San Diego Divorce Attorneys Blog

March 12, 2015

SO YOUR EX QUIT THEIR JOB…NOW WHAT DO YOU DO? [Part Two – Spousal Support]

In Part One of this blog, I discussed the issue of income imputation (often referred to as earning capacity) in child support cases. The focus of the article was about your options if the other parent voluntarily quit their job and was seeking a modification of child support. As that blog explained income imputation (assigning income to a party that is not actually earned) is fairly straight forward based on California’s significant state interest of ensuring parent’s support their children. If you missed this blog, and you are facing a modification of child support based on the other party voluntarily quitting their job, I highly recommend you go back and read that blog.

But what happens if there are no children; or as is typically the case, there are orders for child and spousal support? Can you still seek to impute income at a party’s previous income when they voluntarily quit their job? The short answer is yes you can.

Family Code Section 4320(c) lists the earning capacity of the supporting spouse as one factor to consider in making spousal support orders. [“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. Family Code §4320 (c)]

Although Section 4320(c) speaks of earning capacity, the code does not specifically define what it means. For that answer we look to the case, Marriage of Simpson In Simpson, the California Supreme Court stated “‘[E]arning capacity’ represents the income the spouse is reasonably capable of earning based upon the spouse’s age, health, education, marketable skills, employment history, and the availability of employment opportunities.”Many of the same principles associated with the imputation of income with regard to child support apply to the imputation of earning capacity for spousal support. Just as with child support, the three-prong test of ability, opportunity and willingness that is found in Marriage of Regnery must be proven for spousal support as well. This also includes the principal that no finding of “bad faith” is required to support an imputation of income.

For a very long time, the Courts held that there needed to be a finding of bad faith, or in other words a deliberate attempt to avoid paying spousal support, before a court could impute income for spousal support purposes. This holding came from the case Philbin v. Philbin (1971) 19 Cal.App.3d 115. And yes, it is the same Philbin your thinking of as you read the case name.

In Philbin, Regis Philbin was working as a comedian in the late 1960’s, but his income had fallen dramatically since he left as Joey Bishop’s sidekick on the nationally syndicated “The Joey Bishop Show.” At the time the case was heard by the trial court, Regis’ annual income dropped from $95,000 per year to $27,000 per year (or $635,000 a year to $181,000 in 2014 dollars.) The Court of Appeal ultimately held that imputing income to Regis was not warranted since there was no bad faith on his part.

However, more recent case law suggests that the requirement of a bad faith finding for the purpose of proving earning capacity is no longer required.

It is important to note the Appellate Court has refused to impute income to a supporting spouse who voluntarily quit his job when the decision was based on a decision to follow a path of good works and services. In Marriage of Meegan (1992) 11 Cal.App.4th 156, the court upheld the trial court’s reduction of spousal support for a spouse who quit his high paying executive position to pursue a life in a monastery as a Catholic priest. The court held, the “[r]eduction [was] appropriate where Husband [was] acting in good faith and did not resign [his] job to avoid [his] spousal support obligations.” It is important to note that Meegan addressed only a spousal support order and child support was not at issue. In fact, Mr. Meegan voluntarily agreed to pay $875 per month towards his 2 adult children’s college expenses. I believe if child support were at issue in the Meegan case, the court would have made a different finding.

The Meegan case is an interesting example of a situation where the Court refused to impute income to a party who voluntarily quit their job and depressed their income. It also illustrates how very fact specific income imputation case can be. It is important to contact a qualified attorney to review your case and specific set of facts to determine whether an income imputation is appropriate.

The Court’s authority to impute income to a party is not limited to situations where the party quit their job. If one party refuses to get a job, or has been unemployed for a long period of time, the court may consider imputing earning capacity in these situations as well. In this situation, the party who wants to impute income will need to seek the assistance of an expert, called a vocational evaluator, to provide evidence of the 3 factors discussed above.

Spousal support requests, especially when they involve a request to impute earning capacity to a parent, can be difficult to navigate without the assistance of skilled family law attorney, so it is important to discuss your case with a qualified attorney.
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March 11, 2015

Can I Get Around the California Divorce Residency Requirements?

By Bickford Blado & Botros

As one would reasonably expect, not everyone can file for divorce in California. In fact, California has strict residency requirements that each person filing for divorce must meet. Although there is no way of getting around these requirements, it doesn’t mean that you absolutely can’t get divorced in California.

