Practical information that couples should understand about how financing, taxes, and other expenses impact real estate settlements in a high-asset divorce.
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The Impact on Your Estate if You Die Before a Divorce is Final
The untimely death of chef and actor Anthony Bourdain has brought to national attention the potential ramifications of a person’s death during a divorce proceeding. In the same vein, it has highlighted the importance of understanding what would happen to your estate if you were to die during the pendency of your dissolution without having made any changes to your estate plan.
As occurred with Mr. Bourdain’s untimely death, he had been separated from his wife of 20 years for a year and a half. Though the pending “divorce” was made very public, it is unknown whether any divorce filing actually occurred,
What if does indeed happen if you have not taken steps in expectation of a permanent separation (indeed some are more permanent than others)? The broad answer to this complicated issue depends on whether your passing occurs before or after entry of judgment terminating your marital status. This discussion describes what occurs under California Probate and Family Law. The rules for these scenarios may be different in other states.
Death Before Entry of Judgment Terminating Marital Status
If you should die before entry of a status-only judgment, the Family Law Court would lose jurisdiction over all issues, except those already adjudicated. In California, this is called Abatement, and it happens automatically in this situation. Under these circumstances, your share of the community property and all of your separate property would pass as if the Divorce had never been filed! This is true, regardless of who originally filed, how long the divorce went on, how long the period of separation, or how hostile the parties were to each other during the process. It is also true regardless of cohabitation with a new significant other, regardless of the length of that cohabitation.
Therefore, your assets would pass to the beneficiaries of your current estate plan, which is usually your surviving spouse. If you do not have an estate plan, your estate, if over $150,000.00, would pass through probate, and your spouse would potentially receive all of the community property assets and a share of the separate property. Any non-probate assets, such as retirement assets and life insurance plans, would pass to your designated beneficiaries, again, normally your estranged spouse.
Death After Judgment Terminating Marital Status
If you should die after a status-only judgment (a provision of California law that allows the divorce to occur before, or separate from, the resolution of the other issues) that expressly reserves jurisdiction over the remaining issues in the case, the Family Law Court would retain jurisdiction and the property division would take place there. The personal representative of your estate would be substituted in your place in the divorce for this purpose, and the Family Law Court would be able to decide the outstanding issues in the case. It is worth noting, that the court’s jurisdiction over custody, child support, and spousal support would terminate automatically upon your death in the vast majority of cases.
Death after a status-only judgment also has a very different impact on how your estate would be distributed. A judgment of dissolution automatically terminates non-probate transfers between former spouses, including wills, trusts, and beneficiary rights under retirement plans. It also terminates the right of survivorship interest in joint tenancies and community property with right of survivorship. Unless the respective wills provide otherwise, the judgment also revokes all testamentary transfers between former spouses and any provision in a will nominating the former spouse as trustee, conservator or agent. However, a judgment of dissolution does not terminate the surviving spouse’s rights as a designated beneficiary under the life insurance policy. While the ability to change a beneficiary of a retirement plan or life insurance policy may remain during a divorce, California law prohibits such a change after the filing or service of Divorce papers.
One issue that everyone should consider with an impending divorce is that if you do not sign documents specifically stating otherwise, your estranged spouse will continue to hold the power, upon your incapacity, to make medical decisions on your behalf and, like in the case of Anthony Bourdain, will be the person to make all decisions regarding the disposition of your remains.
While no-one anticipates their death, the best course of action, always, is to prepare for that eventuality with an updated, current estate plan, which takes into consideration all aspects of your life, including an impending divorce. Sometimes doing nothing is indeed a conscious choice; by way of illustration a person with knowledge of a terminal illness also going through a divorce who chooses to maintain or change his/her estate plan. Sometimes it’s simply doing nothing.
Obviously we recommend that you always make that conscious choice knowing all of the consequences of that choice.
Infidelity & Divorce in California
Why Is It Important To Maintain Civility With Your EX?
Is marriage forever? For the lucky few, yes. Unfortunately, however, the reality is a significant amount of marriages end in divorce. Many relationships end because one or both spouses have been unfaithful. When infidelity occurs, it can make an already tough situation worse, especially when there are children involved. This is because, rather than completely parting ways, parents still have to spend many years, if not a lifetime, co-parenting, interacting with one another, attending events, family gatherings, and the like.
