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10 Common Reasons for Divorce in California

Since California is a “no-fault” state when it comes to divorce, many people believe that their divorce attorney has no need to know the reason for their divorce. But even though it is not necessary for the attorney to prove that someone did something wrong, knowing the reasons the marriage is ending can help your divorce attorney develop the best strategy to secure the right terms in your divorce settlement.

With over 300 years of collective experience protecting clients’ interests in the divorce process, the team at Holstrom, Block & Parke, APLC has seen a huge array of reasons that couples choose to dissolve their marriages in California. Here are ten of the most common reasons.

1. Lack of Commitment

The most common justification cited for ending a marriage–the term “lack of commitment”-- is itself lacking in clear meaning. What does it mean to say that you or your partner lack commitment? Sometimes it means that a partner is not ready to share their life with someone. Or it could mean that a partner still wants to share their life with more than one someone. If you believe your marriage is ending due to lack of commitment, try to explain to your divorce attorney what this means to you. That enables your attorney to plan to meet the challenges likely to arise during the divorce process.

2. Communication Problems

Couples who don’t communicate or who communicate primarily in angry outbursts are very likely to end up divorced. A relationship is built on meeting each other’s needs, and if you can’t communicate effectively, needs go unmet and couples grow apart and often resent each other. If lack of communication or angry outbursts are a big problem in your marriage, letting your attorney know the difficulties can allow your legal advisor to find the most effective method to exchange information during the divorce process.

3. Differing Values and Interests

Sometimes couples meet over shared interests, but other times, they have little in common. If they don’t make an effort to develop mutual interests, or if partners develop diverging interests over time, they may feel like roommates rather than partners.

4. Financial Disagreements

When spouses have different ideas about how money should be managed, that can lead to a state of constant conflict that is exhausting. It is vitally important to make your attorney aware of financial disagreements because this enables your attorney to prepare for potential problems. It may be necessary to work with a forensic accountant to locate hidden assets or trace the history of separate property.

5. Infidelity and Trust Issues

If one partner has had an extramarital affair, or if a spouse has wrongfully accused the other spouse of cheating, then trust between partners is destroyed. It can be extremely difficult to rebuild trust, so partners often instead simply choose to end the marriage. However, if there is a desire to preserve the relationship and rebuild trust, often a postnuptial agreement provides a safety net to protect a spouse while giving the other partner a chance to prove they are worthy of trust.

6. Bullying and Abuse

When one spouse is abusive and controlling, it can be very difficult for the other spouse to take steps toward divorce, and when they finally do so, it is important to put measures into place for physical, mental, emotional, and financial protection. Make sure your attorney knows the details so they can take the best steps to protect your interests.

7. Parenting Struggles

Children often become the center of a marriage, and when spouses disagree about how to raise their children, the fighting can become painful for everyone and lead to a desire for peace. In situations where a child faces a medical crisis or has special needs, the pressure of dealing with the child’s needs also often drives couples apart. In either situation, it is helpful for your attorney to understand the conflict so your lawyer can determine how to help you formulate the right parenting plan.

8. Getting Married for the Wrong Reasons

Some people expect marriage to solve their problems when instead it can make those problems even worse unless steps are taken to the underlying issues. Make sure your attorney understands the unmet needs to determine the best options for settlement.

9. Addiction

Addiction destroys marriages very quickly. An addicted spouse puts the addiction ahead of everything else, and that can make life unbearable for the rest of the family. If you or your spouse are dealing with any type of addiction--from substance abuse to online shopping—your attorney needs to be aware of it.

10. Mid-life Crisis

Some people suddenly decide they don’t like the day-to-day aspects of their lives and want to start over, leaving behind their spouse, children, and everything else. If that’s the case with your spouse, let your attorney know. If your spouse only wants cash, for instance, your attorney may be able to negotiate a division of property that provides you with more value in exchange for less liquidity. Or if your spouse later requests custody, your attorney will be aware that they could be making the request purely to reduce child support obligations.

Tell the Team at Holstrom, Block & Parke, APLC Why You are Getting Divorced

The more information you can provide for your attorney, the better you enable your legal advisor to protect you during divorce. This is not the time to be embarrassed—we have seen it all. Moreover, we are bound by confidentiality provisions so your secrets are safe with us.

For a confidential consultation to discuss the ways Holstrom, Block & Parke, APLC can protect your interests in divorce, contact our team today.

The Tricky Task of Navigating Pension Division in Divorce in California

Dividing community property in a California divorce seems like it should be simple. Each spouse gets half, right?

Well, the process is more complicated than that, particularly when dealing with certain assets such as pensions and retirement benefits. It is important to handle valuation and division carefully to get your fair share of community property and avoid added fees or tax liability.

