Articles Posted in Judgment

The Associate Press is reporting that Los Angeles Dodgers owner Frank McCourt will keep paying $225,000 in temporary spousal support to his ex-wife, Jamie McCourt, over the next couple of months, but that money once used toward the mortgages of six luxurious homes will come from a $1.1 million escrow account funded by the sale of one of their other homes that was located near the Playboy Mansion.

When child and spousal support are at issue in a San Diego divorce, the issues can be resolved two way; either by agreement of the parties, or the court will make an order after having a hearing on the issue.

When parties reach a support agreement outside of a court hearing, either on their own or through their attorneys, the agreement is called a “Stipulation.” To become effective, the terms of the Stipulation must be written down and filed with the court.

You have just received a court stamped copy of your Judgment from your San Diego divorce attorney. Everything has been resolved – custody, visitation, child support, spousal support, division of assets and division of liabilities – there is nothing left to do, or is there?In a recent arbitration case, Husband who had been through a bitter divorce, did not change the beneficiary on his IRA, which listed ex-Wife as beneficiary. When he died 10 years later the IRA money went to his ex-Wife. Husband’s Widow sued to collect on the IRA money. The arbitration panel denied Widow’s claims. The panel found that Husband opened an IRA in 1994. Husband and Wife divorced in 1999. Husband remarried several years later. Husband was an attorney who made his own business decisions. Husband changed the beneficiaries on several of his other accounts, but not the IRA account. Although Husband probably did not intend for the IRA money to go to his ex-Wife, it was Husband’s responsibility to change his IRA beneficiary.

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

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

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

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

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

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

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

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

Also be sure to change title on any vehicles awarded to you. This can usually be done through the DMV with forms available online.If you were ordered to refinance real property loans, be sure you do so. Even if you are only required to make your best efforts to refinance (it is difficult to qualify for re-financing in this economy), make your best efforts by applying with several lenders, and keep trying. If you do not do so, depending on the Judgment language, you may lose the property!

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

Internet / E-Mail. Be sure to change the passwords and answers to security questions for all of your e-mail accounts and for any internet websites you visit (Facebook), purchase from (Amazon) or use for finances (Banks). Make sure the new password something that your ex-spouse cannot easily guess. Many websites let you write and answer your own security questions. This can help prevent your ex-spouse hacking into your online accounts and e-mails.
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A San Diego client recently asked me if the court could seize control of the parties community property business, which was started during marriage and is managed by his spouse.

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

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

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

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

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

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

(4) Orders the business sold.
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Jason London, star of the 1993 coming of age comedy Dazed and Confused, (not to be confused with his twin brother, Jeremy, the Party of Five and Seventh Heaven actor who was in the news last year for allegedly being kidnapping while changing a flat tire and forced to smoke crack at gunpoint,) finalized his divorce from wife, Charlie Spradling, last Thursday, according to E! Online.

E! Online reports that London and Spradling, after being separated for a number of years, filed for divorce in February 2010. In November 2010, before his divorce was finalized, London proposed to his girlfriend, Canadian born actress Sofia Karsten. Karsten said yes, and the couple plans to wed in July.

If London was planning on popping the question last November, why did he wait until now to finalize his divorce? Although I can only speculate, the logical answer is that there were issues raised in the divorce that simply weren’t resolved until now. But what if London had wanted to get married, and not just engaged, before all of the issues in his divorce were resolved? Could he have done so?

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