San Diego Divorce Attorneys Blog

July 7, 2011

The “7-Day Rule” for Premarital Agreements Revisited and Reinterpreted

Premarital Agreements (“PMA”) can be very tricky. As experienced San Diego family law attorneys, we work hard to keep up with changes to the PMA rules. The rules for “PMA’s are contained in California Family Code Sections 1600-1617. In addition to parties essentially creating their own agreed upon law (within the boundaries set by the PMA Act) for what is to occur in the event a marriage ends, the rules and the courts interpretation of the rules are constantly changing.

PMA’s may cover the following subjects:

• Property rights and obligations, property management and control, and disposition of property;

June 30, 2011

The Impact of Cohabitation and Remarriage on Child and Spousal Support

By Bickford Blado & Botros

After a divorce, one party may decide to cohabit or remarry. As a San Diego divorce attorney, when this occurs, clients (or former clients) ask questions about the impact of cohabitation or remarriage on child support and spousal support.

What is Cohabitation?

Everyone know what remarriage means, but what about cohabitation? Does staying overnight qualify as cohabitation?

June 24, 2011

Schwarzenegger is paying for private school tuition; might a court order you to too?

By Bickford Blado & Botros

As the details of our former Governor’s extramarital indiscretions continue to emerge, it is somewhat surprising that neither party has filed for divorce. But while the parties have yet to file for divorce, it appears they are already addressing an issue that arises in most divorce cases involving children: child support.

Radar Online reports that Schwarzenegger is already paying child support to Maria Shriver. In fact, according to the online source, it’s been reported that Schwarzenegger is paying “a significant amount of child support” and that he is “also paying for his sons, Patrick and Christopher’s private school bills.”

While in this case it appears that Schwarzenegger is voluntarily paying for the parties’ son’s private school tuition, will a court ever order a party to do so absent their agreement? The short answer is yes, under certain circumstances.

June 23, 2011

Problems That Could Affect a Couple Divorcing After a Long Marriage

By Bickford Blado & Botros

Many San Diego clients make the decision to divorce after decades of marriage. This means not only a painful separation after years of their lives being intertwined, but also facing a thicket of different property laws. First and foremost are California’s current community property laws, which get more complicated if the couple once lived out of state. Then there could be property laws from other eras that determine the division of property for each spouse.

If the couple lived in California throughout the marriage, their home, employment income, and any purchases made with the employment income would belong to each spouse equally. Only a gift, inheritance, or property owned before the marriage would be considered separate property. By contrast, in separate property states, the person whose name is on the title owns the property. If the couple were to divorce in one of the 40 separate property states, the result would be known as “equitable distribution”: a property distribution that is not equal, but based upon what each spouse contributed to the marriage. Yet if the couple moved to California and later divorced, our state treats much of the separate property as quasi-community property. Quasi-community property is simply property that would have been community property if the couple had lived in California. During the marriage, it is treated as separate property; but once the couple divorces, it is divided equally between the spouses, like community property.

This is the basic concept behind quasi-community property, but in reality, it is not so clear-cut. Couples who accumulated property over several years in another state may have lost or misplaced documents establishing the nature of the property — whether it was kept entirely separate, or was used for the family. Separate property used for family purposes has often been ruled to be community property in California. If it cannot be properly identified, one spouse risks losing significant assets that he or she would otherwise be entitled to. Without proper documentation, the only evidence of the couple’s history in their previous state comes from their own statements and those of family and friends. These statements may be based on faulty memory, or be otherwise biased and unreliable. In these situations, couples need an experienced San Diego divorce attorney to piece together as many records as possible until the most accurate situation emerges.

Couples divorcing after a long marriage may also be affected by laws that no longer exist today, but were relevant during the marriage. One such law involves transmutation of property. Transmutation is an agreement between spouses that community property will become one spouse’s separate property, or that separate property will become community property. Today, sections 850 through 853 of the California Family Code require that all transmutations must be expressly stated in writing by the spouse whose interest is adversely affected. However, until 1985, transmutations could be oral. That means that community property could have become separate property without any evidence other than one spouse’s declaration. Confusion over the true nature of the property could lead to battles between spouses over what was separate and shared, based on inaccurate memories. Some marriages may also be affected by the Married Women’s Special Presumption, which has not been valid since 1975. Property purchased in the woman’s name before 1975, without any indication of her marital status, was presumed to be her separate property.
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June 9, 2011

Schwarzenegger Case Illustrates Issues of Marital Property, Child Custody, Alimony in San Diego Divorces

By Bickford Blado & Botros

FOX News and other media outlets continue to report that the divorce of Arnold Schwarzenegger and Maria Shriver could be among the most expensive celebrity splits on record.

Some estimates say Shriver could get more than the $100 million Tiger Wood’s ex-wife Elin Nordegren received.Division of marital property in a San Diego divorce, or a divorce elsewhere in California, is supposed to be equal under the state’s no-fault divorce law. In practice, one party to a divorce can end up with significantly more than half the assets for a number of reasons.

What constitutes community property is one potential area of contention. Property owned before marriage and inheritance to one spouse are both examples of separate property. Valuating community property is another area where a San Diego divorce lawyer will focus attention. For instance, is the marital home valued at current market value? After the economic downturn, a couple’s primary residence is often a liability — with more owed on an upside down mortgage than the property could bring at sale.

With Schwarzenegger and Shriver, there are more complications — and more assets — than in many marriages — even celebrity marriages. And, with allegations about Arnold’s infidelity continuing to surface, he may find an unsympathetic judge on the bench. And, with four children and the majority of the earning power, several media outlets have reported child support and alimony could easily top $100,000 a month.