How Much of the Pension is Considered Community Property?

When couples divorce in California, they equally divide up property that is considered community marital property. However, any property that is legally considered to belong to a spouse individually does not get divided—it stays with that spouse. Sometimes assets can be made up of a combination of both separate property and community. With careful tracing, it is possible to separate the value so that the spouse who is rightfully entitled to keep some of the value as separate property is able to do so.

So, when is a pension separate property and when is it community property? The issue comes down to when the interest in the pension or retirement benefits was earned. Any amount earned before the marriage began should be the separate property of that spouse. Amounts earned during the course of the marriage, by contrast, are treated as community property belonging equally to both spouses, even though only one spouse did the work to earn the benefits and despite the fact that they are held in the name of one spouse only. To further confuse matters, retirement benefits earned after the date you separate are also considered separate property, even though the divorce is not final. So establishing the date of separation is crucial.

To get your rightful share of pension and retirement benefits—both your own and those of your spouse—it is important to consider records very closely and work with an attorney who is prepared to help you comb through the details to find all community property and properly allocate all your separate property.

Factors That Make Pensions and Other Retirement Benefits Complicated in a California Divorce

For many couples, particularly those in advanced stages of their careers, retirement benefits and employment compensation packages represent some of the most valuable assets in their portfolio. Both partners have an expectation of being able to rely on the retirement benefits earned to provide support during a comfortable retirement. So there is a lot at stake both financially and emotionally when it comes to dividing pension benefits.

Traditional pensions are a type of deferred compensation. A worker may earn them during the marriage, but they don’t have the right to receive the payout until years later. Trying to establish a current value for the future payments can be tricky, especially if the benefits are only partially vested at the time of divorce. An employee might have earned a certain amount of pension credit but not be entitled to receive it unless they remain employed by the same company for an additional term, and there is no way to predict whether that employment will continue.

Another factor that complicates retirement benefits in divorce is the tax treatment. Assets in a “qualified” retirement plan involve tax-deferred contributions. If those assets are not handled according to federal requirements, a hefty tax bill could become due immediately after a divorce.

The Need for a QDRO

Pension plans and other retirement benefits are held in the name of the spouse who earned them, even if they are entirely treated as community property under California law. Therefore, the companies that manage these plans need to have a specific type of court order before they are able to pay out any of the funds to the other spouse. For qualified retirement benefits, a qualified domestic relations order (QDRO) is necessary. This is a specialized document usually prepared by a professional with particular expertise. It is important to plan ahead to ensure that the preparation of the QDRO does not delay the divorce process or add any unnecessary expense.

Work with a Legal Team That Knows How to Protect Your Interests in Retirement Plans and Other Complex Assets

Some aspects of a divorce settlement, such as alimony and custody determinations, can be revisited later. But the classification and division of marital property is one aspect of divorce that is nearly impossible to change, so it is important to get it right the first time.

The Certified Family Law Specialists and associates at Holstrom, Block & Parke, APLC know how to work effectively and efficiently to protect your property interests in a California divorce. Schedule a consultation today to learn more about how we can help.

Conflict Avoidance—a Key Factor in Divorce for Couples Over 50 in California

Why are so many more couples over the age of 50 choosing to separate their lives and get divorced? For many, it comes down to a pattern of refusing to deal with things that matter because they want to avoid conflict. This pattern becomes exhausting and stifling and divorce often seems the only way to get a sense of relief.

Understanding conflict avoidance is important whether you are trying to save your marriage or working to establish the right terms for a divorce. At Holstrom, Block & Parke, APLC, our Certified Family Law Specialists and associates have seen that when the patterns of conflict avoidance are ignored, it can cause complications in divorce and extend the time it takes to resolve critical issues.

What is Conflict Avoidance?

Conflict avoidance refers to a habit of avoiding confrontation or any hint of conflict in a relationship. The behavior can be intentional or inadvertent. When one partner does not want to upset the other, they end up suppressing the desire to discuss important issues such as hopes, dreams, and worries. They even avoid mentioning the things that annoy them.

Due to their fear of confrontation, they end up burying their personal feelings. When this pattern repeats for years or even decades, spouses end up as strangers. Even worse, they can end up as strangers who resent each other. Avoiding conflict does not make it go away. Instead, it festers like a wound that will not heal.

At some point, one or both spouses suddenly realize that there is no longer a “we” but only an “I.”

Trying to Avoid Conflict Avoidance

Our busy culture makes it easy to establish and maintain a pattern of conflict avoidance. Each partner can get lost in a world of:

  • Busyness
  • Over-work
  • Social media
  • Screen entertainment

It not only becomes easy to avoid dealing with difficult issues—it becomes almost impossible to even find the right time and place to start addressing these issues.

