Recent Blog Posts

Divorce and Family Law HORROR STORIES - How the System Is Broken! SHARE Yours With Us?

Thurman W. Arnold CFLS — Wed, 18 Apr 2012 14:45:00 GMT

Share Your Family Law Horror Story?

I want to thank all of you who write me about the difficult circumstances and horror stories surrounding your divorce and other family law matters, both in and out of divorce court. I receive dozens of emails each month from non-client readers, many who need help and so have questions, many who are merely venting, and many who have deep problems with how the government sponsored system for resolving family law disputes has unfolded and been applied for them, or misused.

I am not able to respond to every email, and for those who really want was is in effect a consultation with me (by seeking detailed answers to complex questions, for instance) I suggest you consider a phone or Skype conference with me or Mike Peterson at my office. I bill $350/hour for those consults and Mike bills at $250/hour.

However, for those who simply wish to have their often tragic stories heard I've decided to open up a portion of my website for posting them. Your experiences may be useful to others, and I imagine others similarly situated will read them with great interest. I think there should be a forum for people to communicate the good and bad of what they've been through.

Therefore, you must understand that I have a busy law practice along with a website that requires my constant attention and so am practically limited in my time and ability to respond or educate people about the law, your options, tactics you might try to change the course of your case or situation, and so on. I may not be able to enter into an ongoing dialogue with many of you, and don't want you to be offended if my responses are truncated, but if you wish to share your situations and experiences and if they are appropriately written, I will post them in a new section of my website that I am creating.

Your stories - if you'd like me to share them with the world for you - shouldn't simply be rants, but they certainly can express the poignancy of your situation. They need to be coherently (but not perfectly) written, not be abusive, respect other's rights to privacy, and provide enough information that a reader can follow them. I will create editorial guidelines as this concept develops. If you wish to have your story posted you will have to give me the rights to use it as I see fit.

Again, I will refine how this will work. For now I will watch to see whether creating such a forum is something the public really desires - both in terms of people sharing their experience as well as others caring to read about them. Hence, this concept is a work in progress.

If this makes sense to you and is something you wish to undertake, send me your stories at twarnold@verizon.net - don't use my on-line intake forms or blog comments because the length is limited in what I receive.

Thurman W. Arnold, III, C.F.L.S.

Is It Proper To Give A GAVRON WARNING Before the Final Judgment Is Entered?

Thurman W. Arnold CFLS — Mon, 02 Apr 2012 23:05:00 GMT

Q. Is it proper for the Family Court to give a domestic partner a Gavron Warning when I am receiving temporary partner support and we haven't divided our assets so that no final judgment has been issued in the case yet?

A. As you probably know, the same rules apply to registered domestic partners in California dissolution cases as apply to married persons. What we traditionally consider as "alimony" or "spousal support" is the same animal as partner support.

Marriage of Gavron was decided in 1988. The issue there was whether a trial court abused its discretion in terminating spousal support to a 57 year old wife based on her failure to become gainfully employed or to seek vocational training. The parties in Gavron had been married for 25 years and shared one adult child. They separated in 1976, and judgment was entered in June, 1979. In the final judgment the court ordered the former husband to pay spousal support until further order of court. Husband evidently really resented the obligation, because notwithstanding a relatively fresh separation, in 1981 he went back to court asking to reduce the support amount by half and to have it terminated after one more year of payments. That request was denied.

In 1986 Husband returned to court seeking to lower the payments and an order that support terminate. The court refused to lower support, but did order that after another five months support would be fixed at zero with the court retaining jurisdiction to reinstate it, until the death or remarriage of wife. The evidence was that while Husband attended dental school early in the marriage, Wife held different low paying jobs (although she did work at the dental office for a time after it opened), on and off, during the marriage and afterwards. She contended that most of these jobs were "too physically demanding," and there was uncontested evidence that she suffered tumors on her feet and shoulder problems. She did not seek any kind of retraining after separation. She did own some significant assets - her house was free and clear, she had no debt, and she had real estate venture investments. Husband had remarried, and had used most of his 401k to buy Wife out at the time of the dissolution; his business was becoming more competitive, and the evidence suggested he was overburdened and himself closing in on retirement.

The trial court was not impressed with Wife's efforts to become self-supporting. In setting a zero support award, it stated: "Aside from demonstrating a lack of diligence, in regards to becoming employed, [Wife] remains highly improvident by relying on [Husband] for her sole support. She apparently has given no thought to the possibility that [Husband] may become incapacitated or meet an untimely demise. It should be noted that a marriage of twenty-five (25) years is not tantamount to social security. The Court is mindful that this is a lengthy marriage and that [Husband's] duty to support [Wife] will not terminate by the mere passage of time. Nonetheless, the [Wife's] failure to become employable or to seek training after so many years shift[s] the burden to her to demonstrate her continued need for support in light of her continued inaction in this regard."

The trial court was reversed. Essentially the justices found that nothing materially had changed (i.e., no change of the parties' circumstances as is required to modify most orders) between the date of the 1981 application to terminate support and the 1987 application - the parties' overall financial situations were much the same as in 1981.

The appellate court observed: "We recognize that it is in the best interests of both spouses and of society in general that the supported spouse become self-sufficient. Civil Code section 4801, subdivision (a)(1)(A) expressly directs that in determining the amount and duration of spousal support, a court is to consider as a factor the supported spouse's marketable skills and ability to engage in gainful employment. As the court observed in In re Marriage of Morrison, [citation omitted], 'It certainly may be inferred that by specifically setting forth this factor, the Legislature intended that all supported spouses who were able to do so should seek employment. It also appears the Legislature expected that courts would issue orders encouraging these spouses to seek employment and to work toward becoming self-supporting.'"

