What Duties Do Spouses Owe to Each Other?

May 29, 2017 Judy L. Burger Leave a comment

You have probably heard the term “fiduciary” used in the context of business relationships. In a nutshell, married people have a fiduciary duty to one another in all matters involving marital property. Marital property is anything of value that is obtained or accumulated while a couple is married.

California Family Code § 721 provides that “in transactions between themselves, spouses are subject to the general rules governing fiduciary relationships . . ..” What exactly does that mean? It means a duty of “good faith and fair dealing” with one another. This code section also states that the duty is the same as between business partners who are not married.

In practical terms, each spouse is obligated to ensure that in any action that adds to or diminishes marital property, the interests of the other spouse are protected. Section 721 authorizes spouses to enter into transactions with third persons. This can range from very basic things like buying a television to more complex things like investing retirement funds. The fiduciary duty imposed by the law protects the spouse who is not involved in the transaction.

The general idea of a fiduciary relationship is that one party trusts another to act on her behalf in financial matters. This is true in various business relationships, such as banking and investments, as well as in matters of marital property. The person being trusted has a fiduciary duty to ensure to the greatest extent possible that the trusting person’s financial interests are not harmed.

In many marriages, one of the spouses manages the household finances without much involvement from the other. The managing spouse functions as a trustee of the other spouse’s interest in the marital assets. If the managing spouse harms the other’s interest by error or fraud, then the trusting spouse has a cause of action just as she would against a business partner.

When a marriage is dissolved, disputes often arise regarding management of the marital assets by one spouse or the other. If a spouse is found to have harmed the other’s interest in the marital assets, California Family Code § 1101 permits the court to award an offset to restore the harmed spouse’s share of the marital assets she lost as a result of a transaction. This is true whether or not the managing spouse intended to cause harm. If a spouse is found to have fraudulently harmed the other’s interest, a court is required to grant 100 percent of the value of the fraudulent transaction to the harmed spouse.

In an ideal world, a spouse would never act in a way that is detrimental to the other. But that is not always the case. If you are contemplating divorce or need advice regarding matters of marital property, you should consult with an experienced California lawyer. The attorneys at the Law Offices of Judy L. Burger are experienced in difficult divorce proceedings and what it takes to sort out complexities in the marital estate. Call today to see how we can help you: (415) 293-8314.

Marriage

Who “Owns” Money Damages Recovered by One Spouse During the Marriage?

May 22, 2017 Judy L. Burger Leave a comment

Money damages received by a spouse as compensation for a personal injury that occurred during the marriage are owned by both parties. The money is marital property. As with most things that come up in the dissolution of a marriage, however, there are additional details to be considered.

While California Family Code § 780 provides that damages received for an injury that occurred during marriage are marital property, Section 781 states that if the injury occurred after entry of a final divorce decree or after separation of the parties, the money damages are the separate property of the injured party. It is important to recognize, however, that whether a couple is considered legally separated can be complicated. If there is a formal separation approved by the court, there is no question. If not, the court considers various factors, including living arrangements, comingling of funds, and other indications of whether the couple otherwise functioned as if they were married.

If a couple dissolves a marriage during which one of the parties received money damages, California Family Code § 2603 provides for the allocation of those funds to the spouse who received them. But that is assuming the funds can be distinguished from other marital funds and have not been comingled. If, for example, the money was set aside in an investment account in the injured party’s name, that money, although marital property during the marriage, would be allocated to the injured spouse at the time of dissolution.

If the money damages were comingled with other marital funds, then they may be considered marital property at the time of dissolution. Where comingling is concerned, money damages are treated essentially the same as property owned by a spouse before the marriage. If the owning spouse allows the money or property to be comingled with other marital property, it is treated as part of the marital estate at the time of dissolution.

Once again, though, there are more details. Section 2603 also authorizes the court to allocate some of those funds to the non-injured spouse “after taking into account the economic condition and needs of each party, the time that has elapsed since the recovery[,] . . . and all other facts of the case.” If the court makes such an allocation, however, no more than one-half of the funds may be so allocated.