How Can You Tell if Conflict Avoidance is a Problem?

Some couples argue constantly. Others may engage in one huge confrontation where everything comes out like an explosion. But when one or both partners are avoiding conflict, you won’t see this type of decisive evidence. Conflict accumulates over time but never erupts. Instead, it festers deep below the surface. For self-preservation, one or both partners begin to avoid communication in general as a means to avoid conflict. If they don’t take steps to address the problem, the relationship disintegrates.

If you are asking yourself whether this is a problem in your relationship, consider whether you ever:

  • Sense pent-up frustration
  • Look back over your marriage and realize you don’t want things to stay the same
  • Feel as though you need to put an end to something
  • Sense the need to make a change or reconcile
  • Suddenly feel the urge to open up to your spouse
  • Feel like a dam is bursting

Dealing with suppressed conflict is not easy but it needs to happen for your emotional health. Facing the conflict sometimes leads to reconciliation and the rebuilding of a marriage. If there are trust issues, often preparing a postnuptial agreement can establish a safe set of ground rules while couples reestablish trust in each other.

Facing the conflict can also cause you to realize that it is time to end the relationship and get a divorce.

Work with a Divorce Attorney Who Recognizes the Issues That Need to Be Addressed

Conflict avoidance patterns are most common in couples who have been married for a considerable period of time, which is why it is a prevalent reason for divorce among couples over the age of 50. Divorcing at this stage of life, with retirement on the horizon, comes with its own set of unique challenges. Therefore, if you believe you may have conflict avoidance issues in your marriage, it is important to work with an attorney who is prepared to develop a plan to help with both the patterns of conflict avoidance and the financial and emotional difficulties that arise with divorce later in life.

Ironically, the divorce process often forces couples with conflict avoidance issues to address the issues they’ve avoided for decades. Even if they are not able to save their relationship, the process can help them develop better communication patterns for the future.

Holstrom, Block & Parke, APLC Helps Overcome a Wide Array of Family Law Challenges

With over 300 years of combined experience handling difficult situations in divorce, the team at Holstrom, Block & Parke, APLC, understands how to recognize potential difficulties and develop plans to protect your interests. We invite you to schedule a confidential consultation to learn more about the assistance we can provide if you are considering a postnuptial agreement to preserve your marriage or a divorce to prepare you for the next steps in life.

 

A Checklist for Divorce in California

Divorce is a complex process in California, with numerous critical details to be arranged. The impact of decisions you make and the steps you take during the process will impact your life for years to come.

With 300+ years of collective experience guiding clients through the divorce process in California, the team at Holstrom, Block & Parke, APLC has seen a few techniques that prove to be very helpful. One of those is to create a checklist of tasks you need to complete to protect your interests during the process. You can start with basic major steps and fill in additional details as you move forward.

1. Find the Right Divorce Attorney

We may be a bit biased in setting this as your first priority, but if you think about it, you can see the logic. A dedicated family law attorney will have guided many people down the difficult path you are taking and they can provide advice at each step along the way. When you have questions, your attorney can provide answers. Your legal advisor can also keep you mindful of aspects you never considered. In fact, if you are too overwhelmed to create or work through a divorce checklist on your own, a good divorce attorney can help you get started.

2. Make a List of What You Own and Where to Find It

One of the most complex and stressful parts of a divorce is dividing up property and debts. In California, marital assets and debts are split evenly, so the parts of the process that are most critical are first locating all assets and debts and second determining whether they should be allocated to one spouse completely, to both spouses completely, or partially shared and partially to one spouse. Your attorney can help you with this process.

Preparing a list early in the process can prevent problems if your spouse tries to hide assets later.

3. Develop Plans and Goals for Custody

If you have children, this task should be on your checklist twice. In the beginning, you need a workable plan for parenting while the divorce is in progress. The goal is to avoid disrupting the children’s lives as much as possible. For that reason, arrangements may not always be convenient for the parents.

You will also need to develop a parenting plan for the years to come. To create a plan that works best for the children and is manageable for both parents, it will take considerable time and effort.

4. Change passwords

Your spouse may know your passwords or be able to guess them. Even if you don’t anticipate vindictive behavior, it is a good idea to create new passwords for all your accounts to ensure that you will be able to access them in the future.

5. Open Accounts in Your Own Name

After the divorce, you will be operating with accounts in your name only, so you might as well get started opening those accounts now. Once you have separated, you are not supposed to be responsible for debts incurred by your spouse, but if you are both still using a joint account, creditors can still try to get you to pay the debts of your ex. After the divorce is final, make sure debts are refinanced in the name of one spouse only.