The Court continued: "Nonetheless, the trial court here erroneously held that the wife's 'failure to become employable or to seek training after so many years shift[s] the burden to her to demonstrate her continued need for support in light of her continued inaction in this regard.' To the contrary, absent stated or reasonably undisputed prior expectations as to the supported spouse's future self-sufficiency at the time of the previous support order, after a lengthy marriage and an appropriate retention of jurisdiction to modify spousal support, 'the burden of justification is on the party seeking termination.'"

Finally it ruled: "Inherent in the concept that the supported spouse's failure to at least make good-faith efforts to become self-sufficient can constitute a change in circumstances which could warrant a modification in spousal support is the premise that the supported spouse be made aware of the obligation to become self-supporting. It is particularly appropriate here that there should have been some reasonable advance warning that after an appropriate period of time the supported spouse was expected to become self-sufficient or face onerous legal and financial consequences. There was a lengthy marriage during which the wife was unemployed except at the outset. The wife also presumably devoted herself initially to the development of her husband's earning capacity, rather than to her own earning capacity, then to wifely and parental duties, and now to the care of her elderly mother."

* * *

"The wife may have lacked the personal foresight to more diligently seek employment prospects eight years earlier in 1979 when the original support order was fashioned. Nonetheless, she cannot be penalized now, years later, because of an apparent lack of judicial foresight in not forcing her to focus on the drastic legal and financial consequences of the then-unrevealed expectation that she become self-sufficient."

This became the "Gavron Warning, " also known as a "Gavron Admonition." This rule is now set forth in Judicial Council Form FL-180, the Judgment of Dissolution, such that at the time of entry of judgment and whether it is actually read by the supported party or not, the Gavron Warning is deemed to have been given:

"NOTICE: It is the goal of this state that each party will make reasonable good faith efforts to become self supporting as provided for in Family Code section 4320. The failure to make reasonable good faith efforts may be one of the factors considered by the court as a basis for modifying or terminating spousal or partner support."

Marriage of Tong and Samson (2011) 197 Cal.App.4th 23

Attorneys representing alimony payors want the Gavron Warning to be given at the earliest opportunity, so that they can argue to the Court early on and frequently that a supported spouse is shirking his or her responsibilities to be become self-supporting. Often this takes the form of an oral "oh, by the way, judge" type request in open court where a court is making support rulings. It is important to resist this request, and obviously if you are a payor (or represent one) it is important to urge that it be given. Some judges, usually those new to family law, can be persuaded to give the admonition on the record at an OSC type hearing in the early stages of the litigation.

I am not aware of any case authority that supports giving a Gavron Warning at the pendente lite (temporary) stage of the proceedings. The fact that it is found in Family Code 4320 and in the final judgment form are compelling evidence that both the legislature and Judicial Council view it as applicable only at time of trial, final judgment, or beyond.

Marriage of Tong and Samson provides good authority for objecting to a Gavron Warning prior to entry of Judgment. The case is one of the few that addresses the distinctions between "temporary support" and "permanent" (judgment) spousal support. Family Code section 3600 governs the court's authority to issue temporary spousal support awards. Family section 4320 governs judgment support awards. The two sections are very different because they serve different public policy purposes, and the support amounts as to each are theoretically also likely to be different (although, funny, oft times the amounts don't change much). The core holding of Tong deals with how to treat severance pay for spousal support purposes, under the somewhat unusual facts as existed there. Still, it also involved a request to terminate support based upon cohabitation, which was denied.

Pertinent to this discussion, the appellate court in Tong v. Samson ruled "The factors listed in section 4320 apply to permanent support orders. Of these, the only factors relevant to temporary orders are the supported spouse's needs and the supporting spouse's ability to pay. [Citation omitted]. To the extent the court required Richard to present evidence on factors included in section 4320 but inapplicable to temporary spousal support, it erred. 'Ability to pay encompasses far more than the income of the spouse from whom temporary support is sought; investments and other assets may be used for... temporary spousal support.... [Citations.]' [emphasis added]."

Hence, 4320 in all its glory does not control how courts arrive at temporary spousal support numbers - which instead, as other Blogs herein descirbe - are generally addressed using the child support guideline formulas and the legal Xpouse or Dissomaster software.

Do California Courts "ADD BACK" DEPRECIATION In Determining Child and Spousal Support?

Thurman W. Arnold CFLS — Mon, 02 Apr 2012 01:02:00 GMT

Q. How do California Family Courts deal with depreciation in setting child and spousal support? Does depreciation reduce the paying spouse's income available for support and so lessen the amount that must be paid?

A. There are very few reported appellate decisions in California giving direct guidance to family courts about how to assess, and what to do with, depreciation deductions when ordering child support, or temporary or judgment spousal support. Commentators have noted that many courts tend to add back all depreciation in all circumstances, and some have criticized this approach. One question that arises is, is this phantom income or a phantom expense and how does it practically affect a payor's cash flow (depreciation add backs can also bite support payees)?

Another question is whether depreciation should be treated differently if we are talking about child support verses spousal support orders. If so, then trial courts dealing with guideline temporary spousal support awards should possibly be running two different analyzes in every case where depreciation is an issue and both alimony and child support may be due, denying the add back in child support settings but possibly allowing it when determining spousal support.

"Income" is not defined in any California family law statute for purposes of determining spousal support. "Gross" and "net" "income" are defined for purposes of awarding child support, in Family Code section 4058 and Family Code section 4059.

