Articles Posted in Mediation

California divorce courts generally consider any property owned by one spouse before a marriage that spouse’s separate property to be kept by the spouse in the event of a divorce. Community property, on the other hand, includes anything that one or both spouses acquire through their efforts during the marriage, and it is typically divided equally between the spouses upon divorce. A recent case from the state’s Fourth District Court of Appeals shows how spouses can change the nature of separate property by specifically granting the other spouse an interest in it.

Husband and Wife were married for roughly 32 years before separating in 2007. Two years earlier, they signed an agreement in which the couple stated that all of the property they owned now and anything they acquired going forward would be considered community property. The spouses were eventually able to resolve many of the issues related to the divorce, but a nine-day trial was also held to consider lingering matters related to property distribution.

Wife argued that the trial court erred in awarding Husband reimbursement for his separate property under Family Code section 2640 because of the agreement to transmute all separate property to community property.

Family Code section 2640. (a) “Contributions to the acquisition of property,” as used in this section, include downpayments, payments for improvements, and payments that reduce the principal of a loan used to finance the purchase or improvement of the property but do not include payments of interest on the loan or payments made for maintenance, insurance, or taxation of the property.   (b) In the division of the community estate under this division, unless a party has made a written waiver of the right to reimbursement or has signed a writing that has the effect of a waiver, the party shall be reimbursed for the party’s contributions to the acquisition of property of the community property estate to the extent the party traces the contributions to a separate property source. The amount reimbursed shall be without interest or adjustment for change in monetary values and may not exceed the net value of the property at the time of the division.

The court rejected Wife’s contention that Husband waived his 2640 reimbursement right when he signed the community property agreement. The account became community property with the signing of the community property agreement the right to reimbursement can only be waived with a specific writing that waives the right of reimbr]ursement. Since the community property agreement did not expressly waive the right of reimbursement, the account and the court said this was therefore a contribution of separate property to the community and therefore the 2640 reimbursement was applicable at the time of divorce. However, the court further found that because Husband and his father had added Wife to the account as a joint tenant prior to the father’s death the presumption of title and a section of the probate code prevailed such that the property was not separate property at the signing of the community property agreement, but was actually community property.

California divorces often raise a wide variety of complex issues, including those related to assessing and dividing community property. These issues – and much of the stress that often accompanies divorce cases – can be minimized through alternatives to litigation, such as collaborative divorce and mediation. With offices throughout the San Francisco Bay Area, California divorce lawyer Lorna Jaynes provides innovative legal tools to resolve many family law disputes without the bitterness and acrimony engendered by the adversarial process.

Related blog posts:

How Time Limits and Filing Deadlines Can Complicate California Divorce Cases – Ellis v. Ellis

Dividing Retirement Accounts in California Divorce Cases – In re Marriage of Keitany

Why Must I File a Lawsuit to Obtain a Divorce in California

California law operates under a set of guidelines in child support cases that is used to calculate a parent’s support obligations based primarily on each parent’s income and time with the child. The overall aim of the guidelines is to set the support at an amount that attempts to equalize the living standard in both homes. The guidelines calculation is generally presumed to be correct, but there are some circumstances in which a court may choose to order support at an amount lower than the calculated rate. As the Fifth District Court of Appeals recently explained, that includes situations in which the paying parent has an “extraordinarily high income,” and the guideline amount is more than the child needs.

boarder-1536813Mother and Father’s four-year marriage was annulled in 2004, after it was found that Mother was still married to her first husband. They had two daughters:  one born during the marriage, and the other born in 2008. Mother lived in Bakersfield with the children, as well as with a son that she had with her previous Husband and another daughter that Father had from a previous marriage. Father paid Mother more than $17,500 in child support per month for his three children. As a member of the Manuel Band of Mission Indians, Father received annual distributions from the tribe based on its profits from a casino. That money often totaled more than $2 million per year, according to the Court. He wasn’t employed and didn’t have any other sources of income.

Mother went to court in 2012, asking a judge to order Father to pay her at least the guideline child support amount of about $20,000 per month for the couple’s two daughters. The court declined, setting the amount instead at roughly $12,500. It said that the amount “would adequately ensure that the children’s needs will be provided for.” Mother had been receiving nearly this amount from Father for the two kids prior to the ruling, the court said, and failed to show that it wasn’t enough to meet the children’s needs.

