Custody Relocation

Often, after a separation or divorce, a parent decides to move because he or she can no longer to afford to live in the same city, for a new job opportunity, or so that he or she can be closer to extended family for financial or emotional support. Whatever the reason, when a parent wants to move, difficult decisions have to be made regarding where the children will live and how the other parent will maintain a relationship with them.

Sometimes, divorced or separated parents can agree on where their children should reside and what the visitation arrangements will be. Many times, however, these situations are emotionally and logistically difficult, and parents cannot agree. It will then be up to a court to decide.

The move-away laws are complicated and confusing, and there are many factors involved in the outcome. This is a general overview of how a move-away case proceeds in court, and what a judge will consider when making this difficult decision.

Overview of Custody Law in California

In California, when parents separate or divorce, a court will issue orders for custody and visitation arrangements based on what is in the best interest of the child. In general, the goal of a custody order is for both parents to maintain frequent and continuing contact with their child(ren).

The court may decide that parents should have joint custody, which means that the child will live with both parents almost equally according to a set schedule, or the court can order that one parent has sole custody, so that the child lives mostly with one parent, and that parent has responsibility for the day-to-day care of the child. In general, when there is a final custody order in place, the order can only be modified if there is a significant change of circumstances making a change in custody necessary for the child’s well-being (divorce.com).

What Is a “Move-Away?”

A “move-away case” arises when a parent that has joint or sole custody of the child decides to move to a location that is far enough away to disrupt the current custodial arrangement. Whether the move is 20 miles away or 2000 miles away, if the move will impact the current custody situation, the parents will need new custody and visitation orders (singleparents.about.com).

What Happens When a Divorced Parent Wants to Move Away with a Child?

When a divorced parent wants to move away with a child, one of the parents files a motion with the court for new custody orders. The moving parent might file for permission to move with the child, or the other parent might file a motion for a change of custody so that the child can stay.

 

Before this issue goes to a judge, the parents must mediate the issue to try and reach an agreement about where the child will live and what the visitation arrangements will be with the other parent. If the parents can’t agree, then there will be a hearing for the court to make new orders.

It is important to remember that in a move-away case, the court does not decide whether the parent can move, people have a Constitutional right to move and the court cannot prevent them from doing so. Instead, the court has to decide whether the child should move with that parent and, if so, what the visitation arrangement should be (singleparents.about.com).

What Do Courts Consider When Deciding Move-Away Cases?

The court’s approach to these decisions depends on whether the moving parent has sole physical custody of the child, or whether the parents have joint physical custody:

Joint Physical Custody: If the parents have joint physical custody, there’s no need to show changed circumstances for the court to change the custody order. Instead, the parents come to court on an even playing field, and the court will hold an evidentiary hearing to make a new custody decision based on the best interests of the child.  To have joint physical custody the parent with less timeshare must generally have the children a minimum of 35-40% of the time.

Sole Physical Custody: A parent with sole physical custody has a “presumptive right” to move with the child. This means there’s an assumption that the parent and child can move. To prevent the move the non-moving parent has the burden to show that the move would be detrimental to the child at which point the Court will seek to determine a custodial schedule that is in the best interests of the child.

Showing detriment can be difficult. Although the harmful impact the move will have on the relationship between the child and the non-moving parent is an important consideration, this factor alone usually will not be sufficient to establish a detriment. If the parent is able to make the initial showing that the move will be harmful to the children, then the court will have a hearing to determine how to modify the existing custody order in the best interests of the child. If the parent cannot show a detriment, the child will be allowed to move and the current order will be modified to allow for the move.

At the formal evidentiary hearing, the judge will examine evidence and hear live testimony. Parents, child custody evaluators, and others with relevant information regarding the child’s best interests may testify. In some cases, the child may testify. California law requires that the court consider a child’s wishes as to custody and visitation if the child is old enough and mature enough to make an intelligent preference. Children 14 years of age or older must be allowed to testify if they want to, unless the court finds that it is not in their best interest. Children under 14 years of age may also give their preference if the court finds that it is appropriate.

A child’s testimony may be taken in open court. However, many courts prefer to get information regarding a child’s preference by having a mediator, evaluator, or other professional talk with the child and bring the information to court, so that the child does not have to go through the trauma of appearing in court and basically choosing one parent over the other.  Each county has been tasked with developing protocols for taking testimony from minors.