The two primary statutes addressing spousal support are Family Code sections 3600 and Family Code section 4320. When alimony is awarded prior to the division of the community property estate, whether by way of a marital settlement agreement/stipulated judgment or trial court decision, it is termed "temporary spousal support." FC § 3600 provides that "the court may order ... the husband or wife to pay any amount that is necessary for the support of the wife or husband, consistent with the requirements of subdivisions (i) and (m) of Section 4320 and Section 4325...." Subsections (i) and (m) concern incidents of domestic violence, as does § 4325. Hence, as one court has recently ruled, except for cases involving DV, Family Code section 4320 does not otherwise apply to temporary spousal support determinations. Tong v. Samson (2011) 197 Cal.App.4th 23. Instead, trial courts traditionally employ the child support guideline formula (in the form of the Xspouse or Dissomaster) without considering the other 4320 factors - beyond considering each party's need for support and the other's ability to pay.

The only reported decision directly approving a depreciation add back is Asfaw v. Woldberhan (2007) 147 Cal.App.4th 1407. Asfaw is a child support case. The trial court accepted husband's argument that he should receive $57,000 worth of depreciation, which would reduce his income available for support in a corresponding amount. Its findings were reversed as a matter of law (meaning that it was not simply an abuse of discretion). The appellate court ruled that depreciation is not properly deductible under Family Code sections 4058 and 4059. However, it is noted that different public policy considerations, and legislative histories, apply to child support as opposed to spousal support statutes, and therefore while this ruling lends support for arguments that depreciation should be added back when dealing with the latter it is not direct authority for that proposition. Asfaw addressed depreciation for rental properties only, and the facts did not involve other forms of depreciation that typically apply to small businesses - like the acquisition of equipment or vehicles. Nonetheless, most Family Courts will add all forms of depreciation back and rarely exercise discretion in deciding whether business expenses were reasonably necessary and should therefore not be added into the payor's income.

Marriage of Blazer (2009) 176 Cal.App.4th 1438 is a spousal support case that lends support for the idea that accounting and business decisions made by support obligors may be upheld, and business related expenses may not be charged to the payor for purposes of assessing income available to pay spousal support, where the trial court after hearing all the evidence concludes that the expenses are rationally related to the conduct of the business. Scott Blazer was paying temporary spousal support of $57,000/month, and operated an agricultural business that involved the sale of strawberries, among others. He and his expert testified that in order to compete and stay in business, investment of capital was needed to "diversify the company's work" and that funds spent for that purpose were accordingly "reasonable expenses" properly chargeable to the business, and not to the husband. The trial court agreed, and was affirmed on appeal. Clearly trial courts will rarely be reversed in issuing support findings and awards at the "permanent" (trial) support phase of the proceedings, where the record shows that the court considered all the evidence and the relevant 4320 factors, and therefore exercised an informed discretion in reaching a decision. In Blazer Scott's position made some sense, and the trial court was free to accept it.

Hence, one can argue by extension that Blazer supports trial court discretion NOT to add back depreciation under appropriate circumstances - if the support obligor demonstrates a sound business reason for the expense, as with a car rental business replacing its fleet of vehicles, they may not be charged with those monies expended as though they should have, could have, used it to maintain their former spouse.

This becomes more difficult if the issue at bench is child support, at least if one gives Asfaw a wholesale application.

Clearly, one can argue that Asfaw should be limited to child support settings because that Court expressed its view that child support and spousal support serve different masters, so to speak, and this observation about public policy is correct.

On the other hand, depreciation that does not relate to business enterprises would seem to be likely to find little traction with family court judges and commissioners.

I guarantee the forensic accountants will vigorously differ on this point based upon business accounting principles and the historical IRS treatment of depreciation. I will discuss what I understand to be their reasoning in a future Blog.

Judicial Council Releases New Rules of Court for CHILD TESTIMONY Re CUSTODY PREFERENCES

Thurman W. Arnold, III — Wed, 28 Mar 2012 01:05:00 GMT

California Rules of Court For Children's Testimony
Expressing Parental Preferences Per
Family Code Section 3042 - C.R.C. RULE 5.250

On January 1, 2011 amended Family Code section 3042 became effective. It changed prior law involving custody and visitation of children by, in principle, mandating that Family Court judges consider the voices of kids before making custody and visitation determinations affecting them. These revisions would represent a major shift from how judges and commissioners have traditionally viewed their discretion whether to listen, or ignore, what children might have, directly, to say. While my first inclination was to express a painfully obvious "duh, of course" kind of response, we may see whether this turns out to have benefitted and protected children, in time.

Per subsection (h) of 3042 the California Judicial Council was given until January 1, 2012 to promulgate "a rule of court establishing procedures for the examination of a child witness, and include guidelines on methods other than direct testimony for obtaining information or other input from the child regarding custody or visitation."

That task is complete. We have sparkling new Cal.Rules of Court, Rule 5.250. It is of epic length....

Rule 5.250 is a must read for any lawyer or self-represented party who desires to offer or resist a proffer of a child's testimony about these hugely uncomfortable topics.

I began a conversation with you about my opinions on this important topic in December 2010, expressing a bias against Family Code section 3042 testimony because of a concern that parents will consciously or unconsciously be encouraged to enlist children into custody battles, creating a power imbalance in the family triad that children have few defenses against. Since mothers statistically have custody of children (and not for statistical reasons as some men ought recognize), this has the potential to separate genders into a kind of class struggle. But that is not news. It creates incentives for behaviors around your children that contain layers of intention beyond the simple joys of modeling how you believe one should act in the world.

Supporters of section 3042 believe that children should have a much greater voice in the family court process when their circumstances are being decided, and this makes sense. Custody decisions should be informed. Children, as the center of the controversy, could be made to be the most important informers.