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“Dogs are our link to paradise. They don’t know evil or jealousy or discontent. To sit with a dog on a hillside on a glorious afternoon is to be back in Eden, where doing nothing was not boring–it was peace.”
Milan Kundera

It is estimated that about 50% of American marriages end in divorce. It is also estimated that 62% of American households include at least one pet. So, it is reasonable to conclude that many divorces also involve pets.

Do you consider your dog to be a highly adored member of the family? If so, you may be surprised to learn that most family law courts consider your ball-catching canine to be classified as personal property.

Divorces in California almost always include the division of property (assets and debts) between spouses. And sometimes, quite often in fact, the property is a dog. Since most courts consider pets to be personal property just like your toaster or car, judges usually follow the same guidelines they use to determine who gets to keep personal property when couples are dividing things in a divorce. All of this applies equally to cats but for some reason, it is the care and control of dogs more so than cats, that are disputed issues. California’s First District Court of Appeals recently considered a dispute over the family dog.

dog-3-1403648Husband and Wife entered into a stipulated agreement resolving most of the issues related to their divorce. However, they were unable to agree on what to do with Sadie, the family dog. The stalemate led to a two-day trial, after which a judge concluded that the pet was community property. The California Family Code requires community property to be split evenly between spouses. Courts often award the property to one spouse and require that person to compensate the other spouse for his or her interest in the property. Here, the trial judge awarded the dog to Husband, noting that Wife had maintained sole use and possession of the animal since Husband filed for divorce two years earlier.

Wife appealed the decision, arguing that her daughter from another marriage was the dog’s true owner. She said her daughter adopted Sadie and registered the animal with local authorities under her own name. Unfortunately, however, Wife didn’t point to any evidence in the record from the trial court hearing showing that this was actually the case. Moreover, the First District said she didn’t even provide a transcript of the proceedings. A person appealing a divorce decision is not required to provide the transcript of the proceedings, but courts in California typically don’t go and get those records on their own and are likely to presume that the decision was supported by adequate evidence if there is no transcript to review.

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When a divorce involves a business of one or both spouses that is community property, issues of valuation arise, including how and when the business is valued. California’s Second District Court of Appeals recently considered the question of when a business is valued.

business-card-1525590Husband and Wife divorced in April 2012, after entering into a written settlement agreement related to the division of their community property and the payment of spousal support. They weren’t able to agree on one issue, however:  what to do with the small heating and air-conditioning company that the former spouses owned and operated together. Husband managed the company’s day to day work, while Wife was in charge of the business’s marketing and finances.

According to the Court, Husband “frustrated” Wife’s attempts to get information about the business by ousting her from her job, filing for bankruptcy, and refusing to produce financial records or to be deposed about the company’s financial health. He also transferred assets from the business to another business owned by a former employee and managed by Husband. Because of these actions, the trial court eventually decided to value the business based on what it was worth in May 2012 instead of setting the value at the time of a trial on the issue nearly two years later. The court accepted a valuation prepared by business broker and accountant Rodd Feingold, who set the value at about $470,000. Although a separate appraiser – Phillip Sabol – said the company was only worth $47,000, the Court rejected that valuation because it didn’t take into account the business’ goodwill and tangible assets. The court awarded the business to Husband and ordered him to pay Wife half of its value.

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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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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!

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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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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Many divorcing couples who wish to resolve the issues in their divorce with their personal and economic dignity intact, preserve or create a positive co-parenting relationship for the benefit of their children, save money and preserve assets, or for a host of other good reasons, choose mediation or Collaborative Divorce rather than litigation and traditional attorneys. Such folks tend to see divorce as a problem to be solved rather than a battle to be won.

But whatever process is used, divorce in California requires that a Petition for Dissolution and Summons be filed by one spouse and served on the other spouse in order to commence the dissolution process and to establish the court’s jurisdiction to terminate the marriage.

The Summons, in particular, can be problematic. The first page states, “You are being sued” and “you have 30 days to respond” and the second page sets forth numerous rules called automatic restraining orders. It is not uncommon for spouses who are trying to work together in a civil and respectful process to be shocked and somewhat hurt when faced with a document telling them they are being sued by their spouse.

