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Yes, each party in a divorce holds fiduciary duties to the other person.
Among these is the responsibility to voluntarily share material information about assets and debts, including community property, investment opportunities, and sources of income. California divorce law recognizes the importance of this fiduciary duty. Not sharing material information before the divorce is finalized can result in severe penalties.
Until a divorce is finalized, and property is divided, divorcing parties hold fiduciary duties to each other. The fiduciary duties between married people are wide ranging, but one important duty during a divorce is to voluntarily share all material information on assets and debts with the other party. This information and document sharing extends to other financial areas such as sources and amounts of income, business opportunities, and retirement accounts. Failure to share this information is a breach of fiduciary duty that can result in such penalties as 100% of the undisclosed asset and attorney’s fees.
The fiduciary duty between divorcing parties is broken when one party acts against the best interests of the other party. This can take many forms. Here are two examples:
It is important to note windfall gains that occur after a finalized divorce is not a breach of fiduciary duty unless the gain came through fraudulent behavior.
No, a final declaration of disclosure may not be required if a judgment is executed before a petition for divorce is legally filed. In situations in which a final declaration of disclosure is not required, divorcing parties still hold the same fiduciary duties to each other as in any other situation.
The divorce court may use different measures of valuation for a business, such as the going-concern value or an investment value. Generally speaking, the court determines the measure of value on the basis of the business not being sold, instead considering the business to be an investment held by the spouse that operates the business.
The methodology used by the divorce court may vary as long as it does not violate two basic rules: It cannot rely on speculation and must follow all existing family law principles. Two common methodologies concern the capitalization of earnings and capitalization of excess earnings. The court may choose a market approach to valuation, but this methodology faces significant challenges, including finding comparable companies for use in valuation. Other valuation methodologies sometimes used include measuring prior sales or the purchases of interests in the business. California law does not recognize the widely used discounted future cash flow (DCF) valuation methodology because the divorce court value of a business cannot be based on speculation about how the business will perform in the future. In many cases, the valuation of a business owned by divorcing parties requires an analysis of financial performance for the last five years. Some factors in this analysis can be omitted if a valuation expert makes a convincing case that this omission will result in a more accurate picture of the company’s true value.
If a company owned by the divorcing parties has goodwill, it must be valued and allocated as part of the settlement. Typically, goodwill is calculated based on the performance of the business over the last five years. The treatment of goodwill by the divorce court can vary dramatically based on the particular circumstances of the business. For example, a partnership agreement may limit community interest in goodwill. Other factors that impact the valuation of goodwill include whether the company is public or private. Our team of valuation experts work to determine the best and fairest valuation of a company, including its goodwill.
California family law and a significant body of case law indicate the business should be valued as close to the trial or settlement date as possible. There are exceptions to the rule, in some cases the date of separation is used. In other cases, valuation experts provide the court with convincing evidence that a completely different valuation date is most appropriate.
Yes, it is generally necessary to have an expert value the specific assets held by a business. The valuation expert responsible for the overall valuation may not have the expertise to properly value such business assets as machinery and intellectual property, so experts in these areas assist in finding the most accurate valuation possible. The valuation may need to address operating vs. non-operating assets, in which case experts determine which assets are truly required to run the business on a day-to-day basis.
Determining the controllable cash flow of the operating-spouse can be a major source of contention between experts working for each party in a divorce. One source of this disagreement is determining what portion of the business’s profits can be distributed to the operating-spouse without harming the business, such as impacting its ability to cover operating expenses and remain solvent. Typically, cash flow is based on either the income approach or the distribution approach. Cash flow generally includes the operating-spouse’s personal income, perks, and profits to some degree. Economic depreciation is frequently added to cash flow.
Finding reasonable compensation for the operating-spouse can be another source of contention between valuation experts in a divorce. There are two primary approaches to determining reasonable compensation. The first is to consider the annual salary of typical employees who have a similar level of experience as the operating-spouse. The second approach is to consider a “similarly situated professional,” which asks what it would cost to hire someone to perform the responsibilities of the operating-spouse. This method generally produces a lower goodwill value than the first method.
Even if valuation experts are close in their valuation of a business’s tangible assets, they can strongly disagree on the value of goodwill. Several specific topics lead to such disagreements:
The rate of return on tangible assets is calculated as part of the capitalization of excess earnings valuation method. Although this rate may be called the “industry rate,” it is not standardized. Its calculation differs from expert to expert based on factors they select and can also differ based on economic conditions and interest rates.
When a business is valued by the capitalization approach, the company’s excess earnings are either multiplied by a multiplier or divided by a capitalization rate as part of the valuation process. The multiplier/capitalization rate chosen is directly related to how risky the business is. A company deemed “risky” due to its operations or industry will have a lower valuation than that of a company considered safer. Since the safer company is considered more likely to generate excess earnings into the future, it receives a higher valuation. Some factors that also impact the multiplier/cap rate include: barriers to entry, pending litigation, and how likely accounts receivable are to be collected.
When a business is valued by the capitalization approach, the company’s excess earnings are either multiplied by a multiplier or divided by a capitalization rate as part of the valuation process. The multiplier/capitalization rate chosen is directly related to how risky the business is. A company deemed “risky” due to its operations or industry will have a lower valuation than that of a company considered safer. Since the safer company is considered more likely to generate excess earnings into the future, it receives a higher valuation. Some factors that also impact the multiplier/cap rate include: barriers to entry, pending litigation, and how likely accounts receivable are to be collected.
A business owned by the operator-spouse before the marriage is generally separate property. If the business increases in value during the marriage, a portion of that increase may be reimbursable to community property if certain criteria are met. If the value of the business increases during the marriage due, in some degree, to the efforts of the non-operating spouse, then community property is entitled to be reimbursed for a percentage of the increase. This reimbursement value is determined by one of several approaches.
The Pereira approach, named after the IRMO Pereira decision, determines a reasonable rate of return for the business as it existed at the time of the marriage, and then attributes to community property the remainder of any gain in value. For example, under the Pereira approach, if a business was valued at $10,000,000 at the time of the marriage, then valued at $20,000,000 at the time of the divorce 10 years later, the $10,000,000 increase would be considered community property after the 10 years’ worth of interest was accounted for. When the Pereira approach is utilized, valuation experts are likely to be in conflict over what interest rate should be assigned and whether the interest should be simple or compound.
The Van Camp approach, named after the IRMO Van Camp decision, creates a right of reimbursement for community property equivalent to the under-compensation of the operator-spouse throughout the length of the marriage. Any increase in value beyond the under-compensation remains separate property. For example, if the separate property business contributes $22,000,000 to community property during the course of the marriage and the amount of under-compensation was determined to be $24,000,000, the separate property business would be required to reimburse $2,000,000 to community property.
The Van Camp approach, named after the IRMO Van Camp decision, creates a right of reimbursement for community property equivalent to the under-compensation of the operator-spouse throughout the length of the marriage. Any increase in value beyond the under-compensation remains separate property. For example, if the separate property business contributes $22,000,000 to community property during the course of the marriage and the amount of under-compensation was determined to be $24,000,000, the separate property business would be required to reimburse $2,000,000 to community property.
Tax impacting can be a significant factor in business valuation. Tax impacting is useful in situations when different types of corporations are involved since different types of corporations, such as S-Corporations, are taxed differently. Importantly, whatever decision is made, both the multiplier and income stream should be considered as pretax or after-tax, not a mixture of the two.
It is very rare for a business to be sold as the result of a divorce. Unless there are special circumstances, ownership of the business will be awarded to the operator-spouse who has been running the business. If the divorcing parties operate the business together, it is awarded to the party considered most important to continued operation of the business. The operating-spouse does not have the right to cease business operations at the time of the divorce in most cases. If they do, they risk being charged for the value of the business before it was shut down. The court may even award a business to a divorcing party who doesn’t think it should be included in their portion of the community property (IRMO Rives).
Yes, when a business is involved, a divorce attorney needs knowledge and skills in areas such as valuation principles, generally accepted accounting principles (GAAP), and a solid understanding of relevant statutes and divorce valuation case law.
It’s extremely important to build a team of experts to properly represent a client’s interests when a divorce involves a business. A valuation expert is a key part of the team working to reach the best settlement. Divorce courts frequently order valuation experts to meet before a trial begins to iron out the differences in valuation between the parties.
A strong valuation expert is worth their weight in gold when a divorce involves business ownership. The right expert brought in at the right time can play a key role in determining case strategy and the development of the most beneficial settlement offers. To maximize their contribution, a valuation expert should be involved in the divorce from the beginning, not just when the two parties disagree on valuation. Additionally, it is critically important that the chosen expert have a strong reputation with the court, or they may not be effective.
It is not a wise decision to have a personal accountant attempt to handle the valuation of the business for divorce purposes. This work requires far more than the general principles of valuation that your accountant may understand. A valuation expert must have a strong understanding of divorce valuation laws in California. Additionally, it is critical that the valuation expert have a good reputation with the court and be viewed as unbiased, a standard your personal accountant is not likely to meet.
Absolutely not. Frequently, divorces involving complex assets and other issues are resolved amiably by divorcing parties without the need for a trial or even significant involvement of a judge. Although a trial or court appearances may not be necessary, every divorce involving complex assets benefits greatly from the involvement of an excellent divorce lawyer and a team of experts.
According to California law, separate property includes assets that were owned by a party before the marriage, were bought or otherwise acquired after separation, or were received during the marriage as a gift or inheritance, according to the California Family Code. Payments, such as rents and dividends generated by separate property assets, are also considered separate property. Community property includes assets that were acquired from the date of the marriage until separation.
It is of vital importance to have potential tax issues in mind throughout the divorce process and to seek the advice of an expert in the Internal Revenue Code (IRC). Tax issues associated with community property assets may dramatically impact the value of the assets and also affect their desirability to the divorcing party. Additionally, failure to strictly follow the IRC regarding these assets can result in files and penalties. Taxes play a role in most divorces in California.