In particular, I suspect that some trial courts will tend to return to their prior personal views on the matter, meaning that while Rule 5.250 requires a court to state certain findings on the record in order to overcome the 'presumption' of the statute that child testimony should be allowed, all that is generally required of judges to avoid being reversed on appeal is compliance with the rule (i.e., explaining why they ignored it) and evidence that they thought about the subject before deciding.

I apologize for not getting this to you sooner - but here you have it. Anyway, I'll expand this Blog topic soon.

MARITAL BALANCE SHEET Programs and Free Divorce Calculators

Thurman W. Arnold, III — Fri, 23 Mar 2012 16:14:00 GMT

Free Divorce Calculators for
Property Division, Support, and Taxes

I recently had the opportunity to meet with Donna Smalldon, who is a collaborative law financial neutral and co-mediator based out of Portland, Oregon. Donna regularly trains legal professionals in beginning and advanced conflict resolution techniques as applied to divorce and family law matters and proceedings. She serves as a collaborative law neutral and divorce mediator both in Oregon and in Palm Springs, California. You can learn more about her at Applied Divorce Solutions.

Donna introduced me to something that I want to share with you: Family Law Software by Dan Caine. Dan has developed programs for use in determining income and tax calculators, property division calculators, alimony "buy-out" calculators, sale of home calculators, and much more. Some of these can be used for free to test different scenarios as you begin to evaluate and plan for your life during and after divorce. These invaluable tools can be accessed at FamilyLawSoftware.com.

The property division calculator is a must-use for those who are evaluating an equitable division of property within the economic divorce. For those who are considering a spousal support buy-out, Family Law Software provides a solid foundation for figuring out a current value for a lump sum payment instead of payments over time.

Understandably, the price for using the free program materials that Family Law Software provides is that they will email you your answer - you are exchanging your contact information for some free help, probably a fair trade.

I hope you find this useful!

How To COLLECT ARREARS For CHILD and SPOUSAL SUPPORT?

Thurman Arnold, III, C.F.L.S. — Sat, 17 Mar 2012 15:52:00 GMT

Q. I am owed past due support from my ex. How should I proceed to collect this?

A. There are several strategies you can employ, including a contempt citation (which can be problematic, expensive and time-consuming), to collect delinquent child and spousal support. Family Code section 291 provides that support orders are enforceable until they have been paid in full or otherwise satisfied. It also relieves parties of the requirement to renew Judgments that otherwise applies to civil litigants.

I believe that in all cases it is an absolute must that you obtain a Judgment on Arrears, whatever else you decide to do. A court order for support, except when an obligor is employed thus permitting a wage assignment to be an effective way to ensure that employers comply with support orders, is often only a half measure on the road to collection.

If you have a court order which the other party refuses to comply with, before you can collect (i.e., execute) against assets you must have a Judgment. A support order is not a Judgment. In order to obtain a Judgment you must file an OSC or Notice of Motion which is accompanied by Judicial Council Form FL-490 entitled "Application to Determine Arrears ". Use of this form is mandatory - if you don't complete and file it along with your OSC or NOM, your application will be denied without prejudice, forcing you to start over.

Form FL-490 should be supported by Form FL-420, entitled Declaration of Payment History. Form FL-421 is a payment history attachment that gives you more space to outline more past due support payments.

The Judicial Council has provided Instructions for how fill out the payment history forms, and to properly present your application to determine arrears.

The problem with court ordered support, when a person refuses to comply, is that you can only obtain a Judgment on payments that have become due and were missed - your remedy only looks backward and you will need to present a later application to obtain a Judgment for future support that remains unpaid, after it becomes due.

Once you have a Judgment, the first thing you should do is submit to the Court clerk for issuance an Abstract of Judgment. This is then recorded with the County Recorder for each California county where the debtor resides, or where he or she may own interests in real estate (whether as a secured creditor or as an owner). When and if that interest in real estate is ever transferred through an Escrow, the Title Company will pick up the Judgment and require that it be satisfied as a condition to closing escrow (i.e., for sale or refinance).

An Abstract can also be useful to collect against people in certain industries, like real estate brokers who receive commissions from escrow companies when deals close, in that since the Abstract is a mature judgment, serving it upon a person or entity who is transferring money to your obligor will convince them to satisfy the Judgment to you rather than paying the money over to the obligor, since otherwise this innocent third party may be exposed to a claim that they now owe the money to you.

The other thing you may wish to consider is obtaining a Writ of Execution. You can seek this at the same time as you seeking your Judgment by requesting a Writ issue as an additional item of relief in your judgment arrears' application. This Writ can then be served upon a banking institution where the obligor holds accounts, and so be used to effectively lien the monies the debtor may have on deposit. More difficult, but sometimes successful, strategies can also include attaching personal property (i.e., a car that is free and clear) for sale to satisfy the delinquencies.

In the event that you are applying to the Court for other orders, like support modifications, it makes good sense to include an application to determine arrears within that package of requests. One of the problems with not having a Judgment already in place is that if you learn that your obligor is coming into money, you won't likely be able to get in front of a judge fast enough to obtain the Judgment before your opportunity to collect evaporates.

RE-ELECT JUDGE JAMES COX - Best Riverside County Judges, 2012 Election

Thurman W. Arnold, C.F.L.S. — Sat, 10 Mar 2012 16:04:00 GMT

Thurman Arnold Endorses Superior Court Judge James Cox
For Re-Election in 2012

There are a number of candidates for several judicial positions that have opened up in Riverside County for the June, 2012 elections. One is Superior Court Judge James Cox, who seeks re-election. Judge Cox supervises the Probate Calendar for the Indio courts from his courtroom in Palm Springs. Judge Cox also, somewhat infrequently, covers family law and dissolution related matters - typically when our two Family Court bench officers in Indio are disqualified, or recuse themselves, from hearing matters otherwise assigned to them.

