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Can Alimony be Modified in California?

When a final divorce decree is issued, one of the spouses may be awarded alimony. Too many times, those who are paying alimony, and those who are receiving alimony believe the amount awarded is the “final” amount and that amount is paid until the judgment is released. However, California courts do recognize in some cases, once an order has been established, there may be valid reasons to request the order be modified.

What Circumstances Can Lead to Modification of Alimony?

The first thing to understand is an alimony, or spousal support order as it is known, may only be modified if specific conditions are met. Spousal support payments are not ordered randomly — there are specific criteria which must be met before a judge will include spousal support in a divorce settlement. The specific criteria are included in California Family Code Section 4320.

Some of the circumstances which would allow you to make changes in spousal support include:

  • Income Changes — if the spouse receiving alimony has an in income of greater than 10 percent, there may be grounds for requesting a modification. The paying spouse who has the same situation may also request an alimony modification.
  • Living Situation — if the spouse receiving alimony begins cohabitation, there may be grounds to request a modification of alimony orders. Additionally, if the paying spouse has had a change such as a new dependent, they may also request a modification of support.
  • Failure to Exert Effort to Become Self-Sufficient — one of the characteristics of spousal support is it is to serve as a bridge unless there are circumstances which make it impossible for the receiving spouse to gain employment. In these cases, it may be necessary to request the court issue a “Gavron” warning which stemmed from Marriage of Gavron, 203 Cal. App. 3d 705, 711-712 (Cal. App. 2d Dist. 1988). This case was brought when a spouse who was receiving a substantial monthly alimony payment refused to seek employment over an extended period of time. This option is available when the court has not ordered permanent alimony payments.

There may be other circumstances which could warrant a modification of alimony, you should speak with a skilled family law attorney if need to either request an increase in alimony payments, or you are seeking a decrease in payments.

Alimony Modification Process in California

Assuming the court has retained the jurisdiction necessary to hear a case for modification of alimony, the person requesting the modification will be required to fill out the following forms:

  • Spousal or Partner Support Declaration Attachment(Form FL-157 ) – this form is optional but may help you prove the reasons why a modification is needed
  • Declaration(Form MC-030 ) or an Attached Declaration (Form MC-031 ) would be used if more information is necessary to support your request

While it may be possible for you to fill out these forms on your own, the challenge is making sure the arguments you are putting forth will sway the judge to find in your favor. This is one reason why it is helpful to work with a certified family law attorney in all matters which require court intervention.

Things to Avoid When Requesting a Modification of Alimony in California

While a modification of an alimony order may be made at any time, it is important to make sure you have the legal grounds to do so. There are other things you should be aware of when filing for a modification of spousal support including:

  • You should continue making payments if you are the person paying. This is important because a failure to make payments could result in your being held in contempt of court.
  • You should file a modification request as soon as you have identified the legal conditions have been met. Should an order for modification be issued, it will not be retroactive, the new order will only be in effect once the court has ordered or approved the change.
  • Do not modify your payments based on a verbal agreement between the two involved parties. Even if you have agreed to a change, it must be changed within the court system.

It is always important to protect yourself during the modification process, so you do not face additional legal challenges associated with non-payment or partial payments of alimony. Seek legal guidance if you have any questions regarding payments of alimony.

Experience Matters When Dealing with Alimony Modifications

When you are requesting a modification of alimony, it is important to have the proper documentation and proof needed to justify the request. While it is always possible to have the alimony order modified in California, if you do not have the legal basis to do so, it will be denied.

Spousal support payments are typically designed to ensure a person can maintain their standard of living following the dissolution of a marriage. However, when the paying spouse is facing challenges making payments, or the receiving spouse is unable to make ends meet, there may be grounds for changing the payments. You will not know if your situation warrants a modification until you speak with an experienced California alimony modification attorney.

Hiring an experienced family law firm can make a difference between having your request approved or denied. That is because an experienced attorney can help you determine if you have the legal grounds needed to request a modification. If we determine you have the legal basis for a modification, we will help you gather the documentation, fill out the required court forms so they are accurate and represent your interests in court. 

To talk to our lawyer about your family law issue in a free telephone consultation, please call our office at 619-304-0418 or an email. We provide services to individuals throughout the San Diego County area and help them reach a resolution on all types of family law matters. Contact The Law Offices of Steven M. Bishop, Attorney at Law, A California Corporation at (619) 299-9780 if you have questions about your current alimony. Let us help you with requesting a modification.

 

Types of Property that are Eligible for Division in a Divorce

California is a community property state. This means during a divorce, the assets of the marital estate are divided equally, as are the debts. However, what is not as clear is what is considered part of the marital estate. Under California Family Code 750 Section 3 the definition of the marital estate is more clearly defined. However, this does not mean that all property is considered community property.

Property and Debt Acquired During a Marriage

In general, when any asset is acquired during a marriage it is considered to be community property. This includes:

  • Wages and Benefits
  • Lottery Winnings
  • Business Ownership
  • Real Estate
  • Bank Accounts
  • Retirement Accounts

These assets would be divisible equally between the spouses at the time of a divorce in California.

Understanding Sole Property in California

Separate (or sole) property may also be owned by a spouse in a California marriage. There is a narrow standard for this category of property. To be considered sole property, the spouse must show the property was gifted to them, was acquired from an inheritance, or was part of a personal injury compensation settlement.

Other sole property may be identified as agreed upon by the partners. Generally, this means the partners have either a post-nuptial or a prenuptial agreement in place. Property which either party owned prior to the marriage may also be considered sole property under California Code § 770.

There is one other category of sole property which couples should be aware of. Any debt or asset acquired following the parties physically separating from each other during the marriage would also be considered sole property.

