Nancy J. Bickford

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News just broke that reality star, Kim Kardashian, has her legal team working very hard to ensure her divorce from basketball player, Kris Humphries, is handled in a private mediation; no cameras allowed! It’s Kim’s hope that by taking their divorce out of the spotlight, the proceedings won’t take longer than the actual marriage itself. A source close to the Kardashian family adds:

“A public trial is the last thing that Kim wants, and she has instructed her lawyer to formally petition the court so that the divorce can be heard by a mediator, which is routinely done in California, since it’s a no-fault state. Kim doesn’t want a long drawn out trial. She wants the mediation to be private, confidential, and legally binding. She and Kris have no assets together and kept separate bank accounts, so this is a fairly routine divorce proceeding. Kim just wants this over and done with.”

Mediation is an alternative to going to court. It is a confidential process by which the parties get to try and settle the case with a third party neutral (mediator). It allows the parties a chance to communicate and have the opportunity to be heard. The greatest benefit to mediation is that you and your spouse get to come up with the terms of the agreement rather than the Judge deciding for you. There is a risk with putting fate in the courts, because you and your spouse know better than anyone, what is best for you and your family. It provides a win-win for the parties because you each have a role in making the agreement. On the other hand, when you go to court, one or often both parties are dissatisfied with the Judge’s decision. Mediation will save time and money by not going through the court process, which can take months or even years for all the aspects of the divorce to become final and can be extremely expensive.

In California, it is required if you have children to attend mediation when getting a divorce to determine custody. Family Court Services interviews you and your spouse regarding the health, safety, and well being of the children involved. The mediator will determine what is in the best interest of the child(s) and propose a custody arrangement to the Judge. It can be as specific as you want including who the child(s) will be with for birthdays and holidays. Before going in front of a judge for your divorce, you may want to consider trying to work something out with your spouse instead by doing what’s known as a divorce mediation as well.

San Diego County is known throughout the state of California for being less litigious, and more settlement-oriented, than other counties. There are attorneys who have specialized training in mediation and are settling the vast majority of their cases. Issues included in divorce mediation include but are not limited to: Distribution of property, child custody, child support, spousal support, retirement benefits and taxes. Some issues may be more difficult than others to discuss, but it is the mediator’s job to keep the lines of communication open, brainstorm ideas with you and provide a safe environment for each of you to speak in an amicable way. Lack of communication or arguing may have been one of the reasons for your divorce; mediation has the ability to help you communicate with each other again, if only for the sake of your children.
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Many San Diego residents own businesses that continue to operate and generate income throughout the owner’s divorce. It is well established in California, absent an agreement otherwise, that a spouse is entitled to an interest in community property assets. Community property generally consists of all assets acquired during the marriage. We have previously blogged about the date of separation and its importance in the division of property in a dissolution proceeding. Business owners are confronted with a unique problem – is their business community property? What about the increase in value between the date of separation and trial?As a general rule, for the purpose of division of the community estate upon dissolution of marriage, the court shall value the assets and liabilities as near as practicable to the date of trial. Any income or assets acquired by a party between separation and divorce are separate property. However, the value of a particular asset is not determined until the date of trial. For example, consider this hypothetical. Husband and Wife decide to separate with intent to end the marriage accompanied by objective acts to demonstrate that intent. At the time of separation, the couple owns a house that is worth $150,000. Husband decides to move into a nearby apartment and Wife takes over all mortgage payments. Because they have a daughter still in high school, the couple decides not to file for divorce immediately. Two years later, because of market fluctuations, the house is worth $200,000. Although Husband moved out of the house and Wife made each mortgage payment following separation, they are both entitled to share in the increase in profit. The court may make orders to account for the mortgage payments made by Wife, but Husband will generally share in the increased value. Real property values can fluctuate dramatically between the date of separation and trial because parties may separate months or years before their case is finalized. If the asset is a typical community property asset such as a family home the value is determined as close as possible to the date of trial.

There is an exception to this general rule. Under California Family Code section 2552(b), “Upon 30 days’ notice by the moving party to the other party, the court for good cause shown may value all or any portion of the assets and liabilities at a date after separation and before trial to accomplish an equal division of the community estate of the parties in an equitable manner.” Any party may petition the court to value an asset at the date of separation rather than closer to trial by showing that this alternate valuation is fair. A date of separation valuation of property is appropriate when the hard work and actions of one spouse alone and after separation, greatly increases the “community” estate, which then must be divided with the other spouse. However, if the asset increases in value from non-personal factors such as market fluctuations or inflation, it is fair that both spouses share in that increased value.