At the hearing, the court will look at evidence related to the following factors:

• The importance that the child maintain a stable and continuous environment, considering factors like how much time the child spends with each parent under the current arrangement, how long the current custody order has been in place, as well as the child’s ties to friends, school, and community activities and any special needs the child has
• The distance of the move
• The child’s age
• The child’s relationship with both parents
• The relationship between the parents, including how well they communicate with each other, whether they’re able to put their child’s interests ahead of their own, and how likely the moving parent is to accommodate contact between the child and the other parent
• Where the child wants to live, if they are of an age and maturity level to make an intelligent preference, as discussed above, and
• The reasons for the move (while the moving parent does not have to show that the move is necessary, if there is evidence that the purpose of the move is just to disrupt the relationship between the child and the other parent, the court may factor this reason into the decision). (divorce.com)

Move-away cases are complicated and challenging, and there are no clear-cut rules to guide the court in making the decision. The goal is to create an arrangement that will be best for the children and allow them to have a continuing relationship with both parents, even when there is distance between them.

For more information, it is best to talk to a family law attorney with significant experience in child custody cases. For a free 1-hour consultation, please contact The Law Office of Matthew J. Rudy.

 

Signs Your Marriage Is In Trouble

One of the most frequently cited family law statistics is that 50% of marriages end in divorce.  No one gets married with the expectation of getting divorced. However, changes, including in the nature of the relationship between spouses, are inevitable and one or both spouses may ultimately come to the conclusion that a divorce is in the best interests of all involved. Below are some common signs of a failing marriage:

1. Decision making has become a dictatorship. There used to be a time when you and your partner would discuss the upcoming weekend plans, what to eat for dinner, the handling of work-related issues, etc. Now, you are making decisions without consideration from the other.

2. You are constantly keeping score. If one partner does something, then the other keeps track and puts in on a scorecard. You are actively keeping mental notes on how much you are contributing versus how much your partner is or is not.

3. You no longer have the same interests. When meaningful conversations become extremely rare and silence is more common, it is time to re-evaluate the relationship.

4. You can do no right. Everything that you do results in a fight with your partner. Larger relationship issues turn into negative criticism of day-to-day tasks.

4. A spouse looking for distractions from the problems. If the television is on constantly, or you both sit with your face buried in a book, or you always have something else that needs to be done there may be a problem. It is common for individuals to find such distractions to avoid dealing with a troubled marriage.

6. Arguing over the same subject repeatedly. If your arguments become routine with all the same issues and no resolution, then your marriage is either standing still or dying fast. You may need the assistance of a professional counselor to help find solutions to the problems that don’t seem to go away.

7. Intimacy is a thing of the past. A considerable decline in physical affection is one of the most recognized symptoms of a failing relationship. Intimacy is an act that allows spouses to bond. If your partner is showing no or very little interest in intimacy with you then they are showing little concern for their emotional bond with you.

8. You pull out your needle and start jabbing. Anyone in a long-term relationship knows their partner well enough to have a keen awareness of their hot buttons. In days past, you accidentally pressed them, learned from your mistakes and vowed not to repeat them. Today, you press them with full awareness, and you like it. (Huffington Post & Divorcesupport.com)

If you feel that your marriage is coming to an end and would like to speak with a Family Law attorney, please contact The Law Office of Matthew J. Rudy for a free 1-hour consultation.

Divorce and Bankruptcy

Financial problems are often a source of stress in marriages. Sometimes this stress can lead to divorce proceedings. A bankruptcy filing can be the most severe form of financial stress. It is not unusual for a bankruptcy filing and a divorce proceeding to occur at nearly the same time. There are ways for the parties to a simultaneous or near-simultaneous bankruptcy and divorce proceeding to ease this process.

Which should happen first, divorce or bankruptcy?

Every situation has its own wrinkle. However, if three conditions exist, filing a joint bankruptcy action first may very well be the quickest, most cost effective option for both parties and for both the bankruptcy and divorce cases. These conditions are:

1. Both parties know that they will eventually make use of bankruptcy.
2. There are very few assets that would be exempt under bankruptcy laws, and thus not that much property to be divided in the divorce.
3. The parties are not so hostile that they cannot cooperate in the bankruptcy proceeding. (Legalzoom.com)

What if one spouse will not agree to a joint bankruptcy?

One spouse may file bankruptcy on his or her own. That spouse would be able to discharge the debt. Because both spouses are responsible for the debt incurred during marriage, the creditors would then simply pursue collection for the entire debt against the non-bankrupt spouse. A divorce court may not order the spouse who has discharged the debt to pay it, and a divorce court cannot keep creditors from pursuing the non-bankrupt spouse, since the divorce court has no say over the contract between the creditor and the debtor. The divorce court only has the ability to assign debts between the two spouses. In order to prevent this situation, the non-filing spouse may wish to join in the bankruptcy case (Californiabankruptcy.com).

