jurisdiction in Del Mar


Pre-Judgment: Prior to the final resolution of a divorce case, the court will generally avoid ordering the sale of community or separate assets. However, under Family Code §2108, at any time during the divorce proceeding, the court has the authority to order the liquidation of a community asset if necessary to avoid unreasonable market or investment risks. Divorce lawyers know that, in making this determination, the court will consider the nature, scope and extent of the community estate. California courts have held that judges may not order the sale of a community asset unless necessary to prevent the loss of that or another community asset. In some cases, the financial strain of divorce may cause the family residence to be lost to foreclosure. If equity remains in the home, it may be prudent to petition the court to order the sale of the residence so that it is not lost to foreclosure.

At the onset of a divorce proceeding, automatic temporary restraining orders take effect. These restraining orders are commonly referred to as "ATROS". The ATROS prevent the parties from altering the status quo of the marriage during the dissolution proceeding. For Del Mar divorce attorneys, this means that if one party maintains health insurance for the family, he or she cannot cancel that insurance plan because a divorce has been initiated. The ATROS also restrain parties from selling assets before they are divided by the court. Thus, a party may not unilaterally sell a home during divorce without a court order as discussed above.


At Trial: At the end of the case, the court is not as restricted in its ability to order the sale of the home. If the parties only significant asset is the family home and an award of that asset cannot be offset by another, the only way to divide the community estate is to sell the home. Therefore, during a Del Mar divorce, it is well within the court's authority to order the sale of a residence and to divide the proceeds equally between the parties.

Please contact us if you are thinking of meeting with a divorce lawyer. Whether you are considering a divorce from your spouse, a legal separation, or have questions regarding child custody and visitation, consulting with a knowledgeable attorney is of paramount importance. Nancy J. Bickford is the only lawyer in San Diego County representing clients in divorces, who is a Certified Family Law Specialist (CFLS) and who is actively licensed as a Certified Public Accountant (CPA). Don't settle for less when determining your rights. Call 858-793-8884 in Del Mar, Carmel Valley, North County or San Diego.

How Valentine's Day Can Affect Your Divorce

February 11, 2013

San_Diego_Waterfront.jpgValentine's Day is a romantic time in Del Mar and throughout San Diego County. The romance of this holiday can sometimes stir up old feelings between divorcing spouses. It is not uncommon for spouses going through a Del Mar divorce to send each other gifts on Valentine's Day or even to spend the day together. However, it is important to consider the legal ramifications of these acts especially with regard to the date of separation. On the other hand, newly separated spouses may be spending Valentine's Day with a new significant other for the first time in a while. Before substantial gifts are given to a new love interest or money is spent on a lavish trip, it is important to also consider how these acts may impact your divorce proceeding in Del Mar.

The date of separation is an important consideration in many divorces. The marital estate is the property divided upon divorce. Property can only be accumulated in the martial estate between the date of marriage and the date of separation. Thus, once spouses decide to end their marriage, they stop accumulating any community assets. In order for a separation to occur, the spouses must physically separate (live apart) with the simultaneous intent never to resume the marital relationship. As Del Mar divorce attorneys understand, only one spouse is necessary to establish the requisite intent to end the marriage.

Read more about date of separation from Del Mar divorce lawyer Nancy Bickford

Depending on the assets in the martial estate, a dispute regarding date of separation can have enormous financial consequences. In order to determine which spouse is correct regarding the date of separation, the court will consider the conduct of the parties. One of the factors considered by the court is whether the spouses gave each other gifts or spent holidays together. If Husband and his attorney allege the parties separated January 1, 2010, the same year he earned a $100,000 bonus at work, that bonus would be his separate property. However, if Wife can show that Husband sent her flowers and a romantic card on Valentine's Day in 2011, her divorce lawyer can use this as evidence that they in fact separated much later and she will be entitled to half of Husband's 2010 bonus.

Under the Family Code, which governs the divorce process in Del Mar, spouses are not permitted to gift community property without the written consent of the other spouse. While both spouses are entitled to manage and control community funds, gifting community property is not considered a function of a spouses right to "manage and control" community funds. If a separated spouse intends to purchase any lavish gifts for a new significant other, he or she should be careful only to use separate property funds for this purchase.

In Del Mar, the divorce process can be complex, and selecting a qualified and knowledgeable divorce attorney is exceptionally important. Please contact us if you are considering a divorce from your spouse, a legal separation, or have questions regarding child custody and visitation. Nancy J. Bickford is the only attorney in San Diego County representing clients in divorces, who is a Certified Family Law Specialist (CFLS) and who is actively licensed as a Certified Public Accountant (CPA). Don't settle for less when determining your rights. Call 858-793-8884 for more information about the consultation process.