California’s residency requirements for married couples to file for a divorce, also known as a “dissolution of marriage”, are quite clear. One of the first steps in filing for divorce is to file a Petition for Dissolution of Marriage. On Page 1 of the Petition (Form FL-100) the person filing for divorce, the Petitioner, must check the box under oath stating that either the Petitioner or Respondent (other spouse) has been a resident of California for at least six months and a resident of the county where they are filing for at least three months preceding the filing of the Petition. The form notes that at least one person of the marriage must comply with the residency requirement. Thus, if you don’t meet the residency requirement but your spouse does, then you can still file for divorce in California.

If neither you nor your spouse meets the residency requirement, then this doesn’t mean that you can never get divorced in San Diego. You actually have a few different options. First, you can simply decide to wait to file your divorce action until you meet the residency requirement. If you are pretty close to meeting this requirement then it might not be that detrimental to hold tight in the marriage for a bit longer. You can even establish a date of separation without actually filing the petition for divorce. Talk to an experienced family law attorney to learn how you can establish a date of separation.Another option is to file a petition for legal separation instead of a petition for dissolution of marriage. As discussed in my earlier blog entitled, “Changing Your Mind from Legal Separation to Divorce,” there are no residency requirements for a married couple to file for a legal separation in California. If you intend to satisfy the California residency requirements, then once time has passed and you meet the residency requirement, you can file an amended petition and ask the court to convert the petition for legal separation into a petition for divorce. This strategy is advantageous because it will give you immediate access to the Family Law Court to ask for temporary orders. Additionally, if the case involves domestic violence then the same judge can hear both the domestic violence issue and the divorce case. Additionally, since there is a 6 month waiting period in California to terminate marital status, by filing for legal separation, the clock will start ticking on the 6 month countdown even though you filed for legal separation instead of dissolution of marriage.
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March 10, 2015

SO YOUR EX QUIT THEIR JOB…NOW WHAT DO YOU DO? [Part One – Child Support]

By Matthew S. Blado

With the national economy making positive strides, and the unemployment rate down more than 4% from the same period in 2010, worry about involuntary termination of employment is less of a concern for parties’ involved in a divorce cases in California.

But what happens if the other party voluntarily quits their job? The answer is nothing until one party files a motion to modify support. If the party who quit files a motion to reduce their support obligation, the court has the authority to “impute income” (assign income to a party that is not actually earned) to the party who quit their job.

The court distinguishes between earning capacity for child support orders and for spousal support orders. The application of the law, though similar, is different in some important ways. This blog will discuss the Court’s authority to impute income to a parent for the purpose of setting child support. My next blog will discuss the application of income imputation to a former spouse for spousal support orders.

Family Code §4058(b) provides that the court may, in its discretion, consider earning capacity of a parent in lieu of actual income, consistent with the best interests of the children. The policy behind Section 4058(b), and the cases that have interpreted the meaning and application of the statute, is to further the state’s policy that a parent’s primary obligation is to support his or her children according to the parent’s station in life and ability to pay. California has an overwhelming policy interest in ensuring both parents support their children to the best of their ability.For party to convince a court to impute income to the other party, they must provide evidence to the court of three important factors to prove “Earning Capacity”. Those factors are, (1) the ability to work, including age, occupation, skills, education, health, background, work experience and qualifications; (2) the willingness to work exemplified through good faith efforts, due diligence and meaningful attempts to secure employment; and (3) an opportunity to work which means an employer who is willing to hire. These factors were set forth in a case called Marriage of Regnery. One way to prove these factors is to show the Court the other party voluntarily quit their job. The implication is the quitting party is still “able” to earn income at a level consistent with their past employment since it was their decision to leave. That is, but for the parent’s decision to quit their job; they would still be earning income at that level. This argument was approved by the Court of Appeal in a case called Marriage of Eggers. In the Eggers case, the Court said, “When a supporting party quits a job, the trial court has the discretion to conclude the parent’s conduct reflected a divestiture of resources required for child support obligations. [The Court] may refer to the former job as the basis for its findings of ability and opportunity and may impute income to the parent based on his or her prior earnings.”

The Court’s authority to impute income to a party is not limited to situations where the party quit their job. If one party refuses to get a job, or has been unemployed for a long period of time, the court may consider imputing earning capacity in these situations as well. In this situation, the party who wants to impute income will need to seek the assistance of an expert, called a vocational evaluator, to provide evidence of the 3 factors discussed above.