What happens if one spouse starts bankruptcy in the middle of divorce?

If a bankruptcy is filed while a divorce action is pending, the financial matters of the divorce action would be halted under the “automatic stay” provision in the bankruptcy code. This means that the divorce may not go forward until the bankruptcy case is over without permission from the bankruptcy court. Non-financial matters, such as child custody, needing to be resolved would not be halted (Legalzoom.com).

What if one spouse files for bankruptcy after the divorce is final?

Sometimes one spouse will take bankruptcy after the divorce. However, recent changes in the bankruptcy code keep the spouse from expunging any debts in bankruptcy that are “in the nature of support.” This makes debts such as child support or spousal support arrears non-dischargeable (Californiabankruptcy.com)

Divorce or bankruptcy individually can be very complicated proceedings. When dealing with both issues at the same time it is particularly important to work with a knowledgeable local family law attorney. For a free 1-Hour Consultation with a San Jose family law attorney, please contact The Law Office of Matthew J. Rudy.

What are Preliminary Financial Disclosures?

A required step in the divorce process is preparing and exchanging preliminary financial disclosures. A judge will not grant a divorce without the completion of this step. Not filling out the forms or filling financial disclosures out incorrectly can cause problems for both parties.

California is a community property state, which means that with few exceptions everything acquired during marriage is community property. Community property includes asset, liabilities and pensions. Whenever a person wants to get divorced in California, the court requires that all issues that were created during the marital period also be resolved at time of divorce. This includes dividing the assets and the debts, resolving custody and support issues. California Family Code section 2104 requires the preparation of financial disclosures known as Preliminary Declarations of Disclosure detailing all assets comprising the marital estate, both separate property assets and community property assets.

Both parties in a California divorce are required to disclose detailed, accurate information to the other about their respective incomes, expenses, property (both marital and separate property) and all debts and obligations. There mutual disclosures are called the parties’ “Preliminary Declaration of Disclosure”. The formal disclosures are signed under penalty of perjury. A Final Declaration of Disclosure can be completed at approximately the time of trial or settlement in the case unless the parties mutually agree in writing to waive such final disclosure.

These Declarations of Disclosure consist of special forms required by the court, and except for proof that the parties served each other with such forms, these forms are otherwise not filed with the court. The 4 forms that generally comprise the Declaration of Disclosure are:

1. Declaration of Disclosure (Form FL-140)

2. Income and Expense Declaration (Form FL-150)

3. Schedule of Assets and Debts (Form FL-142)

4. Declaration of Service of Declaration of Disclosure (Form FL-141)

The purpose of such financial disclosures is to make settlement negotiations easier to proceed because of the generally clear picture of the parties’ financial situation given by such formal disclosure. Moreover, it protects the parties in the event that either spouse failed to disclose all assets (scscourt.org).

It is very important to fill out the preliminary financial disclosures because it helps the parties and, if necessary, the court to identify the entire community estate. While it may, at first glance, appear easy to identify the entire community estate, the problem is that many people who fill out these forms on their own do not understand the definition of community property.

Filling out the forms incorrectly can cause serious consequences to one or both parties. It is imperative to know the difference between community and separate property as it can greatly affect the settlement. One of the primary issues in a divorce is how to split up community property assets. There is a basic presumption that all assets acquired during marriage are community in nature. This means both the husband and wife equally own all money earned by either one of them from the beginning of the marriage until the date of separation. In addition, all property acquired during the marriage with “community” money is owned equally by both the wife and husband, regardless of who purchased it. Like community assets, all debts contracted from the beginning of the marriage until the date of separation are community debts. Therefore, each spouse is equally liable for debts. In most cases, this includes unpaid balances on credit cards, home mortgages and car loan balances. It is important to close out all credit cards, bank accounts, and joint accounts as soon as possible after a divorce has been decided. It is not enough to remove names from the account (findlaw.com).

Separate property assets are those acquired by either spouse prior to marriage, during marriage by inheritance gift or devise or after separation. (Family Code section 770). Separate property is generally awarded to the party who owns the asset although its value may be considered for issues such as support or attorney’s fees.

Separate property can also include anything that one spouse gives up to the other spouse in writing. In certain cases, separate property can become mixed with community property. When this occurs, it is important be able to trace the payments and show where the separate and community money came from. For example, a husband may have contributed the down payment for a house either prior to marriage or with his separate property after the date of the marriage, and then paid off the mortgage with community property. In this case, the husband would have a claim either to be reimbursed for his down payment or to a pro rata interest in the house depending on whether the house was purchased before or after marriage and how title was held.