I endorse Judge Cox and urge our community to retain him in the upcoming election.

All judges, and applicants aspring to become judges, are not created equally. I have probably appeared in front of Judge Cox only a dozen times or so in the past five years, since my office doesn't generally handle probate matters and he gets only a small number of family law cases. While I've not always agreed with his rulings, I have always felt that he gave both parties in the matters he has decided a full and complete listen, and that he has an uncommon intelligence and ability to discern what the pivotal issues are and to apply the law in a fair and unbiased way. That is the essence, for me, of a good judge. Judge Cox is a particularly smart guy with a good understanding of family law, and the public interest is best served by retaining experienced jurists who've proven over time that they can do their jobs well.

Judge Cox is roundly endorsed by judges, lawyers, and members of the district attorney and public defender's offices.

I can tell you he is worth keeping. It is for that reason that I am speaking up in his support. Please consider voting for him.

FORM 8332 NOW MANDATORY TO CLAIM DEPENDENCY EXEMPTIONS

Thurman W. Arnold, III, C.F.L.S. — Thu, 08 Mar 2012 15:29:00 GMT

Form 8332 Must Now Be Submitted With Your Return
If A Noncustodial Parent Wishes to Receive the Dependency Exemption for a Child

Palm Springs CPA Brian Wachs recently brought to my attention an important 2011 change in IRS policies with regard to the paperwork that is required in order for a non-custodial parent to claim and receive dependency exemptions relating to children.

IRC section 152(c) permits a custodial parent, where a minor child resides with that parent for more than half the year as the child's principal place of abode, to claim a Dependency Exemption. This exemption can be released to the other parent.

However, the Tax Court issued an opinion in late 2011 holding that a noncustodial parent was not entitled to a dependency exemption deduction or the Child Tax Credit for his minor child, where the divorce decree stipulated that the noncustodial parent (the father) would be entitled to take his son as a dependent if he kept current on his child support payments. (Defernez v. Comm. TCS 2011-87). The mother did not sign a Form 8332 or similar declaration stating that she would not claim the dependency exemption, and indeed claimed it despite the language in the judgment. Father was therefore denied the credit.

Similarly, the tax court ruled last year that a noncustodial taxpayer who attached a pre-2009 divorce decree to his return was insufficient to entitle him to a credit because the decree failed to contain the custodial parent's Social Security number or the years to which it applied. (Briscoe v. Comm. TCM 2011-165).

It used to be that a custodial parent could release his or her claim to the dependency exemption by signing Form 8332 or "a similar statement" to enable the noncustodial parent to claim the dependent - these are to be attached to the noncustodial parent's tax return.

The "similar statement" needed to provide at least the following information:

The name of the child
The name and social security number of the noncustodial parent claiming the exemption deduction
The social security number of the other parent
The signature of the custodial parent
The date of custodial parent's signature
The year(s) for which the claims are released

However, for divorce decrees (or similar orders) issued after 2008, the IRS will no longer accept a divorce decree in lieu of of Form 8332 or the qualifying statement.

For divorce decrees or orders issued before 2009, if the decree or a separation agreement went into effect after 1984 and before 2009, the noncustodial parent can attach certain pages from the decree or agreement instead of Form 8332, provided that these pages provide information that is substantially similar to 8332. However, to be eligible to do this, the divorce decree must state:

That the noncustodial parent can claim the child as a dependent without regard to any condition (i.e., such as the common language that the claiming parent must first be current on their support obligation)
That the other parent will not claim the child as a dependent; and
The years for which the claim is released

The noncustodial parent must attach all of the following pages from the decree or agreement:

A cover page (that includes the other parent's SSN)
The pages that included all the items described above
A signature page with the other parent's signature and the date of the agreement

This means that in every child support order from now on (and before as stated above), particularly where the Court utilizes the guideline formula (Xspouse, Dissomaster, etc.) and in doing makes assumptions about how the dependency claims will be distributed, that there must be additional order directing the custodial parent to sign Form 8332 -and parties will be very well served to have that form with them at the hearing so that they can ask the custodial parent to sign it then and there. Otherwise, a payor noncustodial parent may find that they were ordered to pay more support by the Court than otherwise on the mistaken belief that they would be getting a tax savings, only to find that the IRS disallows it.

Here is Form 8332.

Thanks Brian! By the way, I highly recommend Brian's services as a thorough professional tax preparer, accountant, and CPA.

Thank You For Your Support Of The ENLIGHTENED DIVORCE BLOG And Our ThurmanArnold.com Website! Help Us Help You?

Thurman Arnold, III, CFLS — Wed, 07 Mar 2012 04:44:00 GMT

I want to express appreciation for all of you who visit this website, and especially those who write a comment to a blog or a message - I read these and respond to most.

I won't bore you with what my life looks like, other than to say that all I do is mediate, litigate and write on this site. But then, there is Jake.

The Enlightened Divorce Blog takes alot of care and feeding. I hope to make it even more widely read, and possibly you will support me in this effort if you feel what you find here resonates and has value for your life and so might be useful to others.

There are a couple of ways you can do this - although we get a ton of visitors, few people take the time to review us. Those reviews are something that gets measured by the search engines, like Google, and are useful in directing more traffic here.