Division of the marital estate at the time a marriage is dissolved can be highly contentious and complicated. While state law provides the framework for issues such as money damages for personal injury, it also gives the courts broad discretion to achieve a fair outcome for both parties. If you are facing a divorce proceeding, especially one that involves a complicated estate, you should consult with an experienced California lawyer. The attorneys at the Law Offices of Judy L. Burger are well-versed in difficult divorce proceedings. Call today to see how we can help you: (415) 293-8314.

California Divorce, Marriage

Who Controls Marital Property During the Marriage?

May 15, 2017 Judy L. Burger Leave a comment

The assets a couple accumulates during marriage, for the most part, are marital property. This includes money and things of value such as automobiles, furnishings, and real property like the marital home. Each spouse is a 50 percent owner of the assets. There are circumstances under which property owned by one of the parties before marriage may become marital property, but that is beyond the scope of this article.

Marital property may be controlled by either or both parties to a marriage. Both own half of the property, and both have the authority to manage or dispose of the property but with this limitation: the controlling spouse cannot act in a way that diminishes the other spouse’s 50 percent share of the asset’s value.

The underlying concept of control of marital property is that marriage is a contract that imposes a “fiduciary duty” on each party. In the context of this discussion, the duty requires the spouse who exercises control over a particular asset to do so without damaging the other’s 50 percent interest in the property.

A good example of both the power to control an asset and the fiduciary duty is a car owned by a couple. Most married people officially title a car as belonging to John or Jane Doe. This means that in the eyes of the State of California, either John or Jane can assign the title of the car to a third person.

According to California Family Code § 1100, however, the party disposing of the car may not do so for less than “fair and reasonable” value without getting the consent of the other spouse. In the case of the car, the spouse could legally sell it according to state motor vehicle law, but if he did so for $10,000 less than its value without his spouse’s consent, the non-consenting spouse would have a claim against him.

In this example, the spouse selling the car has a fiduciary duty to the other spouse to maintain the value of her 50 percent interest in the fair and reasonable value of the car at the time of its disposition. A failure to do so results in the selling spouse being liable for that loss.

In the case of real property, it is little different. California Family Code § 1102 requires that any sale or encumbrance of real property, or its lease for more than one year, requires execution by both spouses. There is much less room for a spouse to take unilateral action without the other spouse’s agreement. A spouse is, however, authorized to encumber her half of real property for the purpose of engaging counsel once a proceeding for dissolution of the marriage has been commenced.

If you have concerns about your spouse’s management of marital assets, you should consult with an experienced California divorce lawyer. The attorneys at the Law Offices of Judy L. Burger will provide authoritative legal support tailored to your specific situation. Make the call today to learn how our attorneys can help: (415) 293-8314.

California Divorce, Child Custody

How is Child Custody Handled During Divorce Proceedings?

May 8, 2017 Judy L. Burger Leave a comment

One of the first things that happens when a couple decides to split up is that they start living in separate places. That seems like the normal course of events. And one of the common issues you hear about when a divorce is finalized is child custody arrangements. But what about child custody during the period of separation? Sometimes, that period can last for a long time.

The number one consideration in child custody under California law is the “best interest of the child.” This is true whether a court must make a determination while a divorce is pending or when it is actually granted.

A separating couple has the right to decide how to manage child custody and rearing. Similarly, they have the right to come to terms on child custody that will endure even after a divorce is granted. The difference is that a court must order the arrangements when the divorce is finalized. Prior to that point, a court will not be involved in child custody arrangements unless asked to do so by either or both parties.

According to California law, when a petition for divorce is filed, it may be accompanied by a petition for a temporary custody order. A petition for custody may also be filed any time after the filing of the divorce petition. If both parties are in agreement as to the custody of the children, the court will usually enter an order granting the temporary custody—so long as their agreement is in the best interest of the child. If the parents do not agree, the court is empowered to grant a temporary custody order based only on the requesting party’s petition. Within 20 days, however, the court will hold a hearing to allow both parents to argue about the appropriateness of the order.