Child support requests, especially when they involve a request to impute earning capacity to a parent, can be difficult to navigate without the assistance of skilled family law attorney, so it is important to discuss your case with a qualified attorney.
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March 9, 2015

Divorce Versus Annulment Matters When Filing Taxes

By Bickford Blado & Botros

It’s that time of year again…tax time! It’s a time of gathering all of your financial documents and keeping your fingers crossed that you will get a big refund in the mail rather than having to pay Uncle Sam more money out of your pocket. Whether you got divorced or had your marriage annulled last year, filing taxes this year will certainly be different. In particular, if you had your marriage annulled, there are some specific issues you may have to deal with.

Whether you have been divorced or had your marriage annulled, either way you look at it, your marriage has come to an end. However, a divorce is the end of a marriage that was valid at the time the parties wed. An annulment, on the other hand, marks the end of a marriage that was either void or voidable at the time the parties wed. For instance, under Family Code Sections 2200 and 2201, the marriage may have been void in California if it was illegal due to incest or bigamy. Or under Family Code Section 2210, the marriage may have been voidable due to a number of reasons, including fraud, force, physical incapacity, and unsound mind. The marriage may also have been voidable because the party filing for the annulment was under eighteen years old at the time of the marriage. Or lastly, the marriage maybe voidable and thus an annulment granted if there was a prior existing marriage that took place after the former spouse was absent for five years and not known to be living.

If the marriage simply ended by means of a divorce (also known as a dissolution of marriage in California) by December 31st of the prior year, then you will be required to file a separate tax return for the taxes due April 15th of the following year. You won’t be able to even file married filing separately if your divorce has actually been finalized by the court as of the end of the prior year.However, if your marriage ended via an annulment, then tax filing gets a bit more complicated. If you were married during the last tax cycle, then chances are that you filed your taxes as “married filing jointly” with your spouse. Once the April 15th tax deadline has passed, people who filed joint tax returns are usually not allowed by the IRS to change their filing status to file separately. However, since your marriage was annulled, that means that your marriage was never valid at the time you previously filed joint tax returns. Consequently, you must now file an amended tax return for the prior year as a single person rather than as married filing jointly. This may result in you paying more taxes because typically filing jointly with your spouse has some tax benefits that single filers don’t get. On the flip side, if you would have paid less in taxes as a single person, then you will be entitled to a refund when you file the amended tax return. In addition to amending your previous tax return(s), you must file this year’s taxes separately.
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March 5, 2015

Tips for Divorced Taxpayers

By Bickford Blado & Botros

By now, it’s likely that you’ve heard the H&R Block commercials or you are at least aware of their well-advertised “Get Your Billion Back America” campaign. H&R Block, like many other tax service companies, is clearly committed to pushing for consumers to use their services so they can help them get the maximum tax benefit that they deserve. Whether you use H&R Block, one of the many online tax service programs, a personal accountant or do your taxes yourself, it is important to understand how marriage and divorce may affect your taxes. Here are some helpful tips for divorced taxpayers.

1. Know your Filing Status.
Just like getting married affected your filing status, getting divorced will too. If your divorce is official as of December 31st of the year prior to when you are filing your taxes (i..e divorced by December 31, 2014 for 2014 taxes filed no later than April 15, 2015), then you will need to file separate tax returns. No, not “married filing separately”, but rather “single”. A change in your filing status could drastically affect the amount of taxes that you are responsible for paying.

2. Adjust your Income Tax Withholding on your W-4.
As discussed above, a change in your marital status will affect your tax filing status. As a result, the amount of income tax that should be withheld from your paycheck will change. The Form W-4 that your employer gave you to fill out when you first started your, is what determines how much income tax you have withheld from each paycheck. So once your divorce is finalized, you should go to your payroll department and ask to fill out a new Form W-4 and update the number of allowances that you are claiming.3. Know When to Claim or Deduct Child and Spousal Support.
If you are receiving/paying either temporary or permanent spousal support and/or child support, then it is important to know how to properly claim or deduct it on your tax returns. Generally, if you are the one receiving spousal support, then you must claim it as income on your tax returns. Child support, however, does not count as income for federal income tax purposes and thus is not taxable. If you are the one paying support, on the other hand, you may typically deduct the spousal support payments from your income, but not child support payments. However, it’s important to take a close look at your divorce decree because sometimes, spouses agree to designate spousal support payments as non-taxable and non-deductible.
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March 4, 2015

Is the Other Parents Nanny Raising Your Child?