If you care to, you can review what you know of this site on Avvo.com at this address: http://www.avvo.com/attorneys/92262-ca-thurman-arnold-82804/reviews.html

Or, you can review the site at Alexa.com using this link: http://www.alexa.com/siteinfo/thurmanarnold.com #

You can also take a minute to click the Google +1 buttons that appear at the top of most pages. Even better, please recommend the site by clicking the Facebook "Like" button on my Home Page, the Blog Page, or anywhere else?

Am I being too shameless?

We are working on some neat stuff - including an E Book about how to navigate family law and divorce proceedings. This will include the hundreds of articles you find here, and more.

In the meantime, we will include your comments on our Testimonial Page, properly redacted to protect your privacy - and kindly tell me what questions matter to you, and we will provide our feedback on those subjects!

How Do I PROTECT Monies Loaned By MY FAMILY For LOANS I Use For ATTORNEY FEES?

Thurman W. Arnold III, C.F.L.S. — Mon, 05 Mar 2012 04:03:00 GMT

Loans From Family and Friends to Pay
Attorney Fees For Your Divorce

Unfortunately for those who love or care about you, often the only source of funds to hire or keep a family law attorney involved in your case are friends, co-workers, significant others, and parents or other family members. It is exquisitely painful and humiliating to be forced to borrow from these folks. Yet without their financial aid you may be lost.

Often these cash advances can be recovered from the other spouse by one of the mechanisms described here, and so they will be repaid without jeopardizing your ability to conclude your family law matter.

However, there are a few tips you should know:

Have your helpers pay the attorney directly - whether by credit card or check. Whenever someone loans or gives you money to help with fees or living expenses, if you deposit those monies directly into your bank account even if you next write a check to your lawyer, the other party will argue that you have undisclosed income or resources and may wave your bank statements in front of the court. This forces you to explain the transactions and the source of these funds. You always want to be in a position of needing to explain as little as possible.

Ask them to keep a record of those payments -- in the form of canceled checks or the credit card statement. You may want to introduce these as evidence later. Take control of evidence you might need now.

Sign a promissory note at the time you receive the money -- and keep a copy; better yet, have it sent to the other party's attorney as a "sua sponte" (spontaneous) augmentation of your Preliminary Declaration of Disclosure - no one will later challenge it, and you've just proven you take your fiduciary duties to update your circumstances to the other party seriously. Frequently parents of children in divorce are pre-distributing your inheritance to you in the sense that if they never ask for the money back, they nonetheless are poorer for what they gave you. There is always a suspicion that these "loans" are disguised gifts. If a Court believes that your parents are funding your side of the litigation, it may affect the Court's willingness to order the other party to contribute. The attitude of most lawyers and judges is that a loan is not a loan unless some written agreement memorializes it as such.

Make repayment on these loans -- even if it is interest-only or small amounts. Not only do most people fail to sign a promissory note, they rarely think to create a record that these funds were being repaid. Obviously you cannot repay it all until you receive an attorney fee award or your case resolves - but demonstrating some effort to treat the insider loan as you would any other creditor is persuasive evidence that the monies you received were in fact loans and not gifts. Regular gifts begin to smell like income.

For more information about how to pay your attorney for services they render in your divorce, please visit us here!

How Are BUSINESSES Owned Before Marriage DIVIDED In Divorce?

Thurman Arnold, III, C.F.L.S. — Sat, 03 Mar 2012 01:44:00 GMT

Q. My Wife is a personal injury lawyer with a good practice which she started six years before we married. We have been separated for nine months, after nine years together. She just sent me a settlement agreement. It says the law practice is ordered to her, but it says nothing about me receiving any money for that. She says that since I am not a lawyer and can't practice law, and I get no share of its value. Is she right?

A. No, assuming it has a value that is greater than its value on the date you married!

The fact that you are not a lawyer has nothing to do with whether the "community estate" (the two of you as an economic unit) has an interest in the business that must be reimbursed. This would be true if she or you were a doctor, married to a person who isn't, and so who must have a license to practice their trade. Obviously the law practice must be awarded to her in your dissolution, but that doesn't mean she won't be forced to buy you out as though you were a licensed "silent partner."

When people marry or become domestic partners, they commonly already own assets like businesses or professional practices. This is especially likely for those who've been previously married.

During marriage a professional-trade spouse may increase the worth of a business they manage, whether as a sole proprietorship or as a shareholder of a professional corporation. Per Family Code section 760, all economic value that is created during marriage is presumed to belong to both parties. Value in this sense is measured by a benchmark date, and these dates vary according to circumstances and scenarios. This is called the "date of valuation", but there may be more than one. What gives rise to the community property interest is either spouse's contribution of time, skill, and efforts (TS&E) to - pretty much whatever - from the period from the DOM (date of marriage) to DOS (date of separation).

By the way, a prenuptial (or post-nuptial) agreement may waive a legal interest derived from these TS&E increases, meaning that the community estate acquires no interest in the separate property of the business-owner spouse. I assume you didn't sign one.

Unless you've waived the community property interest in your wife's separate property, it is a breach of interspousal fiduciary duties to deprive the community estate - of which you own one-half - of increases to a party's separate property resulting from TS&E. This means that the community (and separate) interests must be priced in terms of recent or present values. Always a controversial area. Once you physically separate, all your wife's TS&E belongs once again to her alone.

After separation a business or professional practice may likewise increase in value through continuing TS&E type contributions. These may be reimbursable to the separate property estate of the managing spouse and so backed out of the community interest, because it is likewise unfair that the community should benefit from separate property efforts.

There are three time periods relating to the value of your wife's practice that matter here: (1) the value of the law practice as of the date you married, (2) the increase in value (if any) that occurred during marriage that existed as of the date of separation, and (3) at the time of trial. Indeed, California law presumes that the property date for valuing an asset is at trial. Family Code section 2552.