6. Learn the Rules

Even if you plan to create your own arrangements for property division, custody, and other matters, it is still helpful to understand your rights under California law and how a court would decide on matters if you had to have a judge decide the issues. Your attorney can provide this information, which is another good reason to hire a lawyer sooner rather than later.

7. Develop a Financial Plan

Divorces cost money and they drive up the cost of living since you will need to support your household with one income instead of two. To protect your interests and your sanity, it is a good idea to develop a plan to cover living expenses in the short and long term. The process of evaluating expenses and income is also very helpful if you plan to seek or expect to pay spousal support.

8. Gather Legal Documents

Even for the most basic situations, a California divorce will require you to submit considerable amounts of information. Get together key documents such as tax returns, mortgage statements, estate planning documents, and, of course, your marriage license.

9. Take Care of Yourself

This is another item that needs to be listed more than once on your checklist. Divorce is a painful loss, similar to the death of a loved one. You need to allow yourself the opportunity to process your grief and anger. Working with a therapist can often be helpful and can help you avoid the temptation to dump too much negative emotion on your family and friends.

Get the Right Guidance Throughout the Divorce Process

To overcome the challenges of the divorce process, you need the right guidance and support. The Certified Family Law Specialists and associates at Holstrom, Block & Parke, APLC, are ready to steer you through from start to finish. Get started with a confidential consultation today.

 

Is It Okay to Move Out of the Marital Home Before the Divorce Is Finalized in California?

Divorce tears a family’s home life into pieces. But unlike some states, California does not require divorcing couples to live apart. For the sake of children, and for financial reasons, couples often continue to live together during the divorce process.

Is there an advantage to staying in the marital home? If one party moves out, are they at a disadvantage when it comes to divorce terms? Every divorce situation is unique, but there are some general issues to consider when deciding whether to move out of the family home before a divorce has been finalized. It is a good idea to consult an attorney before taking steps to move out of home because that action can have a significant impact on many aspects of the divorce process.

Moving Out Can Affect Your Relationship with Your Children

In custody decisions, courts are not supposed to favor one spouse on the basis of their parental label as mom or dad. However, courts look carefully at the role of caregiver, and often find that it is in a child’s best interests to be with a parent that meets the child’s daily needs on a regular basis. If you, as a parent, are usually the one to put the kids to bed at night or make breakfast and get the kids off to school each day, moving out of the home will likely impact your ability to continue with these daily rituals. If you have the option of staying in the home with the children, consider whether the benefits of leaving the home outweigh the loss in caregiving opportunities and whether there are ways to continue in the caregiving role.

Another way to protect your relationship with your children is to establish a plan where the children stay in the home and the parents alternate staying in the home with them and staying in another location. While this arrangement is not feasible for many people on a long-term basis, during the divorce process it can provide stability for the children and help parents feel more secure in their parental rights.

Moving Out Does Not End the Obligation to Pay for the Home

A spouse who moves out during the divorce may need to pay for their own new living arrangements while continuing to contribute to the cost of the family home. In fact, if both spouses are on the mortgage, they both continue to be obligated to make mortgage payments even after a divorce is finalized, until the property is sold and the mortgage is paid off or one spouse takes out a new mortgage in their own name.

But even if the marital home is rented and there is no mortgage, a spouse who earns more money may have an obligation to help support the other spouse during the divorce process, and if there are children, both parents are required to contribute to meeting their housing needs.

Moving Out Should Not Make it Less Likely That You Will Receive the Home in the Divorce Settlement

The underlying property rights with respect to the family home should not be affected by which spouse is living in the home during the divorce process. The property interests are determined by whether the home was purchased before or during the marriage, and whether funds used to pay the mortgage and other expenses were community property or one spouse’s separate property.  A spouse might move out of the home during the divorce but then end up with the house later, either through an agreement between the spouses or by a judge’s determination.

Moving Out is Sometimes Legally Required

When there are allegations of domestic violence or other issues that could pose a safety risk to the other spouse and children, the court may issue an order requiring you to leave the home and stay away. If there is a court order requiring you to keep out of the house, it is vitally important to obey the order, even if it is unfair. Your attorney can help you contest the order and possibly change it. But acting on your own can cause you to get into legal trouble and damage your efforts to obtain advantageous terms in your divorce settlement.

Have a Written Agreement Before You Move Out

When parents are in constant conflict, staying in the same home may not be a wise move. Having one spouse move out can ease the stress and it also makes it easier to establish the date of separation. However, to avoid allegations of abandonment and protect parental rights and possibly other rights as well, it is a good idea for both spouses to have an agreement in writing regarding separate living arrangements.