Typical couples should understand the tax implications of alimony and child support as there may be opportunities to move money in one direction or the other. Alimony is treated as taxable income for the receiver and as a tax deduction for the payer. Child support is tax free for the recipient but not deductible for the payer. One caveat to keep in mind: Courts are much better about helping you collect back child support than they are about assisting with the collections of back spousal support.

In the case of Schwarzenegger and Shriver, their marriage will be seen as long-term under California law, which means she may collect alimony for an indefinite period of time. A short-term marriage is defined as one lasting under 10 years, which is in part why it’s not uncommon to see celebrity couples split near the 10-year mark.

Other factors worth considering in this split is Arnold’s future income from motion pictures — particularly sequels to movies made during the marriage. The New York Post reported last year that Diandra Douglas — the ex-wife of Michael Douglas — moved to collect on his payday for the making of “Wall Street 2,” claiming her divorce agreement entitled her to a portion of the proceeds.

For most couples, similar concerns often involve retirement accounts or the earning power of an advanced degree — such as a medical degree or law degree — earned during the marriage.
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May 10, 2011

Can the Court Seize Control of Your Business like Major League Baseball did to the Dodgers?

By Bickford Blado & Botros

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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April 28, 2011

Is the Spousal Support Waiver in Our Premarital Agreement Valid?

By Bickford Blado & Botros

As a San Diego attorney, clients with premarital agreements often ask whether the spousal support waiver provision in their premarital agreement is enforceable. Whether my client wants to enforce the agreement or have it not enforced, the answer is – it depends.

The Premarital Agreement Act applies to premarital agreements executed after January 1, 1986. For a spousal support waiver to be valid, it must pass the “representation by counsel” and “not unconscionable” requirements.

If the party against whom enforcement of the spousal support waiver provision was not represented by independent counsel at the time the premarital agreement was signed, then the spousal support waiver is not valid. This means: (1) if the parties prepared the agreement themselves without legal counsel, the waiver is not valid; or (2) if Party A wants to enforce the waiver against party B, and Party A was represented by independent legal counsel but Party B was not, the waiver is not valid.

April 18, 2011

What if I want to move with the children?

By Bickford Blado & Botros

Sometimes, during or after a divorce, my client may decide to move away from San Diego. The most frequent reasons I hear are that my client can no longer afford to live in San Diego, have family/friends elsewhere, or received a great job offer out of San Diego.

When there are no children involved, a party is free to move. However, things become complicated there are minor children involved and the moving party wants to move with the children.

Whether you are the one requesting to move, or opposing a request to move, it is important to consult or retain an experienced San Diego divorce attorney. Once divorce proceeding have begun, both parties are automatically restrained from removing the minor children from the State (and usually the County once temporary custody orders are entered) without written consent of the other party or court order.

April 12, 2011

Family Law Filing Fees in San Diego County

By Bickford Blado & Botros

If you are heading to the court house to file a Petition for dissolution of marriage (or a Response), don’t forget to bring your check book. Here in San Diego County, the current filing fee for a “first paper” (which includes a Petition or a Response) is $395. And while that may seem quite expensive, it could be a lot worse.

The Associated Press recently reported on a new law in Romania which allows each of the country’s municipalities to set their own fee for a divorce. The towns’ fees range across the board, with the most expensive being Sangeorgiu de Mures. Couples divorcing in Sangeorgiu de Mures must pay 10,000 lei, which is approximately $3,370. To put this in perspective, The Associated Press reports that this amount is nearly 60 percent of the average annual salary. Interestingly, the fee to divorce in Sangeorgiu de Mures is 2,000 times what it costs in the capital city of Bucharest.

So why the high fee in Sangeorgiu de Mures? The Associated Press reports that the goal is to discourage divorce, as many of the town’s 8000 residents are catholic. And in fact, it appears to be working. According to The Associated Press, a number of couples have actually decided to remain married after learning of the high fee.

April 4, 2011

Divorce Litigation: Can My Spouse Pay For My Attorney?

By Bickford Blado & Botros

Did you happen to catch CNBC’s documentary Divorce Wars when it premiered last weekend? Promoted as “CNBC goes inside the confidential world of multi-million dollar divorce revealing the secrets of winning and losing on a battle field of emotional pain and financial gain”, the show highlighted, among other stories, the creation of Balance Point Funding, a company that provides money from private investors to fund divorce litigation in exchange for a percentage of the divorce settlement. According to its founder, Stacy Napp, the idea for the company was born from the challenges she faced in funding her own divorce litigation.

While creative, this is not the only option for a divorcing spouse in California. Rather, as a San Diego Divorce attorney, I regularly file motions for a contribution from the other spouse to my client’s attorney fees under Family Code Section 2030. This type of a motion is appropriate where there is a disparity between the parties in access to funds to retain counsel (in other words, “need”), and where one party is able to pay for legal representation of both parties (in other words, “ability”). The statute is designed to ensure that each party has access to legal representation, including access early in the proceedings, to preserve their respective rights.

While Family Code section 2030 addresses the allocation of attorney fees and cost, what about costs other than attorney fees and costs, such as court costs, expert fees and consultant fees? Family Code section 2032 provides a procedure by which either party may file a motion requesting that the court designate their case as complex or involving substantial issues of fact or law related to property rights, visitation, custody, or support. If the case is then designated as complex, the court has the discretion to allocate between the parties attorney fees and also court costs, expert fees, and consultant fees.