Granting an order of custody based only one party’s request (known as an ex parte order) may only be made when it has been shown that immediate harm to the child may occur or that the child will be removed from the state. In that regard, when granting an ex parte custody order, the court is also required to enter an order to restrain the parent gaining temporary custody from removing the child from the state during pendency of the custody issue.

The attorneys at the Law Offices of Judy L. Burger have extensive experience in family law matters, including temporary and permanent child custody orders. We can help you put your best foot forward in advocating for the best interest of your children. Contact us today to learn how our attorneys can help you in your case: (415) 293-8314.

Marriage

Does California Recognize Common Law Marriages?

May 1, 2017 Judy L. Burger Leave a comment

It seems like no one gets married anymore. We all have family members and friends who choose to live with their significant others rather than “tie the knot.” We have all also probably heard of common law marriage. Doesn’t that mean that people living together are actually tying the knot even though they may think otherwise? In California, perhaps surprisingly, that is not the case. The Golden State has not recognized common law marriage since 1895.

Marriage laws are governed by state laws. Common law marriage was a function of older times when states were either not yet states or had not yet formally codified marriage rules. Today, only 10 states and the District of Columbia recognize common law marriage.

While California law does not allow for common law marriage, it may recognize one that was effected in a state that does permit common law marriage. Such was the case in the matter of In re Marriage of Smylko. In this case, the Smylkos had been formally married in Alabama in 1941, but they divorced in 1953. In 1957, they moved back in together and again lived as husband and wife in such a way as constituted a common law marriage under Alabama law.

The couple moved to California in 1960, where they continued to live together. In 1976, Mr. Smylko moved to Hawaii and subsequently remarried. He continued to send money to his common law wife in California for another five years. When he stopped, his California wife filed an action to “determine the validity of her marriage.” The California court ruled that there was a valid marriage recognized in that state due to its having existed in the state of Alabama before the Smylkos moved to California.

This case, which was decided in 1986, does not mean that any common law marriage from another state will be found to constitute marriage in California. Each case is evaluated on its own particular facts as well as the laws of the state where the marriage occurred.

If you have established a relationship that is commensurate with marriage within the state of California, a claim of common law marriage will not survive. If, however, you came here from another state under circumstances that might fulfill the common law marriage requirements in that state, and you need for that marriage to be recognized for whatever reason, you might have a strong argument.

The attorneys at the Law Offices of Judy L. Burger have extensive experience in family law matters, including what constitutes a legal marriage. We can advise you about the many different issues that can come into play when a marriage is in question. Contact us today to learn how our attorneys can help you in your case: (415) 293-8314.

California Divorce, Legal Separation

New Law in California Addresses Date of Separation

April 24, 2017 Judy L. Burger Leave a comment

When a marriage or domestic partnership fails, the parties are immediately confronted with a number of issues, not the least of which is how to separate physically. Typically, there is an initial intimate separation that then morphs into a physical separation.

Separating physically, however, is not that easy for many couples because of issues like finances and children. Couples advancing toward divorce sometimes choose to continue living under the same roof while they get their affairs in order before finally divorcing. Until recently, separated couples in California had to actually live in separate residences to have their post-separation finances considered as separate.

The rule had been handed down in 2015 by the California Supreme Court in a case called In re Marriage of Davis. In that case, the couple had been living in the marital home pending their divorce, although they were functioning as individuals. For example, their finances were handled separately, they travelled to children’s events separately, and they each did their own laundry. Notwithstanding their living separate lives, the Court ruled that an indispensible component of a married couple being separated under the eyes of the law was living in separate residences.

The legislature took umbrage with this ruling and passed Senate Bill 1255, which took effect January 1, 2017. This bill amended the California Family Code, specifying two grounds on which the date of marital separation could be established: 1) One spouse has expressed to the other spouse his or her intent to end the marriage; and 2) the conduct of that spouse is consistent with his or her intent to end the marriage. The bill also provided that courts “shall take into consideration all relevant evidence” to establish the date of separation.

The new law provides more flexibility to couples who decide to end their marriages. It is a much more sensible way of respecting the decisions that those couples make as they navigate such a significant upheaval in their lives.