Talk to Your Attorney Before You Move Out

At Holstrom, Block &  Parke, APLC, our Certified Family Law Specialists and associates know that there are often good reasons for moving out of the marital home. But it is still wise to review the issues from a legal perspective before taking action.

Schedule an appointment with our team today to discuss the living arrangements that make the most sense during your divorce.

 

Using An Appraiser to Value Real Property in A California Divorce

Whether you’re talking about the family home, a vacation property, or commercial real estate, determining the value of real property often has a tremendous impact on the short-term and long-term futures of couples divorcing in California. The state’s unique and volatile real estate market makes it difficult to come up with a property value that both spouses can agree on. And there’s a lot at stake, so it is important to make the effort to gain an accurate value.

Many people wonder whether it makes sense to work with an appraiser during divorce or whether that only adds expense and further uncertainty to the process. In our 300+ collective years of experience handling divorce cases, we’ve seen many instances where the use of an appraiser has reduced conflict and delays in the divorce process. However, it is important to take the right approach and understand what’s involved.

A Divorce Appraisal Can Be Different Than a Mortgage Appraisal in California

Traditionally, home appraisals are ordered when someone is purchasing a property or refinancing the mortgage on a property. They are conducted for the benefit of the lender to ensure that the property represents a good investment. Mortgage lenders require these appraisals to appear in a specific format and to comply with Uniform Appraisal Dataset guidelines established by Fannie Mae and Freddie Mac, the federally-sponsored enterprises that guarantee most of the mortgages in the U.S.

An appraisal prepared to establish the value of a property for purposes of property division in a divorce does not need to follow those specific formats and guidelines, and so this type of appraisal might read quite differently. It is important, however, to ensure that the appraiser presents and considers sufficient evidence to support their opinion of the property’s value.

Comparative Market Analysis vs. Full Appraisal

In many situations, people rely on a Comparative Market Analysis performed by a real estate professional to determine the value of a property. This involves evaluating the neighborhood, taking note of certain features about the property, and comparing it with three to five comparable properties that have sold recently in the area. A market analysis is part of a full appraisal. But an appraisal considers more details about the individual property, and an appraisal can only be performed by a professional licensed as an appraiser. For that reason, a full appraisal is considered to provide a more accurate representation of the value of a property.

How an Appraisal is Prepared

During the appraisal process, the appraiser visits the property to inspect a wide variety of issues. In addition to measuring room sizes, the appraiser will evaluate the condition of various aspects of the property, considering whether features are in good repair and whether they are dated or reflect modern trends.

The specific aspects that make the property unique will be considered when comparing it to comparable properties in the area that have sold recently. All the information will be written up in detail  to justify the value assigned by the appraiser.

Finding the Right Appraiser

There are appraisers who specialize in testifying in high-conflict divorce proceedings. Depending on your situation, it might make sense to consult one of these specialists. If your divorce is proceeding through a more cooperative process, then you might ask your attorney or a local realtor for a recommendation. You want the appraiser to be a neutral third party providing an opinion that will be respected by both spouses.

Issues to Consider Regarding Real Property in a California Divorce

There are a few issues to keep in mind as you prepare to assess the value of real property and develop a plan for dividing community property. First, the timing of the appraisal matters. If you are looking at an appraisal done when you refinanced the property a year ago, that value is no longer accurate. If you had an appraisal completed in January but you are still working out the divorce details nine months later, you might want to have an updated appraisal or at least an updated market analysis.

When considering the value for property division purposes don’t forget to account for tax issues. The property may come with capital gains liability, depreciation recapture issues, or the ability to take advantage of a one-time transfer of protected property tax rates. Your attorney should review all the details to ensure that your final plan of division fairly allocates all obligations as well as assets.

Holstrom, Block & Parke, APLC, Knows How to Protect Your Property Interests in California Divorce

There are so many details to consider in divorce that it can easily become overwhelming. The best way to ensure that everything is accounted for is to work with an experienced attorney who is dedicated to safeguarding your interests.

At Holstrom, Block & Parke, APLC, our Certified Family Law Specialists and associates consider all the details and how they fit into the big picture so that we can ensure you receive the right value for your share of real property and other assets in divorce. Schedule a consultation with our team today to find out how we can protect your interests.

 

Financial Issues Facing Business Owners in Divorce in California

Divorce is much more complicated for business owners, particularly financially, than it is for others in California. After working hard to build your business, it is important to take the right steps to protect the enterprise and ensure you emerge from the divorce process positioned advantageously and not struggling under a load of impossible obligations.

The Certified Family Law Specialists at Holstrom, Block & Parke know how to assess all the factors that require strategic handling during and after the divorce process. These factors are different in every situation, but here is a general overview of the financial issues business owners need to address in a California divorce.