When a spouse operates a community property business after separation, there is a sense of unfairness when applying the general rule that the business must be valued as of the date of trial. The law recognizes that an increase in value of these businesses is primarily a reflection of the contribution of the owner’s services. This exception applies especially to professional businesses such as law practices, medical practices, or contracting businesses. If the skill and reputation of the owner accounts for an increase in the assets value, the court may value the asset at the time of separation and divide the property accordingly.

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Often, the line between being married and being separated is blurred. Couples considering divorce have the option to experiment with a trial separation in order to give the spouses time to consider if divorce is their best option. Other couples decide to file for divorce and later reconcile. Sometimes those couples continue with the marriage and other times they resume divorce proceedings. The decision to end a marriage can be difficult and messy, however the parties’ actions between the time of separation and a dissolution judgment can impact their case significantly.One reason why date of separation is so crucial is that it is used as the dividing line between the beginning and the end of the marriage. Surprisingly, for the purposes of property division, the date of divorce is not used as the date of the end of the marriage. California is a community property state. This means, for the most part, any contributions by either spouse after the date of marriage belongs jointly to both spouses. Any income of either spouse belongs jointly to both spouses. Further, any property or assets purchased with that income belongs jointly to both spouses. Few assets such as inheritances or property acquired before marriage are separate property.

To complete the divorce process, depending on the circumstances, can take anywhere between a few months to over a year. Presumably, both spouses will continue working during this time and purchasing assets. Do these assets and income belong to the respective spouses as separate property or to the spouses jointly as community property? How will these assets be divided upon divorce? Under California Family Code section 771, the earnings and accumulations of a spouse, while living separate and apart from the other spouse, are separate property of the spouse. Therefore, anything acquired by either party between the date of separation and the divorce is separate property. The next problem is – when did the couple “separate”?

Date of separation is often a hotly contested issue because it can determine how a number of significant items are distributed. For instance, it can determine whether a marriage is long-term or short-term, if one spouse is entitled to the lottery winnings of the other, and whether one spouse is entitled to any number of valuable assets acquired by the other spouse during the dissolution process. It would seem that deciding when the parties separated is an easy task that both parties could easily agree on. However, in a potential divorce situation, the behaviors of the parties can be confusing and separating spouses often send mixed signals to each other. When determining the parties’ date of separation, the court looks to their private conduct rather than how they behave publically. This comes from an understanding that many couples keep up public appearances of a marriage for many different reasons such as for the benefit of any children they have. The ultimate question to be decided in determining the date of separation is whether either or both parties has the subjective intent to end the marriage and furthers that intent through objective conduct. This is a factual question and the court looks at various steps taken by the spouses to demonstrate the final breakdown of the marriage.

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A New York Court recently granted the state’s first contested no-fault divorce. While New York’s no-fault divorce law is only one year old, California enacted no-fault divorce over 40 years ago, in 1970.

Wife filed for divorce under New York’s year old no-fault divorce law on the grounds that her marriage was “irretrievably broken.” Wife testified that she has not had marital relations with her Husband for over five years, they slept in separate bedrooms and never ate meals together. Although she is in poor health, she testified that her Husband had not taken her to her doctor’s appointments in the last five years or even asked about her health for the past ten years. She further testified that she had “no hope for the marriage … and that her only wish is for a divorce so that she can have one-half of her marital assets and leave them to her four children before her demise.”
Husband contested the divorce because he wanted to remain married saying he “worked hard to acquire everything the parties had” and didn’t want to lose it in a divorce.

The Court applied the new no-fault law and granted Wife’s request for a divorce stating, “[I]t is this Court’s determination that the parties’ relationship has so deteriorated irretrievably …the plaintiff is entitled to a judgment of absolute divorce,”

In California, a no-fault divorce allows for a divorce without requiring either party to present evidence of wrong doing or breach of the marital contract. The idea behind a no-fault divorce was that removing the fault requirement would also remove some of the bad blood from the divorce process, and allow couples who wanted to break up to do so without having to make false allegations to justify the divorce to the court. No longer would couples, or even just one party, who wanted a divorce have to choose between lying under oath in open court or remain married.

Prior to no-fault divorce in California, a divorce could be obtained only through a showing of fault. This requirement meant that one spouse had to plead that the other had committed adultery, abandoned them, was cruel, or some other culpable acts. To get a divorce, parties often lied, colluded and committed fraud upon the court in order to get around the statutory limitations of the fault based requirement. Prior to the enactment of no-fault divorce, many prominent attorneys and judges in California believed that the “legal fictions” used by parties to satisfy the requirements for divorce made oaths meaningless and threatened the integrity of our legal system by encouraging perjury. Without committing perjury, many couple could not obtain a divorce, even if both parties wanted a divorce.