Similar to separate property, separate debts belong to one spouse. All debts incurred before marriage are separate debts. For example, educational loans or job training loans incurred before marriage would be separate debts.

Another consequence of not disclosing all assets debts and liabilities is possible court punishment to the guilty party. The Court has a variety of remedies to punish a party from omitting an asset on their disclosures, including sanctions and the award of the entire asset to the other spouse. Also, committing perjury can result in jail time (scscourt.org).

Although these forms seem straightforward and easy to fill out, it is always best to have a Family Law Attorney review the documents. For a free 1-hour consultation, please contact The Law Office of Matthew J. Rudy.

Summer Vacations with the Children after a Divorce

Summer is almost upon us, which means two things: school is out and summer vacations are in. And with summer, say goodbye to your daily routine and hello to possible chaos. This sentiment especially rings true if you have recently gone through a divorce and are adapting to new custody and visitation schedules.

Here are some helpful hints to ensure that you and your ex do not ruin these vacations for your children:

Determine a Vacation Experience

Before planning a vacation, you need to determine what you want to get out of the experience. Are you planning on visiting family? Are you planning on going to a tourist destination and do a lot of tourist activities? Are you looking for a relaxing place like the beach resort?

Once you determine what experience you are looking for, it’s easier to choose an appropriate destination, set a budget and plan your itinerary. If your children are old enough, letting them participate will help insure everyone has a good time. You’ll also want to determine what type of hotel or resort accommodations you require. Will you and your children all stay in one hotel room or will you reserve a two-bedroom suite or connecting rooms? Two separate bedrooms gives everyone room to spread out. In one hotel room with double beds, the tight space and lack of privacy will add stress to any vacation. Remember that vacations are expensive, so save money ahead of time.

Plan a Vacation Schedule with your Ex

Meet with your ex and discuss a vacation schedule. This will allow each parent to voice opinions on dates and destinations with immediate feedback. Stick to the plan after a decision has been made.

Use Open Communication

If you have to defer from the agreed upon vacation schedule, by all means notify the other parent as soon as possible. It is always a good idea to notify the other parent of your vacation plans or if those plans change. If for some reason or another you have decided not to tell the other parent of your plans (where, how long, how to be reached, etc.), be prepared for the other parent to possibly bring legal action against you. The courts will want a detailed explanation as to why you will not provide the information, and a judge will typically order a parent to divulge vacation plans for safety reasons, unless there is a compelling reason not to (findlaw.com).

Consider Mediation

Sometimes the best way to resolve summer vacation disputes is to mediate your differences in front of a neutral decision-maker. This is especially true if you know you and your ex have a volatile relationship. If you do, choose a different path and bring in a mediator to help come to an agreement. Either ex-spouse can hire a private mediator, or each party can hire a child-custody lawyer and resolve their disputes without going to court. If it helps to have a third party in place, than it’s worth the added expense for less headache in the long run.

Set a Court Date

The last and final option would be to get the courts involved. Often in separation and divorce agreements, the following are set forth:

– The amount of vacation time each parent is allocated

– The amount of notice each parent must give the other one

In addition, many agreements limit the travel locations, and the scope of travel may be more limited when the children are younger.

If you desire to have a court ruling regarding your child’s vacation schedule, then plan accordingly. Create the agreement as far in advance as possible so the court can approve the plan and make it legally binding. Often, this agreement, if approved by a court, can replace a regular child-custody agreement during summer time (findlaw.com).

If no summer vacation agreement is in place, child-custody agreements generally allow a parent to take a child wherever she or he chooses, as long as the child is not in danger and there are not any other restrictions. If this worries you, take the extra precautionary steps and make it legal. After all, the last thing you want to do is find yourself with an unwanted court date instead of going on a trip because you and your ex could not come to an agreement.

If you have just filed for divorce and do not yet have a custody and visitation agreement in place be aware that the Standard Restraining Orders contained on the Summons prohibit you from leaving the state of California with your children without your spouse’s consent or a Court order.

Keep these tips in mind this summer when planning your child’s or children’s summer vacation and you’re sure to have a successful summer break with less headache.

If you still have questions or would like to discuss your options with a Family Law attorney, please contact The Law Office of Matthew J. Rudy for a free 1-Hour Consultation.

Domestic Violence Restraining Order

Previously we provided statistics with regards to the prevalence of domestic violence.  Today  our focus is on the process for obtaining a domestic violence restraining order pursuant to California’s Domestic Violence Prevention Act (DVPA) as set forth in Family Code §6200, et seq.