Your Business is Probably Community Property

Unless you executed a prenuptial or postnuptial agreement specifying that the business would remain the separate property of one spouse, then the value of at least part of the business is probably considered community property, even if you owned the business before you got married. California’s community laws consider amounts you earn during the marriage to be jointly-owned marital property belonging equally to both spouses. This is particularly likely to be true if your spouse contributed to the business in any way, such as maintaining the home while you focused on building the business.

This means that as part of the process of dividing marital property, you will need to assess the value of your business, determine how much of that value is community property, and develop a plan to either buy out the other spouse’s interest or to share financial interests and control after the divorce.

Do You Have a Business Succession Plan?

Many partnerships and privately-held corporations in California have plans for business succession, such as buy-sell agreements among owners. These generally provide structure for handling interests when one owner goes through a transition such as a divorce. A comprehensive business succession plan should include a method for establishing the value of the owner’s interests and strategies for transitioning those interests.

These plans can make it much easier to ensure that business operations continue uninterrupted so that the business maintains viability and value regardless of what happens during the divorce process.

If you don’t have a plan for business succession, you need strategies to keep business operating as close to normal as possible for the sake of both spouses. It does neither party any good to decrease the value of such an important marital asset.

Valuing Business Interests in California

Setting a value on a business is both an art and a science, and in divorce, both parties have interests that are often at odds when it comes to the result. It often works most effectively to agree on a neutral third party to perform a value evaluation.

Providing the most detailed information about obligations as well as assets can help ensure that the valuation is accurate. When you work with an attorney who is experienced in protecting business interests in divorce, your attorney can also keep watch over specific interests such as managing intellectual property and maintaining the value of unique assets.

Business Ownership Impacts Alimony, Child Support, and Custody in California

In addition to determining an accurate value and the appropriate percentage of the business to be treated as community property, a business owner who is divorcing in California also needs to be mindful of the effect on spousal support (alimony), child support, and parenting plans. It will be necessary to calculate a reasonable income figure for the spouse who works in the business. If both spouses receive income from the business, that will complicate matters still further.

Spouses seeking child support or alimony from a former partner who operates a business often present calculations based on unrealistic income figures that can cripple the cash flow needed for business operations. At the other end of the spectrum, business owners can often find ways to hide income and assets, so it may take a thorough investigation to gain an accurate financial picture.

Buy Out, Sell, or Continue Joint Operation?

Every business is unique and every family situation is unique, so the best solutions for handling business interests in divorce often require a creative approach. While you might want to buy out the other spouse’s interests, that may not be immediately feasible or advisable. A spouse might consider retaining economic interests in the business for a set period of time. Or couples who are capable of working together might continue to do so after the divorce. In this type of situation, it is helpful to have rights and obligations specifically spelled out in a detailed written agreement.

In some cases, the most economically sensible approach is to sell the business and start fresh with a new enterprise after the divorce. When you work with an attorney who understands the issues, your legal advisor can help you evaluate your options and formulate the right plan based on your specific needs and goals.

Get the Advantage of 300+ Years of Collective Experience in Handling Tough Issues in California Divorce

The team at Holstrom, Block & Parke, APLC has extensive experience handling intricate cases involving challenging issues associated with business ownership and complex assets of high value. We develop strategic plans to protect the full range of business owners’ interests in divorce. For a confidential consultation to learn more about the protection we can provide in your particular case, contact our team today.

 

 

Who Keeps the Golf Club Membership When You Divorce in California?

Divorce can tear your social life apart. Friends often feel that they have to take sides with one partner or the other, so your social network can decrease quickly. At the time you most need the support of friends and the comfort of a regular routine, you may find yourself forced into unfamiliar surroundings and uncertain of who to turn to vent frustrations or even where to go when you need a break.

When you belong to a country club, that club is often your safe haven. It is the place where everybody knows your name and you can always be certain of a warm welcome and a place to relax. But divorce threatens to take that away, too. What happens to a golf club membership when you divorce in California?

Is the Golf Club Membership Community Property?

A private club membership is a unique resource. As an investment, it is a type of property. But it also includes contractual arrangements that govern its use. And, as noted above, club membership has significant emotional value. Let’s first consider club membership as a type of property that may be subject to division in divorce.

Under the community property rules in California, most property acquired during the course of a marriage is considered marital property, and both spouses have equal ownership rights in it. The exceptions to this rule are inherited property and gifts, which generally belong to the spouse who received them. So if a country club membership was given or bequeathed only to one spouse, that spouse may be able to keep it as their separate property. If it was a joint gift, however, it would be marital property.