Commingled Marital Property

Spouses often do not understand community property statutes and inadvertently wind-up using funds which might otherwise be considered sole property for property which becomes part of the marital estate. Some examples of this include:

  • Pension and Retirement Accounts — any funds which are in a pension or retirement account at the start of the marriage are considered sole property. However, if you withdraw funds from these accounts during your marriage and deposit the proceeds in a jointly held bank account, they are then considered community property. The difference in value between the accounts at the time of the marriage, and upon the dissolution is also considered community property. Funds in this case which are owed to the non-contributing spouse would be divided through a Qualified Domestic Relations Order (QDRO).
  • Real Estate Liquidations — if one spouse owned a piece of property coming into the marriage and subsequently sells the property the proceeds may be deposited into an account in only their name and remain sole property. However, if the proceeds are used as a down payment on another property, the new property becomes part of the marital estate if the payments on the property from funds either partner earns, then the equity in the property is considered community property.

As you can see, community property rules are confusing which is why a couple who is in the process of a divorce must seek competent legal assistance. Debt and property, including business which is part of the marital estate must be carefully reviewed.

Post Nuptial and Prenuptial Agreements and Community Property

Another factor which must be considered when dividing property in a community property state is what agreements exist between the spouses. In some cases, there are agreements which were entered into legally which bind the parties. Unless there are instances of fraud or coercion, these agreements will further dictate the division of property. Some examples include:

  • Debt incurred by one spouse — either spouse may elect to purchase a vehicle or other large-ticket item which requires a loan. In these cases, the spouses may have an agreement in which one party agrees to be legally liable for the loan. These agreements, unless they are forced upon the spouse are legal and would eliminate one spouse’s liability.
  • Assets acquired by one spouse — when a spouse buys a business, invests in artwork, or buys an antique, they may have a reason for holding it as sole property. If the spouses have a legal document specifying that for legal purposes the property is designated as sole property, the court will typically uphold these agreements.

Prenups, and post-nuptial agreements can often cause complications in divorce proceedings. Make sure your attorney is informed of any agreements which exist which may have an impact on the overall value of your marital estate.

Always Seek Legal Help When Dealing with Property of a Marriage

Most people are not aware of how the courts view marital property under California law. Individuals should take steps to ensure their sole property does not become commingled during their marriage to protect their own interests. It is also important to remember that if you should acquire property during a period when you are separated from your spouse you should make a note of the date of your separation to ensure you are credited with being the sole owner.

Student Loans in Community Property States

Remember, there may be different rules which apply to student loans. When a spouse takes out a student loan during a marriage, the rules may be applied differently. If the spouse co-signed on the loan, they are liable for repayment of the loan. If the loan was used and as a result the student’s income improved the family’s financial picture, then both spouses may be liable for repayment.

However, if the spouse who used the loan defaulted on the loan and the other spouse was not a cosigner, they may not have any liability. If one spouse entered the marriage with outstanding student debt, that debt does not become part of the marital estate and remains the sole liability of the spouse who took out the loan. Talk to your attorney about any student loans which were taken out during your marriage, so you understand when you may be responsible for part of the loan.

Want to Know More About Community Property?

To learn more about your specific options regarding community property and your divorce, call our San Diego office at 619-304-0418 or send us an email.  We will arrange a free phone consultation with Attorney Bishop, and he can help you understand sole and community property and how it may apply to you.

 

Is My Spouse Hiding Assets During Our Divorce?

Marital property — this is one of the most misunderstood factors in a California divorce.  California is a community property state — this means property and debt is generally equally divided between each spouse. According to the courts in California, when a couple divorces, marital property is considered equally owned by both spouses. Since each spouse or partner owns one-half of the property, they also are responsible for one half of the debt. There are complicated rules that pertain to sole owned and community property during a divorce which make it imperative for you to hire an attorney who understands California law.

Marital Property Versus Sole Property in California

There are two categories of assets and debts which a couple may have at the time of their divorce. Marital assets are those assets which are accumulated during the marriage. Marital debt is the debt accumulated during the marriage. However, there is also property and debt which may be classified as sole property and debt including:

  • Inheritances — any inheritance a person may receive while married is classified as a sole asset. This means upon the dissolution of a marriage; the property is not divisible between the two partners.
  • Property owned at time of marriage — if a person owns property at the beginning of the marriage, this property may not be included in community property. There are exceptions to this: For example if a partner owns a property or business at the time of the marriage and no additional investments in the property or business were made during the marriage from community property funds, they may remain classified as sole property. However, if there were investments during the marriage, the value of the property at the time of the marriage, less the current value may be classified as community property.
  • Proceeds from Personal Injury Cases — if one partner settles a personal injury lawsuit, the value of the lawsuit may be classified as a sole asset.
  • Property Defined in Pre or Post Nuptial Agreements — when a couple enters into a post or prenuptial agreement they often classify certain property as sole owned. This may be presented to the court as proof of one party owning the property in cases where property division is being considered.
  • Debts Which the Spouse had When Entering a Marriage — student loans, automobile loans, etc. which a spouse had prior to being married may be classified as sole debt.

You should speak with a California property division attorney during your divorce to make sure you understand the complexities involved in community property law.

Financial Disclosures During a Divorce Proceeding

Both parties will be required to submit individual financial disclosures during their divorce proceedings. These disclosures cover all assets including life insurance policies, IRA, and other retirement accounts, as well as bank and brokerage accounts. The court requires the person submitting such a disclosure to attest as to its truthfulness and completeness.

Still, there may be times when one spouse attempts to diminish the value of the assets of the marriage. There are several ways this may be done including:

  • Liquidating bank or brokerage accounts — withdrawing funds from accounts as a means of hiding the value of the account is a common tactic that is used to minimize the value of the marital estate.
  • Investing in Cryptocurrencies — today with increasing availability of cryptocurrency, one spouse may make a sudden investment in these currencies. There is no statement which is issued by the company holding this asset. This may be done in advance of considering a divorce as a means of shielding the spouse from disclosing the asset.
  • Business Investments — in advance of filing for divorce, one partner may withdraw funds from a bank account or other investment account and put the funds into a business which has been designated as sole property. This is a method used to minimize the value of the marital assets.
  • Other Investments — rare books, artwork, or other unexpected investments in antiques may be used as a way of hiding assets during a divorce proceeding.
  • Unexplained Loans — your spouse may make unexpected loans to friends and family as a method of hiding the true cash value of your marital estate.