California’s no-fault divorce law provided a straightforward ground for ending a marriage – irreconcilable differences. Not only did California’s no-fault divorce laws eliminate the fault requirements to obtain a divorce for spouses seeking a divorce by mutual consent, but also in cases where only one party to a marriage wanted a divorce.

No-fault divorce ushered in other changes to divorce laws. Under no-fault divorce, gender-based responsibilities such as the Husband always being responsible for child support while the Wife was always responsible for custody gave way to gender-neutral responsibilities such as both parties being eligible for custody and responsible for child support.

As an interesting side-note, California’s no-fault divorce policy even invalided a Marital Agreement that was intended, after Husband had an affair, to “preserve, protect and assure the longevity and integrity of an amicable and beneficial marital relationship between them.” In the Diosdado case, rather than divorcing, the parties agreed to be subjected to a legal obligation of emotional and sexual fidelity to the other. If either party volitionally engaged in certain acts with any person outside of the marital relationship, that party would be in breach of the Marital Agreement, which provided for liquidated damages should the obligation of sexual fidelity be breached. Damages included that the party in breach would be: (1) required to vacate the family residence, (2) solely responsible for all attorney fees and court costs, and (3) pay $50,000 over and above any settlement or support obligations. Of course, Husband had another affair and Wife sued for breach of contract, seeking to enforce the liquidated damages clause of Marital Agreement. However, the Trial Court granted Husband’s judgment on pleadings, because the Marital Agreement was contrary to the public policy underlying California’s no-fault divorce laws. Wife appealed, but the Court of Appeal affirmed stating, “Here, where the agreement attempts to impose a penalty on one of the parties as a result of that party’s ‘fault’ during the marriage, it is contrary to the public policy underlying the no-fault provisions for dissolution of marriage. [See Family Code §2310, Family Code §2335.] For that reason, the agreement is unenforceable.”
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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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It is surprising to think that, in California, a parent can be arrested and criminally prosecuted for kidnapping his or her own child. This surprising truth became all too real for a Twin Falls woman who was charged with custodial interference in Idaho. In the recent case, Stefanie Contreras pleaded guilty to abducting her own 4-year-old son. Contreras entered the father’s home with three others intending to take her son from father’s custody. To follow up with Contreras’ case, stay tuned for her sentencing hearing, which is scheduled to occur on March 26, 2012. Few San Diego residents are aware that they can be found guilty of abduction for moving their own children outside of California. If you are considering taking your child outside of San Diego or California it is important to consult the other parent involved.

There are many misconceptions about what is required to charge an individual with kidnapping. A stranger to the child is not necessarily the only person who can kidnap a child. If a parent disobeys a custody or visitation arrangement he or she may be arrested for kidnapping. Whether the parent has sole legal custody, meaning the exclusive right to made decisions regarding the child’s health, safety, or wellbeing, is irrelevant. Under California law, if the parent takes, entices away, keeps, withholds, or conceals his or her own child intending to deprive the other parent of his or her lawful visitation or custodial rights, he or she can be prosecuted for kidnapping. It is important to note that a parent can be charged with kidnapping regardless of whether there is a formal court order regarding custody and visitation.

Although child custody and visitation orders originate in the family court system, kidnapping is a criminal charge and may result in a criminal record and/or incarceration. For example, under California Penal Code section 278, any person found guilty of kidnapping shall be punished by imprisonment in a county jail for up to a year, a fine not exceeding $1,000 or both. Sentences and fines may vary depending on whether the parent is prosecuted for a felony or misdemeanor.
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The most recent controversy in Hollywood is the split between multi platinum recording artist, Katy Perry, and movie actor, Russell Brand, who announced the end of their marriage on December 30, 2011 after only 14 months. Rumor has it that the couple did NOT have a prenuptial agreement. Katy Perry made a record breaking $45 Million during the marriage. Russell Brand only made about $7 Million. In California, which is a community property state, assets are split evenly among the couple if there is no pre-nup, meaning Perry stands to lose over $20 million not including the two homes the ex-couple purchased together during the marriage.

A prenuptial agreement is a contract between two people about to get married that spells out how assets will be distributed in the event of divorce or death. Premarital agreements or “pre-nups” establish the property and financial rights of each spouse.