How The California Court Weighs Infidelity During The Divorce Proceedings
In dissolution and child custody proceedings, it may be tempting to assume that such unfavorable behavior would give the “cheated on” spouse an unfair advantage, financially, with respect to parenting time, and otherwise. It may come as a surprise then to find out that, generally speaking, infidelity will not have much of an impact on your divorce and child custody matter. This is because California is a no-fault state.
In California, divorce and legal separation are generally based on “irreconcilable differences, which have caused the irremediable breakdown of the marriage.” This ground is pleaded generally which means that you do not have to “prove” fault to obtain a divorce. In very rare instances, divorce and legal separation can be based on “permanent legal incapacity to make decisions.” Thus, informing the court that your spouse cheated on you will not get you very far. The court will not award you additional support or time with your children because your spouse was unfaithful.
The Specifics Matter – Make Sure You Consult With An Attorney
On the other hand, disclosing this information to the court may hurt you, at least with respect to child custody and visitation. This can occur if you start bashing your ex to the court. A court may, in some cases, feel that you are not co-parenting. This is because although health, safety, and welfare concerns regarding your children are relevant to custody proceedings; your spouse’s ability to stay faithful is not. Please note, you should always contact an attorney regarding the specifics of your case. Even though California is a no-fault state, your divorce attorney may hear other facts in your case that you may be able to use to your advantage.
Social Media and Child Custody
Social media is present in most of our lives today. Whether you use Facebook, Twitter, Instagram, or some other social media outlet, most people freely post their comments and pictures without much thought about how the posts may affect them later.
Can social media affect your child custody case?
Many couples include their significant others on their friends list. Mutual friends may also have access to your social media page(s). Social media posts provide a mountain of evidence that can be used against you in court to prove that it is not in the best interest of the children to place them in your care, should issues relating to child custody and visitation arise later. Even an “innocent” re-post of a picture or comment you just believe is funny can be used to show your state of mind.
Social Media Posts and Your Character
For instance, e-cards and pictures relating to alcohol use are often used to prove that a parent has a drinking problem and/or is not stable enough to care for minor children. Additionally, posted statements or pictures relating to your case that are unflattering or places the other parent in a bad light may indicate that you are not the parent who will foster the parent-child(ren) relationship, thus causing you to have a reduced time-share with the children. This is especially true when your children are members of your social media pages.
While there are several other ways that social media can reflect poorly on a parent’s character and therefore their ability to parent, the important thing to keep in mind is to always be mindful of what you are posting on social media especially when you enter legal battles that involve child custody and visitation. Or you can simply turn off your Twitters and Facebooks until your divorce is finalized.
Who Keeps the Pet?
The strong bond between an owner and their pet cannot be understated. Whether we’re talking about a dog, cat, goldfish or a Llama, owners often treat their pets almost like children and, for many, they are an inseparable part of the family. Since we care so strongly for our pets, they can be just as much a point of contention as child custody – however, your pet doesn’t enjoy the same legal status as a child would. Many of our clients often ask us, “Who gets to keep the pet?”.
While many of us view our animals as children, unfortunately, the California courts do not share that view. When parties decide to dissolve their marriage, your pets, despite being living things, are viewed by the California Courts as property.
As the law sees it, your beloved pet is an asset with an assigned value, just as the court views your vehicle, home, and bank accounts. Therefore, in order to determine who will be awarded the property, the court must first determine the character of that property.
How Are Pets Characterized When Determining Property Division
Characterization is a bit of a misnomer to those who aren’t fluent in legalese. Characterization isn’t a description of whether Fido is a “good boy” or a “bad dog”, but rather a classification. Property in the dissolution of a marriage is characterized as either separate property, community property, or sometimes may have a mix of separate and community property. Your pet will be ‘characterized’ as either “separate property” or “community property”, like every other asset involved in your case.
What do those terms mean in plain English? Simply put, Community Property is any property acquired during the marriage, whereasSeparate Property is any property acquired before the marriage, after the date of separation or during the marriage by gift, devise, or descent.