If you suspect your spouse may be hiding assets, it is important you advise your attorney of this fact immediately. There are ways to ensure there is full disclosure including looking back at prior account balances. Always bear in mind these methods are often utilized well in advance of a divorce filing — you may stop seeing certain bank or brokerage statements, notice your spouse is getting less in bonus money or commissions, or has taken a sudden interest in unregulated investments.

Hiding Assets or Shielding is Illegal

When a couple files for divorce, each is entitled to an even division of property as well as obligated to repay debt which is part of their marital estate. Anything less than full disclosure is illegal, and the courts may hold the responsible party in contempt of court, or the offending party may face other penalties imposed by the court. You should never settle for less than the full value of your marital estate because your partner is attempting to hide assets.

When you are involved in a divorce where a significant portion of your marital estate is deemed community property, one spouse may be attempting to shield some of these assets. You need an attorney who will thoroughly investigate any claims of hidden assets to ensure you get the portion of the marital estate you are entitled to under California law. Be certain to tell your lawyer about any assets you believe may have been wrongfully liquidated or transferred to others in the months leading up to your divorce. Remember, the higher the value of your marital estate, the more likely your spouse is to attempt to shield assets.

We Can Help With High Value Divorces and Hidden Assets

To speak to us about your property division case, please call the San Diego offices of Attorney Stephen Bishop at 619-304-0418 or send us an email to arrange a free phone consultation. We can help ensure your spouse is making a full disclosure of all assets which should be part of your marital estate to make sure you get your rightful share of your marital estate.

Ways Business Debt Can Affect Your California Divorce

Divorces are messy. California is a community property state which can further complicate an already complicated situation. In community property states, in general, any assets or debts accumulated during the marriage are divided evenly between the two parties with the exception of property which was acquired prior to the marriage or acquired by one party as the result of an inheritance, or a personal injury lawsuit settlement.

Business Finances Can Complicate Divorces

When there is a business involved, the entire situation becomes far more difficult: Not only are there assets which must be dealt with, but there are also business loans and other debts to deal with. This is a common problem in which the already complicated high-asset divorce becomes even more complex

The two areas in which business debt can impact a divorce include:

  • Business Loans — you may have taken a loan against your business assets to repair a roof, expand your home, or for other purposes which you believe enhance the value of a marital asset. However, this may not result in your spouse being responsible for half the debt.
  • Salary from Business — even if a portion of your salary from business is being used to repay the loan you took out for personal reasons, you may not use this reduced amount for consideration for spousal or child support obligations.

Both of these situations would result in your having higher debt following a divorce. This could result in a devastating financial picture as you move forward.

Avoiding Business Debt Problems During a Divorce

We already understand having a business can further complicate your divorce. However, there are some steps you can take to avoid being saddled with debt which should rightfully be divided between you and your spouse.  There are some steps you can take to ensure your business debt is equitably distributed during a divorce.

Avoid Commingling Personal and Business Funds

Your business funds and family funds should remain separated at all times. The only funds which should be placed in your personal accounts from a business account is your salary. In the event you borrow money using your business assets or your business you need to carefully document the use of funds.

If you are borrowing money for personal reasons, make sure you carefully document the following:

  • How much money was borrowed from your business
  • What the purpose of borrowing funds was
  • Any amounts which were repaid from personal funds

Use of Business Funds Once Divorce Proceedings Begin

Once your divorce proceedings have started, you should avoid borrowing business funds to pay for personal expenses. Doing so could jeopardize the court’s rulings on how much income you may have to acknowledge for purposes of calculating child and spousal support payments.

You should continue to draw your normal salary from your business during your divorce proceedings. The more caution you use with business funds, the less likely your expenditures are to be questioned during these proceedings.

Consult with the Appropriate Professionals

Just like you hire a skilled family law attorney to assist you with a divorce, you should also consult with a financial advisor and a tax professional when dealing with business assets and debt. In many cases, it will require the expertise of a forensic accountant to assist in determining the value of your business. Make sure you provide them with any documentation which is requested so they may set a true value for your business.

High Value Divorce Complications

Even when you and your spouse agree you can no longer share your lives together, there can be serious disagreements over how assets and liabilities are divided during a divorce. If your business is considered “sole ownership” – meaning your spouse may have no right to the assets of the business, this does not make it less complicated if you have borrowed money against your business for personal reasons.

A jointly owned business, and a solely owned business are treated in different manners for the purposes of divorce in California. In order for a business to be considered sole ownership, one of the following conditions must be met:

  • Ownership prior to marriage
  • Whether the business was inherited from another family member
  • Whether you and your spouse had a prenuptial or post-nuptial agreement

None of these factors may prevent your spouse from having a claim against the business. Some of the items which will be reviewed as part of your divorce settlement will include whether any of your family’s funds were used to grow or invest in the business, whether your spouse provided any labor support during your marriage, and whether money taken from family funds was repaid during your marriage.

Avoid Taking Risks in a High Value Divorce

Anytime there is a business involved in a divorce proceeding, the ability to have a “simple” divorce becomes impossible. You want to work with an attorney who understands what is at risk and maintain as much control as possible over your business once your divorce is finalized. You also want to avoid having business debt that could cripple you financially as you start on a new path. Working with a skilled divorce attorney who has experience handling high value divorces with a business as an asset can help you overcome some of the challenges you will be facing.

If you are in doubt regarding any financial decisions you are making during your divorce proceedings, speak with your attorney before doing anything. The courts will not look favorably upon you if there is an attempt to use personal funds for business reasons. Keep your business finances and your personal finances completely separate and make sure you do not liquidate any assets which may be considered joint property.

Contact Attorney Steven M. Bishop to schedule a consultation today. Attorney Bishop is a Certified Specialist in Family Law, he can help you from the early planning stages to the final disposition. Do not take unnecessary risks that could put you in legal jeopardy. To schedule a consultation regarding your divorce, contact Attorney Bishop at (619) 304-0418 or complete our online  contact form.