By Matthew S. Blado

Celebrities are not immune to the problems which arise when two people try to co-parent their child following a divorce or separation; just ask Wiz Khalifa and Amber Rose. It was recently reported that the custody battle between Mr. Khalifa, the Grammy nominated rapper whose songs include “Black and Yellow” and “Payphone”, and Ms. Rose, the mother of his one-year-old son Sebastian, is heating up. In papers expected to be filed with the Court, the rapper alleges Ms. Rose is neglecting their son by staying out all night, and leaving their son in the care of family members or babysitters most of the time. According to reports, Mr. Khalifa alleges Ms. Rose has made a habit of only seeing Sebastian for a short time in the morning before leaving him in the care of others.

Reconciling after Divorce is Finalized

By Bickford Blado & Botros

Those who haven’t been too jaded by divorce may choose to re-marry again. Perhaps they now know what they are looking for (or certain characteristics they are trying to avoid) in a partner or they are simply in a difference stage of life and ready for another go at marriage. But after all of the time, money and emotions that many couples go through to get divorced, the last thing you would probably expect is for that couple to give their relationship another try after their divorce has already been finalized and they have been restored to single status.

Believe it or not, people change, circumstances change, and sometimes ex-spouses are actually able to rekindle their flame post-divorce. If you are thinking about remarrying your ex, then you not only need to proceed with caution, but you also need to become educated on how your reconciliation or re-marriage will affect your divorce decree. Reconciliation after the divorce judgment has been finalized and entered by the court may require the assistance of an experienced family law attorney.If you decide to re-marry your ex-husband, you may be surprised to know that not all of the provisions in your divorce decree are necessarily negated by your re-marriage. For example, many divorce judgments have a provision whereby the former spouse has waived the right to inherit from the other spouse. Remarriage to that same spouse does not void the divorce judgment, so a new estate plan will need to be considered. Spousal support is another tricky issue with regard to remarriage after a divorce judgment. If the divorce judgment includes a provision for one spouse to pay the other spousal support, when the parties remarry the spousal support will be terminated. However, if the spousal support had already ceased before remarriage, and the parties remarry but divorce a second time, then the Court might only take into consideration the length of the second marriage, rather than the combination of the first and second marriages to the same person. As discussed in my blog entitled “Reconciling after Filing for Divorce but Before Divorce is Finalized,” the division of your assets and calculation of support may be significantly affected by filing for divorce a second time after reconciliation or re-marriage to the same person.

It would behoove you to consult with an experienced San Diego divorce attorney before you re-marry your ex-spouse and determine exactly which provisions of your divorce decree will survive your re-marriage. Hopefully the second time is a charm and your reconciliation is not a temporary fix. But in any case, if you have taken steps towards protecting yourself, your family and your finances, you will be better off.
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March 2, 2015

Reconciling after Filing for Divorce but Before Divorce is Finalized

By Bickford Blado & Botros

Deciding to file for divorce or legal separation is a huge decision for any married individual. By the time that person actually gets enough courage to sit down with a divorce attorney and sign the Petition for Dissolution of Marriage or Petition for Legal Separation, his or her mind is typically made up. But what happens if somewhere along the way, a miracle happens and the couple reconciles? Is it too late to pull the plug on the divorce and live happily ever after?

It may come as a surprise, but it is not uncommon for couples to decide to forgo the divorce action and give their marriage another shot. Perhaps they felt forced to file for divorce at the time or the issues they had with their spouse have been resolved. Whatever the reason may be, if a couple is going to make a good faith attempt at reconciliation they need to be open to change and willing to examine the mistakes they have made in their relationship in the past. Forgiveness is also a big part of the reconciliation process. It is advised that a couple establish a timeline for their reconciliation, write down their relationship goals, and talk about their issues often. It is vital that neither spouse has an ulterior purpose for the reconciliation.If a couple decides to reconcile after filing for divorce but before their divorce has been finalized (i.e. a judgment entered by the court), there are a few options on how to proceed. First, if the couple is just beginning the reconciliation process but there is an upcoming hearing on calendar, the parties may seek a continuance to get the hearing pushed out to a later date. However, the court will ensure that the continuance is not sought in bad faith or simply to unnecessarily delay the divorce. If you think that you and your spouse are on the road to a full reconciliation, but you aren’t 100% sure, then you might prefer to stipulate (written agreement between both parties) to exempt your case for a certain period of time. This means that the court will essentially put your case on hold and suspend temporary orders that are in effect.