A domestic violence restraining order is a court order that helps protect people from abuse or threats of abuse from someone they have a close relationship with. Requirements for a domestic violence restraining include:

• A person has abused (or threatened to abuse) you;

AND

• You have a close relationship with that person.
  • You are:
    • Married or registered domestic partners,
    • Divorced or separated,
    • Dating or used to date,
    • Living together or used to live together (more than roommates),
    • Parents together of a child, or
    • Closely related (parent, child, brother, sister, grandmother, grandfather, in-law).

As a parent of a child under the age of 12, you can file a restraining on his or her behalf to protect your child. If your child is 12 or older, he or she can file the restraining order on his or her own.

What does a Restraining Order do?

A restraining order is a court order that requires the abuser to

• Not contact or go near you, your children, other relatives, or others who live with you
• Stay away from your home, work, or your children’s schools
• Move out of your house (even if you live together)
• Not have a gun
• Follow child custody and visitation orders
• Pay child support
• Pay spousal or partner support (if you are married or domestic partners)
• Stay away from any of your pets
• Pay certain bills
• Release or return certain property

A computer system, called CLETS (short for California Law Enforcement Telecommunications System), holds all of the information concerning your order so that law enforcement agents anywhere in the United States can obtain this information.  If you move out of California, contact your new local police so they will know about your orders.

Types of Restraining Orders

Emergency Protective Order (EPO)

For immediate protection, this order is optimal. An EPO can be provided by the police department at any time of the day or night. The only caveat is that this order only lasts for 5 court days or 7 calendar days. The judge can order the abusive person to leave the home and stay away from the victim and children for the allotted time. This allows for enough time to go to court to file a temporary restraining order.

Temporary Restraining Order (TRO)

After filing court paperwork that explains the situation, a judge can give you a TRO that will last 20-25 days until the court hearing date.

“Permanent” Restraining Order

When you go to court for the TRO hearing, the judge can issue a “permanent” restraining order that will last up to 3 years. At the end of the 3 years, you can ask for a new restraining order for protection.

Criminal Protective Order or Stay-Away Order

The district attorney can file criminal charges against the abuser, depending upon the circumstances. As the criminal case is ongoing, a criminal protective order against the abuser is issued. This can last for 3 years after the case if the defendant is found or pleads guilty.

The Restraining Order Process

                After filing the court forms (no fee to file) for a protective order, a judge will determine whether to grant the temporary order and give a hearing date. The filed documents must be served on the opposing party by someone 18 or older not involved in the case. The restrained person has the right to file an answer to the restraining order request, explaining his or her side of the story. After the hearing, a judge will choose to continue or cancel the temporary restraining order.

Resources for Help

• National Domestic Violence Hotline
• California Department of Public Health Violence Prevention Resource Directory
• Futures Without Violence
• Next Door Solutions

For more information on the above content, please check out http://www.courts.ca.gov/selfhelp-domesticviolence.htm and http://www.scscourt.org/self_help/restraining/dv.shtml.

If you have any questions about filing a Domestic Violence Restraining Order (DVRO) or have been served with a DVRO or a Request for a DVRO, please contact The Law Office of Matthew J. Rudy for a free 1-hour consultation.

Domestic Partnership in California

Same-sex marriage has become a much publicized issue in recent years. Pending the United States Supreme Court decision regarding the status of same-sex marriage in California same-sex couples in California may register as domestic partners with all of the same rights, at the state level, as spouses.

A California domestic partnership is “a legal relationship available to same-sex couples, and to certain opposite-sex couples in which at least one party is at least 18 years of age.” It affords the couple “the same rights, protections, and benefits, and… the same responsibilities, obligations, and duties under law…” as married spouses (legalinfo.ca.gov).

Similarities to Marriages

Currently, California affords domestic partnerships the same rights and responsibilities as marriages under state law. Among these:

• Making health care decisions for each other in certain circumstances
• Hospital and jail visitation rights that were previously reserved for family members related by blood, adoption or marriage.
• Access to family health insurance plans (Cal. Ins. Code §10121.7)
• Spousal insurance policies (auto, life, homeowners etc.), this applies to all forms of insurance through the California Insurance Equality Act (Cal. Ins. Code §381.5)
• Sick care and similar family leave
• Step-parent adoption procedures
• Presumption that both members of the partnership are the parents of a child born into the partnership
• Suing for wrongful death of a domestic partner
• Rights involving wills, intestate succession, conservatorships and trusts
• The same property tax provisions otherwise available only to married couples (Cal. R&T Code §62p)
• Access to some survivor pension benefits
• Supervision of the Superior Court of California over dissolution and nullity proceedings
• The obligation to file state tax returns as a married couple (260k) commencing with the 2007 tax year (Cal R&T Code §18521d)
• The right for either partner to take the other partner’s surname after registration
• Community property rights and responsibilities previously only available to married spouses
• The right to request partner support (alimony) upon dissolution of the partnership (divorce)
• The same parental rights and responsibilities granted to and imposed upon spouses in a marriage (nclrights.org)

How to File for Domestic Partnership

Same-sex couples in California may want to register as domestic partners prior to a determination of whether or not they will be allowed to marry under California law. By registering as domestic partners, couples are entitled to all the rights and protections of state law. To qualify as domestic partners, couples must meet certain conditions. To register a domestic partnership in California, follow these guidelines.