 

How The Length of Your Marriage May Affect Your Divorce in California

Divorces and legal separations are difficult for everyone involved. The idea of transitioning to a new life is usually unimaginable when you’re ending a long-term marriage. The process often creates lifestyle changes and financial inequities between the two new households. These changes can be particularly devastating if one spouse stayed home to care for the family while the other built a career.

California Family Codes consider the length of a marriage when ruling on divorces and separations. They provide solutions that anticipate how a divorce may leave one spouse with an unstable financial future. The court’s overall goal is to ensure that both spouses maintain the standard of living they were used to doing the marriage. When long-term marriages dissolve, the solutions must meet a number of inherent challenges.

A Certified Specialist in Family Law

Attorney Steven M. Bishop understands how the length of your marriage influences spousal support payments and other key legal outcomes. As a Certified Specialist in Family Law, Attorney Bishop helps clients work through these and other difficult issues. He has assisted numerous couples in establishing agreements and working out complex details. He has helped his clients resolve their differences, both inside and outside the courtroom.

Marriages of “Long Duration”

California Family Court “…retains jurisdiction indefinitely…” when it considers a marriage one of long duration. This usually involves unions lasting 10 years or more. Unless divorcing or separating spouses agree to the contrary, the court has the discretion to issue a spousal support order based on perceived need. When ruling on a marriage of long duration, they also have the right to leave the order open-ended.  Final orders don’t necessarily include a termination date. The court retains the authority to reassess and reevaluate all spousal support and community property issues in the future.

Other than a few exceptions, all assets and liabilities go into a community estate. The court uses its discretion when dividing the estate between spouses. When spouses are exiting a marriage of long duration, the court’s extended jurisdiction grants indefinite discretion to reassess or reevaluate any decision. Either spouse may appeal a decision or seek a modification.

Duration-Related Spousal Support Factors

California Family Codes address many of the spousal support factors that arise when a long-term marriage ends. §4320 (f)simply names “The duration of the marriage” as a factor. This brief mention is just one of the items under “Factors to be Considered in Ordering Support.” Several of the described issues and circumstances demonstrate the court’s need for wide discretion when ruling on a long-term marriage.

Earning Capacity

In awarding spousal support the court evaluates each spouse’s ability to earn enough to maintain their previous living standard. The process considers their education, training, and skills in light of the existing job market. One important factor it considers is the effect of a spouse’s devotion to “domestic duties.” When spouses remain unemployed or underemployed for long periods, they often must retrain to re-enter the job market. Depending on the spouse’s age, the available jobs won’t necessarily provide a substantial enough income.

When a young parent stays at home instead of working, it establishes an early financial gap between spouses. If they continue the roles over an extended period or a lifetime, the gap rarely closes. Typically, it becomes a problem if the couple divorces or separates.

A Pew Research Center study of stay-at-home parents shows that the stay-at-home spouse scenario is fairly common. Their most recent study determined that 7% of male parents in the U.S. and 27% of female parents stay home to take care of their children. Some spouses remain in the home to care for aging parents.

Whatever the reason for exiting the job market, long bouts of voluntary unemployment or underemployment often affect future employability. As AARP’s  Working at 50+ page explains, there are plenty of jobs for people aged 50 and over, but they often require additional training. Over time, stay-at-home spouses age-out of consideration for their preferred careers. If they’re degreed or trained for a specific profession, they often lose accreditation for which they previously trained.

Contribution to Spouse’s Career

When one spouse excels, it’s sometimes because the other spouse sacrificed their money, their emotional well-being, and their own careers. That sacrifice often comes as financial contributions to a college education or sole responsibility for household duties. Some spouses simply fall into a routine of caring for children alone while the other spouse builds a career. A spouse’s financial and emotional support help elevate a family’s lifestyle. When these arrangements continue over time, they often leave a spouse unqualified to re-enter the job market.

Standard of Living

The court assesses a spouse’s need for support based on their established standard of living. This often becomes an issue during a long term marriage. Spouses work together for years building their net worth. Often the standard improves because one spouse performs all the domestic duties while the other earns the income. It’s a mutually beneficial arrangement if spouses stay married. When they separate or dissolve their marriage, one spouse often bears the burden of an unexpected lifestyle change.

Age and Health

Age and health often become dual considerations when a couple has remained married for a long time. As couples age, they often deal with multiple illnesses and medical conditions. Because of age-related physical and immune system issues, older people are less able to recover from an illness. They are more likely to require long-term care.

Contact The Law Offices of Steven M. Bishop

If you’re considering a divorce from a long-term spouse, contact Attorney Steven M. Bishop for comprehensive legal assistance and compassionate advice. Attorney Bishop recognizes that no divorce is easy or simple, so he works closely with clients to provide the help they need.

To schedule a consultation, call our office at (619) 299-9780 or complete our Contact Form.

Top 5 Mistakes to Avoid When You’re Planning to Divorce

When you’re going through the planning stages of a divorce, it’s a tough transition for everyone. Despite the potential for unimaginable stress, you must still make prudent choices. That’s often difficult when you’re experiencing so many emotional changes. Still, it’s important that you strike a balance between living a normal life and avoiding the mistakes that inevitably make your divorce even more stressful.

Attorney Steven M. Bishop understands that divorce is hard, even during the planning stages.  As a Certified Specialist in Family Law, he’s often seen consequences when a divorcing couple makes mistakes before seeking legal advice. He created this list of the top 5 divorce planning mistakes to encourage you to think carefully before you act.

1. Including Your Children in Your Conflict

As parents, you must try to keep your children out of the middle of what is essentially an adult conflict. That’s often difficult when they’re the object of so many critical decisions. California Family Statutes include a helpful standard that should guide your actions before, during, and after your divorce. Their goal is to make decisions based on “the best interests of the child.” That must be your goal as well.