Most of the time embedded taxes, such as capital gains taxes, will not be deducted from the value of an asset. Deductions of value due to taxes are limited to cases in which the taxes will immediately become due at the time of divorce or shortly afterward, not when taxes will be an issue in the future if an asset is sold. There are some exceptions to this guidance, such as stock options, which hold no value until they are exercised. Also, community ownership of a business typically results in negotiations over how business taxes could impact the value of the business.
Divorce courts in California consider a wide range of factors in valuing retirement plans. This list includes the most common factors, but others also might be considered:
The divorce court typically will divide assets in retirement plans into separate or community property based on when the value of the plan was earned. For example, if a party was employed with a 401(k), they contributed to for 10 years before the marriage, a portion of that 401(k)’s value will be separate property, while another portion of the plan will be community property if the party continued to contribute to the plan after getting married. This subject often results in complications in dividing community property assets.
Stock options that were either granted during the marriage, or become partially vested during the marriage, may be treated by the court as at least partially community property in California. This is based on the idea that earnings during the marriage are community property and stock options or similar assets are typically granted as part of a compensation package. The division of options between separate and community property will vary based on the methodology used by the court.
Increases in the equity of real estate and other real property assets is generally attributed to community property or separate property based on whether the real estate itself is community or separate property. There are several factors analyzed as part of this determination:
Yes, a residence owned as separate property by one spouse can become partially community property if certain criteria are met. If community funds are used to make principal payments against a home mortgage for property owned by one spouse, the community may gain interest in the property (IRMO Moore and IRMO Marsden). Importantly, loan payments made on an interest-only loan are not treated the same way. If community funds are used to improve a separate property home, there may be a community interest as well.
No, adding a spouse’s name to the title of a home does not give them half the equity in the home at the time added. The existing equity in the home at the time the spouse is added is considered to be separate property unless a waiver of Family Code Section 2640 is made at the time of the change. Any increase in equity made after that date would be community property. For example, if a party adds their spouse to the title of a separate property home with equity of $1,000,000, which then grows during the marriage to $1,500,000, the first $1,000,000 in equity is considered to be separate property.
If one party used their own separate funds to either make a down payment on a jointly titled home or pay down the existing loan on a jointly titled home, they may be reimbursed for this amount in certain circumstances. Specifically, the party must be able to prove the funds used were truly separate property by demonstrating through bank records or other documents where the funds came from.
If a jointly owned home was purchased using funds from the refinance of a home that originally was separately owned by one spouse, that spouse may be eligible for reimbursement for the amount that can be traced to equity that existed on the date the separate property became jointly titled (IRMO Walrath).
For example, if a party owned a separate property home with equity of $4,000,000 which was then jointly titled with their spouse and refinanced for the purpose of buying another home, that party may be eligible to be reimbursed for the portion of the equity used to purchase the second home after the refinance.
Tracing is used to track separate funds used to purchase assets titled jointly, and to split apart bank and brokerage accounts that have been mingled together. Tracing is also useful to determine reimbursements from or to community property related to separate property.
There are two primary types of tracing. The first is the direct tracing method, sometimes called “mechanical tracing,” and the second is the family expense method, sometimes called “recapitulation.” Tracing can become expensive, and it is very difficult to predict its success with any certainty until it has been completed. Sometimes a court will allow tracing using a different methodology, but it must not violate any family law principles or rely on speculation.
Direct tracing is the preferred method of tracing separate funds that have been mingled with community funds or assets. In direct tracing, transactions are analyzed on a line-by-line basis to forensically reconstruct the movement of funds between separate and community accounts. Direct tracing can lead to a large number of transactions to analyze, especially if money is moved between several accounts before a purchase is made. For example, if a party is seeking reimbursement for separate property assets that were used to make a $100,000 down payment on a jointly titled property, direct tracing could be used to track the transactions of the $100,000 from a separate party bank account to a community property bank account and ultimately to an escrow account for the purchase. The transactions and account balances would have to hold up to the scrutiny of direct tracing throughout each transaction for the party to be reimbursed.
Family expense tracing is used when direct tracing is impossible due to a lack of records and relevant information and this information breakdown is not the fault of the party seeking reimbursement. Family expense tracing attempts to show that an asset purchase must have been made with separate property because community funds did not exist at the time to afford the purchase. Family expense tracing may show, for example, that the asset purchase exceeded the community income at the time of acquisition. When comingled accounts (including both separate and community funds) are used to pay community expenses, the community funds are used first before separate funds, according to a rule called the “community expense presumption.”
A divorce trial is like other types of trials with several notable exceptions. First, unlike many criminal and civil trials, there is no jury for a divorce trial. Secondly, divorce trials can become quite complex because the court follows both the Evidence Code and the Code of Civil Procedure. Divorce trials are frequently lost because attorneys do not have a clear understanding of both the Evidence Code and the Code of Civil Procedure.
Yes, spouses owe a fiduciary duty to fully inform each other about all assets and debts, both community and separate, similar in some respect to business partners. The court may rule strongly against divorcing parties that violate this fiduciary duty, including penalties. A divorcing party should be ready to voluntarily make a complete disclosure of all assets and debts in a good faith effort to comply with their fiduciary duty to their spouse until the divorce has been finalized. The rules and requirements can be found in Sections 721(b), 1100(e), and 2100(e) of the California Family Code.
Typically, valuation experts are brought in to value a business owned by the divorcing parties. It is extremely important to build a team of experts to properly represent a client’s interests when a divorce involved a business. A valuation expert is a key part of the team working to reach the best settlement. Divorce courts frequently order valuation experts to meet before a trial begins to iron out the differences in valuation between the two parties.
Separate key factors are considered when valuing goodwill. They include: the total compensation of the operator-owner, the reasonable compensation for their position, the rate of return on tangible assets like business equipment, and the application of a multiplier/capitalization rate.
Yes, divorce courts will sometimes reimburse community property from one party’s separate property, or credit community property if certain criteria are met. The comingling of community and separate property often creates gray areas; when that happens, the court typically favors community property. While there may be presumptions made about assets being community property, such presumptions can be countered with evidence of separate property ownership. Ultimately, the court may find that community property should be reimbursed a portion of the increase in value of such assets as investments and businesses.
When divorcing parties cannot come to an agreement on the custody of their children, the family court will decide all aspects of custody, including physical and legal custody, for them. Such orders typically are made after a hearing that may include witness testimony. The court may make additional orders pertaining to the children’s education and relocation.
Divorce lawyers must have a particular set of skills and knowledge to effectively represent clients in child custody matters. The statutes and case law around child custody is complex and quick moving. A divorce lawyer must stay up to date on all changes to the law, however minor, to competently represent clients in child custody hearings. Additionally, a divorce lawyer must have a strong mix of trial skills and must be especially conversant on Evidence Code Section 730/Family Code Section 3111 child custody evaluations and psychological testing.
No, different judges handle child custody matters in different ways and hold varying opinions on subjects such as the child moving away from one parent. The branches of the Superior Court in the State of California are not uniform in their treatment of child custody issues and there is also variation from county to county within the state.
Our practice primarily centers on Orange County, Los Angeles County, and San Diego County. Lawyers must be familiar with the courts, judges, and particular family law rules in each county where they practice law, so it’s in the best interests of our clients to specialize our practice in a few counties instead of spreading out throughout the vast state of California.
A child custody hearing is a trial before a judge. It has many traits in common with other trials, but with the added complexity of family law. Child custody lawyers must be very sharp on the rules of evidence, burden of proof, and the nuances of child custody law. A lawyer without strong trial skills may fail to properly present their case to the judge.
Our team takes pride in using a teamwork approach when representing our clients in child custody matters. We are experienced litigators with the sharp trial skills needed to effectively represent you and defend your rights as a parent, while also having deep expertise in the nuances of California family law guiding the court’s decisions on custody and visitation.
Our clients receive a candid analysis of the strengths, weaknesses, opportunities, and threats to their child custody case after their first attorney-client meeting and are updated as additional facts about the case emerge. You deserve the opportunity to make smart decisions about your children and their future, and to do that, you need the unvarnished truth about the situation.
Settling child custody disputes and avoiding litigation is always the preferred route. We recommend clients take every possible action to settle a dispute before it reaches the courtroom. Litigation comes at a high cost, and not only in money—parents should consider the emotional toll litigation takes on their children as well as themselves. Even if settlement seems impossible, a careful review of the outcome of litigation should be undertaken. What will a “win” look like? Is winning the fight worth what it will cost both in money and emotional trauma? Litigation should only be pursued after these important questions are answered.
Absolutely not. Lawyers are different, with particular strengths and specializations. An excellent child custody lawyer is often the difference between the success and failure of your children achieving the future you want them to have. You should learn about a lawyer through public resources such as their website and then interview them to determine if they are a good fit for your family’s needs.
Typically, the court will make a temporary order during the Request For Orders (RFO) stage. After this stage, written discovery and depositions occur, including potential expert witness testimony. Finally, a permanent order is made as part of the divorce trial.
Child custody orders have a great impact on many other factors in a divorce. For example, a parent with custody may be prevented from moving away to pursue a better job opportunity. Custody also has a direct impact on child support payments, which may increase as the payers’ income increases or timeshare percentage of custody decreases. Custody matters also play a role in the treatment of outcomes, such as the decision to keep or sell the family home. Since the impacts of child custody are far reaching, it is important to make decisions with the support of a team of experts ranging from the divorce attorney to therapists and experts in child mental health. Ultimately, the goal is to achieve the best outcome for the children and help them weather the storm that divorce has brought into their lives.