If the parties are sure about their reconciliation and absolutely no longer want to get divorced, they can choose to dismiss their divorce action altogether but without prejudice. This means that they would not be precluded from or penalized for filing another Petition for Divorce at a later date, if the reconciliation falls through for some reason. However, if a spouse decides to file for divorce later on down the road then it is very important to keep in mind that the date of separation will be different. Pushing out the date of separation to a later date can significantly affect division of assets and calculation of support and should be considered carefully before deciding to dismiss a divorce action. An experienced divorce attorney can advise you on your best course of action.
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February 26, 2015

Lessons Learned from Couple Who Divides Beanie Babies in Family Court

By Bickford Blado & Botros

If you grew up in 1990s, chances are you are familiar with the Beanie Babies fad. However, if you somehow missed out on that craze, Beanie Babies were the extremely popular stuffed animals made by Ty Warner, Inc. (later renamed as Ty Inc.). They were so popular and “valued” that in 1999 a divorcing couple actually went to count to divide up their Beanie Baby collection. No, I am not kidding! Apparently, the couple was unable to figure out how to divide up their Beanie Babies by themselves, without court intervention, so they literally took them all to court and divided them one by one in front of the judge.

While the family law court provides individuals with their “day in court” to allow a judge to make a decision about their case, most people will agree that it seems pretty ridiculous to go to court to have Beanie Babies divided. Even as a family law attorney, I am a big proponent of helping my client resolve as many of their issues outside of court as possible.

Going to court can be very costly for both parties. They are not only paying their attorney’s hourly fee, but there are other costs involved such as paying for a court reporter. Additionally, going to court means that if you are a working individual, you will have to take time off work to attend the hearings. Also, the divorce process will likely take much longer. The courts are extremely backed up and hearings are typically set months out. The longer your divorce goes on, the more anger, resentment and frustration seem to build up. Is it truly worth the time, attorney fees and emotional impact?So many issues can be dealt with outside of a court room. This includes division of your precious collection of Beanie Babies with your soon to be ex-spouse. If the value of your precious items is at issue, then bringing in a third party appraiser might be helpful. Also, when negotiating division of assets outside of court, it is important to carefully consider the item’s current and future value. It may be a huge risk to assume that items, like Beanie Babies, will have a significant future value. If you let your spouse keep a $20,000 vehicle at no charge or offset, in order to keep your beloved collection of Beanie Babies, you might be highly disappointed when years down the road you find out that Beanie Baby is still only worth less than $10. It’s a significant risk when you don’t know the item’s future value, but it’s a risk you might have to take to move the negotiating process forward and stay out of court while proceeding with your divorce.
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February 25, 2015

Dividing Art in Your San Diego Divorce

By Bickford Blado & Botros

Divorcing couples must divide their house, cars, money, furniture, businesses, retirement accounts and everything else they own. Division of property is just one unpleasant but inevitable part of the divorce process. In most cases, the parties own few antiques or family heirlooms, if any at all, and possibly a few other valuable items. However, for those couples with several pieces of art or even an art collection, dividing personal property can be much more complicated.

Many collectors of art are sentimentally connected to specific pieces and do not look at the piece of art the same way they would look at any of their other assets, like a savings account for instance. Consequently, the art collector will be less likely to divide the art in the same manner that he/she is willing to divide the kitchen appliances or family vehicles. Therefore, when dividing art it is important for the divorce attorneys and parties to find a solution that will make everyone as happy as possible.

Before coming up with a solution to divide the art, the parties are advised to make an inventory that details each piece of art that was acquired during their marriage. They should also include, in the same or a separate list, all art acquired prior to the marriage or after the parties’ separation, which will be confirmed as the respective party’s separate property. One way to inventory the art is to create a spreadsheet that lists the name or brief description of the piece of art, the place where the art was purchased, the current location of the art (i.e in the family residence, in a storage unit, displayed in a gallery, etc.), the purchase price and the current value, if known.The value of the art is not necessarily the price that was paid for it. So in order to know the value of the art, the parties might consider hiring an appraiser to come appraise each piece of art. It may seem like just one additional cost to add to the ever growing divorce expense list, but having the art appraised could make a big difference when figuring out how to equitably divide it between the spouses. If the spouses cannot agree on a joint appraiser, then each spouse can hire their own appraiser. However, if the appraisals conflict significantly, it may make negotiations over division of the art a bit more complicated. One way to resolve this issue is for the couple to agree to split the difference between the two conflicting appraisals. If the couple (with the help of their attorneys) is able to figure out a way to divide the art, rather than taking the issue to Court, everyone is more likely to come out happier with the result.
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