Divorce

November 23, 2015

Property Division and Tax Issues in California Divorce Cases – In re Marriage of Becker

California’s community property system is meant to simplify property division issues in divorce cases by making it clear that all property gained through the efforts of either or both spouses during the marriage is to be split evenly between them. The reality, however, is that complicated issues still arise, including those related to property and income taxes. The state’s Fourth District Court of Appeals recently considered such a case.

Husband and Wife married in 1997 and had two daughters before separating nine years later. While their divorce case was pending, the couple entered into a “post nuptial agreement,” wherein they resolved various issues, including their rights to the family home in Southern California. They agreed to list the home for sale and to treat the proceeds as community property, except that Husband was entitled to an additional $2.5 million for separate property funds he had contributed to the residence.

The couple eventually sold the home in 2009 for $10 million. They used nearly $1.4 million from the proceeds to pay state and federal taxes on their estimated capital gains from the transaction. They evenly divided the remaining $3.5 million after covering the additional $2.5 million owed to Husband, as well as interest, fees, commissions, and closing costs. Husband and Wife filed separate 2009 tax returns, with each reporting $5 million in income from the sale of the family home. Husband was required to pay an additional $65,000 in estimated capital gains taxes, while Wife estimated a $475,000 refund because she included the $2.5 million separate property payment as part of her nontaxable basis for the property.

November 13, 2015

Conscious Uncoupling

by Lorna Jaynes

Gwyneth Paltrow’s announcement on her website Goop last year that she and husband Chris Martin were divorcing presented the views of Dr. Habib Sadeghi & Dr. Sherry Sami, apparently experts on what it means to divorce. Sadeghi and Sami use evolutionary biology and the structure of the human skeleton (“Life is a spiritual exercise in evolving from an exoskeleton for support and survival to an endoskeleton”) in order to explain why a divorce might happen. Good grief. One might think that a simple press release announcing the divorce would suffice, but apparently the star feels the need to use her divorce as an occasion to enlighten us all. Regardless, the impetus and intent behind so called “conscious uncoupling” is a good one.

It is about putting the children first by minimizing conflict and supporting the child’s relationship with the other parent. A thoughtful process can help couples from regressing into immature and harmful behavior. They can be helped to understand why they chose to end the marriage and how the process can be managed without unnecessary harm to any children and without catastrophic financial consequences. Disputes about custody, visitation, and spousal support can be addressed with much less anger if the couple elects to approach the end of their marriage “consciously,” instead of trying to hurt the other person.

The term conscious uncoupling derives from psychologist Katherine Thomas Woodward and the goal is to to negotiate the end of a romantic relationship with goodwill and respect; in a way that enriches rather than wrecks lives. Katherine is a romantic and a realist; a fan of marriage and love who endeavors to explore the possibility that couples seeking her guidance in ending their relationship might actually stay together. But also, she argues that the ideal of lifelong monogamy is antiquated: researching the ‘happy-ever-after myth’, she discovered that it emerged 400 years ago and ‘had a lot to do with the life conditions of the time – many people died before the age of 40’. The Goop article also references the academic journal Evolutionary Anthropology, stating that we are living too long for marriage to one person to be a sensible choice. We are out of evolutionary synch, and shouldn’t feel wretched that we want out, it’s normal.

August 25, 2015

Setting Aside a California Divorce Ruling for Fraud – In re Marriage of Nhothsiri

by Lorna Jaynes

California law allows a party to a divorce proceeding to ask a court to set aside a judgment in certain circumstances, including those in which the other party has committed fraud. In In re Marriage of Nhothsiri>, the Fifth District Court of Appeals explains that a person seeking to set aside a judgment must do so within strict time limits.Wife filed a Petition for Dissolution in 2007. Husband alleged in his response that the couple had married Jan. 5, 2000. Following a hearing, the trial court approved the divorce in January 2010 and awarded spousal support to Wife, citing Jan. 5, 2000 as the date of marriage.

Wife later sought to set aside the judgment, pursuant to section 2122 of the Family Code, after she was notified that the support would end in June 2011. Claiming that Husband “fraudulently provided the incorrect date of marriage,” Wife argued that the couple was actually married in Laos in 1981 in a religious ceremony that did “not require a marriage certificate.” She further stated that the couple obtained a marriage certificate in California in January 2000.