Physical custody defines where a child lives on a day-to-day basis. There may be sole custody or joint between the parents. Legal custody defines the responsibility to make important decisions in the child’s life, ranging from health and medical to education. Courts in Orange County award joint legal custody in most cases, but this may differ based on the case. Both physical and legal custody can be joint or sole at the judge’s discretion.
Legal custody defines the responsibility to make important decisions in the child’s life, ranging from health and medical to education. Typically courts in Orange County award joint legal custody in most cases, but this may differ based on the case. Typically, courts are not interested in ordering what school a child should attend. Instead, they award legal child custody to one parent specific to education matters, authorizing that parent alone to make decisions in this area.
Physical custody defines where a child lives, and which parent has supervisory parent time for certain established periods. Joint physical custody does not mean that a child will spend half their time with each parent. A 70/30 split of parenting time would also be considered joint physical custody. Courts rarely split physical custody between siblings, instead choosing to keep them together whenever possible.
Yes, child custody mediation is mandated by the family court. The goal is to reach a custody agreement before the divorce ever reaches the courtroom. Child custody mediation is confidential, and the results will be shared only with the judge if an agreement is reached between the two parties. Divorce attorneys do not attend the mediation session, but it is important to work with a divorce attorney before mediation to have a strong understanding of the process and your personal goals for a custody agreement. If an agreement is made in mediation, it will likely control your children’s custody for years to come, so both your interests, and those of your children, will be best served by preparing for the mediation with an effective child custody expert.
Yes, the court will rarely question a schedule if both parents agree to it. If the differences between the parties can be resolved and a schedule agreed to by both parents, they are not required to attend child custody mediation.
No, the court will not accept a non-modifiable agreement on child custody even if both parents agree to it. The divorce court always reserves the right to change child custody agreements and orders as new facts emerge or conditions change. The divorcing parties cannot stop the court from modifying child custody orders in the future (IRMO Goodarzirad) and cannot stop the court from allowing one spouse to relocate with the children (IRMO Abrams).
The divorcing parties have great flexibility and discretion in developing a mutually agreeable custody and parenting plan. The key to this flexibility is both parents agreeing that a plan is best for their children and their own considerations. If the divorcing parties cannot agree on a plan, the court will develop a parenting plan for them. Although the divorcing parties have discretion in developing a plan, it is not easy to change the plan once it is in place. Although aspects of life, such as the work schedule may change, ultimately both parents must follow the agreement in place.
A wide variety of factors may be considered by the court when making child custody orders. The court’s goal is to create the best circumstances for the children, which is often a complex matter to determine. The following factors are often taken into consideration, although this list is far from exhaustive:
No, the court cannot base child custody orders on the economic circumstances of the parents (Burchard v. Garay).
In contentious child custody cases, the court may order an Evidence Code Section 730/Family Law Code Section 3111 child custody evaluation. These evaluations are quite costly and delay a child custody case by at least four months, so the court will not automatically grant requests for such evaluations unless it deems them truly necessary. A child custody evaluation is performed by a licensed mental health professional who makes recommendations on custody and related matters to the court based on the evaluation. The evaluation involves interviews with the parents, children, and frequently other members of the community such as neighbors, teachers, and anyone else with relevant information. Frequently, the evaluation also involves a home visit to observe the parents and children in their normal environment. The evaluator frequently will hold multiple meetings with the parties alone, together, and a mix of the parties and the children. In general, a child custody evaluation increases attorney fees for both sides while dramatically lengthening the time involved in the trial itself.
The divorce court may decide on its own or at the request of a divorce lawyer to involve a range of experts in a child custody matter. This may take the form of an Evidence Code Section 730/Family Code Section 5111 child custody evaluation, a “child custody investigation” (CCI), or even the appointment of a divorce lawyer to represent the interests of the child, known as a minor’s counsel. The court also has the power to order the divorcing parties to attend therapy related to the child custody matter.
No, experts are not always involved in determining child custody. Frequently, no expert input is required at all. Deciding to involve a child custody expert in a case is a decision that should be carefully made in conjunction with your divorce lawyer, along with the equally important task of finding the perfect expert who will best represent your interests and those of your children while demonstrating credibility to the court.
Yes, documented incidents of domestic violence can play a major role in child custody decisions. Divorce courts must take domestic violence situations into consideration when determining custody of children by statute. Assigning joint legal custody or physical custody to a parent who has been found to have committed an act of domestic violence within the last five years is presumed by the court to be damaging to the best interests of the child (Christina L. v. Chauncey B., IRMO Fajota, and Celia S. v. Hugo H.) Domestic violence may include stalking, taking someone’s cell phone without their permission, and threats, whether explicit or implied. The court will consider these incidents in context and different judges may place a different weight on incidents based on their judgment.
When the court is making orders regarding child custody, it bases decisions on the best interests of the child — except for hearings to modify a final order (Montenegro v. Diaz). When a final order is being modified, the “substantial change of circumstances” standard is used (Burchard v. Garay). “Best interests” and “change of circumstances” are both vague concepts subject to interpretation by the court. Frankly, court decisions are often unpredictable by divorce lawyers, even when they are familiar with the judge’s history.
Even when the divorcing parties agree on how decisions should be reviewed, their agreement does not limit the discretion of the court to make a different decision (IRMO Cohen).
No, a parent cannot change the child’s residence by their own decision even if they hold sole legal and physical custody. No one has total power to change where the child of divorcing parties live (Brown & Yana).
The court operates under the assumption that the parent requesting to move will, in fact, move with or without the child. The court will consider a modification to the existing child custody order, and one important part of this process is determining if the child will live with the party who is moving or live with the party who is not moving. A noncustodial parent attempting to modify a custody order to relocate a child faces a great burden in the court (Jane J. v. Superior Court).
No, a parent with physical custody does not need to prove that relocating the child is necessary (IRMO Burgess). In fact, a parent opposing a move must show it will be detrimental to the welfare of the child (IRMO LaMusga). If this is proven, the court will then weigh the differences between allowing the move, changing physical custody to the nonmoving parent.
The court carefully considers multiple factors before modifying a custody order to allow the child to be relocated. The court will examine the willingness of each party to put the child’s interests first, the reasons for the move, the extent of shared custody under the current order, the age of the child, their relationship with each parent, and the ability of the parents to maintain whatever level of stability exists in the child’s life.
Yes, if there is a child custody arrangement in place, the divorce court must conduct a hearing to determine if the best interests of the child are being considered before a relocation (IRMO Cohen). If a final order is not in place, the court will use the “best interests of the child” standard to make its decision, which is a lighter burden of proof than the more substantial “change of circumstances test.” The divorcing parties cannot make a deal between themselves that stops the court from allowing the relocation of the child (IRMO Abrams). At the same time, the court cannot order a parent with lower financial means to relocate closer to the child’s residence (IRMO Fingert).
Yes, child custody orders can always be modified. The court reserves the right to change or modify existing orders and is not bound by agreements between the parties (IRMO Goodarzirad). To modify “final” child custody orders, the court must be shown a considerable change of circumstances from when the existing custody order was made. If the order is not final, the court is primarily interested in determining what is in the best interests of the child.
There are many factors that may be viewed by the court as being a significant change in circumstances as related to a custody order. Here are some of the more common items:
Issues at school
The divorce court will not modify an existing temporary child custody order without evidence of significant change of circumstances. Divorce courts seek to have only one custody trial and are not enthusiastic about revisiting the custody issue after the fact. Some minor changes, like a change in schedule that doesn’t change the timeshare between parents, may not be considered a change in custody, meaning no modification of the agreement is necessary.
Guideline child support is calculated according to a complex formula used by software programs called Xspouse and DissoMaster. After the guideline child support amount is determined by the software, the court may order that one parent pay additional expenses it calls “add-ons” over and above the child support amount. Add-ons range from schooling and childcare to medical costs. These add-on costs can be paid by one parent or distributed between both depending on the court’s decision. Sometimes the family court may order a certain level of child support based on a parent’s base salary, but stipulate additional payments based on other compensation such as bonuses. This supplemental payment is called an Ostler-Smith order.
Computer programs are used to begin the process by determining a “guideline” level of child support. This amount is frequently modified by court order that one parent pay additional expenses it calls “add-ons” over and above the child support amount. Add-ons range from schooling and childcare to medical costs. These add-on costs be paid by one parent or distributed between both depending on the court’s decision. Sometimes the family court may order a certain level of child support based on a parent’s base salary, but stipulate additional payments based on other compensation such as bonuses. This supplemental payment is called an Ostler-Smith order.
The amount of time that a parent has custody of the child is a significant factor in determining child support amounts. A higher timeshare of custody for a payer will decrease the amount of child support and vice versa. Conflict over timeshare tends to arise because of issues such as who has custody during the school day and sleep hours.
The primary difference is when the determination is made. Temporary guideline child support is determined during the Request For Order (RFO) stage, while post-judgment child support is ordered during the trial. The same formula for guideline child support is used at the two stages.
Yes, the court has the discretion to deviate from the guideline child support amount even though the presumption is that the guideline amount is correct. The court must make certain findings to depart from guideline child support (IRMO Hall). Here are some circumstances that may lead the court to depart from the computer-generated child support amount:
Our clients receive a candid analysis of the strengths, weaknesses, opportunities, and threats to their child custody case after their first attorney-client meeting and are updated as additional facts about the case emerge. You deserve the opportunity to make smart decisions about your children and their future, and to do that, you need the unvarnished truth about the situation.
The amount of time each parent has custody of the child impacts the calculation of guideline child support payments. The court may calculate the timeshare of custody several different ways. Sometimes, the divorce court will determine a percentage of time each parent has custody (IRMO Rosen and IRMO DaSilva). In other cases, the court will order that custody hours are counted, creating an exact timeshare down to the hour for each parent.