If the court characterizes the pet as the separate property of a person, that person will be awarded the pet. It doesn’t matter who took care of the pet or who loved it more or who the pet is most attached to -it boils down to who acquired the pet and when. If you bought the dog before the marriage, it’s your dog – plain and simple, but if you bought the dog while you were a married couple, that’s where things get complicated.
If it is determined that the pet is community property, the pet will be treated as a marital asset and will be valued and divided along with the remainder of all other the marital assets.
Determining The “Value” Of A Pet – What’s Fido Worth?
When determining the value of a pet, more often than not, the sentimental value given to the animal is usually higher than the actual dollar value of a pet. The problem with sentimental value is that it is not a measurable, tangible thing. What that means is that the court will not consider the sentimental value of the animal, but only the actual monetary value of the pet.
For example, let’s imagine you’re married, and you bought an AKC Certified Australian Shepherd Dog for $900. You have the dog a few years, you and your spouse love the dog, but grow apart and decide to end your marriage. Your dog happens to be the world’s best dog in your opinion, so to you, his sentimental value is $100,000 – but that’s not what he’s worth. For the sake of discussion, let’s say that someone could buy a similar AKC rated dog of the same age for $1200 right now online. – That value of what someone else would pay today on the open market is what the dog is worth in the eyes of the law. This is a simplified example, but conveys the point well enough.
The value of the pet will usually be determined by the amount the animal could be sold for on the open market, thus placing a nominal value to an animal (unless a particular factor gives the animal more value). For example, an animal may have more value if it is a purebred, a stud animal, service animal, a specialty trained animal, or an animal bred for racing.
How The Court Determines Who Gets To Keep Fido
Finally, the court will need to determine who will be awarded the pet – the all important question of who keeps Fido the dog or Fluffy the cat. As a result of the law viewing your pet as property, in our experience over thousands of cases,
The best way to ensure that you are awarded your beloved pet is to compromise with the other party.
Since in most cases, both parties still care deeply for their pets, you may need to give up other items you want in order to have other party agree to have the pet awarded to you. If neither party can bear to part with the pet, another option is for the parties to work out a “visitation” agreement that will ensure both parties are able to see the pet.
However, if the parties cannot come to an agreement then the court will make an order awarding the asset to one of the parties. The current laws surrounding dissolution of marriage and family pets may eventually change. Until the laws change, it’s best to try and work with the other party and compromise in order to arrive at an amicable arrangement ensuring you retain custody of your pet.
Fame Is A Harsh Mistress
Written By: Ron Funk
It has recently been reported that UCLA head football coach Jim Mora Jr. missed a UCLA football camp due to his separation from his wife of 35 years. You see this quite often, where people in high visibility, high commitment, or high-pressure careers just can’t seem to make their marriages work. It’s a testament to how difficult marriage is, and how people so often have to choose what they are going to give their attention.
I recall an article about the former Miami Hurricane, Dallas Cowboy and Miami Dolphin head coach Jimmie Johnson, who apparently made the decision to divorce his wife in order to focus on football. I suppose that’s one way to ensure you don’t spread your attention too thin.
This is going to be an extremely expensive decision for Coach Mora. His current contract pays him about $3.5 million per year through 2019. You can bet his wife is going to get a big chunk of that (as well as any assets they’ve accumulated throughout their 35 years as a married couple).
What about the property they may have acquired in other states where he’s coached, which may not be community property states? They’ll be divorcing in California, a community property state, and California law provides that even real property located in other, non-community property states, will be treated as community property – “quasi-community property.”
Coach Mora is certainly not going to be destitute after his divorce is over, but his estate is going to be substantially lighter. Not only giving up half of all of his real and personal property to his wife, but a thirty-five-year marriage is a long-term marriage in California, which means he is going to be paying his wife a huge chunk of spousal support for a very long time.
3 Tips to Help Reduce Your Lawyer Bills in a Divorce
If you are about to retain an attorney to help you go through the emotional roller coaster ride known as "dissolution of marriage", one of the most anxiety-producing issues in the family law matter is the cost of attorney's fees.
The assistance of a divorce attorney is usually required even for what some would call a "simple" divorce. The immense quantity of paperwork which is now required to complete a divorce is anything but simple. Further, this paperwork is burdensome, confusing, and time-consuming, and it is important to get right the first time around.
