Bay Area Divorce Lawyer Blog

When a couple decides to divorce, one of the many issues that they often grapple with is how to divide community property. California law provides that any and all assets acquired due to the efforts of either spouse during the course of the marriage are to be split evenly between them upon divorce. Sometimes this means awarding an asset to one spouse and requiring him or her to make an equalizing payment to compensate the other spouse for their interest in the property. First, of course, you have to know how much the property is worth. Assets such as real property or financial accounts are generally easy to value, whereas a business can be very complex. A recent case out of the Sixth District Court of Appeals is a good example of how courts may determine the value of a family business, a figure that often includes “goodwill” built up by the business over time.

calculator-1406929-mHusband and Wife moved to California from India at some point after they married in 1976. Husband started his own trucking company in 1993, and Wife worked seasonally as a produce packager to supplement the family’s income. They bought a home in Watsonville, with Husband using income from the business to pay the mortgage and Wife using her wages to cover certain household expenses. They separated in February 2009 but continued to live in the home. Husband continued making the mortgage payments through May 2012, when Husband moved out of the home after Wife filed for divorce. They reached an agreement wherein Wife was responsible for the mortgage payments and Husband paid her $465 per month in temporary spousal support.

Following a divorce trial, a court awarded Husband the full trucking business and an equalizing payment to Wife. The trial court found the business had an overall value of $40,000, including $15,000 in actual value and $25,000 in goodwill. The goodwill aspect was based largely on Husband’s business relationship with his cousin, which the trial court said allowed him to gain a steady revenue stream without incurring marketing expenses.

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

accounting-calculator-tax-return-90376-mHusband and Wife married in 1997 and had two daughters before separating nine years later. While their divorce case was pending, the couple entered into a “post nuptial agreement,” wherein they resolved various issues, including their rights to the family home in Southern California. They agreed to list the home for sale and to treat the proceeds as community property, except that Husband was entitled to an additional $2.5 million for separate property funds he had contributed to the residence.

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

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If you’ve read this blog before, you may already know that we prefer to help clients resolve divorce and other family law matters through alternatives to litigation that help them work collaboratively with a former spouse to reach a positive solution. One of the many drawbacks of the traditional litigation route is the dizzying array of procedural requirements that can end up costing a person his or her case. A recent decision out of California’s Second District Court of Appeals is a good example of one of the primary procedural hurdles:  time limits and filing deadlines.

time-is-going-1415573-mHusband filed for divorce from Wife in May 2009, roughly 10 years after the couple was married. Following a six-day trial, the court ordered Husband to prepare a draft judgment reflecting both the trial court’s decision and a partial settlement agreement that the couple had reached. Wife refused to sign the draft judgment, however, and the court entered it as a final judgment in March 2013. The judgment divided the couple’s assets and set monthly spousal support to be paid by Husband to Wife. The court modified the judgment – with a few handwritten changes to the 12th paragraph – one week later. The court granted Wife’s request to further modify the judgment in May 2013, making clear that Husband was required to make an equalizing payment to Wife covering her share of his Individual Retirement Account (IRA).

Wife filed a notice of appeal two days later. The Second District dismissed the appeal, however, ruling that it was untimely. The applicable rules, the Court noted, require a person seeking to appeal a family court ruling to file an appeal within 60 days of the ruling. Although the lower court had just modified the ruling two days earlier, the Second District said the 60 days started to run when the trial court issued its original ruling in March 2013. That’s because the Court said the modifications made after that time were not “substantial.”

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

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

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

A long and happy marriage is a truly beautiful thing. But most of us are unable to achieve it and need processes to end a relationship with our personal and economic dignity intact.

Helping couples divorce without destroying their families is what my firm does – and why it is gratifying to see high-profile couple showing others how to find creative, forward-thinking solutions and eliminating the risk of having a judge make decisions for their family. If you would like to discuss creative resolutions that work for your family, contact Lorna Jaynes,  to get started!

