What Factors Do California Courts Consider in Setting Child Support?

Parents have a mutual duty to support their minor children. Ideally, parents come to an acceptable agreement about financial support, an agreement that the court will approve. However, if they cannot or will not do so, a court must decide whether child support will be paid from one parent to another.

The California State Legislature has found that the “state’s top priority” in setting child support is the “best interests of children”. For this reason, California law sets forth guiding principles that courts must use when determining child support. These principles allow for both parents’ standards of living to be considered. They also allow for child support to be used to reduce significant disparities in the parents’ living standards.

The factors considered in determining child support are set by law in California. A formula is used that takes several factors into account:

Both parents’ actual income;
The higher-earning parent’s net monthly disposable income;
The percentage of time that each parent will have “primary physical responsibility” for the children; and
The combined net monthly disposable income of each parent.

In addition, California courts must take into account the parties’ respective health insurance coverage. There is a proportional increase in the amount of support for each additional child.

Once the amount of child support is established using the formula, it may be affected by other issues, including but not limited to the following:

Extraordinarily high income of one parent;
Different time-sharing arrangements;
The amounts spent by each parent on housing; and
Special medical needs of the children.

In most cases, the income of the paying parent’s new spouse or partner is not taken into account as actual income. However, it may be considered if a parent quits his or her job to reduce income or if a parent attempts to hide income.

The health and well-being of your children are important not only to you, but to the State of California. In hotly contested child support matters, you need an attorney to fight for you and your child. The attorneys at the Law Offices of Judy L. Burger have extensive experience in divorce, child custody, and child support matters. Make the call today to learn how our attorneys can protect you and your children: (415) 293-8314.

California Divorce

What Is an Ex Parte Hearing?

July 13, 2015 Judy L. Burger

Regardless of the circumstances, divorce and legal separation are difficult for everyone involved. Sometimes, however, they can be particularly stressful, such as when there is a threat of violence, danger, or significant financial injury.

Fortunately, the California judicial system has in place a procedure to deal with circumstances like these quickly: ex parte hearings.

Ex parte hearings are simply emergency hearings. Depending on a court’s caseload, it can take weeks or even months to get a hearing before a judge.

Ex parte hearings are designed to reduce that time drastically. However, they are only available for true emergencies, when there is a threat of irreparable harm or immediate danger. Examples of factual circumstances that may warrant an ex parte hearing include the following:

child visitation or custody rights with a parent who leads a dangerous lifestyle;
a threat of grave injury to a couple’s children; and
a valid concern about depletion of community funds from a joint account.

An application for ex parte relief must be supported by very strong evidence of future irreparable harm or immediate danger. For example, exposure of a young child to alcohol and drugs could warrant an application for an ex parte hearing. Likewise, the prior acts of a spouse wiping out community funds from one bank account would likely warrant ex parte relief to prevent him or her from doing the same thing with other accounts.

In most cases, the person against whom an order will operate, usually the other party to the divorce or custody proceeding, has a right to notice before an ex parte hearing is held. This is because the judge may order relief that contravenes that person’s rights, such as the right to visitation or the right to access his or her own money. However, when absolutely necessary, notice may be avoided. This is only true if providing notice will result in immediate, irreparable harm.

Care must be taken when requesting ex parte relief. If it is requested unnecessarily, it can affect the court’s view of the parties in future proceedings. Judy Burger is experienced in presenting ex parte issues in the San Francisco Bay and Sacramento areas. If you believe ex parte relief may be needed in your case, contact her today at (415) 259-6636.

California Divorce

How Is a Business Interest Valued in a California Divorce?

July 8, 2015 Judy L. Burger

For those going through a divorce or contemplating one, a common concern is how a business interest will be treated by the court. Sometimes, both spouses own a business together. Other times, however, only one spouse has an ownership interest in a business.