The divorce court may attribute the time a child is in school or sleeping to one parent if that party is responsible for the child’s welfare during those hours (IRMO Whealon and IRMO Katzberg).
The divorce court takes a child’s special needs into consideration as part of the process to determine child support. The court will also consider related topics, such as if the child has attended private schools and the reasons for that attendance. The court intends for child support payments to address the child’s needs, not just their basic necessities, so a parent may be ordered to pay more in such cases.
Child support payments continue until the child has completed high school or reached the age of 19. In some cases, support continues for adult children if they are incapable of supporting themselves.
Guideline child support is based on the gross income of the parties and includes many types of compensation and revenue such as:
Some forms of revenue or income are not included in the guideline child support calculation, including:
As the family law court examines the income and assets of each parent, many issues, complications, and disputes may arise. For example, when the amount of income for a parent is disputed, the court may consider recent loan applications as admissions of income (IRMO Calcaterra & Badakhsh). Voluntary loan payments, such as paying down a mortgage, cannot be used to give the appearance of lower assets or income (IRMO Kirk). The voluntary deferral of income is not a valid reason for reducing child support (IRMO Berger). Increased equity in a family home is not considered income for purposes of determining child support (IRMO Henry). Spousal support is not considered income when calculating child support (IRMO Corman).
Financial gifts are sometimes considered income for the purposes of calculating child support. If the gifts are loans or advances on an expected inheritance, they are not considered income. They are also not considered income if they are not recurring. Recurring gifts may be considered income at the discretion of the court (IRMO Alter). Even if a gift is recurring, there are circumstances in which they may not be considered income for calculating child support. For example, recurring gifts from a “good Samaritan” are not income as it pertains to child support (Anna M. v. Jeffrey E.).
Divorcing parties frequently have income that fluctuates significantly based on factors such as overtime pay, sales commissions, and bonus payments. The court uses a representative time period as a sample of what levels of income the parties will realistically have in the future (IRMO Riddle). Sometimes, the court will order the child support payer to pay a set percentage of fluctuating income, such as bonuses as supplemental payments, to support the child (IRMO Ostler and Smith). If the income fluctuation is due to compensation such as stock options, it is important to recognize that stock options that are vested but not exercised may also be considered income for purposes of calculating child support (IRMO Kerr and IRMO Macilwaine).
No, in some circumstances the court will not use a divorcing party’s actual income for calculating child support, but rather use their ability to earn. This occurs when the court finds that the party is deliberately lowering their income to pay less support (IRMO Labass & Munsee). A divorce lawyer must prove that the other party has a higher capacity to earn than their income shows for this to happen.
Typically, the answer is no. A payer’s ability to earn is compared to a reasonable person in the same industry working a typical, non-excessive schedule. The court will not base child support on overtime pay, but if the payer continually works excessive hours and earns significant amounts of money by doing so, then the court may base child support on the higher level of income they are receiving.
If a divorcing party voluntarily quits their job or lowers their income, the court may impute their income to the previous level of income to calculate child support, regardless of whether the move was made in good faith (IRMO Padilla). The reason the party chose to reduce their income does not matter when calculating child support (IRMO Hinman).
Yes, the court can impute earnings from the assets held by each divorcing party when calculating the amount of child support (IRMO Dacamus, IRMO Destein and IRMO Sorge). Unrealized equity in a home will never be included as income in the child support calculation.
Yes, if a payer has an established pattern of using their separate assets to create a certain standard of living for the family, the court may order them to continue this practice in regard to child support (IRMO Deguigne).
No, a reduction of income will not always result in a reduction of child support payments. The court will determine if the change is significant enough to be a change in circumstances to such a degree that a reduction in child support payments is required. The court will also consider alternate sources of income and if the timeshare of custody has been altered.
Yes, the court will impute income to a custodial parent only if it is in the child’s best interests (IRMO Ficke). For example, the court may choose not to impute income to a mother with custody if it would result in her having to work outside the home and the court finds it would be in the child’s best interest for her to stay home.
Yes, the court will impute income to a custodial parent only if it is in the child’s best interests (IRMO Ficke). For example, the court may choose not to impute income to a mother with custody if it would result in her having to work outside the home and the court finds it would be in the child’s best interest for her to stay home.
Yes, the court will impute income to a custodial parent only if it is in the child’s best interests (IRMO Ficke). For example, the court may choose not to impute income to a mother with custody if it would result in her having to work outside the home and the court finds it would be in the child’s best interest for her to stay home.
No, the court cannot order that child support payments be saved for college through methods such as paying into an educational trust. Family law court does not have the discretion to order child support be used to fund higher education, no matter how large support payments are (IRMO Chandler).
Yes, child support can be modified by the court. This usually happens if there is a significant change in circumstances after the order was made. A change in income level may or may not be a material change in circumstances, which is also true for changes in custody timeshare. A serious drop in income may not be a material change in circumstances if there is other income from investments and other sources.
In certain situations, yes. Community property may be reimbursed based on the increase in value of a business that was owned before the beginning of the marriage.
No, if a business was owned by a party before the marriage, no matter how long it lasts, it will be characterized as separate property. A business acquired during the marriage will typically be community property. The marriage will not change the characterization of the business unless there is a written agreement to do so.
Generally, the business will be awarded to the operating-spouse. If both parties work in the business, the court will choose the party more important to the business continuing as a going concern.
If the increase in value of a separate property business results from a natural enhancement of assets, it is unlikely that community property will be reimbursed at all (Estate of Ney). If the increase in value is based on the work and effort of the operating spouse, the community may be entitled to a reimbursement for a portion of this increase (Cozzi v. Cozzi). Community property will not be given an ownership interest in the separate property business but may receive a reimbursement amount based on the court’s goal of achieving substantial justice.
There are two general approaches the court may use to allocate an increase in value of a separate property business to community property. They are the Pereira approach and the Van Camp approach. The court may also apply each approach to certain years of the marriage or use another methodology if it represents the best option to achieve substantial justice.
The Van Camp approach examines the compensation of the operating spouse to determine if they were adequately compensated throughout the marriage. If so, there will be no reimbursement. Likewise, if the operating spouse was undercompensated but used business distributions to pay community expenses, there will be no reimbursement. The Pereira approach determines an investment return on the value of the separate property business at the time of the marriage, and other increase in value beyond that figure is reimbursed to community property.
The most common approach beyond Van Camp and Pereira is a mix of these two, commonly known as the Brandes approach. This involves using Van Camp for certain years and Pereira for others. Additionally, the court may split the difference between the two approaches (Todd v. C.I.R.).
Yes, the approach selected can have a dramatic impact on the reimbursement from a separate property business to community property. It is critical that experts on the topic represent the interests of both you and your business.
If the increase in value of a separate property business is primarily due to the work and individual efforts of the operating spouse, the Pereira approach is the most common formula selected. As such, it is most commonly found in cases of professional services firms and professional practices. If the business is capital intensive and the increase in value can be attributed to market factors such as patents, an effective leadership team, and competitive advantages, the Pereira approach is most likely to be applied.
No, there is not always a reimbursement to community property based on an increase in value of a separate property business. Based on the facts and the approach selected by the court, the increase in value may go entirely to separate property.
There is a wide variety of deferred compensation plans, some of which are completely customized to an employee’s situation. Some plans follow the Employee Retirement Income Security Act (ERISA) rules and regulations, but others are completely free of such rules. Deferred compensation plans are typically complex and hard to value and include benefits that may be received far in the future, if at all. A deferred compensation plan earned in part during a marriage typically will be characterized by the court as community property.
A qualified deferred compensation plan must be offered to all employees and must follow all rules and regulations found in the Employee Retirement Income Security Act (ERISA). A popular example of a qualified deferred compensation plan is a 401(k)-plan offered by many employers. A nonqualified plan doesn’t need to follow ERISA or be offered to all employees, and generally contains an element of risk.
There are many types of deferred compensation plans. Below is a short list of common plans used by employers today:
The State of California views marriage as a partnership with each spouse acting as a partner to the other. A divorce, therefore, is the dissolution of the partnership between the two parties. This dissolution can be friendly or contentious and can be resolved through settlement or litigation.
Most cases of divorce never go to court—they are settled between the parties long before the judge enters the courtroom. While any divorce could end up in litigation, an expert divorce lawyer with a settlement mindset can help you achieve your goals and move on to the next phase of your life.
There are several factors that can make a divorce case more complex. Child custody issues, business ownership that leads to questions of valuation, and domestic violence are key issues that lead to protracted divorces. Additionally, divorces involving high net worth individuals tend to be more complex by virtue of the significant assets involved. Even with these complexities present in the divorce case, settlement can be quickly achieved if the parties remain civil and work with the right lawyers.
Divorce cases often take dramatically different paths through the court system. Currently our court system is bogged down due to multiple factors. It is common for divorce cases to experience multiple continuances and for trial days to be split apart by weeks or months due to the number of cases occurring in the same court.
Yes, an overwhelming majority of child custody cases never reach litigation, they are resolved by settlement.
Experts can play a critical role in the successful resolution of a divorce case. They are crucial to navigating the intricacies of family law, which is more complex than most people understand. Experts are practically mandatory in some aspects of a divorce case, and the right expert involved in a divorce can lead to a fast and positive settlement instead of a protracted and painful litigation.
Yes, a marriage is considered to be a partnership, and like business partners splitting up, there is a transaction to split up assets. Many divorces are not as simple as determining a simple split down the middle when it comes to assets. The parties may argue over the valuation of assets, who will be awarded certain assets, and if a particular asset is community or separate property. If the divorcing parties cannot agree on a settlement, the divorce will end in litigation.
Yes, a domestic violence action can be filed with the family law court. Family law court has a lower threshold for domestic violence than criminal courts do, and domestic violence does not necessarily involve physical touching. A domestic violence action may impact many areas of a divorce case such as child custody and support, attorney’s fees, and spousal support.