Settlement in San Diego Divorce Cases

April 10, 2012

The State of Alaska is reforming the way a divorce case proceeds through the court system. The new program named the Early Resolution Project is aimed at resolving divorce cases quickly and efficiently. One distinguishing characteristic of Early Resolution is the emphasis on settlement. Under the program, the Anchorage Superior Court addresses several divorce cases in one afternoon on a biweekly basis. On this afternoon, the parties are give free legal advice and encouraged to reach a mutually beneficial agreement.

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Superior Court Judge Stephanie Joannides envisioned the program as a result of her experience in the Alaskan family court system. She was concerned because many divorce cases are assigned a court date that is several months after the initial filing. This waiting period caused the parties to become firm in their positions and unwilling to compromise. Judge Joannides proposed to attempt to resolve these divorce cases early in the process and has seen promising results. In the first year, eighty percent of cases settled as a result of Early Resolution.

Besides a quick resolution to the case, the Early Resolution program and others like it offer a number of fringe benefits to the parties. Like any case that settles early in the litigation process, a divorce settlement can save the parties a great amount of money. Litigating a family law case in San Diego involves filing fees, court costs and attorney's fees. If a case settles early, the parties will not be responsible for any further costs and fees. Another benefit to dispute resolution is the preservation of the relationship between the parties. Litigation has the tendency to ruin the relationship between the parties indefinitely. However, in family law cases involving children, it is crucial for the parents to maintain a co-parenting relationship. Although the California Family Code is often clear, family court judges have an element of unpredictability. The facts of a case may be disputed and therefore the outcome can be uncertain. If parties reach a settlement they are in control of the outcome of the case. In family law cases, the outcome often has life-changing consequences for both parties. In order to have input in the final decision, the parties much reach an agreement.

The San Diego family court system has a program similar to Alaska's Early Resolution Project. In San Diego, the family court judge will assign the parties a Mandatory Settlement Conference (MSC) date before any case will proceed to trial. Unlike in Alaska, the MSC will occur toward the end of the parties' case. The MSC will take place at the San Diego Superior Court where the parties have been litigating their case. A settlement conference judge will be assigned to the case. These judges are experienced local family law attorneys who have volunteered their time to help parties resolve their cases before trial. Because they have so much experience with San Diego family law, the settlement judges are able to help the parties predict what the judge will likely do at trial and reach a settlement agreement based on the probable outcome. The benefit to reaching an agreement during the MSC is avoiding trial. The parties are able to avoid the cost, time and emotional toll of a trial.

Alaska's Early Resolution Project also relies on local attorneys to volunteer their time to help needy clients. These attorneys are able to get family law experience without becoming entrenched in long drawn-out cases. Before the biweekly court appearance, the volunteers are able to scan the divorce case file and begin to formulate possible solutions for the parties. A MSC is slightly more formal in this respect. The parties to an MSC are required to submit a Settlement Conference Brief to the settlement judge at least five court days prior to the MSC outlining the disputed issues and their proposed solutions.

Please contact us if you are considering a divorce from your spouse, a legal separation, or have questions regarding custody. Nancy J. Bickford is the only attorney in San Diego County representing clients in divorces, who is a Certified Family Law Specialist (CFLS) and who is actively licensed as a Certified Public Accountant (CPA). Don't settle for less when determining your rights. Call 858-793-8884 in Del Mar, Carmel Valley, North County or San Diego.

How will divorce affect my income taxes in California?

It is that time of year when you need to file your income taxes and we want you to be informed. Your filing status for taxes depends partly on your marital status on the last day of the year. If you were still legally married (meaning there is no final divorce decree) as of December 31, 2011 you are considered to have been married for the full year and must file as either married filing jointly or married filing separately. For federal tax purposes, "marriage" currently only means a legal union between a man and a woman as husband and wife. Your filing status is important and is used for many things on your tax return, such as determining your standard deduction, whether you need to file a return, the amount of tax you owe, and whether you qualify for various deductions and credits. When it comes to your filing status, you do have options.