By law, California courts must make a substantially equal division of community-owned property. Therefore, the first step in deciding how to deal with a business ownership interest is to determine whether it is separate or community property. It may even be a little of both. If you are not familiar with basic property law in California divorces, please see our separate blog here.

If the couple started the business together and operated it together, the court will likely decide it is a community-owned asset. However, often, business ownership is not so clear. For example, sometimes, a business was started before the couple married. Other times, although one spouse may be the owner “on paper”, the other may have worked in the business and contributed substantial value to it. In more complicated cases such as these, the court will need to decide issues such as the value of the business at the time of marriage and the present, the value of spousal contributions to the business, and other difficult factual questions.

It is usually necessary, in these cases, to retain a forensic accountant. Forensic accountants are trained in both accounting and investigative techniques. For this reason, they can be invaluable partners in determining the value of a business and in presenting their valuations to a court.

Forensic accountants are experts at detecting irregularities in company records. Their findings can help demonstrate, for instance, if one spouse has altered company records to make it look like a business is more or less profitable than it really is. Ultimately, the accountant will give an expert opinion about the value of the business. One of three methods is typically used:

the income approach, which attempts to value future economic benefits;
the market approach, which compares the business to others that have recently been sold; and
the asset approach, which compares the relative assets of the business to its liabilities.

If the parties do not agree about how to divide a business ownership interest, the court will divide it for them, keeping in mind that their community property must be divided substantially equally. How this takes place is within the court’s discretion. Options available to it include awarding the business to the spouse who plays the greatest role in its operation, awarding it to the other spouse, dividing the stock ownership among the parties, and ordering the sale of the business.

Business ownership interests are among the more difficult issues that arise in family law, and how they are handled can affect the parties for the rest of their lives. The attorneys at The Law Offices of Judy L. Burger have extensive experience in all matters relating to property division, including dealing with business interests and forensic accounting. Make the call today to learn how our attorneys can protect your financial future: (415) 293-8314.

California Divorce, Marriage

The Intentional Breach of a Spouse’s Fiduciary Duty

July 6, 2015 Judy L. Burger

A fiduciary duty is one in which one party owes another the highest duty of care. For example, someone serving as an executor of an estate has a duty to handle its property and finances with the utmost care. An executor cannot misappropriate money or steal property belonging to the estate, or he may be liable for damages.

Similarly, California law places a fiduciary duty on each spouse to act in the best interest of the other spouse. California Family Code § 721 explains that spouses have “a duty of the highest good faith and fair dealing” with each other and that “neither shall take any unfair advantage of the other.” This fiduciary duty includes three core components: (1) allowing access to records of financial transactions; (2) providing accurate and complete information about community property transactions; and (3) treating benefits and profits from certain community property transactions fairly and accounting to the other spouse for them.

In addition, California law provides a duty of full disclosure regarding all community assets. The duty applies during the period of marriage and after the parties separate, until the item is divided by the court or the parties. Indeed, the California laws regarding divorce provide a formal method by which the assets and liabilities of each party are disclosed to the other.

What happens if one spouse does not perform his or her fiduciary duties? The failure to perform these duties is a called a “breach,” and the law sets forth what happens when there is a breach. The consequence that is imposed depends upon the seriousness of the breach and the view of the family court.

Examples of ways that parties may breach their fiduciary duties include hiding assets or transferring assets to try to deprive the other spouse of any interest in them. The law provides several remedies, or consequences, for a breach of spousal fiduciary duties, including the following:

A court-ordered accounting and determination of rights of ownership;
The placement of the name of a party on the title of an asset;
An award of either 50% of an undisclosed or transferred asset or of an amount of money to compensate the injured party for the loss of interest in that asset; and
Attorney’s fees and court costs.