The family law court defines domestic violence as actual or threatened abuse between people who are related by blood or have been in an intimate relationship. This abuse may be physical, psychological, or even emotional in nature. The abuse may or may not be sexual in nature and can result in the other person being injured whether intentionally or unintentionally. The family law court may issue an order to restrain whatever type of behavior was involved in the domestic violence, along with other behaviors.
Yes, a domestic violence restraining order issued in family court is entered into the California Law Enforcement Telecommunications System (CLETS). CLETS can be accessed by any law enforcement agency in the state. A party with a domestic violence order against them will have that fact known by any police officer who runs their ID.
A documented finding of domestic violence can have serious consequences for a divorcing party. These can include:
A restraining order protects more than just the person it is issued to. It also covers people in intimate relationships, family members, and members of the protected person’s household. Generally, the restraining order requires that the restrained party stay away from the protected person’s residence, place of work, and avoid all in-person or electronic contact with the protected party.
A permanent restraining order may be granted for up to five years with an extension available for another five years. The court may even order that the restraining order be in place as long as the restrained person is alive.
Generally speaking, the definition of domestic violence in family law encompasses a wider variety of acts than in criminal law. Family law does not have a requirement of physical injury or assault; domestic violence can include acts such as destruction of property, annoying phone calls, and falsely impersonating a person.
“Disturbing the peace of the other party” generally can be understood as conduct that damages the emotional calm or mental wellbeing of the other party (Burquet v. Brumbaugh, Phillips v. Campbell and Qing Hui Gou v. Bi Guang Xino).
Yes, a Domestic Violence Protective Act (DVPA) hearing can be based on mental abuse. Mental abuse such as controlling behavior can be sufficient evidence to demonstrate the destruction of mental peace and emotional wellbeing (Rodriguez v. Menjvar).
Yes, causing fear of serious injury is disturbing the peace of another and is grounds for a DVPA restraining order (Qing Hui Gou v. Bi Guang Xino and Perez v. Torres-Hernandez).
Badgering is generally not grounds for a Domestic Violence Protective Order. An appellate court ruled that badgering may not be sufficient evidence to warrant a restraining order (S.M. v. E.P.).
No, DVPA protections extend to domestic partners in the same manner as married people (Altafulla v. Ervin).
Yes, accessing and publicly disclosing written materials such as emails and text messages can be grounds for a restraining order because such actions disturb the peace of the order party (IRMO Nadkarni).
No, domestic violence is not required to involve physical abuse in family law court. Domestic violence takes many forms such as emotional or mental abuse (IRMO Evilsizor & Sweeney).
Yes, an appellate court ruled that sending a video of a faked suicide was sufficient to disturb the peace of the other party (Hogue v. Hogue).
Proof of past domestic violence, along with current acts or ongoing fear of domestic violence by the protected party, can be sufficient evidence under the DVPA for a restraining order (IRMO Fregoso & Hernandez).
In some cases, the answer is no. In one case, a stepfather was violent to a child’s father without the child present; this was not found to be sufficient for protection under the DVPA (Hauck v. Riehl).
No, the court cannot dismiss a request for a DVPA restraining order without a hearing if pleadings are factually accurate in describing acts of abuse
(Nakamura v. Parker). Accusations by themselves are not sufficient grounds for a finding of domestic violence (A.G. v. C.S.).
No, the court cannot dismiss a request for a DVPA restraining order without a hearing if pleadings are factually accurate in describing acts of abuse
(Nakamura v. Parker). Accusations by themselves are not sufficient grounds for a finding of domestic violence (A.G. v. C.S.).
Yes, the family law court can grant mutual restraining orders on both parties. To do so, each party must request a restraining order on the other party. The court does not have the authority to grant a restraining order that hasn’t been requested by the party through appropriate methods (Isidora M. v. Silvino M.).
Yes, self-defense is a valid defense against domestic violence allegations. For a family law court to issue a restraining order against a party, it must find that the party acted as the aggressor in the situation and not in self-defense (J.J. v. M.F. and IRMO G).
According to the DVPA, to issue a restraining order that names a minor child as the protected party, the court must have evidence that the child’s safety is at risk (IRMO C.Q.).
Yes, to be protected as a cohabitant by a DVPA restraining order, a person must live in the same household as the protected party (O’kane v. Irvine).
Yes, to be protected as a cohabitant by a DVPA restraining order, a person must live in the same household as the protected party (O’kane v. Irvine).
Yes, the court can order the party found to have committed domestic violence to pay the attorney’s fees of the victim party. This order to pay fees will not be reversed on appeal unless the court is found to have abused its ability to order such fees paid, or if the amount ordered “shocks the conscious” (Loeffler v. Medina). After a DVPA restraining order has been issued, the victim party may seek an awarding of fees even if they didn’t seek such an award initially.
Yes, the family law court can renew an existing domestic violence restraining order for five years or even make it a permanent order. The renewal of a restraining order is based on the restrained party’s likelihood of future abuse (Ritchie v. Konrad and Cueto v. Dozier). Continuing abuse is relevant when considering the renewal (Perez v. Torres-Hernandez and Ritchie v. Konrad). A fear of physical abuse is not a requirement for renewal (Eneaji v. Ubboe).
Family law court orders are often enforced by private attorneys although the Department of Child Support Services may get involved in certain circumstances. Family law court orders cover a wide range of topics such as spousal support, child support, custody and visitation rights, and payments due between parties. When orders are not voluntarily complied with, enforcement options include a contempt finding, an abstract of judgment, a wage assignment, and other remedies as deemed necessary by the court.
Yes, the court may modify orders on child support, child custody, and spousal support after judgment. Modifying such orders typically requires a significant change of circumstances, but there are exceptions to that rule. Modifications are brought to court by filing a Request For Order (RFO). The divorce court has discretion to modify orders unless the parties have agreed to make the order non-modifiable, and the court will not observe non-modifiability for several types of orders.
The divorce court will not consider a non-modifiable order related to child custody or support. In fact, such agreements are viewed by the court as contrary to public policy. In the eyes of the court, all child custody and support orders are modifiable, even those that claim to be non-modifiable. Temporary child custody orders are rarely modified unless there is an issue with the child’s safety.
The court will modify a final child custody order if the parent attempting to modify the order can show a “significant change in circumstances.” The court carefully examines such claims to determine the true impact on the child’s health and welfare, along with any educational concerns. The court has wide discretion to interpret changes as being significant or not.
The “best interests” test is utilized when a child custody order is not specifically a “final” order. This is a lower threshold than the “change of circumstances” test used with final orders. For final orders, the court will only consider if there has been a significant change of circumstances since the final order was established. In such a case, if the court finds there is not a significant change in circumstances, it cannot modify an order even if it believes it would be beneficial for the child.
The “best interests” test is utilized when a child custody order is not specifically a “final” order. This is a lower threshold than the “change of circumstances” test used with final orders. For final orders, the court will only consider if there has been a significant change of circumstances since the final order was established. In such a case, if the court finds there is not a significant change in circumstances, it cannot modify an order even if it believes it would be beneficial for the child.
The “best interests” test is utilized when a child custody order is not specifically a “final” order. This is a lower threshold than the “change of circumstances” test used with final orders. For final orders, the court will only consider if there has been a significant change of circumstances since the final order was established. In such a case, if the court finds there is not a significant change in circumstances, it cannot modify an order even if it believes it would be beneficial for the child.
The court carefully considers multiple factors before modifying a custody order to allow the child to be relocated. The court will examine the willingness of each party to put the child’s interests first, the reasons for the move, the extent of shared custody under the current order, the age of the child, their relationship with each parent, and the ability of the parents to maintain whatever level of stability exists in the child’s life.
Yes, all child support orders are modifiable by the court if the circumstances indicate that a change is appropriate, even if the parties agreed to a certain level of child support the previous week. Even if the parties make an agreement that they claim is non-modifiable, the court can still modify it. If the agreed-upon child support is below the guideline child support number, the level of support can be raised by the court to the guideline level without evidence of a change in circumstances.
Guideline child support is calculated by software such as DissoMaster or Xspouse based on such factors as the income of each parent, the timeshare of custody between the parents, and any deductions. The divorce court must find the guideline level of child support but may depart from that guideline with “good cause.” If the court finds the guideline level unjust, it will lower the level of support from the guideline level. The court has wide discretion in determining high earner status for a payer-parent. The income level that results in high earner status varies from county to county and even from courtroom to courtroom. The “good cause” that will result in the court deviating from guideline child support may involve a child’s special needs, a parent not paying their share of expenses while they have custody, or other circumstances in which failing to change the level of support would be unjust for the child’s welfare.
No, the court cannot modify an order for spousal support that clearly indicates it is non-modifiable. The divorce court will not make non-modifiable orders, but the two parties may agree to one between themselves. In such cases, the court loses the ability to change the order, no matter how drastically circumstances change in the future.
The basis for all changes to spousal support is a “change of circumstances.” This test applies to both orders and agreements between the parties. The circumstances in question, as related to spousal support, are the needs of each party and their respective income levels. The ability to earn, as opposed to actual earnings, may become an issue in some cases. If a payer loses their job, and after a good faith effort to find a new job accepts a lower-paying position, it may be a change in circumstances justifying a modification. On the other hand, an increase in earnings for the payer does not justify a modification on its own. A modification would be justified in this case if the payee proves that their needs were not satisfied by the current level of support. In that case, a modification may be appropriate to raise the payee’s standard of living to an appropriate level (IRMO Hopwood and IRMO Hoffmeister). Notably, the marital standard of living becomes less important to a modification over time (IRMO Rising).