As a result, many choose to retain an attorney to lead them "through the wilderness" and to prepare all of the necessary paperwork.
If you choose to retain an attorney, you should know, understand, and put into practice certain tips which can help to save you hundreds, if not thousands, of dollars in fees. An attorney is paid for his time so, in order to keep your fees as low as possible, you need to do the following:
Gather, Organize, And Deliver Documents & Information
The largest part of a "divorce budget" is what is called discovery. You can help keep your costs and fees down by gathering, organizing, and delivering all of the documents and information requested by your attorney as early as possible. This means that you will have to sacrifice some of your downtime in order to do so, but it definitely beats the "down" you will experience if you do not, as the increased attorney fees will not make you happy. A small hint: the longer the case goes on, the more fees you will pay.
Don’t Use Your Attorney As An Emotional Counselor
With relatively few exceptions, the attorney is a legal expert, not a mental health professional. Many clients seem to think the attorney is a "jack-of-all-trades" and can double as a counselor as well as a legal expert. Do yourself a favor - do not call or communicate with your attorney to "dump" all of your emotional problems. Save that process for your best friends, a rabbi/priest/pastor, or an actual mental health professional. If you do not, you will have nobody but yourself to blame for those extra hours in fees.
Limit Your Communications With The Attorney
Because an attorney's "stock-in-trade" is time, the less attorney time you use, the lower your bill will be. Most attorneys bill in six-minute increments or any portion of a six-minute period. Here's a tip: instead of sending several emails or making several telephone calls over the course of a day or a week, write your "points" down and then communicate those "points" in one email or in one telephone conversation. For example, if you send six (6) emails in one day or you make six (6) different telephone calls to your attorney in one day, that will generally cost you .6 of an hour in billing. If you follow the tip above, you can reduce that .6 charge to a .1 or .2 hour billing. Over the course of a case, that can result in significant savings to you.
A divorce hurts so much on an emotional level, and most times, there is nothing you can really do for that hurt except give it time. However, if you follow these tips, you can significantly control the "sting" that a divorce can have on your finances.
Which Friends Can You Talk to During a Divorce?
Going through a divorce is obviously one of the worst periods anyone can experience in life. In fact, many have stated that divorce is worse than the death of a loved one because, in death, it is common for the survivors to focus on the "good characteristics" of the deceased while overlooking the faults. On the other hand, a divorce is a "death" of a relationship, but in that "death", the parties seem to have nothing good to say or think about the other.
Divorce brings out a great deal of anger, hate, bitterness, and resentment. Most mental health professionals will suggest that a person going through a divorce needs to talk about those feelings to a select group of close friends, people who know you and who will allow you to vent to them.
Here are a few tips on how to pick those friends to whom you may safely vent:
- Do not choose a relative or close friend of your spouse
The saying that "blood is thicker than water" is more than an adage. If you choose a relative or close friend of your spouse, it often comes back to "bite" you because of their allegiance to the other spouse;
- Limit the number of "close friends"
A good general rule of thumb is to ask about five to seven friends for permission to vent to them. Do not pick anymore, and try not to pick less than that number. If you pick more, then you lose "quality" control. If you pick less, the individuals that you chose are likely to be "burned out" by your venting, as there are no alternatives for you to choose; and
- Do not choose a family member
It is always surprising how many attempted reconciliations fail because one party's family refuses to forgive or accept the other party because of the "venting" which the relative spouse has done with them. Relatives are typically very protective and, if you vent too much of the "bad" things about the other party, they will never trust that party again; and
- Ask for permission to vent
Once the group of "venting" friends has been decided, be sure to reach an agreement with those friends that you will first ask them if it is a good time to hear your "venting" before you start venting; and
- Don’t discuss legal matters
Do not ask your friends for legal advice unless that person is an attorney. Asking advice of a friend about a legal matter like a divorce is like asking a friend who has had knee surgery if he would do some arthroscopic surgery on your knee. You would not do that, so don't ask your friend who has gone through a divorce to be your legal representative.
If you are currently going through or considering a divorce, don’t hesitate to contact our Corona divorce law firm to discuss the specifics of your case.
Setting Boundaries During a Divorce Can Save you Money
Going through a divorce? Then you know attorney’s fees can be expensive.