In particularly egregious cases, the family court can order the breaching party to give the injured party the whole asset or to pay the injured party its full value . When fraud, oppression, or malice have been adequately proven, the court may award punitive damages, designed to punish the breaching party . It is sometimes necessary to hire a forensic accountant to show that a spouse intentionally breached his or her fiduciary duty. A forensic accountant is trained to trace funds and assets, which can help demonstrate that a spouse intended to hide or misappropriate community assets.

Breach of the spousal fiduciary duty is serious wrongdoing. If you are concerned that your spouse may be attempting to hide or minimize assets, you need an aggressive lawyer who will fight on your behalf. The attorneys at the Law Offices of Judy L. Burger have extensive experience in contested divorce and property proceedings. Call today to learn how our attorneys can protect your property interests as you go through this difficult time: (415) 293-8314.

California Divorce

Who Gets the Family Home in a California Divorce?

July 1, 2015 Judy L. Burger

In a divorce, one of the most significant concerns is what will happen with the family home. This is particularly true when minor children are involved.

The family residence is often the largest asset owned by the parties to a divorce, so the financial interest is often significant. In addition, there can be a sentimental attachment to the home. For these reasons, dividing the parties’ interest in the family home can be easier said than done. The first task is to decide who actually owns the house. You can learn more about determining basic ownership interests here.

It is not always easy to apply property law when dividing the family residence. For instance, what happens if the down payment was made with separate property funds? What if both parties contributed to pay down the mortgage while they were married, but the home is titled in just one name?

When there is a community property interest in the residence, there are three basic ways it can be divided: (1) sell the property outright and apply the profits toward the couple’s community property estate, to be divided; (2) one spouse buys out the other’s interest, assuming the purchasing spouse has adequate funds or credit to do so; and (3) deferred sale.

The first two of these options are fairly straightforward. However, a “deferred sale of home order”, also known as a “Duke” order (named after a significant case on the issue), requires some explanation. Deferred sales are usually considered when the parties have minor children and want the children to be able to stay in the family home until a later date. A custodial parent, in these situations, is given exclusive use and possession of the home on a temporary basis so that the kids can stay there.

In determining whether to allow a deferred sale, the family court must first consider whether it is economically feasible to do so. The court must balance the relative hardship of the parent and children staying in the home with the hardship placed upon the parent no longer living there. The law requires that certain factors be considered in making these determinations. It also requires that the deferred sale of home order contain an end date, such as the date the youngest minor child attains the age of majority or graduates from high school.

In addition to the disposition of the home, the family court will have to determine whether one party must reimburse the other for “contributions for the acquisition of property”. These reimbursements may be required if one party made the down payment on the family residence out of separate funds. They may also be required if separate funds are used to pay down the principal on the home.

As you can see, many factors impact how the family residence is handled in a divorce. How these issues are presented can significantly affect your outcome. Judy Burger is experienced in complex property division matters and how to present those in family court. Please contact her today at (415) 259-6636.

California Divorce

How Are Stock Options Divided in a California Divorce Proceeding?

June 29, 2015 Judy L. Burger

When a couple divorces, it is easy to divide physical items. One of the parties simply takes possession of items such as home furnishings, tools, jewelry, and even cars. Other property is more difficult to evaluate and divide. This is the case with employee stock options.

Stock options are granted by a company to an employee, usually managers and executives. Stock options represent the right of the employee, at some point in the future, to purchase company stock if he or she chooses to do so. Sometimes, a company gives an employee stock options to attract the employee to come to work for it; other times, a company offers stock options to try to keep an employee or to compensate him or her for future work. If and when a stock option “vests”, the employee has the right to buy the company’s stock.

A basic understanding of property rights in California is essential to understanding how family courts deal with stock options. You can learn more about these rights here.

In addition to understanding basic property law, it is important to understand what the term “vest” means in relation to stock options. The date a stock option “vests” is the date upon which an employee has the right to buy the stock. This is known as “exercising” the option right.