The basis for all changes to spousal support is a “change of circumstances.” This test applies to both orders and agreements between the parties. The circumstances in question, as related to spousal support, are the needs of each party and their respective income levels. The ability to earn, as opposed to actual earnings, may become an issue in some cases. If a payer loses their job, and after a good faith effort to find a new job accepts a lower-paying position, it may be a change in circumstances justifying a modification. On the other hand, an increase in earnings for the payer does not justify a modification on its own. A modification would be justified in this case if the payee proves that their needs were not satisfied by the current level of support. In that case, a modification may be appropriate to raise the payee’s standard of living to an appropriate level (IRMO Hopwood and IRMO Hoffmeister). Notably, the marital standard of living becomes less important to a modification over time (IRMO Rising).
The court holds the presumption (which is rebuttable) that a supported party has a reduced need for support when they are cohabiting with a third party. Cohabitation is not limited to remarriage, and the burden is on the supported party to show that cohabiting doesn’t lower their need for support.
No, a spousal support order cannot be modified to a date before the Request For Order (RFO) is filed with the court.
Yes, the court resolves matters of paternity and parentage along with child support and custody issues. Family law court has the jurisdiction to determine the parents of a child based on DNA testing. After the determination of parentage is made, questions of custody, visitation, and support will be addressed. Litigation involving parentage is resolved in family court, which has specific statutes, legal assumptions, and a large volume of case law to reach decisions that protect the interests of the child and also conform to common sense.
Yes, paternity may impact the custody and support of children, issues decided by the same California courts as parentage. The courts are guided by the Uniform Parentage Act (UPA) but are not limited by this law in finding a decision.
Yes, paternity laws are based, in part, on presumptions. It is presumed that if a wife is cohabiting with her husband, and the husband is not sterile or impotent, that the child of the wife is also the child of the husband.
Yes, retirement plans are a type of compensation, and compensation during the marriage is community property. As part of a divorce, the plan will undergo valuation and a determination of what percentage is community property and separate property will be made based on if it was earned during the marriage. Following valuation, it will be divided between the parties.
Retirement plans fall into two general categories: defined benefit plans such as a pension, and defined contribution plans such as a 401(k).
Retirement plans fall into two general categories: defined benefit plans such as a pension, and defined contribution plans such as a 401(k).
A Qualified Domestic Relations Order (QDRO) is designed to enable the distribution of the nonemployee’s share of a retirement plan without suffering from income tax consequences. Since the contributions to many retirement plans are pretax, the QDRO ensures that this tax status is appropriately handled as part of the settlement between the parties.
Many factors are considered when characterizing and valuing retirement plans as part of divorce proceedings. These include:
Defined benefit plans provide a set benefit, begin paying that benefit at a specific age, and provide the benefit for a specific length of time. For example, a pension plan may pay $5,000 per month beginning at an employee’s 60th birthday and continuing to their death. In a divorce, a defined benefit plan is valued by an actuary to determine the present value of the benefit plan. Defined benefit plans that aren’t based on military service are split between community and separate property based on the “time rule,” which measures the difference in time worked to earn the plan between the marriage and before marriage (and after separation). Military pensions are split between community and separate property based on the “frozen benefit” rule, in which the community’s interest in the plan is frozen on the date of the divorce order.
A defined contribution plan allows individuals to make a certain dollar amount contribution to the plan, often on a pretax basis, annually. The specific plan defines what level of contributions can be made each year. Common examples of defined contribution plans include 401(k), IRA, SEP IRA, and profit-sharing plans. Money deposited into a defined contribution plan after marriage and before separation is community property, as it is a form of compensation. Gains on the investments in the plan take on the characteristic of the underlying assets, so assets with a community interest generate community profits and losses.
Tracing is an examination of financial expenditures to determine if one party’s separate assets were used to purchase an asset or pay an expense, which may make the amount reimbursable back to the party’s separate property.
Tracing is an examination of financial expenditures to determine if one party’s separate assets were used to purchase an asset or pay an expense, which may make the amount reimbursable back to the party’s separate property.
Separate and community property are frequently commingled in a variety of circumstances. Common examples include separate property assets used to purchase jointly titled assets such as real estate, the use of separate party funds to make mortgage payments on a community property home, and the use of separate party funds to improve a community asset, such as a home remodel.
No, separate property commingled with community property is not treated as a gift to community property. If tracing can prove assets or funds originated in separate property, then the party will be reimbursed for that amount. If tracing cannot prove it was separate property, it becomes community property.
The burden is on the party that is claiming an asset is separate property and their lawyer to prove that the asset does, in fact, belong to them and not the community. The party must have the records necessary to make tracing possible.
The burden is on the party that is claiming an asset is separate property and their lawyer to prove that the asset does, in fact, belong to them and not the community. The party must have the records necessary to make tracing possible.
The burden is on the party that is claiming an asset is separate property and their lawyer to prove that the asset does, in fact, belong to them and not the community. The party must have the records necessary to make tracing possible.
Legally, assets purchased or otherwise acquired during the marriage are considered to be community property. It is presumed that when separate property and community property assets or funds are commingled in a particular account to pay community expenses, that it is the community funds that are withdrawn to pay those expenses, not the separate property funds.
Tracing should begin as early as possible in the process of divorce. Tracing relies on financial records, and if those records must be subpoenaed from financial institutions, it may take months before tracing can even begin. The tracing process itself often takes multiple months to complete.
Tracing is most commonly completed using the direct method, also known as the “mechanical” method, or the family expense method, also known as “recapitulation”. Other methods may also be used, as long as the method does not rely on speculation in any way.
If the court finds that one party needs support and that the other party can pay, it will order spousal support. Spousal support that is payable before a final judgment is temporary support, while after the judgment it is referred to as permanent spousal support.
Temporary spousal support is support payable to the supported party before a judgment in the divorce is reached. Temporary spousal support is designed to maintain the status quo in living conditions for the parties to whatever extent is possible. Temporary support may be ordered at the Request For Order (RFO) stage, and the level of support is frequently determined with the use of computer programs. Temporary spousal support may be ordered retroactively to the filing date of the RFO.
Permanent spousal support is ordered as part of the divorce judgment. The “permanent” name does not indicate that the support lasts for the party’s entire life, but rather draws a distinction between support ordered at trial and temporary spousal support ordered before judgment. Other names for permanent spousal support are post-judgment or long-term spousal support.
Temporary spousal support is designed to maintain the status quo for each party as the divorce works its way through the legal system. Permanent spousal support is based on family law. Permanent spousal support may be higher than temporary support, but the temporary spousal support awarded may not be the basis of a permanent spousal support order (IRMO Schulze).
There are four common structures for permanent spousal support awards:
While temporary spousal support is designed to maintain the status quo in the parties’ lifestyles, permanent spousal support is based on law, specifically, Family Law Code § 4320. The court cannot set permanent spousal support based purely on the computer software used in other situations.
Family Law Code § 4320 considers the following factors:
(a) The extent to which the earning capacity of each party is sufficient to maintain the standard of living established during the marriage, taking into account all of the following:
(1) The marketable skills of the supported party, the job market for those skills, the time and expenses required for the supported party to acquire the appropriate education or training to develop those skills, and the possible need for retraining or education to acquire other, more marketable skills or employment.
(2) The extent to which the supported party’s present or future earning capacity is impaired by periods of unemployment that were incurred during the marriage to permit the supported party to devote time to domestic duties.
(b) The extent to which the supported party contributed to the attainment of an education, training, a career position, or a license by the supporting party.
(c) The ability of the supporting party to pay spousal support, taking into account the supporting party’s earning capacity, earned and unearned income, assets, and standard of living.
(d) The needs of each party based on the standard of living established during the marriage.
(e) The obligations and assets, including the separate property, of each party.
(f) The duration of the marriage.
(g) The ability of the supported party to engage in gainful employment without unduly interfering with the interests of dependent children in the custody of the party.
(h) The age and health of the parties.
(i) All documented evidence of any history of domestic violence, as defined in Section 6211, between the parties or perpetrated by either party against either party’s child, including, but not limited to, consideration of:
(1) A plea of nolo contendere.
(2) Emotional distress resulting from domestic violence perpetrated against the supported party by the supporting party.
(3) Any history of violence against the supporting party by the supported party.
(4) Issuance of a protective order after a hearing pursuant to Section 6340.
(5) A finding by a court during the pendency of a divorce, separation, or child custody proceeding, or other proceeding under Division 10 (commencing with Section 6200), that the spouse has committed domestic violence.
(j) The immediate and specific tax consequences to each party.
(k) The balance of the hardships to each party.
(l) The goal that the supported party shall be self-supporting within a reasonable period. Except in the case of a marriage of long duration as described in Section 4336, a “reasonable period of time” for purposes of this section generally shall be one-half the length of the marriage. However, nothing in this section is intended to limit the court’s discretion to order support for a greater or lesser length of time, based on any of the other factors listed in this section, Section 4336, and the circumstances of the parties.
(m) The criminal conviction of an abusive spouse shall be considered in making a reduction or elimination of a spousal support award in accordance with Section 4324.5 or 4325.
(n) Any other factors the court determines are just and equitable.
No, the level of temporary spousal support does not play a role in the determination of permanent spousal support (IRMO Schulze). Permanent spousal support is determined based on the application of the family law code.
Yes, the marital standard of living is one factor considered by Family Code § 4320. The marital standard of living should never be considered the upper or lower limit of spousal support but may be considered as a benchmark value. The standard of living may be defined by the court with a specific dollar value, or a more general statement such as “upper-middle-class standard of living” (IRMO Kerr).
Typically, the marital standard of living is based on either the ongoing living expenses of the marital household, or the net income of the divorcing parties. The net income approach treats investments and other assets as a lifestyle choice, so that investing or paying for a vacation are treated as the same thing (IRMO Winter, IRMO Drapeau, and IRMO Weinstein).
Yes, the marital standard of living diminishes in importance as the time after separation increases (IRMO Rising).