August 12, 2015

Dividing Retirement Accounts in California Divorce Cases – In re Marriage of Keitany

by Lorna Jaynes

If you’ve gone to one of those retirement planning sessions lately, you may already know that saving for life after work is not only incredibly important but also can be very complicated. These matters often become even more difficult in divorce cases, where spouses or a court have to decide how to divide savings that the parties can’t actually access yet. California’s Second District Court of Appeals recently considered such a case.

Husband and Wife separated in April 1998 after nearly 11 years of marriage. Husband had been working for the Los Angeles Fire Department for 18 years at the time and was eligible to retire in 2000. The couple entered into a marital settlement agreement in December 2000. The agreement divided the couple’s assets between the spouses and provided that all “income, earnings, employment benefits, or other property” acquired by one spouse after the separation date would be considered the spouse’s separate property. It also stated that Wife was entitled to half of Husband’s pension/retirement plan, due after he reached 30 years of service, if he decided to keep working past his earliest retirement date.

In 2010, Husband began participating in a new LAFD retirement program, the DROP program, which provides firefighters a lump sum payment upon their retirement, along with any monthly retirement allowance to which they are entitled under another plan. As a condition to the program, Husband agreed that his years of service and accrual amounts would freeze upon the date of his entry in the program. Money would be credited to his DROP account during the five-year period, and he would be able to access that money directly upon retirement.

July 28, 2015

California Court Orders Couple to Split Child’s Rehabilitation Costs as Child Support – In re Marriage of Harrison

by Lorna Jaynes

Child support payments are intended to help cover kids’ basic costs, including money for food, clothing, and shelter. Sometimes, other costs come up. As California’s Fourth District Court of Appeals recently explained, any healthcare-related costs that arise along the way are usually considered additional child support costs to be split evenly between divorced parents.

Husband and Wife separated in 2007. A court awarded Husband primary custody of the couple’s daughter in 2012 and ordered Wife to pay him $540 in monthly child support. The court also ordered Husband to pay Wife $1,800 in monthly spousal support. In reaching the decision, the court found that Wife was making about $2,000 per month, while Husband was bringing in roughly five times that amount.

Father went back to the court about five months later, informing it that a juvenile court had ordered the couple’s daughter to spend four months in an inpatient substance abuse program in juvenile hall or be placed in an inpatient rehabilitation facility. Father asked that Wife be ordered to pay half of the $8,000 per month it was going to cost to send Daughter to the out-of-state facility. He said Wife had insisted on sending Daughter to an inpatient facility and had agreed to foot half of the bill. Husband added that his savings were rapidly depleting and that he could no longer afford to pay spousal support, since he was paying for Daughter’s care.

July 28, 2015

Why Must I File a Lawsuit to Obtain a Divorce in California

by Lorna Jaynes

Many divorcing couples who wish to resolve the issues in their divorce with their personal and economic dignity intact, preserve or create a positive co-parenting relationship for the benefit of their children, save money and preserve assets, or for a host of other good reasons, choose mediation or Collaborative Divorce rather than litigation and traditional attorneys. Such folks tend to see divorce as a problem to be solved rather than a battle to be won.

But whatever process is used, divorce in California requires that a Petition for Dissolution and Summons be filed by one spouse and served on the other spouse in order to commence the dissolution process and to establish the court’s jurisdiction to terminate the marriage.

The Summons, in particular, can be problematic. The first page states, “You are being sued” and “you have 30 days to respond” and the second page sets forth numerous rules called automatic restraining orders. It is not uncommon for spouses who are trying to work together in a civil and respectful process to be shocked and somewhat hurt when faced with a document telling them they are being sued by their spouse.

July 6, 2015

Indian Ad Prompts Needed Conversation About Divorce

by Lorna Jaynes

In a new commercial in India for Tanishq jewellery, a woman preparing for her wedding puts on a Tanishq necklace. At the ceremony, her daughter calls her asking if she can participate in the pheras, an Indian ceremony where the couple walk around a fire seven times while saying their vows. The groom is moved by the girl and picks her up, filling his bride with emotion.