1. Determine whether you and your partner meet the basic requirements to qualify for domestic-partnership status. Certain conditions must be met before a couple can formally apply for California domestic partnership with the Secretary of State’ office. Requirements include:

• Partners must be the same sex, or at least 1 person in an opposite-sex domestic partnership must be at least 62 years old at the time of filing.
• Both people must be at least 18 years old.
• The partners must have a common residence. The primary residence doesn’t have to be jointly owned.
• Neither partner may be married to or in a concurrent domestic partnership with another person.
• Partners cannot be related by blood.
• Both people must be mentally capable of consenting to the partnership.

2. Complete the application process as set forth by the California Secretary of State’s office.

3. Download the Declaration of Domestic Partnership form (NP/SF DP-1) from the Secretary of State’s website at http://www.sos.ca.gov.

4. Print and fill out the application. Incomplete forms will delay approval of your status.

5. Have both partners’ signatures notarized.

6. Send the notarized application to the Secretary of State’s office by mail with payment for the appropriate fee. Applications also can be delivered in person at the main office in Sacramento or the regional branch in Los Angeles.

• After you have filed your application, you will receive a Certificate of Registration of Domestic Partnership and an important brochure that outlines your rights with a domestic partnership.

7. Pay the fees associated with your particular form of domestic partnership.

Tips

• The additional fees for same-sex partnership applications go toward training and support of local organizations that educate the public on domestic-violence issues affecting the gay, lesbian, bisexual and transgender communities.
• Understand the scope of domestic-partnership laws. Laws that protect traditional couples also apply to domestic partners, including survivor’s rights. Like married heterosexual couples, domestic partnerships are dissolved in the family court. To end a California domestic partnership, a couple must complete form NP/SF DP-2, Notice of Termination of Domestic Partnership. If all the requirements of the California Family Code are met, the office can terminate the partnership 6 months after the application is filed. Otherwise, issues surrounding the dissolution of the partnership must be resolved in California Superior Court.
• Hand-delivered applications are subject to an additional processing fee. Both offices accept payments by check, money order or credit card. The Sacramento office also accepts cash. The Los Angeles branch does not.
• In the event of the passage of significant legislation affecting domestic partnership, the Secretary of State’s office will contact all people on the Domestic Partnership Registry and explain the impact of the new law. (http://www.sos.ca.gov/)

If you have any questions about Domestic Partnerships, please contact The Law Office of Matthew J. Rudy for a free 1-Hour Consultation.

Prenuptial Agreement

Given the prevalence of divorce, prenuptial agreements are an increasingly popular way for people to protect assets in the event of a divorce. Most people believe that only celebrities have reasons to have a prenuptial agreement. However, prenuptial agreements are made for anyone that has any assets that need protection in case of divorce. Some agreements also address estate planning issues, alimony, asset management during the marriage and responsibility for debt. Entering into the agreement at or near the time of engagement is highly recommended. In this blog, we will explain the basics of prenuptial agreements by looking at California Family Code Sections 1612 and 1615.

Who Needs a Prenuptial Agreement?

You should consider having a prenuptial agreement if you fall into any of the following categories:

1. You own a home, stocks or retirement funds
2. Own all or part of a business
3. You anticipate receiving an inheritance
4. You have children or grandchildren from a previous marriage
5. One partner is much wealthier than the other
6. One partner will be supporting the other through college
7. You have loved ones who need to be taken care of, such as elderly parents
8. You have or are pursuing a license in a potentially lucrative profession such as medicine
9. You could see a big increase in income because your business is taking off (Wikipedia)

Family Code Sections 1612 and 1615

Family Code Section 1612 sets out what can and cannot be in a prenuptial agreement. Generally, any financial issue can be dealt with in a premarital agreement. Issues relating to children, including child support and custody are not permitted. Nor is one allowed to contract about duties during the marriage, such as household chores, frequency of sexual relations, or penalties for adultery.