Assets owned before marriage are also a spouse’s separate property, but if those assets become commingled with marital property, they can lose their separate character. So if one spouse had the club membership before they got married and paid all dues with money owned before the marriage started, then the value of the club membership might belong solely to that spouse. But if funds earned during the marriage were used to pay dues or assessments, then at least part of the value of the membership becomes community property.

What Do the Club Rules Say?

The discussion about community property refers to the financial value of the membership and whether and how that may need to be allocated in divorce. The question of which spouse gets to remain a member of the club is usually an entirely different issue because it is generally determined by the contractual terms in your agreement with the country club.

For most clubs, even when you hold a family membership, one person is considered the primary member. The rules sometimes specify that in the event of divorce, the primary member has the right to retain the membership. Those rules may allow the other spouse to sign up for a separate membership or they may prohibit another membership. Still other types of club rules may specify that the club will honor the terms of the divorce settlement with respect to continued membership.

It is important to understand that unless the club policies and contractual terms violate the law in some way, they are binding because you agreed to them when you joined the club.

Regardless of the details, in most cases, the spouse who loses the membership often suffers harm financially and emotionally, and this needs to be taken into account in the divorce settlement. Even if that spouse is allowed to join the club on a separate membership, they will usually incur initiation fees, go through a formal approval process, and often be placed on a waitlist. In addition to accounting for the financial losses as part of the divorce settlement, such as membership fees and bond funds, it also may be wise to include a provision specifying that the member spouse will not say or do anything to inhibit the other spouse from joining separately, such as making disparaging comments or voting against their membership.

Details Matter in Divorce

So often, it is the seemingly small issues, such as golf club membership, that cause the most pain in the divorce process. It is important to work with a divorce attorney who is aware of the potential issues and prepared to take the right steps to protect your interests.

At Holstrom, Block & Parke, APLC, our Certified Family Law Specialists and associates analyze the full range of issues that could affect your divorce and we develop the most advantageous strategies to ensure that you emerge from the divorce ready to enjoy your best life ahead. To discuss club memberships or other issues that can affect you in divorce, schedule a confidential consultation with our team today.

 

How Do You Deal With Qualified Retirement Plans In A California Divorce?

Because of California’s community property laws, your retirement plan is also your spouse’s retirement plan. If your spouse has a plan of their own, part of it belongs to you. Everything you earned during your marriage, including employer contributions to your plans and interest earnings over time, is considered community marital property. Both spouses own an equal share.

Amounts you accrued before you got married may be considered your separate property, but unless you had a pre-or postnuptial agreement specifying that retirement benefits would remain as one spouse’s separate property, then you share your interests in both spouse’s plans. Chances are the amounts in the plans are not exactly equal, so one spouse will be receiving funds out of the other’s retirement plan. This can be complicated and requires special handling.

If your divorce attorney is experienced in handling complex and significant assets, they should understand the specific needs and be able to guide you through the process. At Holstrom, Block & Parke, APLC, our Certified Family Law Specialists and associates protect our clients’ interests in retirement plans regularly. But if your attorney is not comfortable with the process or you’re looking for background information, here are the basics.

What Makes Retirement Plans So Complicated

Unlike dividing up funds in a checking account, the process of dividing benefits in a retirement plan involves a lot more issues. You need to understand not just the value on the books today, but also the potential future value and tax consequences. In addition, the companies that manage retirement plans require your legal team to jump through some extra hoops before they will release funds to someone other than the employee who earned the benefits.

The types of retirement plan benefits can vary widely. Sometimes benefits may be accrued but not fully vested, which means the employee might only have the right to a percentage of those benefits if they were to leave today employment, but at some point in the future, they will have full right to those accrued benefits.

When a retirement plan is considered “qualified,” that adds another layer of complexity. The federal Employee Retirement Income Security Act (ERISA) allows certain plans to be funded with pre-tax dollars and these must be managed carefully in divorce to avoid triggering an immediate bill for the deferred taxes. Plans such as 401(k) plans, profit-sharing plans, 403(b) plans, and Keogh plans are considered qualified plans. You generally need a special type of court order to divide qualified retirement plans in divorce.

Obtaining a Qualified Domestic Relations Order (QDRO)

A domestic relations order from the court is usually required before the administrators of a retirement plan will hand over funds to a spouse in divorce. When you are dealing with assets in a qualified retirement plan, you also need a Qualified Domestic Relations Order or QDRO. This is a specialized document that must contain certain features to meet government requirements. Once the QDRO is prepared to incorporate the legal terms and explanations of the assets involved, then the order is presented to the court. If the judge approves, it will be signed and the spouse obtaining the distribution will present the QDRO to the retirement plan administrator. Then the plan itself needs to approve the QDRO. The bottom line is that it takes considerable time and effort to obtain funds from a qualified retirement plan. If the terms of division in the divorce decree do not align with options offered by plan administrators, then it may be necessary to redraft the order, which will further delay payment and add to the expense.