California Divorce, Child Support

A Way to Secure Payment of Future Child Support: Court-Ordered Asset Deposit

April 17, 2017 Judy L. Burger Leave a comment

Divorced parents sometimes have a hard time collecting child support payments on a regular basis. The obligated spouse may or may not pay on time and may even go for extended periods of time without making the ordered payments. This can place a severe hardship on the spouse who shoulders the parenting responsibilities. Fortunately, California state law provides an option for that parent to force her ex-spouse to live up to his obligation.

The California Family Code provides that an obligated parent who is 60 days or more delinquent in child support payments may be required to place on deposit assets that will ensure timely payments. The assets are deposited with a court-designated entity and may ultimately be used to satisfy the amount in arrears. The obligated parent may also be required to pay fees and costs to the designated holder of the assets in connection with management or liquidation of the assets.

In making a request for an order requiring the deposit of assets, the requesting parent must declare under penalty of perjury that the obligated parent owes an amount equivalent to 60 days of payments. Once made, the court will provide notice to the obligated parent, as well as an opportunity to be heard. The court may also issue an immediate restraining order instructing the obligated parent not to dispose of any assets except through the normal course of business. The parent may also be required to document any extraordinary expenses after issuance of the notice.

To avoid an order to deposit assets or to prevent the liquidation of deposited assets, an obligated parent must prove that the non-payment of support was not willful and without good faith. He must also show that he did not have the ability to pay. He may also defend against an order by showing one of the following circumstances:

a change in child custody;
a motion pending for reduction of child support based on reduction of income;
illness or disability;
unemployment;
a serious adverse impact on members of his immediate family who reside with him that would outweigh the harm to the custodial parent and children; and
a serious impairment of the obligated parent’s ability to earn income.

The amount of assets required for deposit must be the equivalent of one year’s worth of child support payments or $6,000, whichever is less. If the obligated parent continues to be in arrears and fails to make a reasonable effort to catch up within a court specified time-frame, the designated holder of the assets on deposit may use the assets to pay the amount in arrears. This may involve the use of cash or the sale of assets such as personal property.

In many cases, the threat of filing a request for court-ordered asset deposit is enough to bring a delinquent ex-spouse around. Hopefully, that is most often the case. If you need assistance collecting child support payments, contact the attorneys at the Law Offices of Judy L. Burger. We have extensive experience in family law matters and can help you determine whether court-ordered asset deposit is the right approach. Contact us today to learn how our attorneys can help you in your case: (415) 293-8314.

California Divorce, Debt

Can I Be Held Liable for Debts My Spouse Incurred if I Didn’t Know about Them?

April 10, 2017 Judy L. Burger Leave a comment

Spouses sometimes come into a marriage with debt and also separately incur debt during the course of the marriage. Sometimes these liabilities are known by the non-incurring spouse, and sometimes they are not. The basic rule in California is that both parties are liable for any marital debt accumulated during the marriage but before separation. This is true whether or not one of the parties even knew it was incurred.

Debts owed by a party prior to marriage, known or not to the spouse, are not the debt of the non-incurring spouse. At the time of a divorce, community property—property accumulated during the marriage—is used to satisfy community debt. If there is not sufficient community property to satisfy the debt, then both parties are assigned a portion of the debt to be paid from their own funds post-divorce.

Couples can sign pre-nuptial or post-nuptial agreements that allow debts incurred during marriage to be treated as separate debts under certain circumstances. For example, they might agree that a debt incurred unilaterally, with only the incurring party’s income and liabilities qualifying for the debt, is the separate debt of that party. Such agreements must be drafted carefully to ensure they are legally defensible if that becomes necessary.

Debt incurred by a spouse after separation but before divorce is that spouse’s debt, and the other spouse is not liable from her separate funds or her share of community property. There is but one exception to this rule: when the debt is incurred to provide the “necessaries of life” for the debt-incurring spouse and the separation is not by formal agreement.

If you need assistance in a family law proceeding, you should consult with an experienced California lawyer, especially if there are significant questions of debt and property ownership. The attorneys at the Law Offices of Judy L. Burger will provide authoritative legal support tailored to your specific situation. Make the call today to learn how our attorneys can help: (415) 293-8314.