The restraining orders prohibit either spouse from doing any of the following:

  1. Remove the minor child or children of the parties, if any, from the state without the prior written consent of the other party or an order of the court;
  2. Cashing, borrowing against, canceling, transferring, disposing of, or changing the beneficiaries of any insurance or other coverage, including life, health, automobile, and disability, held for the benefit of the parties and their minor child or children;
  3. Transferring, encumbering, hypothecating, concealing, or in any way disposing of any property, real or personal, whether community, quasi-community, or separate, without the written consent of the other party or an order of the court, except in the usual course of business or for the necessities of life; and
  4. Creating a nonprobate transfer or modifying a nonprobate transfer in a manner that affects the disposition of property subject to the transfer, without the written consent of the other party or an order of the court. Before revocation of a nonprobate transfer can take effect or a right of survivorship to property can be eliminated, notice of the change must be filed and served on the other party.

Parties must notify each other of any proposed extraordinary expenditures at least five business days prior to incurring these extraordinary expenditures and account to the court for all extraordinary expenditures made after these restraining orders are effective.

The principles and policies underlying the restraining orders generally make sense and are rules that should be followed by divorcing spouses for all of the right reasons. For example, assets should not be hidden, new debt should not be created, and insurance should stay intact until there has been adequate disclosure and agreements made.

Fortunately, divorcing couples using mediation or Collaborative divorce processes need never step foot inside the courtroom, but must comply with the requisite judicial paperwork, some more useful than others, to obtain a divorce. Issues of property division, child custody and child support, and spousal support can all be resolved by gathering all of the financial disclosure information and brainstorming and creating optimal outcomes for the entire family.

But there should be a way for those folks who are willing and able to resolve the issues with respect and civility outside of the courts, to obtain a divorce without the harsh and decidedly uncivil service of a summons. And furthermore, those folks who can solve their problems without the aid of the courts should have substantially reduced filing fees and not have to pay $435 for filing a Petition and another $435 for filing a Response.

However, since the state of California is unlikely to see the wisdom of this anytime in the near future, the best that divorcing couples can do is work with professionals who will explain the process to them together so that both can hear and understand at the same time and have their questions answered. It is very helpful in reducing the fear and anxiety that normally arises when one is served with a document that says, “You Are Being Sued.”

With offices throughout the San Francisco Bay Area, Collaborative divorce attorney and mediator Lorna Jaynes provides innovative legal tools to resolve many family law disputes without the bitterness, acrimony and out of control costs engendered by the adversarial process.

 

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In a new commercial in India for Tanishq jewellery, a woman preparing for her wedding puts on a Tanishq necklace. At the ceremony, her daughter calls her asking if she can participate in the pheras, an Indian ceremony where the couple walk around a fire seven times while saying their vows. The groom is moved by the girl and picks her up, filling his bride with emotion.

A non-Indian would likely miss this point, but it is clear in the ad that this is a second marriage for both bride and groom, and since historically in India, divorced or widowed women are outcasts, the ad is contrary to Indian tradition. The ad is apparently causing quite a stir in India with viewers talking about the cultural taboos and also about the bride’s relatively dark complexion, a turn away from the country’s mainstream obsession with light-skinned lead actresses.

The ad has sparked conversations on Twitter, with celebrities and politicians also weighing in. Parliament member and industrialist Naveen Jindal praised the bride’s darker skin tone and the non-traditional marriage. Apparently, the team that created the ad chose the actors to ensure the couple would look like one of respectable equals, because otherwise traditional-minded Indians might otherwise have assumed that the man was marrying the divorced or widowed woman out of pity.

Living and working in a town that is majority Asian, I have many divorcing Indian clients who invariably express their concerns that divorce is dishonorable and shameful in their culture. I feel sad for them because divorce is hard enough without this added burden. Most everyone feels sadness and a sense of failure at some level, among many other difficult emotions. These feelings should not be exacerbated by familial and social shaming and dishonor. Hopefully this ad will start a much needed conversation among Indians about the need to support each other in these difficult times, not shame each other and add to the pain.

Another way to minimize the financial and emotional pain of divorce is to resolve the issues outside of court through Collaborative divorce or mediation, private and voluntary processes that enable spouses to divorce privately and in accordance with their own values.

With offices throughout the Bay Area, California divorce lawyer Lorna Jaynes provides options and processes to resolve family law disputes and divorce without the bitterness and hostility engendered by the adversarial process.