Yes, the court may require the payer-party to liquidate certain assets to pay spousal support in certain circumstances (IRMO Deguigne).
Yes, the court must consider the marital standard of living of both divorcing parties, not just the spouse who will receive support (IRMO Andreen).
Although the court has wide discretion in ordering spousal support, a general guideline can be found based on the length of the marriage. If a marriage lasted less than 10 years, the court typically awards spousal support for half the term of the marriage. So, a marriage that lasts eight years will likely result in four years of permanent spousal support. The court can order a longer or shorter period of support as it deems appropriate. For a long-term marriage of more than 10 years, spousal support will generally continue until the payee-spouse is remarried or the death of either party. Spousal support payments will typically continue unless the payee-spouse becomes self-supporting.
Yes, the court can structure spousal support with a base support payment and a supplemental support payment based on bonuses, commissions, stock options or other types of compensation that cause a payer-spouse’s income to fluctuate. The supplemental payments in such cases are called Ostler-Smith payments (IRMO Ostler and Smith).
Yes, the court can order a reduction in spousal support payments at some time in the future, which is known as a “substantive stepdown.” The court generally orders a substantive stepdown when the evidence shows that the payee-spouse’s need for support will also be reduced in the future.
Yes, the court can order that spousal support be reduced to zero at some point in the future, which is known as a “jurisdictional stepdown order.” The court must find that the payee-spouse’s need for support will also reach zero on the date chosen.
Yes, the court can order that spousal support be reduced to zero at some point in the future, which is known as a “jurisdictional stepdown order.” The court must find that the payee-spouse’s need for support will also reach zero on the date chosen.
The court views a lump-sum severance payment as being spread out over the term of employment it applies to instead of allocating it to the single month in which it is received (IRMO Tong and Samson).
Unvested stock options, restricted stock units, and other types of equity-based compensation are characterized as income by the court once they become vested (IRMO Kerr and IRMO Macilwaine).
There are multiple gray areas in defining income that must be carefully worked through. For example, free rent or meal allowances may be considered income by the court. Proceeds from the sale of investments may be income, but if it is reinvested, it typically is not income. Deferred salary and recurring payments from family, as opposed to one-time gifts, are considered income.
Although the court has wide discretion in choosing what period of time to consider in examining income, it must choose a period of time that is representative of the income (IRMO Riddle). If one party started a new career in the last year, looking at a four-year average of incomes is not likely to be representative of the party’s income on an ongoing basis.
Yes, the court can impute income based on the assets of each party. For example, the court may impute earnings based on the payee’s community property in a new marriage (IRMO Martin). The court can also impute income based on the sale of assets (County of Kern v. Castle).
Yes, the court may order a divorcing party to undergo an examination by a vocational rehabilitation expert to determine their ability to become self-supporting.
If a divorcing party voluntarily quits their job or lowers their income, the court may impute their income to the previous level of income to calculate spousal support, but the burden is on the party claiming underemployment (IRMO Regnery). Case law is split if the motivation for suppressing income is relevant to the court (IRMO Meegan [Yes] / IRMO Ilas [No]). If the court is going to impute income, it must do so for a normal workload of an individual in a similar job and not include overtime or excessive hours worked (IRMO Simpson).
Yes, a temporary spousal support order can be modified, but most courts require the finding of a change in circumstances, unless the request is based on domestic violence.
Yes, the court can modify a permanent spousal support order based on a change in circumstances (IRMO Clements).
There are many circumstances in which a change to a spousal support order may be supported. Here is a selected list of common issues:
The following issues frequently are found not to constitute a “change of circumstances” indicating the need to modify spousal support:
Yes, the reasonable expectations of each party as expressed in a settlement agreement may impact a “change of circumstances” test when one party wants to modify a spousal support order (IRMO Dietz).
By itself, an increase in the payer-spouse’s income level does not justify an increase in spousal support. The payee-spouse must show that the existing level of support does not meet their needs (IRMO Hopwood and IRMO Hoffmeister).
Yes, the court can look at the payee’s work history to determine if a good faith attempt to obtain employment and become self-supporting has been undertaken. The entire history is relevant, not just the payee’s action since the last order (IRMO Schaffer). A failure to make a reasonable effort to work may be grounds not to extend spousal support.
Yes, spousal support may be modified based on the payee cohabiting in a romantic relationship. There is a presumption (which is rebuttable) that cohabiting lowers the payee’s need for support. The payee does not have to be remarried for this presumption to stand.
No, a divorce court cannot make a spousal support order non-modifiable unilaterally, that requires the consent of both parties (IRMO Zlatnik).
Yes, spousal support can be a source of Family Code Section 271 sanctions payable to the other party but must not cause unreasonable financial problems (IRMO Pearson).
No, spousal support payments made based on orders entered after December 31, 2018, are not tax deductible. Spousal support payments are taxable income for the payee.
Yes, the court must take the history of documented domestic violence into consideration while setting the level of spousal support (IRMO Priem and IRMO J.Q. & T.B.).
Yes, stock options are a form of compensation, which is traditionally community property. If all or a portion of the stock options vest during the marriage, that portion is characterized as community property by the court.
Even if stock options are granted before the marriage, they will likely have a community property interest if they vest all or in part during the marriage. Likewise, stock options earned during the marriage are likely to have both a community and separate property portion. California law dictates that earnings are community property, and the nature of stock options mean they often partially fall into both community and separate property categories.
Yes, the court has multiple formulas it can use to allocate stock options between community property and separate property. There are three main formulas (IRMO Nelson, IRMO Hug and IRMO Harrison) in use today. The community interest in options that vest after separation lessens each year after the separation.
The following factors contribute to the decision of which formula to use to allocate stock options between separate and community property:
Yes, there are multiple types of vesting for stock options. If stock options vest over a series of years, they have “graded vesting,” also known as tiered vesting. If the entire grant vests after a certain number of years, they have “cliff vesting.” Some options also have a performance metric attached such as a financial milestone that must be achieved for vesting.
Yes. Premarital agreements are generally found to be valid if the parties follow the rules laid out in the agreement.
Yes, some premarital agreements may be found to be invalid and unenforceable. If the divorcing parties do not agree as to the validity of a premarital agreement, the court will rule on the matter. The court will consider factors such as the relationship of the parties when the agreement was made, undue influence placed on a party, and lack of disclosures.
Yes, a valid premarital agreement will alter how certain community property laws impact the divorce of the parties. Such an agreement can cause what would ordinarily be community property to be treated as separate property.
Yes, premarital agreements can alter community property laws related to gifts. Valid gifts between spouses must meet certain specific legal requirements in California. For example, a vehicle cannot be characterized as a gift. There are few to no restrictions of gifts of items such as apparel and jewelry.
Yes, premarital agreements have special requirements. The premarital agreement must be “acknowledged” by the other party (IRMO Cleveland). There must be a full week between when the agreement is first presented and when the parties sign it. A premarital agreement that does not comply with these special requirements may be found to be invalid.
No, a premarital agreement cannot stop the divorce court from making specific orders related to child custody and child support. The parties also cannot bind the court in matters of relocation or setting a standard to review child support.
No, a premarital agreement signed before the first marriage of two parties is not valid for the second marriage of the same parties (Barham v. Barham).
Yes, in some circumstances one party’s failure to perform the actions included in a premarital agreement will prevent them from enforcing the agreement on the other party (In re: Warner’s Estate).
No, parties cannot waive the Preliminary Right of Disclosure, but are able to waive the Final Declaration of Disclosure. If this right is waived, both parties are still obligated to disclose all material information about community and separate property.
No, a premarital agreement will be found to be invalid if the court rules that it promotes divorce (IRMO Dajani). One party gaining a significant asset if a divorce occurs is not promotive of divorce on its face. For example, a court ruled that a premarital agreement featuring a $100,000 payment in case of divorce to be valid because that amount was equivalent to the spousal support the payee would have otherwise received (IRMO Bellio).
Premarital and postmarital agreements cannot validly penalize certain areas of behavior. Such agreements cannot include penalties for being sexually unfaithful (Diosdado v. Diosdado). They also cannot penalize a party for the use of illegal drugs (IRMO Mehren & Dargan).
Yes, the law now allows parties to make agreements addressing spousal support in some circumstances, which was formerly prohibited by the court. Such a provision will be unenforceable if the court finds it to be unconscionable. The court may grant temporary spousal support as it determines the validity of such an agreement (Gromeeko v. Gromeeko).
No, a premarital agreement that is not executed in a completely voluntary manner without duress will not be found valid (IRMO Baltins and IRMO Bonds).
Yes, the court may interpret the intentions of the parties if a premarital agreement is found to be vague. The same concept is applied to a marital settlement agreement (IRMO Schu).
Premarital and postmarital agreements are contracts and can be attacked on that basis. A premarital agreement that is not well-written or is vague may be misinterpreted or ruled invalid by the court. There are some differences between premarital agreements and normal contracts. For example, the fairness of a typical contract is judged at the time of the agreement, but the fairness of a premarital agreement on spousal support is judged at the time of divorce.
Yes, cohabitation may result in financial liability to the other party based on express or implied agreement. Any rights arising out of cohabiting are based on contract law rather than family law.
No, the State of California does not recognize common-law marriage. No length of cohabitation will create a marriage, marital property, or marital rights. There is no community property in a cohabitation.
Cohabiting before marriage will not be construed by the court as part of the marriage when calculating support and other important rulings in a divorce. Cohabiting after divorce may result in the lowering or stoppage of spousal support payments.
Cohabiting before marriage will not be construed by the court as part of the marriage when calculating support and other important rulings in a divorce. Cohabiting after divorce may result in the lowering or stoppage of spousal support payments.
Civil litigation related to cohabitation is known as a Marvin case. A Marvin case is quite different than a divorce case because the parties do not have the Family Law Code to help in such an action. Marvin cases are civil matters that are not heard in divorce court and may involve a jury.