California has special provisions regarding spousal support in prenuptial agreements. In California spousal support provisions in a prenuptial agreement drafted at this time will not be enforced unless the person whose receipt of spousal support is limited or waived had independent counsel before entering into the agreement. As well, provisions regarding spousal support will not be enforced if they are unconscionable at the time of enforcement. The unconscionable standard is somewhat ambiguous and it is unclear what will circumstances would make a limitation or waiver of support unconscionable. One such circumstance might be a disability that precludes the spouse waiving support from working. As a result it is impossible to determine in advance whether a spousal support provision will be enforceable at the time of separation, as changing circumstances prior to separation might render the agreement unconscionable.

Probably the most important part of the California Uniform Premarital Agreement Act is found in section 1615, which sets out when a prenuptial agreement is enforceable, and when it is not enforceable. The usual caveats apply here: there must be financial disclosure, the premarital agreement must not be unconscionable, there must not be any coercion, and the parties must understand what they are signing. California requires that there be at least seven days between when a party is first presented with an agreement and when the agreement is signed. To have an enforceable prenuptial agreement it is generally a good idea to ensure that both partners are represented by competent counsel.

Prenuptial agreements can include responsibilities that do not deal with money, but one should avoid making demands that might seem frivolous, such as requiring that a spouse not gain weight, or that he or she quit smoking and take out the garbage three times a week. A judge could look suspiciously upon terms that are less serious than, say, stipulating what religion your children will observe if the spouses are of different faiths (law.onecle.com).

Legal Benefits

Difficult as it may be to talk about money before marriage; doing so can save heartache and hassles in the long run. A prenuptial agreement can minimize the financial and emotional toll of a divorce. Couples without a prenuptial agreement will have their assets divided by a judge if the marriage ends and the parties disagree about who should get what.

Without a prenuptial agreement, assets could end up in the hands of your spouse’s children from a previous marriage instead of your own kids, or they could go to a partner who did nothing while you worked away at a business or book that eventually became a big success.
Premarital agreements are a personal decision, but without one, couples relinquish not only power over their assets but privacy as well (leginfo.ca.gov).

If you have any questions about a prenuptial agreement, please contact The Law Office of Matthew J. Rudy for a free 1-Hour Consultation.

Internal Revenue Section Code 1041

Internal Revenue Section Code 1041

With April 15th fast approaching, we, like many of you, are turning our attention to taxes. For couples contemplating a divorce or in the process of a divorce one of the most important tax provisions to be aware of is Internal Revenue Code section 1041 which addresses the transfer of property between spouses or former spouses. This section provides that any transfer of property from one spouse to another is a nontaxable event. This means that no deductible loss or taxable gain is declared on a qualifying transfer. This section applies to transfers during marriage as well as during divorce. Section 1041 was part of reforms intended to simplify the Internal Revenue Code.

Before 1984, the federal court case of United States v. Davis held that a transfer of property from one spouse to another, “incident to a divorce,” or property settlement was an event for recognition of gain or loss to the transferor. In determining the gain or loss to be applied, the Internal Revenue Service would look at the fair market value of an asset at the time of the transfer as compared to its taxable basis, usually the cost to acquire the asset with certain permissible adjustments for either depreciation or improvements. In 1984 the Internal Revenue Code was amended to provide that gain or loss will be recognized on transfers of property between spouses or between former spouses “incident to a divorce.” (lifemanagement.com) Section 1041 was the key component of this amendment.

The Bradford Tax Institute defines the rule as:

(a) General rule
No gain or loss shall be recognized on a transfer of property from an individual to (or in trust for the benefit of)—
(1) A spouse, or
(2) A former spouse, but only if the transfer is incident to the divorce.
(b) Transfer treated as gift; transferee has transferor’s basis
In the case of any transfer of property described in subsection (a)—
(1) For purposes of this subtitle, the property shall be treated as acquired by the transferee by gift, and
(2) The basis of the transferee in the property shall be the adjusted basis of the transferor.
(c) Incident to divorce
For purposes of subsection (a)(2), a transfer of property is incident to the divorce if such transfer—
(1) Occurs within 1 year after the date on which the marriage ceases, or
(2) Is related to the cessation of the marriage.
(d) Special rule where spouse is nonresident alien
Subsection (a) shall not apply if the spouse (or former spouse) of the individual making the transfer is a nonresident alien.
(e) Transfers in trust where liability exceeds basis
Subsection (a) shall not apply to the transfer of property in trust to the extent that—
(1) The sum of the amount of the liabilities assumed, plus the amount of the liabilities to which the property is subject, exceeds
(2) The total of the adjusted basis of the property transferred.
Proper adjustment shall be made under subsection (b) in the basis of the transferee in such property to take into account gain recognized by reason of the preceding sentence.