The Psychology Today article, “Understanding the Effects of High-Conflict Divorce on Kids” discusses how profoundly parental conflict can change a child. Studies have shown that bickering parents cause childhood problems from mental health to self-esteem. You and your future ex-partner or ex-spouse must decide together how to meet this challenge. Here are a few solutions to consider.

  • Provide reasonable age-appropriate answers to your children’s questions. They deserve simple facts about what’s going on. If they can’t get answers from you, they will find them elsewhere.
  • Don’t argue in front of the children. The above article suggests communicating via email to avoid emotional interactions.
  • Consider accessing the California Court-recommended website, Families Change. It provides resources to help parents, children, and teens deal with divorce.
  • Work together on a parenting plan that’s acceptable to both parents.
  • Establish workable traditions for dealing with future conflicts.

2. Insisting on Your Day in Court

Some spouses and partners want their day in court. They want a judge to hear what they’ve been going through. They want the court to grant them sole custody of the children. They want spousal and child support. They want to air their dirty laundry, no matter the emotional cost. If you’re anticipating this volatile, TV-version of the divorce process, you should probably consider non-court alternatives instead.

Collaborative Divorce: You and your spouse or partner work with attorneys who help you negotiate an agreement without going to court. You may seek input from specialists to help you make decisions about child support, community property, and other matters. You can sign a document designating that you agree to resolve your differences outside the courtroom.

Mediation: Divorcing parties and their attorneys work with a trained mediator to discuss their divorce issues. It’s facilitated negotiation where the mediator encourages the parties to communicate and find solutions. The mediator has no authority to make decisions on your behalf.

3. Going Into More Debt

If shopping is your go-to activity for easing stress, you’re not alone. While shopping might be the ideal activity to calm you during your divorce process, it’s probably not a good idea. Whether you pay with credit or cash, your purchases will affect your divorce-related financial issues one way or another. Before you plan a shopping trip, you must consider your financial future.

You will eventually settle into a new home or apartment. You’ll have to pay all the bills you and your spouse or partner once managed together. If you don’t have custody of your children, the court will order you to pay child support. If you do have custody of your children, you will likely pay extra expenses that aren’t included in the support agreement. You’ll owe court costs and legal fees. Also, when you spend money, your spouse could accuse you of depleting community assets.

4. Hiding your assets

Divorce often brings out a natural instinct to protect your property and financial resources. Some divorcing spouses do this by attempting to hide them. You might think up an elaborate plan to retain assets your spouse might not know about. That’s something you should never consider for two reasons.

  1. Your spouse will likely find out.
  2. If you lie about your assets during a divorce process, it’s perjury.

If your soon-to-be-ex suspects that you’re hiding assets, she or he can hire a forensic accountant to confirm or disprove their suspicions. Forensic accountants specialize in criminal matters, but they also provide valuable services for divorcing spouses. It’s a fee that spouses gladly pay when they believe their future exes are hiding community property assets.

If the Family Court learns about your subterfuge, the judge has the option of referring you for criminal prosecution. When you misrepresent your assets during a court process, you’re not simply misleading your spouse. You’re lying to the court, and that’s perjury. While the court might not choose to refer you for criminal charges, it has the discretion to use that option.

5. Forgetting to Change Your Beneficiaries

Some life insurance policies won’t pay if the beneficiary doesn’t have an insurable interest in the insured person. Not all financial instruments work that way. If your spouse or partner is a named beneficiary on your will, irrevocable trust, or some other financial instrument, you must make the changes immediately. Retirement plans are a little more complicated. You can’t remove an existing spouse’s name from an ERISA-governed retirement plan. If your plan doesn’t become a part of the community estate, you should change the named beneficiary as soon as you can do it legally.

Contact The Law Offices of Steven M. Bishop

As you consider divorce or legal separation, you must know and understand your legal rights and responsibilities. Even if you don’t understand the legal ramifications of your actions, the court will still hold you responsible. Contact Attorney Steven M. Bishop to schedule a consultation. As a Certified Specialist in Family Law, he can help you from the early planning stages to the final disposition.

To schedule your consultation contact Attorney Bishop at (619) 299-9780 or complete our Contact Form.

Can I Get Spousal Support While My Divorce is Pending?

Divorce is never pleasant under the best of circumstances. As spouses begin the transition to separate households, one household often undergoes more financial hardships than the other. California’s Family Code allows the courts to address this inequity. Division 9, Chapter 4, §3600 gives the court discretion to order one spouse to pay support to the other.  When one spouse proves the need for support, the court can require the other spouse to pay while the dissolution or legal separation is still pending. The court’s support order follows the same guidelines as an order issued at a final trial.

A Certified Specialist in Family Law

Contact Attorney Steven M. Bishop if you have concerns about paying or receiving spousal support. As a Certified Specialist in Family Law, Attorney Bishop helps clients understand their legal rights in California. He realizes that financial issues are common for couples and families going through a dissolution or legal separation. They disrupt your peace of mind as you work to build your new life. They continue long after your dissolution or legal separation is final. Attorney Bishop provides compassionate guidance and assistance, and he works hard to resolve his clients’ support concerns.

Why Does Family Court Grant Spousal Support?

When a family dissolves a marriage or initiates a legal separation, they often undergo an immediate economic shift. Suddenly, both parties must handle the cost of separate living arrangements. The transition to independence is often financially challenging, but even more so for the spouse with inadequate income. If he or she also has primary custody of the children, it magnifies the income shortfall. Household expenses, food, utilities, and other costs often become unmanageable.

Custodial parents also struggle with additional financial challenges, even if they receive consistent child support payments. They often pay recreation expenses, extracurricular fees, and other costs that child support payments don’t always cover.  When appropriate, the court issues an order that legally commits the higher-earning spouse to provide spousal support to bridge the financial gap.

When Does the Court Grant Spousal Support?

A Family Court doesn’t automatically grant spousal support. Before rendering a decision the court examines a couple’s financial situations and many other factors. The primary goal is to allow the supported spouse to maintain the standard of living they had during the marriage. The court assesses the need and determines the spousal support amount by evaluating evidence that provides answers to relevant questions.