The first step in determining how to handle stock options in a divorce is deciding who owns the option. Courts have broad discretion on how this is done. However, two different approaches are typically used, both of which are named after the cases that established them. They are known as the Hug formula and the Nelson formula; they are also known as time rules. In essence, the sooner after the date of separation an option vests, the larger the community interest in them.

Which formula is applied, usually depends on the reason the company offered the stock option in the first place. The Hug formula typically applies to options that were given to the employee to attract him to work. The Nelson formula is usually used when the options were offered to keep an employee or to compensate him for future work. While many people assume that options that vest after the date of separation are separate property, this is simply not true when the Nelson time rule is applied.

Valuing stock options properly requires an attorney who understands all the law and who is experienced in making the strongest arguments for her client. To obtain the counsel of just such an attorney, please contact the Law Offices of Judy L. Burger. We have extensive experience in divorce, child custody, and child support matters. Call today to learn more: (415) 293-8314.

Child Support

How Is Available Income Determined for Child Support Orders if a Party Is Self-Employed

June 24, 2015 Judy L. Burger

California law mandates that one of the predominant factors in setting the amount of child support is the actual income of the parents. As you might imagine, this can be very difficult if one or both of the parents are self-employed.

Because parents have a mutual duty to support their children, the parties to a divorce proceeding must disclose all aspects of their finances. All assets, liabilities, obligations, earnings, accumulations, and expenses must be disclosed. Assets must be disclosed even if they are owned as separate property. By law, self-employment benefits may be considered by a court in determining a parent’s gross annual income.

Full disclosure is critical to allow the family court to make a proper order of support for the children’s needs. A statutory process is in place to ensure that proper disclosures are made through the submission of certain forms. These forms include a Schedule of Assets and Debts, as well as an Income and Expense Declaration.

When a party is self-employed, however, he or she has control over documents that would be used to establish his or her actual income. These documents might include profit and loss statements, loan applications, credit card statements, and reports showing monthly expenses. The danger of nondisclosure is enhanced in these situations because the business owner has power over the creation and retention of these documents.

Forensic accountants may be used when self-employment is an issue in a family law matter. These specialized accountants are trained in both sound accounting practices and investigative skills. They specialize in reviewing financial documents with an eye toward tracing funds and locating missing funds or documents. They also testify in court about their findings, to ensure the proper amount of income is attributed to a self-employed parent.

When the actual income of a self-employed parent is an issue, it is critical to hire an aggressive family lawyer who has significant experience in business matters. Judy Burger comes from a business background and has worked extensively in highly contested divorce cases involving forensic accountants. Call her today at (415) 259-6636 to learn more about how she can help you.

Child Support

How Is My Child Support Award Affected by My Spouse’s Refusal or Inability to Work?

June 22, 2015 Judy L. Burger

If you are going through a divorce and your spouse does not work or refuses to work, you may be concerned about the adequacy of your child support award. Child support is designed to ensure that the needs of California children are kept front and center, despite the separation or divorce of their parents. The law recognizes that both parents have a duty to contribute to their children’s support. This includes, in some circumstances, charging unemployed or underemployed parents with income earning capacity even though they may not be working at all. This is called imputing income. Section 4058(b) of the California Family Code states that “the Court may, in its discretion, consider the earning capacity of a parent in lieu of the parent’s income, consistent with the best interests of the children”. In making this determination, courts will consider three factors:

A parent’s ability to work;
The opportunity of a parent to work; and
Whether a parent working is consistent with the best interest of the children.