California courts typically look at both the kid’s needs and the parents’ ability to pay when considering child support after a divorce. The second factor often centers on the former spouses’ incomes, but sometimes that figure doesn’t tell the whole story. The Second District Court of Appeals recently considered a case in which one spouse had at least some of his money tied up in fancy artwork.

art-1419766Husband and Wife separated in March 2011, following nearly four years of marriage in which they had one child. They later entered into a marital settlement agreement, where Husband agreed to pay Wife $600,000 over a certain period of time in exchange for Wife waiving her right to spousal support, and to pay $1,500 per month in child support. The spouses agreed to share legal and physical custody of their daughter, with the child staying with Husband three nights a week.

A trial court in June 2014 granted Husband’s request to increase his time with Daughter and to give him sole legal custody for the purpose of Daughter’s therapeutic treatment. The child suffered developmental delays as a baby and had been in therapy ever since. Wife had recently been treated for alcoholism and bipolar disorder, and Husband was concerned that the child wasn’t getting to school or her therapy appointments. The court also granted Wife’s request to increase child support, but it raised the amount to just over $2,000 instead of to the $6,000 per month that Wife sought.

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California law allows a party to a divorce proceeding to ask a court to set aside a judgment in certain circumstances, including those in which the other party has committed fraud. In In re Marriage of Nhothsiri>, the Fifth District Court of Appeals explains that a person seeking to set aside a judgment must do so within strict time limits.

1384053_wedding_rings_-_african_american.jpgWife filed a Petition for Dissolution in 2007. Husband alleged in his response that the couple had married Jan. 5, 2000. Following a hearing, the trial court approved the divorce in January 2010 and awarded spousal support to Wife, citing Jan. 5, 2000 as the date of marriage.

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

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

tightened-100-dollar-roll-1377964-mHusband and Wife separated in April 1998 after nearly 11 years of marriage. Husband had been working for the Los Angeles Fire Department for 18 years at the time and was eligible to retire in 2000. The couple entered into a marital settlement agreement in December 2000. The agreement divided the couple’s assets between the spouses and provided that all “income, earnings, employment benefits, or other property” acquired by one spouse after the separation date would be considered the spouse’s separate property. It also stated that Wife was entitled to half of Husband’s pension/retirement plan, due after he reached 30 years of service, if he decided to keep working past his earliest retirement date.

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

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When a court considers whether to award spousal support in a California divorce case, it looks at both spouses’ financial situations to determine their need for support and ability to pay it. That often includes detailed information about their income, expenses, and job prospects. In a recent case, California’s Fourth District Court of Appeals approved the use of computer software designed to make calculating support awards easier. The court said it was perfectly fine for a judge to rely on a report generated by the software, at least when making a temporary spousal support award.

canon-pixma-ip-4000r-2-352300-mHusband and Wife had been married for roughly 22 years when Wife filed for divorce in December 2013. She also requested more than $3,000 per month in spousal support, saying that she’d recently lost her job and was unemployed while looking for new work. She was earning just over $1,660 per month in unemployment benefits at the time, while Husband was bringing in more than $8,600 per month.

Wife later filed an amended Dissomaster report, proposing temporary support in the amount of nearly $2,400. Dissomaster is a computer program used to compute child and spousal support based on income, expenses, and other information and in accordance with state guidelines. It produces support estimates in the form of a court order that a judge can then adopt, amend, or disregard. In this case, the trial court adopted the proposal and ordered Husband to pay $2,400 per month in temporary support. According to the Fourth District, that decision came after Husband’s attorney said Husband “agreed with the numbers presented.”

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Child Support Woes of the 1%

There aren’t many whose earnings can make those of the Buffets, Kochs, Adelsons, Waltons and the like look paltry. But according to filings in his divorce case, billionaire hedge fund manager Ken Griffin may be one of them. Griffin’s ex-wife, Anne Dias, said his monthly gross income “approaches $100 million,” and his net monthly income after taxes “averages over $68.5 million.”

For those of us to whom such numbers do not even compute, that works out to $2.2 million a day, or upward of $90,000 per hour.

Dias’ filing is certain to escalate their ongoing dispute over child support, where she is asking for $1 million a month in child support. Griffin argues that amount is excessive and includes expenses such as private jets, $450,000 vacations and $6,800 a month for groceries that are mainly for Dias’ “opulent lifestyle.” He has told the court he will only fund expenses he deems “reasonable.”