Marketable Skills

Does the supported spouse have any marketable skills? What is the market for these skills? Does the spouse need additional training?

Impaired Earning Capacity

Did periods of unemployment “…due to domestic duties…” impair the spouse’s current and future ability to earn a living?

Contribution to Spouse’s Career

Did the spouse seeking support contribute to the other spouse’s education, training, career, etc?

Capacity to Pay Support

Does the supporting spouse have enough income and assets to pay spousal support?

Needs Established During The Marriage

What was the couple’s standard of living during the marriage?

Assets and Liabilities

What separate obligations and assets does each spouse have?

Marriage Duration

How long did the marriage last?

Dependent Children

Can a custodial parent seeking spousal support earn a living without “…interfering with the interests of dependent children…?”

Personal Circumstances

How old are both spouses? Does either have any health issues?

Domestic Violence Issues

Was there any history of domestic violence during the marriage? Was a spouse ever convicted of domestic violence?

Tax Consequences

Will spousal support cause “…immediate and specific…” tax issues.

Before reaching a decision, the court has the discretion to consider these and any additional factors it deems just and equitable.

Does One Spouse Always Receive Support?

Unlike child support, one spouse is not automatically responsible for paying spousal support to another. As with any issue that goes before a court, the person in need of support must produce evidence that verifies their position. As the above parameters indicate, the court attempts to make reasonable decisions based on the spouse’s lifestyle, income, and financial need. The goal is to keep both spouses living as they are accustomed.

Also, it’s not always a matter of a male spouse supporting a female spouse. California Family Code clearly avoids male and female references. It uses the term, “spouse” instead of husband or wife. It refers to the involved parties as the “supported party” and the “supporting party.”  The wording makes it clear that either a man or a woman may be responsible for paying spousal support to the party with limited financial assets.

Is a Spousal Support Order Permanent?

Spousal support is meant to provide transitional assistance as an ex-spouse settles into his or her new life. This is true for temporary support while a divorce is pending as well as the judgment issued when the dissolution or legal separation is final. The laws include a clear expectation that the supported spouse must make an effort to improve their financial situation. It further concludes that a supported spouse must be able to support him or herself within a reasonable period of time.

The court defines a reasonable period as one-half the length of the marriage. This timeframe is subject to the court’s discretion. The expectations are more flexible when a supported spouse has health issues or a couple is dissolving a longstanding marriage. The court can modify or terminate a spousal support order under certain circumstances.

  • The supporting spouse shows good cause that a support order should be modified or terminated.
  • The order is unenforceable during any period where the divorcing parties have reconciled.
  • The supported party has separate assets or enough income to support themselves.
  • The supported party is living with someone in a non-marital relationship.
  • The court awards custody of the children to the supporting party

During a hearing or trial where the court considers spousal support, it sometimes admonishes the person seeking support that they should make a reasonable effort to support their own needs. Before formalizing a dissolution or legal separation, a court may have a vocation training counselor evaluate the supported spouse’s employment skills and abilities.

Contact The Law Offices of Steven M. Bishop

If you need assistance with a spousal support order, Attorney Steven M. Bishop can provide the guidance and legal assistance you need. As a Certified Specialist in Family Law, he always puts your needs first. Attorney Bishop has helped many clients work through complicated dissolutions and legal separations. He wants to determine if he can help you. To schedule a consultation, call our office at (619) 299-9780 or complete our Contact Form.

If I Remarry will it Affect my Alimony in California?

Spousal support is often a thorny issue both during and after a legal separation or dissolution process. Explained simply, it takes money from one spouse and gives it to the other. California Family law established spousal support as a solution to meet a temporary need. As a supported spouse, when you remarry, your financial need changes. Your supporting spouse no longer owes support because the courts and the law assume that you no longer need it.

Spousal Support Helps Maintain Your Lifestyle

The ultimate goal for spousal support is to allow both parties to live the same lifestyle they shared during their marriage. Support also addresses the financial setbacks that often occur when spouses establish new households and take on additional responsibilities. The law and the courts grant support based on a complex assessment of need and ability to pay.

Spouses often require support both during the pendency period and after the court issues its final judgment. Family Courts have wide discretion in granting and terminating support, but it’s always based on documented evidence. Remarriage is one of the legally designated contingencies that automatically triggers a support termination.

Should You Consult With a Certified Specialist in Family Law?

Spousal support issues are often complicated. While California courts allow you to handle them on your own, you need to make sure you get it right the first time. As a Certified Specialist in Family Law, Attorney Steven M. Bishop has helped many San Diego families work through complicated spousal support issues.

Attorney Bishop understands your concerns, and he knows how to protect your legal rights. He has helped clients negotiate flexible support agreements. When necessary, he has presented compelling evidence, encouraging the court to support his client’s position. Attorney Bishop always provides the compassionate guidance and dedicated assistance his clients need.

How do Courts Assess Your Need for Spousal Support?

Spousal support is never automatic. The court hears evidence and decides if one spouse should make payments to the other. To reach an equitable decision, the court examines the presented evidence and considers each party’s financial and personal circumstances. As the spousal support remarriage termination is a Family Law statute, the court doesn’t necessarily have to include it in a final order.

Some couples negotiate their own support agreements. When you negotiate an agreement with your spouse, you have an opportunity to establish guidelines the court might not consider. While the court has a duty to comply with statutory guidelines, you may add your own stipulations. The court still has final approval over any agreement.

In reaching a support agreement, the court considers many relevant factors:

  • Impairments to a spouse’s earning capacity due to household duties
  • Contributions one spouse makes to the other spouse’s career
  • Needs established during the marriage
  • Assets and liabilities
  • Capacity to pay support
  • Length of the marriage
  • Custody and care of dependent children
  • Age and health issues
  • History of domestic violence
  • Potential tax consequences

How Is Spousal Support Supposed to Work?