Do you want to save 70% on your attorney's fees? It really is nothing more than learning to set boundaries with your soon-to-be former spouse.
Focus on the Things You Can Control
It is often said that a divorce proceeding is 70% psychological and 30% legal. That being said, if you want to save on your fees, focus on that area which you can control: the psychological aspects of your divorce.
One of the main causes of high attorney's fees is a client's inability to deal with the other spouse's manipulation, be it real or imagined. If you want to limit certain types of fees, learn to control the "psychological" aspect of your case.
How do you do that? It's very simple. You must learn to set boundaries. For those who would like to learn more about this concept from an original source, read the book, "Boundaries" by co-authors Henry Cloud and John Townsend.
What you will learn from this book, among many other very useful tips, is that nobody can dictate to you how you feel, speak, or think. That is up to you, that is if you learn how to set boundaries.
What are "boundaries" and how do you set them? Boundaries are not walls or physical barriers, rather, it is simply the ability to self-define. If you do not want your former spouse calling you names, sending you on "guilt" trips, or trying to manipulate you to reconcile, then learn how to say "No" and then set consequences for those times in which the "No" is not honored.
For example, if you are on the telephone with your former spouse who is berating you, instead of angrily hanging up the phone, which will leave you angry, simply tell him/her that you will not be spoken to in that manner so you are ending the call, and then end the call. Here's a news flash: you do not have to stay on the phone with and be berated, and you do not have to take the return calls. In fact, you do not have to take any of the calls until the "berater" learns how to communicate in a calm, civil, and reasonable manner.
When you take care of the problem with your "boundaries", you do not have to call your attorney to have your expensive legal counsel call the other attorney. The result of creating boundaries results in savings for you in attorney fees, as well as, self-empowerment.
Determining Who Gets the House in a Divorce
California is one of only a few states in the country that use community property rules when deciding how assets are divided in divorce. To put it simply, property gained or improved during the marriage will be split as evenly as possible; the same is true for marital debt.
For many divorces sorting through and splitting much of their property isn’t much of a problem, but once the family home is on the table, matters can escalate quickly. And it makes sense that they should. Your home is probably your most expensive asset and everyone in your family depends on it. So who is going to get it when the divorce finalizes?
Deciding Factors the Court Will Review
Unless you and your spouse worked out ahead of time who gets your family home and why – this would be a considerable stroke of luck – a California divorce court is going to have the final say in the matter. Knowing what the court is looking for when coming to its decision can help you gain an advantage and increase your chances of keeping the house you put so much time and energy into.
Some of the factors the court will consider are:
- Separate or community: First of all, what kind of property is your home: separate or community? And are you certain? Separate property is what belonged to just you or just your spouse before you got married, and sometimes specific inheritances and gifts. Community property is what you purchased together, or improved together while married. Your ex-spouse may have owned their home before you even met them, but if you contributed to the household significantly during the marriage, it could have been changed into community property in the court’s eye.
- Child custody: The divorce court’s credo may as well be “best interest of the children.” Whenever two parents divorce, each decision needs to weigh how it will affect their children. This is true for deciding who gets the family home. The parent who earns primary or sole custody rights is more likely the one who keeps the home because it eliminates the stress of moving, possibly to a new neighborhood or city, that children can experience.
- Practical considerations: How much money has been put towards the home so far? How much still remains before it is paid off? What is the mortgage amount right now? The court needs to consider whether or not each spouse can afford to keep the home, or if any of them can on their own. If not, it could be more practical just to sell the property and evenly divide the collected value.
Room for Explanations & Arguments
Nothing is set in stone when it comes to legal matters, no matter how serious the legalese on the paperwork. If you are worried that your family home will go to your ex-spouse instead of yourself, don’t just sit idly by and let it go away. Make an argument as to why you should keep the home, refine it, and bring it to court. You never know what will influence the judge to see things your way.
At Holstrom, Block & Parke, APLC, our Southern California divorce attorneys can help you understand your property rights and compete for your family home. With more than two centuries of total legal experience focused primarily on family law, you know you can trust us when it comes to even the most complicated of divorce cases. Contact our firm today and ask about scheduling a free consultation over the phone.
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