At one time, a premarital agreement that was not made in contemplation that the parties would remain married until death was considered to be against public policy in California and other jurisdictions, but the CA Supreme Court concluded in 1976 that the validity of a premarital agreement “does not turn on whether the parties contemplated a lifelong marriage” and in 1985, the California Legislature adopted most of the provisions of the Uniform Premarital Agreement Act. Pursuant to Family Code section 1615, a premarital agreement will be enforced unless the party resisting enforcement of the agreement can demonstrate either (1) that he or she did not enter into the contract voluntarily, or (2) that the contract was unconscionable when entered into and that he or she did not have actual or constructive knowledge of the assets and obligations of the other party and did not voluntarily waive knowledge of such assets and obligations.

The most important factor of a solid premarital agreement is honesty. Both parties must fully and completely disclose of their assets. If it turns out either person was hiding something, a judge can throw out the entire contract. The document should be signed as early before the nuptials as possible to avoid the appearance of coercion, another key reason why some agreements are rendered null and void by the court. A valid pre-nup should also be “fair” and will not leave one of the parties destitute.

You should consider getting a pre-nup if you fall into any of the following categories:

• You have assets such as a home, timeshare, stock or retirement funds
• Own all or part of a private or family business
• You may be receiving an inheritance
• You have children and/or grandchildren from a previous marriage
• You or your spouse is much wealthier than the other
• One of you will be supporting the other through college
• You have loved ones who need to be taken care of, such as elderly parents • You have or are pursuing a degree or license in a potentially lucrative profession Continue reading

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According to FOX news, former NFL superstar Deion Sanders has filed for divorce. His wife, Pilar Sanders, filed a response this week in which she alleges Deion was unfaithful. “She accuses him unkind, uncaring, insensitive, cruel and unusual treatment, as well as physical, mental and emotional abuse of her and their three children.” The response urges the court to punish Deion for “immoral, corrupt, lewd, perverted, unnatural, sinful conduct.” Ironically, the response is similar to that filed by Deion’s first wife Carolyn. Carolyn also accused Deion of adultery and “cruel treatment.”

Pilar is requesting that the judge throw out the couple’s prenuptial agreement and instead grant her most of the marital estate. As grounds for this request, Pilar alleges she was under duress when she signed the agreement. Prenuptial agreements, otherwise known as premarital agreements, must be carefully drafted in order to be enforceable in a California family courts.

California Family Code section 1615(a) states that a premarital agreement is unenforceable if not entered into voluntarily. A premarital agreement is presumed involuntary if the party had less than seven calendar days between the day the party was presented with the contract and advised to seek independent legal counsel and the time the party signed the contract. However, it is important to note that this rule does not apply to a party represented by legal counsel throughout the premarital agreement process. Therefore, if a judge concludes that Pilar was in fact under duress when she signed the premarital agreement, the judge is likely to find the agreement unenforceable.

A fundamental element of any contract formation is freely given consent of the parties. This consent is defeated if one of the parties enters into the contract under duress. Duress often appears in California law as a defense to any type of contract actions. It is crucial when drafting and executing premarital agreements to ensure no party signs the contract under duress.
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In San Diego County an estimated one out of four children is exposed to domestic violence either as a victim or a witness. According to the San Diego Domestic Violence Council over 500 women and children need to stay in a shelter each day. In a relationship that involves a history of domestic violence, if a partner decides to leave, he or she will have many questions about how that history can impact a child custody case.

Understanding what constitutes domestic violence can be complex. Under California Family Code section 6211, domestic violence is defined as abuse perpetrated against specific categories of family members. Mental health professionals agree that domestic violence is a pattern of behavior characterized by an abusers attempt to control his or her victim through the use of a variety of techniques.

In a case that does not involve domestic violence, the court decides the outcome of a custody case based on the best interest of the child. The court considers a variety of factors such as:

1. The health safety, and welfare of the child 2. Any history of abuse by one parent
3. The nature and amount of contact with both parents 4. Habitual or continual illegal drug or alcohol abuse by either parent
There is a prevalent belief in society that when a couple separates, it is in the best interest of the child to have the most extensive relationship possible with both parents. This assumption is true in a typical separation. However, a separation involving domestic violence is not a typical separation. Family Court judges have many options to consider when deciding which parent, or combination of parents, will make decisions on behalf of a child and take care of that child. If a parent has sole legal custody, he or she has the exclusive right and responsibility to make decisions for the child regarding his or her health, education and welfare. If a parent has sole physical custody, the child will live with that parent subject to the visitation rights of the other. Any joint custody arrangement involves the sharing of these rights and responsibilities.
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