In most situations, California Family Law allows spousal support as a temporary measure only. It helps a lower-earning spouse maintain his or her lifestyle while building a new life. Both the law and the court encourage the supported spouse to gain skills and upgrade his or her ability to support themselves. When a couple has a longstanding marriage, if they are older, or if one spouse is ill, the court also considers these factors in deciding support awards and termination provisions.

When the court awards support, it usually anticipates that the supported spouse will improve their financial standing. Considering this expectation, the court sometimes sets a calendar deadline for support termination. Either a judge or a negotiated agreement may set additional termination contingencies. A contingency is a specific situation or life-event that changes the supporting spouse’s obligation to pay.

Remarriage is a statutory contingency. California Family Code, Division 9, Part 3, Chapter 3, §4337 outlines the remarriage guideline in one simple sentence. It explains that unless the parties agree otherwise, the supporting spouse no longer has an obligation to pay when the supported spouse dies or remarries.

The law and the courts naturally presume that your new spouse will comply with his or her legal obligation to help support your household. Your remarriage should also provide additional resources that reduce your need for financial support. Terminating support after remarriage is consistent with these traditional expectations. The law recognizes this by eliminating your spouse’s legal obligation to support you.

How Long Does Spousal Support Continue After a Remarriage?

Based on California Family Law, the supporting spouse’s obligation to pay support ends upon “…the remarriage of the other party…” The wording is clear in its intent to immediately release the supporting spouse from future payment obligations. When spouses negotiate their own support agreement, they may add a provision that extends support beyond remarriage.

Do You Need to Take Action?

If you are a supported spouse who has remarried, a family law professional can assist you in complying with your duty to report your remarriage. Your attorney can also advise you if you must reimburse any support overpayments. As remarriage is a legal termination point for support obligations, your supporting spouse may take action if you don’t. He or she may file a motion to end your support. If the court is deducting support from his or her earnings, your ex may also seek to reduce the deduction order to zero.

San Diego Certified Specialist in Family Law

When you or your former spouse remarries, you need legal assistance to protect your rights. As a Certified Specialist in Family Law, Attorney Steven M. Bishop helps San Diego families understand their changing legal rights and obligations. He recognizes that economic issues are often challenging for families experiencing legal separation or dissolution. He provides compassionate guidance and comprehensive legal assistance when you need it most.

You may reach Attorney Steven M. Bishop at (619) 299-9780 or leave a message on our Contact Page.

How a Business is Valued in a California Divorce

When you’re going through a divorce, it feels as though you’re deconstructing your life one piece at a time. It’s even more complicated when you and your spouse run a business together. A mutual enterprise quickly becomes one more asset to inspect, evaluate, and sometimes dismantle. Like everything else spouses buy, build, or acquire during a marriage, businesses are community property. As with other property you share, someone you don’t know could make important decisions about your business. 

As joint owners, you and your spouse must produce evidence to address your business’s value, community property interests, income, and other key financial data. Of course, some businesses are more complex than others. Even if you own a small, uncomplicated, Mom & Pop operation, you need a business valuation expert to answer and address relevant issues.  

A Certified Specialist in Family Law

Attorney Steven M. Bishop understands that family businesses often add layers of complexity to an already complicated situation. As a Certified Specialist in Family Law, Bishop has helped clients resolve community property disputes. He recognizes the importance of involving an experienced business valuation professional. They provide a clear, unbiased value assessment that can help you manage your community property challenges. 

Why do You Need a Business Valuation?

In distributing community assets and liabilities, the court has the final say about what is fair. As a divorcing couple, you retain control over the decisions if you work out an agreement ahead of your trial. Whether you hammer out a distribution agreement for your business or you let the court decide, a professional business valuator helps both you and the court make an informed decision. 

Of course, you know your business intimately. When you’re involved every day, you have a feel for how your business is doing and where it’s going. You track your cash flow, sales, payables, and receivables through timely bookkeeping. Financial reports provide organized data to help you monitor your progress. Annual tax filings require that you review your overall financial picture.

A business valuation provides another critical piece of financial data you might not have considered before. It tells you how much your business is worth. A valuation assigns a cash value that makes it easier when dividing community property

Choosing Your Expert

As joint business owners, both spouses should exercise some control over your business valuation. You must manage it in a way that allows you to feel confident in the process. You can hire a single expert to represent both your spouse and you, but each party has the right to hire an expert of their own. Evaluating your business is an in-depth process. It ultimately affects the fairness of your property distribution. It’s essential that both parties feel comfortable with their choice of experts. 

Based on California Family Code, Division of Property, §2552, the court considers your assets and liabilities “…as near as practicable to the time of trial…” The court may allow an earlier valuation date. You or your spouse must make a request and show good cause that an alternate valuation date would better accomplish an equitable division.

In addition to your business’s value, the court reviews these factors.

  • Each spouse’s part in developing or operating the business. 
  • Day-to-day control 
  • Ownership status
  • Whether the business is a separate asset
  • Increases or decreases in the business’s value since the separation

The Business Valuation Process

A business valuation is a complex process. All valuation experts review your financial records and rely on varying approaches and methods to reach a final figure. Whatever expert you chose and however your expert performs their appraisal, they review key pieces of financial information. 

  • Current debts and liabilities
  • Fixed assets and values
  • Accounts receivables, payables, and tangible assets
  • Reputation, goodwill, and other intangibles

Valuation Approaches and Methods

In evaluating your business, an expert chooses an approach and a method. 

Asset Approach

Several methods allow value analysis based on the cost to buy a similar business. 

  • Adjusted Net Asset: Determining the fair market value of equipment and other business assets as of the required valuation date
  • Liquidation: Determining a value based on the outcome of liquidating the assets of a closed or closing business 
  • Book Value: Considers asset values as determined by financial accounting (technically lower due to allowable depreciation) 
  • Excess Earnings: Considers higher than reasonable earnings produced by a business’s standing or goodwill

Income Approach

Using this approach, a business valuation expert determines the present value of projected business potential. 