What Does This Mean?

Section 1041 as amended in 1984 is not limited to transfers of property incident to divorce. Section 1041 applies to any transfer of property between spouses, regardless of whether the transfer is a gift or is a sale. A divorce or legal separation must not be started between the spouses at the time of the transfer.

Example 1: A and B are married and file a joint return. A is the sole owner of a home. A sale or gift of the home from A to B is a transfer subject to the rules of 1041.

Example 2: A and B are married and file separate returns. A is the sole owner of an independent X Company. In the ordinary course of business, X Company makes a sale of property to B. This sale is a transfer of property between spouses and is subject to the rules of 1041.

Only transfers of property are governed by 1041. Transfers of services are not subject to the rules of 1041.

The property transferred to a former spouse cannot have been owned by the transferor spouse during the marriage (law.cornell.edu).

A transfer of property is “incident to the divorce” in either of the following two circumstances:

(a) The transfer occurs not more than a year after the date on which the marriage ceases.
(b) The transfer is related to the termination of the marriage.
(1) Transfers are presumed related to divorce if made pursuant to a Marital Settlement Agreement, Stipulated Judgment or Court Order (or any modification of an agreement, judgment or order) and occur within 6 years of the termination of the marriage. Transfers occurring more than 6 years after the marriage are presumed not to be related to the termination of the marriage. (lifemanagement.com)

Tax Consequences

The transferor of property under 1041 does not see any gain or loss on the transfer, even if the transfer was in exchange for the release of marital rights or other consideration.

The transferee of property does not recognize a gain or loss upon receipt of the transferred property. However, the transferee may have built in gains or losses as the transferee assumes the transferor’s adjusted tax basis as of the time of the transfer. Even in the event of a bona vide sale (i.e. the purchase of a spouse’s equity in a home at fair market value) the transferee does not acquire a tax basis equal to the fair market value paid. This rule applies to both gains and losses and is usual most relevant on a subsequent sale or transfer of the property constituting a recognition event for tax purposes. (law.cornell.edu)

A transfer under 1041 may result in the bringing back of investment tax credits with respect to the property transferred. If the property, for example a car, being transferred is used for solely personal use, then the transferee is subject to recapture of the investment tax credit previously taken by the transferor.

Understanding the tax effects of a divorce or marriage can be complicated. It is important to address these issues with knowledgeable counsel. If you have any questions regarding Internal Revenue Section Code 1041 or other tax implications associated with a divorce, please contact The Law Office of Matthew J. Rudy for a free 1-Hour Consultation.

Grandparents’ Rights

During divorce custody disputes can occasionally become multi-generational with grandparents seeking visitation with, or even custody rights over, their grandchildren. In general, the Court’s preference to award custody to one or both parents is set forth in California Family Code § 3040(a)(1). However, the Court may award custody of a child or children to a non-parent in the event that the Court deems it inappropriate to award custody to either parent. This non-parent can be a grandparent, other relative, or even just a family friend. Family Code §§ 3101, 3103 and 3104 set forth the requirements for grandparent visitation in California.
Visitation

In California, there are several requirements that must be met in order for a grandparent to ask for reasonable visitation with a grandchild. First, there must be a “pre-existing relationship” between the grandparent and the grandchildren. “This means that the grandparent must have been involved one way or another in the child’s life on a regular basis usually within 6 months of bringing the complaint for visitation.” A child that lives with the grandparent for a portion of time would also fit under this category. In granting or denying grandparent visitation the Court must balance the interest of the child or children in having visitation with the grandparent against the right of the parents to exercise their parental authority.

Grandparents generally cannot file for visitation while the grandchild’s parents are married. However, there are exceptions to this rule: married parents living separately, a parent’s unknown whereabouts, one of the parents joins in favor of the petition for grandparent visitation, the child does not live with either of the parents, or the child has been adopted by a stepparent (Wikipedia).

Custody

In certain cases, when the parents are unable to care for a child, a grandparent, other relative or established caregiver for the child may file a guardianship action which would grant custodial rights over the child. If either of the parents objects, the grandparent must prove that the child in the parent’s custody would be harmful to the child. Arguments must be very clear and decisive for the grandparents as California law generally favors parental custody. The longer that the child has lived with the grandparent the better the chances are. Finally, it is always helpful in these types of situations to have the approval of at least one of the parents otherwise it can be an uphill battle (Courts.ca.gov).

There are strong presumptions in favor of parental rights; however, grandparents can receive visitation or custodial rights in certain circumstances. To determine if your case meets these requirements, please contact The Law Office of Matthew J. Rudy for a free one hour Consultation.