Yes, the court resolves matters of paternity and parentage along with child support and custody issues. Family law court has the jurisdiction to determine the parents of a child based on DNA testing. After the determination of parentage is made, questions of custody, visitation, and support will be addressed. Litigation involving parentage is resolved in family court, which has specific statutes, legal assumptions, and a large volume of case law to reach decisions that protect the interests of the child and also conform to common sense.
Parties have two years after the birth of the child to rebut the presumption of paternity with genetic testing. The parties who can do so include:
A father may execute a voluntary Paternity Opportunity Program (POP), which has the same weight as a court finding of paternity. The family court can nullify a POP for a variety of reasons, such as the child’s age.
Matters of child custody are always heard by the family court, regardless of whether the parents are or ever were married. The family law court acts in the child’s best interest and will attempt to protect the child’s welfare and promote their education no matter what relationship the parents have or once had.
Please call (949) 760-8888 or email: paul@nelsonkirkman.com
Your first meeting with a Nelson|Kirkman lawyer gives you the opportunity to make smart decisions about your potential divorce in its earliest stages, the most critical time in the entire process. We will share important information about your case and begin gathering facts to best represent you, whether the divorce is headed for court or mediation. You should come to the table with detailed information about potential complexities and a willingness to learn and build the team that will effectively represent your interests.
Preparing certain information and documents before your initial consultation will make it a much more productive session. We advise new clients to bring the following items to the initial consultation:
Yes, you may represent yourself, but even if you believe your divorce is simple, you should have a consultation with a divorce lawyer to make sure you aren’t missing hidden complexities that would cause the divorce to go against you.
If you have no children or real estate, the simplified summary dissolution procedure may be best for you. It is advisable to consult with a divorce attorney to ensure that you fully understand your rights and responsibilities.
You may not need to retain a lawyer if you have already worked out the items in your marriage, such as child custody and support, the separation of assets, and especially if you and your spouse have similar levels of income. It is still advisable to speak to a lawyer to make sure you have addressed all possibilities.
Even without a lawyer, your spouse may have a better understanding of the law or be a better negotiator when it comes to court or settlement. There have been many cases in which a party learned that their spouse hired a lawyer on the day of a hearing, leaving them at a distinct disadvantage.
Some mediated divorces do not require counsel, but many make representation extremely valuable. Consult with our firm to ensure that your rights and best interests are represented no matter how your divorce may be handled.
Our firm provides invaluable skills and experience to help you gain the best outcome possible. Specifically, our team will help you:
To determine if you can afford a lawyer, you must consider two different questions. First, determine the cost of hiring a lawyer to represent you in your divorce case. Good lawyers will be very open with you regarding the overall cost of your case. Second, you must determine the cost of not being represented in your divorce case. Once you realize that a great divorce lawyer may make the difference in paying thousands of dollars a month for years, you may look at legal fees in a different light.
Most divorce cases settle out of court. Some clients demand their “day in court” and hire attorneys who are focused on litigation, but this typically results in drawn-out and expensive divorces. Cases are more likely to go to court if they include matters on which the law is unsettled, the divorcing parties can’t agree on who will be awarded certain assets, and child custody is being contended between the parents.
There is no simple answer to this question. Each person is unique, and each divorce case is also unique, whether it is simple or complex. Our firm will help you learn the positives and negatives of each path a divorce may take to achieve the most successful outcome possible.
There are far too many variables in a divorce to provide a simple answer for how long a divorce will take, especially given the severely backlogged court system. If the divorcing parties are mutually civil and their attorneys are settlement-minded, a divorce can be relatively fast and as inexpensive as possible. If a divorce is contentious, or experts are involved, or the matter heads to court, the divorce will be slowed down considerably.
Mediation without the assistance of a divorce lawyer may save attorney’s fees upfront, but the mediation may result in a disastrous settlement that costs many tens of thousands of dollars more than attorney’s fees would have cost. The cost of mediation may be much higher than hiring a divorce attorney to expertly represent your best interests.
Divorce mediation is most effective when both spouses demonstrate the following characteristics:
Yes, mediations sometimes fail to reach a settlement, and in other cases achieve an extremely unfair settlement. Notably, a failed mediation tends to polarize the divorcing parties, increasing the negative feelings between them. Many people attempt mediation when they aren’t even good candidates for success based on personality and ill feelings between the parties. Mediation may also be used as a delay tactic for one party to make financial moves or take other actions that may harm the other party in the long run. Consulting with a lawyer will help you better understand exactly what is happening with mediation and also help you identify a good settlement deal as opposed to a disastrous one.
Your relationship with your kids is of prime concern. Our experience litigating custody in Orange County helps us objectively focus on facts relevant to the courts. Important considerations by the courts include:
Depending on your circumstances and your children’s needs, we can pursue one of four possible arrangements:
California community property law requires an “equal division” of assets that were acquired during the marriage. The state also recognizes separateproperty, which is any asset you bring into a marriage or an inheritance you receive from a deceased family member before or during a marriage.
Debts are treated in the same manner.
Your relationship with your kids is of prime concern. Our experience litigating custody in Orange County helps us objectively focus on facts relevant to the courts. Important considerations by the courts include:
Depending on your circumstances and your children’s needs, we can pursue one of four possible arrangements:
It is more uncommon and slightly more difficult to modify legal custody over physical custody. Remember that having legal custody means that you, as a parent, have a say in your child’s health, education, and welfare. Therefore, for one to think they deserve a modification in the court’s granted legal custody, they must have sufficient evidence of a change in circumstance(s); meaning, if you feel you deserve more time with your kids, you must present the court with compelling reasons why.
Note, appealing for more custody rights doesn’t always succeed. Even if you have proven, on paper, to be worthy of making legal decisions for your child, the judge may not grant it. The judge is always looking out for a child’s best interest, which goes back to their health, education, and general welfare.
Under a joint legal custody agreement, both parents have a say in major decisions regarding healthcare, education, etc. The court decides in what situations or circumstances the parents must obtain the other’s consent before making a decision. These situations can vary but here are some examples in which one parent must obtain the other parent’s consent:
Contrary to popular belief, joint doesn’t always mean equal. If, during your child custody case, you hear the term joint custody, you cannot assume it will be an even amount of parenting time.
The court will grant an order stating how much parenting time will be allocated. Joint physical custody covers a basic parenting schedule for the course of a school year designating when the child(ren) spend time with the parents on weekends and overnights on weekdays. There are set schedules for the summertime since children are usually not in school and for major holidays. Each parent may also have set vacation times which can be included on the order.
“‘Sole legal custody’ means one parent shall have the right and the responsibility to make the decisions relating to the health, education, and welfare of a child” according to California Family Code 3006.
How is this determined? Can an attorney improve a client’s chances of being the sole custodial parent? Will the client have absolutely no say if he/she is not the sole custodial parent? Can these conditions ever change?
The court can grant sole custody and decision-making in some areas while granting joint legal custody in others. How your case is ruled depends in large part on the knowledge and skills of your family law attorney.
One might assume that the word “sole” connotes one parent is with the kids 100% of the time. But this is not always the case. Sole physical custody simply means that one parent has the child or children most of the time and the other parent has designated visitation times. (This can range from a 60/40 split parenting time to 100/0.)
Does this mean the parent with sole custody can leave the state suddenly or cancel visitations? Absolutely not. Family Code 7501 states, “A parent entitled to the custody of a child has a right to change the residence of the child, subject to the power of the court to restrain a removal that would prejudice the rights or welfare of the child.”
The sole custodial parent may also claim their children as a dependent or claim a child tax credit whereas the other parent might not be able to.
A prenuptial agree (prenup) is a document signed prior to marriage in which the intended spouses detail how property will be divided up in the event of divorce. Many people balk at the idea of a prenup, believing it takes “romance” out of marriage and makes a mockery of the idea of “’til death do us part.” In fact, a marriage is just as likely to end in divorce as it is to last forever (especially in Orange County, which has one of the highest divorce rates in the United States.) Premarital agreements can save couples a lot of stress, money, and time if their relationship fails. Many issues that arise in a long and tedious divorce could have been avoided if only the couple created such an agreement.
What’s included in a premarital agreement? Typically, each includes:
If you are planning to marry, we can help you draft a prenup that is fair and reasonable to both sides and in full compliance with California law.
If you’re already married, getting a prenup is obviously out of the question. But you do have another option: A post-nuptial agreement. This is just like a prenup, only it’s done after-the-fact. The objective is the same: To identify what items/assets belong to you and which belong to your spouse. Like a prenup, such a document will protect you both in the event of divorce.
We can help you draft a postnup that is fair and reasonable to both sides and in full compliance with California law.
When a couple files for divorce, the state has an interest in seeing both parties are treated equitably. This is particularly true in a “No Fault” state like California, where it’s not necessary to produce evidence of wrongdoing to legally part ways.
As a result, court will try to ensure each spouse can live in “the style to which they have grown accustom.” In practicality, this means the higher-earning spouse will be legally obligated to subsidize the lesser-earning one via “spousal support.” (This is separate from child support.)
Spousal support used to be called “alimony,” a term which has fallen out of favor. However, the terms are legally synonymous. In California, the criteria for determining spousal support is contained in Family Code 4320.
We will guide through your divorce with strength, professional competence, and compassion. Our goal is to deliver the results you deserve.
California community property law requires an “equal division” of assets that were acquired during the marriage. The state also recognizes separate property, which is any asset you bring into a marriage or an inheritance you receive from a deceased family member before or during a marriage.
Debts are treated in the same manner.
What’s included in a premarital agreement? Typically, each includes:
If you are planning to marry, we can help you draft a prenup that is fair and reasonable to both sides and in full compliance with California law.