Legal professionals refer to this manner of calculating the community property interest as an "apportionment" or "equitable apportionment."

There are two basic apportionment "formulas" that California judges are trained to apply in these situations:

Fair return on investment . This is called the Pereira approach to apportionment, after Pereira v. Pereira (1909) 156 Cal. 1, 103 P. 488, which involved a husband saloon owner. It apportions a "fair return" on the owning spouse's separate property investment in the business as separate property, then apportions any excess to the community property as arising from that spouse's efforts during marriage.

Reasonable compensation . This is the Van Camp apportionment method, which derives from Van Camp v. Van Camp (1921) 53 Cal.App. 17, 199 P. 885 (yes, seafood in Long Beach), which apportions the reasonable value of the spouse's services during marriage as community property, then treats the balance as separate property attributable to the normal earnings of the separate estate. Reasonable compensation is typically the analysis used in small business valuation cases, and is often found by looking at what other people in the same field performing the same functions tend to earn.

Either analysis (and there are hybrids and others) may be performed to determine the value of the premarital interest in separate property and in deriving the community interest in what began as separate property.

These methods deal with the first half of your question - valuing the law practice as of the date of separation. They may have to be applied in reverse to back out the separate property contributions after the date of separation when a business is valued at time of trial.

Trial courts can pick the approach that they reasonably conclude makes the best sense given the facts of each case. In achieving the apportionment between separate and community property the Court has discretion to decide which formula will achieve 'substantial justice' between the parties.

The Pereira formula is commonly used when business profits are principally attributed to the community efforts (i.e., during marriage). Van Camp is applied when the community efforts are more than minimally involved in a separate business, but the business profits that accrued are attributed to the character of the separate asset (Mr. Van Camp was turning out cans of tuna before marriage).

I'll write more on this fascinating subject.

What Does the Term "Marital Standard of Living (MSL)" Mean?

Thurman Arnold, III, C.F.L.S. — Mon, 27 Feb 2012 16:23:00 GMT

Q. What is meant by the words "marital standard of living" in dissolution actions?

A. In California lawyers in high earner dissolution cases often speak of Marital Standard of Living (MSOL or MSL). This is often the case for our clients in Palm Springs, Indian Wells, and Palm Desert. It is a very important element to determining spousal support/alimony obligations and entitlements. It works to place both a floor and a ceiling on the range of potential alimony awards.

When a court orders permanent spousal support in favor of an unemployed, home-making, or lower earner spouse or domestic partner it must base its decision in part upon the standard of living achieved during the marriage or partnership. This legislative admonition is referenced in California Family Code section 4330 and section 4320. The MSL is not the final factor, but it is the starting point. It references the general station in life the parties enjoyed during their marriage, along with all surrounding circumstances including vacations and other quality of life indicators. The court must also consider all the other factors set forth in Family Code section 4320 as well. These are discussed in my various websites, and you might want to try our search engine at the upper right because it includes all my writings on any subject I have written about and you can peruse my other articles easily.

The MSOL is not a mathematical formula, but must be determined for each couple. It can be determined based upon the parties' average income over time - and also from what they spent. But it can include any factor specific to any couple's living history.

Courts have broad discretion to award spousal support in greater or lesser sums than what the supported spouse requires to maintain the marital standard of living - which is why it is really important to hire a competent matrimonial lawyer. Endless variations are possible, but only if your attorney really understands how to describe them, and also understands how to utilize the other 4320 factors and present them to the court - sometimes with expert testimony or evidence. Frankly this is not likely to happen without an attorney who exclusively practices family law and has been at it for a substantial while.

A spouse or domestic partner's high income will be considered in terms of their ability to pay support, but the need of the supported spouse will also be evaluated. Issues arise when people live beyond their means - for instance, where a high earner is able to live a higher standard of living than the marital standard of living.

It is often the case with older couples that the family's standard of living was low when compared to the income stream that passed through during the marriage - perhaps the parties did not spend, but saved.

In such cases the court may set spousal support at an amount higher than the parties' actual standard of living. If the parties saved and invested and developed assets during the marriage, but spent little on living expenses, the supported spouse may be entitled to continue that savings by being supplemented with alimony.

What Happens If I Place My Wife's Name On Title to My Home and We Later Divorce?

Thurman Arnold — Mon, 27 Feb 2012 01:40:00 GMT

Q. If I put my wife on TITLE to my RESIDENCE does she get half if we DIVORCE?

A. If you place your wife on title for any reason you run the risk that in the event of later divorce she will have some claim to the house, but not necessarily half.

Your question deals with the law of "transmutations"; a transmutation is a change in the character of property from separate to community property, or could include a change from community to separate property. These are complicated issues and very fact specific, so each situation (even each transaction) must be analyzed separately.

Whenever you change the form of title to a type of property that has titles (i.e., real property, automobiles, bank accounts) to add a person you run the risk of inadvertently transmuting the character of the property. People rarely intend this, but it happens quite commonly.

However, when an interspousal transfer unfairly advantages one spouse, there is a presumption that the transaction was induced by undue influence; however, this presumption may not apply if both parties ertr advantaged by the transaction. Marriage of Burkle (2006) 139 Cal.App.4th 712. It is the burden of proof of the party who was advantaged to show that the disadvantaged spouse's action was freely and voluntarily made, with full knowledge of all the facts, and with a complete understanding of the effect of the transaction. Marriage of Matthews (2005) 133 Cal.App.4th 624.

