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San Jose Divorce Lawyers Blog

Monthly Archives: January 2012

Defining Community Property

If you’re seeking a divorce in San Jose, it’s very likely you are interested in California’s laws covering the division of property. Next to issues involving child custody, this is typically the most hotly debated aspect of a divorce settlement.

California, like Arizona, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin, is a community property state. This means that marital assets are either the equal property of both spouses or the separate property of just one individual. Community property laws in the United States are said to have been inherited from Mexico’s ganancial community system, which itself was derived from Spanish law.

California’s community property law states that the money each spouse earns during the marriage, as well as items purchased with those earnings, is considered community property. It does not matter if one spouse earns significantly more than the other; the courts consider the marital relationship an equal partnership.

Separate property includes gifts, inheritances, or personal injury awards received by just one spouse. The proceeds of a pension that vested before the couple married would also be considered separate property. A business owned by one spouse before the marriage remains separate property, but could be considered partial community property if either spouse worked at the business while they were married.

At first glance, it appears that determining whether something is community property or separate property should be relatively simple. However, trouble begins when separate property mixes with community property during the marriage through means such as a joint bank account or if one spouse uses the proceeds of an inheritance to purchase the family home. Separate property that mixes with community property may become classified as partially or entirely community property, depending upon the exact circumstances. Sometimes you might need to hire an expert accountant to trace the funds, and testify in Court about the source of the funds. 

Since many assets acquired during your marriage are unlikely to be sold, keep in mind that the judge will award parties assets of equal cash value. If there is a specific item you are hoping to receive, you should discuss this issue with your San Jose divorce lawyer. If you have children from your marriage, however, it is most likely the parent with primary custody will be awarded the family home, with the other party receiving cash or other property to equalize the distribution.

 

Will I Have to Pay Spousal Support?

One of the most common questions people have when contacting a divorce lawyer in California is if their ex will be awarded spousal support. Also known as alimony or maintenance, spousal support is money that one spouse must pay to the other after divorce.

Today, spousal support awards are fairly rare. It is estimated that only about 10% of all divorce cases involve spousal support. As a San Jose Divorce Lawyer it is very difficult to verify that 10% estimate, since counsel gets hired when spousal support and/or alimony is a valid issue and often is not hired when it is not an issue. Neverthless, alimony awards are most common when one spouse has stayed at home for the duration of the marriage or when one party earns significantly more than the other. When determining if alimony is appropriate, a judge will look at each party’s income first and calculate whether the Santa Clara County Guideline Formula suggests any spousal support, for purposes of temporary spousal support, or look at the couple’s standard of living during the marriage as well as each person’s financial situation after the divorce for purposes of permanent spousal support. The labels “temporary” and “permanent” do not actually mean what the words normally mean, so do not be frightened if you hear your divorce attorney talk about “permanent” spousal support.

Although fault was once considered a factor in determining spousal support awards, with the clear exception of proven instances of Domestic Violence, its role in those determinations has been greatly reduced.

It is most often assumed that spousal support payments are made by the husband to his ex-wife, but a growing number of high earning women are paying spousal support as well. The law does not consider gender when determining who is awarded spousal support payments; the only reason more women than men receive alimony is because they are more likely to stay home to care for their children and less likely to be employed in high earning careers.

When spousal support is awarded, the terms of the divorce may specify that the support payments are to be temporary. The purpose of rehabilitative alimony is to allow the spouse receiving the payments time to reestablish his or her financial independence. For example, a former stay-at-home parent might need spousal support while attending school or a job training program. However, most divorce settlements put an end to spousal support if the person receiving the payments decides to remarry.

It should also be noted that spousal support is considered entirely separate from child support. Spousal support provides financial assistance for the adult person receiving the support payment, while child support provides for the living expenses of a minor child from the marriage.

In most San Jose divorce cases, spousal support payments are considered tax deductible by the person making the payments. The spouse receiving alimony will need to report the payments as taxable income. It is important to have a good divorce attorney help you when drafting any Court Order setting spousal support since if the legal requirements under the Internal Revenue Code for sposual support to be deducted are not met the IRS could disallow the deduction for the party paying and still require the party receiving the money to declare it as taxable income. Both parties being fully taxed on the same funds is something a good San Jose divorce lawyer will help you to legally avoid.

 

2011 Observations in Family Law

2011 brought more than just Tsunamis an increasing national debt and failed prophesies about the end of the world.  From the perspective of a San Jose Divorce Lawyer there were some definable trends and emerging issues in Family Law.

One of those trends was the ongoing encroachment and erosion of privacy rights by our government, including cracking the door open to having your children testify about what is going in in your home.  That has scary implications that reach beyond Family Law.

Another trend, more positive, in my opinion, has been the increasing willingness of the Courts to enforce fiduciary duties.  Too often parties in a divorce have been hiding money, and trying to get away with it.

A third trend has been divorces with underwater homes, where the parties fight over who gets stuck with the debt instead of who gets how much of the equity in the home.  It is uncertain how that trend will play out, since the primary thrust of California Divorce Law as it relates to the division of property has been to divide the equity fairly between spouses, generally on as close to a 50/50 basis as possible.  The California Legislature was simply not thinking about falling real property values when it drafted the Family Code, nor were the Courts — until recently.  It seems probable that there will be changes in the law in the near future that try to answer the questions posed by falling home values more fairly.  Thus, a current bout of unfairness will likely lead to greater fairness for future generations — we just have to get there first.

How Much Child Support Can I Expect to Receive?

If you are working with a divorce lawyer in San Jose and plan to maintain custody of your minor children, you may have questions as to what level of child support you can reasonably expect. The Internet is full of stories of parents being awarded very high or very low child support payments in divorce proceedings, but the reality is a bit more complicated than these articles make it seem.

The purpose of child support is to recognize the fact that both custodial and non-custodial parents have a legal obligation to provide financial support for a child’s living expenses. Ideally, living standards for a child should not have to significantly decrease because his or her parents are ending their marriage.

The primary factors California considers when determining child support awards are parental income and how much time the child spends with each parent. However, courts are allowed to use factors such as who is paying for the child’s health insurance, the cost of day care expenses for the child, and who will be able to claim the income tax exemption for the child at the end of the year in making award determinations. If a parent is also paying child support for children from another relationship, the court may be allowed to consider this as well.

The California Department of Child Support Services offers an online calculator for estimating child support payments on its website. While this tool may give you a ballpark estimate, so many different legal factors are considered when awarding child support in California, that it is best for you to consult your divorce attorney for advice on what a reasonable payment might be for your particular situation. Sophisticated computerized programs, such as Dissomaster™, XSpouse™, and SupporTax™, are used to determine the amount of child support for a particular divorce case. An experienced divorce attorney will understand how to use these programs to provide a better estimate of your possible child support award.

Once you are awarded child support, keep in mind that this amount can be legally changed if your ex has a sudden decrease in income due to unemployment, illness, or a change in jobs. However, child support payments must be made on schedule until a formal order for modification of support is filed. If your ex does not keep current on child support payments, possible penalties might include loss of driver’s license, forfeiture of income tax refunds, or criminal charges.