In some cases, the plan administrator actually needs to be added as a party to the divorce through joinder before a QDRO can be established, which adds still further delays. Finally, when all is complete and funds have finally been released, the spouse receiving funds from a qualified retirement plan may need to be prepared to take quick steps to reinvest the funds appropriately to avoid a tax bill.

Protect Your Interests in Retirement Assets by Working with the Experienced Team at Holstrom, Block & Parke, APLC

Retirement assets are one of if not the most significant source of assets for many couples facing divorce. You don’t want to risk losing out on any value that should rightfully be yours, and you don’t want to waste resources on administrative mistakes. The skilled team at Holstrom, Block & Parke understands how to handle and divide retirement assets of all types, including qualified retirement plans. Schedule a consultation with our team today to learn about the protection we can provide in your particular situation.

 

 

How Long Does A Divorce Take With Children In California?

Unlike some jurisdictions, California does not impose a longer waiting period for divorce when children are involved. Yet it still seems to many people that the divorce process takes longer when a divorcing couple has children.

At Holstrom, Block & Parke, APLC, we know there are several reasons that divorce can take longer with children. We appreciate the struggles that parents go through to protect their children’s best interests during and after the divorce process. While we know that each case comes with unique challenges and it is impossible to precisely predict how long it will take to finalize a divorce with children in California, here are some factors that affect the process.

A Divorce with Children Adds Numerous Issues That Require Resolution

Whether the terms of a divorce are established through attorney negotiation, mediation, or litigation, the process always involves developing terms for each issue. This includes how assets and debts are classified, how marital property will be divided, whether one spouse will pay alimony, and how tax consequences will be handled, and numerous other issues.

When a marriage involves children, then many additional issues will also need to be addressed and resolved, including plans for custody and child support. Not only will there be more issues requiring resolution, but they are issues that are complex and often hotly contested.

Everyone Wants to Get the Issues Right

When couples with children divorce, the outcome affects more than just the two people named in the court docket. A divorce with children impacts the lives of the children and the extended family such as grandparents. The impacts of the process and outcome will affect the children emotionally and mentally, as well as physically and financially. The stakes become extremely high, and everyone recognizes that.

For that reason, everyone involved, from parents to attorneys to court clerks wants to take extra care to make sure they get everything right. Giving extra consideration to every decision will naturally extend the process. If doubling checking figures and confirming the availability of alternatives adds to the length of each stage, then the end result is going to be a longer proceeding.

Issues Involving Children Have Both Emotional and Financial Impact

Another reason a divorce with children can take longer is that the additional issues are those with tremendous emotional and financial impact. Couples who take a reasoned, pragmatic approach to other aspects of their divorce sometimes suddenly refuse to apply logic when it comes to custody issues because they are so terrified of missing out on their children’s lives. When people react emotionally rather than addressing conflict logically, negotiations stall and issues stay unresolved.

Parenting plans affect financial standing as well as emotional wellbeing, so they can trigger a reaction that is even more visceral and hard to overcome.

The Best Interests Standards is Not Cut and Dried

Issues involving children in a California divorce are supposed to be made based on the best interests of the child. Determining what outcomes are in a child’s best interests is not a simple and straightforward determination. Courts are required to consider a wide range of factors, and parents may bring up additional issues as well. It takes considerable time to produce evidence regarding each factor, and then each one must be presented and reviewed by the court. Even if an issue is being negotiated out of court, parents generally should consider the full range of issues to discern what would be in the child’s best interests.

So How Long Does Divorce Take?

At the absolute minimum, if both spouses agree on absolutely every facet of every issue and they get their agreement written up accurately and legally, a divorce could theoretically be finalized within six months and one day. This never happens.

The average time for a divorce in California generally is generally 15 months. This includes simple divorces with short marriages and no complicating factors. Given the issues that complicate divorce when children are involved, the process can be much longer, depending largely on how long it takes for parents to reach agreement on custody and parenting plans. You can do your part to speed the process by providing information promptly when requested by your attorney, by being willing to compromise, and by working with an attorney who is dedicated to your interests rather than one who really enjoys the drama of divorce trials.

When a Divorce Involves Children, Holstrom, Block & Parke APLC Helps Find Solutions That Are Right for the Family

The divorce process sometimes has as much of an impact on children as the outcome, so it is important to consider the children’s interests all throughout proceedings. The Certified Family Law Specialists and associates at Holstrom, Block & Parke, APLC know how to effectively advance your interests while safeguarding your children. We invite you to schedule a confidential consultation to learn how we can help you protect your children in divorce.

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