A non-Indian would likely miss this point, but it is clear in the ad that this is a second marriage for both bride and groom, and since historically in India, divorced or widowed women are outcasts, the ad is contrary to Indian tradition. The ad is apparently causing quite a stir in India with viewers talking about the cultural taboos and also about the bride’s relatively dark complexion, a turn away from the country’s mainstream obsession with light-skinned lead actresses.

The ad has sparked conversations on Twitter, with celebrities and politicians also weighing in. Parliament member and industrialist Naveen Jindal praised the bride’s darker skin tone and the non-traditional marriage. Apparently, the team that created the ad chose the actors to ensure the couple would look like one of respectable equals, because otherwise traditional-minded Indians might otherwise have assumed that the man was marrying the divorced or widowed woman out of pity.

May 7, 2015

Child Support Obligations for “De Facto Parents” – In re Marriage of Abbate

by Lorna Jaynes

Child custody and support are often common issues in California divorce proceedings, both for children born during the marriage, as well as those born prior to one or both spouses prior to their marriage. In In re Marriage of Abbate, the Fourth District Court of Appeals explains the circumstances where a divorcing spouse may be required to pay support even if he or she isn’t the natural parent.

Ms. Camarata had a three-year old son when she married Mr. Abbate in 2005 and the parental rights of the biological father of the boy were terminated one year later. Abbate agreed to assume the role as the boy’s father, and the couple filed a petition for Abbate to become the child’s adoptive father the same year, but they divorced before the petition was approved.

In 2007, Camarata took her son to a hospital for treatment, asserting that that he’d been sexually molested. The boy was sent for therapy, which the court said continued until at least June 2010. Believing it was Abbate who had molested her son, Camarata left the marriage and filed a petition for divorce. She named Abbate as the child’s adoptive parent and asked for child support. A court granted a dissolution of the marriage in 2010, but denied the request for child support.

April 30, 2015

Bankruptcy, Divorce and Community Property – In re Marriage of Rynda

by Lorna Jaynes

The State of California operates under a community property regime in which assets and debts derived from the efforts or actions of either spouse during the course of a marriage are considered joint property to be divided equally between the spouses in the event of divorce. In In re Marriage of Rynda, the California Court of Appeals for the First District explains what happens to community property when one of the divorcing spouses also files for bankruptcy.Carolina and David were married in January 1996. The couple worked together as owners of a small insurance company until Carolina filed for divorce more than eight years later. A superior court dissolved the marriage in May 2005 and ordered that all community property – including the business – be divided equally among the former spouses. When Carolina filed for bankruptcy in 2009, however, the court ordered that all valuations of the couple’s assets for the purpose of dividing it between them be halted until the bankruptcy proceedings were completed. A bankruptcy court-appointed trustee later sold much of the property. That included Carolina’s stock in the company, which the trustee sold to David.

Back in the superior court, Carolina filed a motion claiming that she was entitled to a 50 percent ownership interest in the business and to be compensated for the community debts that were extinguished during the bankruptcy process. She also argued that there remained community property from the marriage for the superior court to divide. The court disagreed. “[T]he bankruptcy court has superior jurisdiction to the superior court,” the judge said. “And if the bankruptcy court divided your businesses or sold them, then they’re done with them. I can’t do anything about that.”

April 27, 2015

Alameda County Divorce Court – Why Divorcing Couples Should Stay Out of Court

by Lorna Jaynes

So, sadly I was in court recently for what I hope will be my last litigation matter ever. Both clients and attorneys waited for nearly three hours because we were called last, a process that costs most clients a great deal of money for little to no effort on the part of the attorney except that I was helping my client at no cost. One more example of how divorce litigation costs can spiral out of control.

So we sat for three hours watching the other matters. One couple and their attorneys came before the judge and said they had reached an agreement on child custody and visitation where the eldest boy would live primarily with the Dad and the two younger kids would stay with the mum, but the parents lived in different towns about 2-3 hours apart.

The mom explained cogently and with heartfelt emotion why they felt this was in the best interest of the children and their family. The dad agreed. The judge, however, had other ideas and decided that she, someone who does not know this family from a hole in the ground, would supplant their thoughtful decisions with her own and rejected their agreement.