Dias says she’s following Illinois law, which requires a parent to fund the children’s lifestyle in a way that is consistent with the lifestyle during their parents’ marriage. According to Dias, the expenses such as the jets and groceries are simply an accounting of all the couple’s child-related expenses while they were married.

“Ken’s false incredulity as to the cost of his children’s lifestyle—a lifestyle which he established and continues to enjoy with the children—is pure hypocrisy. “In her filing, Dias acknowledges the family’s large spending habits. But she says Griffin funded and created the lifestyle, so he has little reason to object.

“It’s a silly exercise to pretend the day-to-day living expenses for the Griffin children even remotely resembles the norm,” she said. But she adds, “Typical American families do not have a father with a net monthly income of just shy of $70 million.”

In California, child support is determined based on statutory guidelines that took effect in 1992. The Guideline is an algebraic formula and the factors used to determine child support are primarily based on income of both parties, the number of children and the time sharing arrangement – custody and visitation.

The Guideline result is deemed to be presumptively correct in all cases, but may be rebutted by evidence of various factors including that “the parent being ordered to pay child support has an extraordinarily high income and the amount determined under the formula would exceed the needs of the children.” Family Code, Section 4057(b)(3).

Individuals who earn an extraordinarily high income and are subject to child support payments may find that proportionally, their child support payments exceed the necessities of the child.  California law allows for exceptions to the child support calculations if an individual is able to prove their high-income status.

California Family Law §4055 sets forth the ordinary guideline for calculating child support payments.  However, §4057 provides the special circumstances under which this guideline can be set aside to account for high-income earning parents who are subject to a child support order.  Under this section, the individual being ordered to pay child support can ask for the ordinary guideline for child support to be put aside if he or she can provide evidence of the high income and show that the amount determined under the guideline formula would exceed the child’s needs.

Although California statutes provide the possibility of taking into consideration high-income earning parents when calculating child support payments, case law has not yet determined an exact number that qualifies an individual as a “high-income earning parent.”  The California Court of Appeals has ruled in previous cases that anywhere from $1 million to $12 million in annual income is considered an extraordinarily high income.  In the 1994 case of Estevez v. Superior Court, an income of “not less than $1.4 million per year” was considered an extraordinarily high income.  In 1996, the court found a similar guideline in McGinley v. Herman.  In 1998, in Johnson v. Superior Court, a professional athlete conceded his annual income to be $1 million, whereas his wife stated she believed his income to be $12 million.  Regardless, the court considered the athlete to be a high income earner.  In 2001, the court decided that an annual income of $1.7 million was extraordinarily high, from In re Marriage of Wittgrove.  Also in 2001, from In re Marriage of Hubner, the court found $1.175 million after taxes to be extraordinarily high.

The range of income levels from the court’s previous decisions goes to show that determining whether a parent’s income is considered extraordinarily high to qualify as an exception or whether those payments would exceed the necessities of the child is ultimately up to the court’s discretion.

In the event that the court determines the parent’s income to be extraordinarily high, it is up to the trial court’s discretion to determine the amount it considers to meet the needs of the child.  §4056 requires that the court state in writing or on the record the following: “(1) the amount of support that would have been ordered under the guideline formula, (2) the reasons the amount of support ordered differs from the guideline formula amount, and (3) the reasons the amount of support ordered is consistent with the best interests of the children.”

The time involved and the resulting costs in litigating such cases, with the extensive discovery and litigation about discovery, are immense. And really, so unnecessary if the parents are willing to put their children’s interests by reducing the conflict and working together to create a mutual and reasonable resolution. And it should cost no more than a couple minutes of Mr. Griffin’s alleged hourly pay rate.

With offices throughout the Bay Area, California divorce lawyer Lorna Jaynes provides innovative legal tools to resolve family law disputes without the bitterness, acrimony and excessive costs engendered by the adversarial process.


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

tightened-100-dollar-roll-1377964-mHusband and Wife separated in 2007. A court awarded Husband primary custody of the couple’s daughter in 2012 and ordered Wife to pay him $540 in monthly child support. The court also ordered Husband to pay Wife $1,800 in monthly spousal support. In reaching the decision, the court found that Wife was making about $2,000 per month, while Husband was bringing in roughly five times that amount.

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

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