  • Capitalization of Earnings: Considers your business’s net present value and the expected return on investment (capitalization rate).
  • Discounted Earnings: Assesses value based on projected future cash flow discounted it to present value. 

Market Approach

Some experts arrive at a value based on recent sales of comparable businesses. Valuation methods include:

  • Public Company: Based on financial data from publicly traded companies 
  • Company Transactions: Uses values from comparable businesses with similar structures
  • Discretionary Earnings: Based on a multiple of the annual financial benefits from a business (multiplier varies depending on the business type)
  • Gross Revenue: Based on a company’s net sales or gross revenue 

The business valuation process is far more complex than these simple descriptions suggest. It becomes even more complicated when the roles are unequal. Problems arise when one spouse owned the business prior to the marriage or one spouse put more effort into building the business. The case, Pereira vs Pereira set the standard for a non-owner spouse seeking to prove that they contributed to the business’s success. The case, Van Camp vs Van Camp addresses community property businesses where a business’s success wasn’t related to a community effort.

A business valuation is vital when you own a business jointly with your spouse. Your expert should have the experience to use an evaluation process that best suits your circumstances. Your attorney can help you determine if it’s best for you to work out a division agreement with your spouse or wait for a judge’s ruling. 

Contact The Law Offices of Steven M. Bishop

Before you hire an expert to review your business, consult with an attorney Steven M. Bishop for recommendations. He provides guidance and assistance in choosing an expert with experience that’s relevant to your business. Attorney Bishop has assisted many clients in resolving complex community property issues.

To schedule a consultation, call our office at (619) 299-9780 or complete our Contact Form.

 

What Are Contested vs Uncontested Divorces in California

Typically, when we think about a contested divorce, what we immediately believe is the two parties do not agree upon the idea of seeking a divorce. However, since California, like most other jurisdictions, offers no fault divorce, a court is unlikely to deny a final divorce just because one party is unhappy about the possibility.

Contested divorces instead occur when the couple is finding it impossible to agree on issues which require settlement. Some of these include:

When the spouses have a disagreement and cannot find common ground regarding the terms of the divorce, the divorce becomes contested. When a couple can agree on the terms of the divorce, the divorce is considered uncontested.

In some cases, divorces are easy: When a couple cites irreconcilable differences, has no unpaid debt which are greater than $6,000, have no real estate, and when alimony is not a consideration, a summary dissolution can be used to dissolve a marriage. This is the fastest type of divorce.

The High Dollar and Emotional Costs of Divorce

Couples are emotionally invested in the life they have built together. Whether a couple has been married for five years or five decades, the ending of a relationship is far more challenging than walking away. When emotions run high, it is difficult for a couple to agree on the major issues pertaining to their divorce. Not only do these disagreements wreak a significant emotional cost on the two parties, they can also result in unnecessary financial costs.

The fewer issues which need to be decided by the courts, the better off for everyone involved. When a couple can agree on property division, division of debts, child custody and support issues, and visitation issues, the chances are high they will not have to go to court. The couple would draft and sign an agreement and their attorneys can deal with the court filings and approvals.

When Property Division is Contested

California is a community property state. Community property is classified as any assets which the couple came into possession of during their marriage. Exceptions to community property include inheritances, gifts, and settlements from personal injury lawsuits. However, there are cases where community property may not result in assets being equally divided between the spouses including:

  • Property acquired before the marriage — when one partner had an asset coming into the marriage, it is considered sole property. During the marriage, providing they have not given up any rights to the property, it remains sole property.
  • Pension and profit-sharing plans — in some cases, a spouse has a pension or profit-sharing plan as part of a job they held prior to the marriage and continued throughout the marriage. Generally, only the portion of the accounts generated during the marriage would be considered community property.
  • One spouse is member of military — military divorces are subject to “minimum’ time a couple is married. In most cases, a divorced spouse is not entitled to benefits such as pension or medical benefits if the marriage has not lasted at least 10 years.

When Child Custody is Contested in California

One of the most difficult issues parents must deal with in a California divorce is that of custody of the children. Contested child custody hearings, occur when one parent files a request for order and the other files a dissent. The courts will generally appoint a third-party to perform an evaluation and report back prior to the hearing. The judge will then decide on legal and physical custody of the children. Here is what this means:

  • Physical Custody — the court may award physical custody of the child to one or both parents. Joint physical custody means the child will split their time between the home of each parent. Generally, this is not a 50/50 division of time. Instead, the court will work with each parent and lay out a schedule for where the child will be.
  • Legal Custody – when a parent is granted legal custody, they are charged with making all decision which will impact the child. These decisions include religious training, education, and health care. Unless there is a valid reason to not pursue it, the court will generally grant both parents legal custody to ensure they come to an agreement on these matters.

When one parent is awarded physical custody of a child, a parenting plan (or visitation plan) must be put into place. Unless there are circumstances which would endanger the child, these plans are designed to ensure the child is developing a relationship with both parents, not just the one they are living with most of the time.

Support Payments for Children and Spouses

Supporting children financially until they reach adulthood is the responsibility of both parents. Generally, if one parent has physical custody, the non-custodial parent will be asked to pay support to the custodial parent. When parents cannot agree on a dollar amount, the court will take various factors into account and set the amount of payment. This amount then becomes part of the final decree and is considered a court ordered payment. Failure to make child support paymentscould result in the non-paying party facing contempt of court charges, losing their professional license, and having their income tax refunds seized for payment.

Alimony payments are handled differently than child support. Spousal support is intended to be a temporary bridge until the receiving spouse is able to be self-supporting. Courts will look at various factors including length of marriage, division of assets, earning capacity, and physical health of both spouses before making a determination.

When couples cannot agree on small matters, the bigger issues they are facing can become even more complicated. Generally, the more a couple can agree upon before filing for divorce with the family court, the better for both parties. Whether you are dealing with a contested or uncontested divorce in California, contact The Law Offices of Steven M. Bishop at (619) 299-9780 and schedule a free consultation. You will see why our four decades of serving clients matters.

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