Married Filing Jointly

If you are still legally married, you and your spouse can file a joint tax return. Married couples do not have to be living together to file jointly. If you file a joint return you both must include all your income, exemptions, deductions, and credits on that return. Even if you or your spouse had no income or deductions, you can still file a joint return. You must balance taxes due against your risk of being jointly and separately liable for taxes, interest, and penalties on a joint return. If you question whether your spouse is reporting all income, or have little or no knowledge of your spouse's income and finances, discuss this issue with legal counsel before signing a joint return. The Internal Revenue Service (IRS) can hold you liable for all taxes due on a jointly filed return, as well as penalties and interest, even if your spouse alone earned the underlying income.

Married Filing Separately

Legally married couples can also file "married filing separate" whether they live together or not. If you and your spouse file separate returns, you should each report only your own income, exemptions, deductions, and credits on your individual return. You can file a separate return even if only one of you had income. However, the married filing separately status rarely works to lower the family tax bill. For example, one major disadvantage is that you can't have one spouse itemize and claim all the deductions while the other claims the standard deduction. Both husband and wife must either itemize or use the standard deduction. You can't mix and match. So if one spouse itemizes and the other has nothing to itemize, that spouse would not then be able to claim the standard deduction, which might have reduced the amount of taxes owed.

Another disadvantage with "married filing separate" filers is that they can no longer take any relevant exclusions, credits, or deductions for adoption or education expenses. Likewise, various exclusion and exemption amounts will be cut for child and dependent care expenses, employer dependent care assistance, and alternative minimum tax. Here are some examples if you file separate returns with your spouse:

• You cannot take the Earned Income Credit.
• You cannot take the Child and Dependent Care Credit in most cases.
• You cannot exclude any interest income from U.S. savings bonds that you used for education expenses.
• You cannot take the Credit for the Elderly or Disabled unless you lived apart from your spouse all year.
• You may owe more taxes on Social Security income or railroad retirement benefits than if you filed jointly.
• You cannot deduct interest paid on student loans.
• You cannot take any education credits.
• You cannot take an exclusion for adoption expenses or the Adoption Credit in most cases.

Benefits of filing under this status include only having liability for the tax, interest, and penalties on your own return. The IRS would not pursue you for your spouse's tax obligation for that same year. If the return is filed electronically, any refund due can be divided up and directly deposited by the IRS in up to three different separate accounts. Note, however, that some financial institutions will not allow a refund for a joint return to be deposited into an individual account, so if this option is being considered, the taxpayer should check with his or her bank.

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Reasons for Delaying Entry of Judgment

February 17, 2011

Why Would Anyone Delay Their Official Divorce Date?

Yahoo News reported that on Thursday, February 10, 2011, Los Angeles Superior Court Judge Hank Goldberg finalized Charlie Sheen and Brooke Mueller Sheen's divorce, however, the Sheen's will not be officially divorced (i.e., legally single) until May 2, 2011. AP reported on February 15, 2011, that Christina Aguilera and Jordan Bratman finalized their divorce but the judgment will not become official until April 15, 2011.

In California, there is statutory six-month waiting period before a divorce judgment can be final for the purpose of terminating a marital relationship. California Family Code Section 2339. In both cases, the delay is because the six-month waiting period has not expired. Sheen filed for divorce in November, thus their marriage cannot be dissolved until May. Aguilera filed for divorce in October, thus her marriage cannot be dissolved until April.

For many of our San Diego clients, the day they become legally single cannot come quickly enough. However, the six-month statutory waiting period is not the only reason soon-to-be-divorced couples may decide to delay their official divorce date. Two other common reasons are health insurance and tax planning purposes.

Health insurance may come into play when one spouse has great insurance through his or her employment. After a divorce is granted, most health insurance plans do not allow a employee spouse to cover their former spouse. Although the non-covered spouse may apply for COBRA coverage, it is often more expensive than the cost of the insurance coverage to the employee spouse.

For example, let's assume that: (1) the non-covered spouse has an upcoming surgery with rehabilitation that will take nine months; (2) the cost of insurance is $200 per month for the employee spouse, and (3) the cost of COBRA will be $1,200/mo for the non-covered spouse. The parties' may decide to delay entry of judgment for nine months until the non-covered spouses rehabilitation has ended, thus saving the non-covered spouse $10,800. In exchange for delaying the divorce and keeping the non-covered spouse on the insurance, the employee spouse may have negotiated a reduction of spousal support for the nine month period he or she is providing the health insurance.

Another scenario is if one spouse just started a new job and has a three month waiting period before their new health insurance coverage begins. The parties' may delay the date of their divorce for three months until the party's new insurance begins.

With regard to tax planning purposes, sometimes the parties' accountant will recommend they delay their divorce date until after December 31st, especially if there are significant tax benefits to each party.