California Divorce, Child Support

Can My Child Stay on My Spouse’s Health Care Coverage after Divorce?

April 3, 2017 Judy L. Burger Leave a comment

The divorce of a child’s parents does not affect that child’s right to maintain health care coverage under one of the parent’s insurance plans. In fact, California law prohibits an employer or insurer from denying enrollment or coverage for a child based on certain outcomes of a divorce. Specifically, coverage may not be denied because the child is not claimed as a dependent for tax purposes or the child does not live with the parent or within the insurance coverage area.

Typically, as part of a divorce involving children, a court will include an order that one parent or the other maintain or provide health insurance coverage for the children, provided that the insurance is available at a reasonable cost. The amount that parties pay for insurance for themselves and their dependents (even new spouses and stepchildren) is an expense that is factored into child support calculations.

Parents who have been ordered to maintain health insurance for children must provide the other parent with the health insurance information. Conversely, the parent not obligated to provide coverage must advise the obligated parent whether or not she has health insurance through her employer or other group insurance coverage. An obligated parent who is paying child support through a local child support agency (“LCSA”) must also provide documentation to the LCSA of such coverage.

California law also requires courts to include in their child support orders a provision that requires the parent providing coverage to affirmatively seek the continuation of coverage when a child reaches a disqualifying age. Such continuation, however, must be pursuant to other provisions of law that require continued coverage if the child is unable to work due to a physical or mental disability or is otherwise primarily dependent on the parent for support and maintenance.

If you want to learn more about health insurance for children of divorced parents or child support matters in California, contact the attorneys at the Law Offices of Judy L. Burger. We can help. Call us today to make an appointment: (415) 293-8314.

California Divorce

Can I Be Ordered to Pay Attorney’s Fees for My Spouse If I Can’t Afford It?

March 27, 2017 Judy L. Burger Leave a comment

The cost of hiring an attorney for representation in a divorce can range from a reasonable sum to quite expensive depending on the complexity of the case and whether the parties cooperate with one another. For some parties to a divorce, however, their legal fees may be shifted to the other party. California state law provides for the court to order one party to pay the other’s attorney’s fees or costs under certain circumstances.

A foundational requirement for the court to consider when ordering such payments is whether a party “has or is reasonably likely to have the ability to pay.” The law also says that the court “shall not impose a sanction . . . that imposes an unreasonable financial burden on the party against whom the sanction is imposed.” Regardless, then, of the reasons that a party may be found liable to pay the other’s attorney’s fees, if he cannot afford to pay, the court is restrained from issuing such an order.

An order to pay another party’s fees is usually based on a disparity of income between the parties. California Family Code § 2030 imposes a duty on the court to “ensure that each party has access to legal representation.” Accordingly, the court may order a party with sufficient resources to pay the fees of the party with insufficient resources.

The law also states that a party may be ordered to pay based on how the “conduct of each party or attorney furthers or frustrates the policy of the law to promote settlement of litigation and, where possible, to reduce the cost of litigation by encouraging cooperation between the parties and attorneys.” As an example, a party who refuses to engage in settlement discussions, files numerous and frivolous motions, and is otherwise uncooperative may be ordered to pay the fees and costs of his soon-to-be ex-spouse.

The law provides that before making an award, the subject party will be given due notice and an opportunity to be heard on the matter. In addition, the court is required to consider all of both parties’ “incomes, assets, and liabilities” before ordering a party to pay.

A party against whom an order has been issued may only pay the fees and costs from his own property or income. In a divorce, assets are deemed either community—that is—owned equally by both, or separate—owned by one or the other. A party ordered to pay must do so from separate assets or from his share of the community assets.

If you are facing a divorce proceeding, especially one that promises to be contentious, you should consult with an experienced California lawyer. The attorneys at the Law Offices of Judy L. Burger are well-versed in difficult divorce proceedings and what it takes to win an award of fees and costs. Call today to see how we can help you: (415) 293-8314.

415-293-8314