The first factor is whether a parent is able to work. This may be restricted to differing degrees. For example, a parent disabled from working in any job will be considered differently than a parent disabled only from working in his or her chosen field. If the ability to work is only partially restricted, a family court may impute earning capacity to the disabled parent. Similarly, if a parent refuses to work or hasn’t worked for a long time, he or she may be perfectly capable of working, given the motivation to do so. The second factor in determining whether earning capacity will be imputed to a parent is opportunity. In other words, are there available jobs that the unemployed parent is capable of performing? If a parent is able to work and has the opportunity to do so, the final factor is whether it is “consistent with the best interests of the children” for that parent to work. Examples of issues that might make a parent working inconsistent with the children’s best interest include a parent taking care of an infant or special needs child. Ideally, there is no dispute about a party’s true ability to work. However, when this issue is contested, there are a few tools that may be used to obtain an objective determination of a party’s true limitations. The first tool is called an independent medical examination (“IME”). This is a medical examination performed by an independent health care provider to determine the ability of a person to work. A second tool that may be available is the use of a vocational expert to assess the ability of a party to work, as well as the opportunities he or she may have for gainful employment. If you are concerned about your spouse’s refusal or inability to work, or if you believe your spouse is underemployed for the purpose of depressing his or her income, you need an aggressive attorney to evaluate the facts of your case and determine your options. At the Law Offices of Judy L. Burger, we recognize the importance of a proper child support order to the well-being of your children. We specialize in difficult custody and support issues, and we’ll put our experience to work for you. Call us today at (415) 293-8314.

California Divorce

Basic Property Rights Law in California Divorces

June 19, 2015 Judy L. Burger

Understanding the basic rules of property ownership in California is critical for anyone going through or contemplating a divorce or legal separation. Property may be owned by a spouse separately, meaning that it is his or hers alone, or it may be held as community property, which means that both spouses share it equally. It is important to understand the difference because, generally, a spouse has no right to any portion of the separate property of the other. On the other hand, California law provides for equitable division of community property.

Property acquired before a marriage or after a married couple separates is considered to be separate. In addition, property given to or inherited by a party during a marriage is considered to be separate. In most cases, a person has no right to the separate property of his or her spouse.

California law assumes that property acquired during a marriage is community property, which means that each spouse holds a one-half interest. Both spouses have an ownership right to one-half of community property, regardless of who actually acquired the property. In determining whether property is separate or community, the date of separation is critical. In fact, the date of separation is sometimes hotly contested for this reason. The date of separation is established, by law, as the date on which two things occurred: (1) one spouse subjectively made the decision that the marriage was over; and (2) that spouse took an objective step to implement his or her decision.

With titled assets, such as homes, cars, and boats, a second property law presumption may come into play. The California State Legislature has passed a law that the“owner of the legal title to property is presumed to be the owner of the full beneficial title”. This means that a court will assume that the name of the person on title to property is the full owner of that property. It takes strong evidence to overcome this presumption.

As you might imagine, the community property presumption and the legal title presumption can often be in tension with one another.

There are many nuances in California statutory and case law that impact property division, and the proper presentation of property issues can significantly affect your outcome. Judy Burger is experienced in complex property division matters and how to present those in family court most favorably to her clients. Please contact her today at (415) 259-6636.

Child Custody

Renewing a Family Law Judgment

March 4, 2013 Judy Burger

A money judgment from a family law case does not expire. The judgment is active and valid until all monies have been paid in full. There are reasons, however, to have your family law money judgment renewed. Family law judgments accrue interest at the rate of 10% per year. For example, if you have a judgment for $20,000, the annual interest would be $2,000. After 5 years with no payments, the amount owed would be $30,000. If you were to have the judgment renewed, all of the money owed would become the new principle. In the example above then, the new principle is $30,000. So, the interest added each year thereafter would be $3,000 instead of $2,000. There is a filing fee, and you must renew the judgment within the first ten years after the date of the judgment. The debtor must be served with the new judgment and will have thirty days to file a motion to vacate or modify the renewal. If you received a judgment awarding you money in a family law case and have not received full payment, contact our office today. Judy L. Burger is known for aggressively representing clients in high conflict cases in and around the San Francisco Bay and Sacramento areas. Call today to learn more about how we can help at (415)293-8314 in the San Francisco Bay area or (916)631-1935 in the Sacramento area, or contact us online using our confidential inquiry form.