Where a valid transmutation occurs (and deed transfers are presumptively valid), there still remains what is known as a Family Code section 2640 tracing right of reimbursement. This is a continuing separate property interest that belongs to you - assuming you do not and did not waive that reimbursement in clear separate writing. This is the separate property equity that exists as of the date of the new deed, into the future.

So, assuming on the date of marriage you place the home you received in your last divorce (btw, why are you getting remarried without a premarital agreement?) into joint tenancy with wife number 2. On that date the equity in that home is 100% yours and there is no Moore-Marsden effect to consider. Say you have $100,000 in equity.

In this simple example, absent a new transaction or a later refinance, you will continue to have a $100,000 separate property reimbursement claim in your home for all time, and in the event of a subsequent divorce, assuming at the time of the divorce sufficient evidence exists that allows you to prove the $100,000. That will typically simply consist of your mortgage balance on that date, and your testimony as to the fair market value of the property on that date (or an expert's opinion of value), with the difference being your 2640 reimbursement. You do not receive interest on that, but it does come "off the top" before the remaining equity - which would now be all community, is divided. The difference to note here is that if you had not deeded the property, it would remain your separate property subject to a Moore-Marsden reimbursement to community which usually is going to be smaller than the reverse situation.

To read more about how the law affects division of your home or other property, follow this link.

Mindfully Redefining the Expectations Surrounding Divorce

Thurman Arnold — Sun, 26 Feb 2012 19:13:00 GMT

The Challenge of Seeing Things As They Really Are

Q. What is meant by the concept "redefining the expectations surrounding divorce"?

A. We all have an amazing ability to rewrite history. We often view the circumstances of our marriage quite differently in hindsight from how they originally seemed, and it is natural that our minds invent stories about the other party that color how we approach divorce. But what if you could choose what your divorce and its aftermath might look like? How would you hope to view all 'those wasted years' today, tomorrow, next week, next year, in 10 years, or as you reflect upon your life as you prepare for your own inevitable exit?

We rarely consider these questions with balanced interest. Instead, our minds become stuck on stories that tend to cause our experience in reality to replicate the attitudes in our heads. These stories often just aren't true, or are quite incomplete. This is mindlessness in practice, and it is our default condition.

As with most questions, it is to be expected that we will formulate our answers from the core of our own interests.

If you could set aside your fear and anger, how might you like your divorce to feel for you and for your spouse?

Mindfulness is a great teacher if we can listen, and it may offer a framework for understanding why we become conflicted. It teaches us to pay attention to the thoughts and attitudes that arise within us in order to test whether they are true - and not to judge or suppress our "answers". It can be illuminating to notice how wounded answers operate to control the course of our lives.

Our views about what is happening to us are always linked to how our self-centered "me" feels. This egoic personality is sometimes called the "Little Me". Our worse fantasies, most selfish or destructive thoughts, and our day to day self centeredness all derive from a sense of a wounded Little Me.

The Little Me is our egoic conditioning. Recognizing the "Little Me" for what it is is an amazing accomplishment. It opens the door to recognizing something infinitely larger - that which notices the Little Me. Spiritual philosphers call this the "Inner Guru." Our highest aspirations, and our most transcendent moments, resonate within and are observed and recognized by our Inner Guru. We are all familiar with both characters, whatever we name them.

"Little Me" is the character that we think we are. It is the filter that judges our selves and everyone else, the one with the committe and all its opinions. It shifts and inverts from moment to moment. Little Me wants above all to be entertained, and it attaches to material things and romantic imagery. It is the part of you that is always in argument with what is happening.

Our Little Me is not awake. Sure, it moves, it bustles around, it can seem quite energetic - hell, it bounces off the walls all the time. But that is not a state of Awakeness. The Little Me might beg to differ, but let it beg. No answer or response will satisfy it anyway. The Little Me is our 2 year old personality structure at an arrested emotional stage of development. It can be quite beguiling like any child, dripping with sweetness and unction one moment and the most terrible tyrant the next. Little Me is a chameleon, and getting rid of the Little Me is like trying to rid yourself of your shadow. Better to know that is not what is going to happen, and if you go to war with your Little Me it is just the Little Me pretending to battle itself.

Your Inner Guru is something quite larger. It is wise enough to be all embracing and all inclusive, and it loves the Little Me with uncompromising compassion. To the Little Me the Inner Guru seems to fly on gossamer wings, and seems tied to some other inaccesible dimension. That perception is not true.

Mindfulness is nothing more than the aliveness of the Inner Guru expressing its aliveness in any given moment. It is allowing the natural spontaneous truth of life to express itself. It seems quite a task to remember that. This sense of difficulty is natural, but it is simply a mistaken apprehension.

So, what might one do?

To find an answer, it is important to consider who or what is asking the question. If the aspect of ourselves that we may call Little Me is asking the question, buckle up.

It is through mindfulness whether as a meditation practice, gentle self-inquiry, or just a gradual flowering of recognition and intention, that we allow the Inner Guru to address the question.

We might ask the question differently: How would my Inner Guru wish this divorce of mine to feel, to me and all other beings?

There is a transformative power in this question. Do you notice that when the Little Me drops out of the equation, when "I" am not the central questioner, previously unnoticed possibilities pop into view?

We need to begin somewhere, and a list is as good a place as any. When we connect to a heartfelt place of best intentions, and examine those intentions in a committed manner, certain themes arise that we did not before consciously consider and could not otherwise organize. This allows us to peer deeper than when stuck in the autopilot of trance conditioning, as we often are. It doesn't matter whether you list what you don't want or what you do want, but try listing it from both directions. Pick which ever is easiest for you to begin, and grab a sheet of paper or better yet a journal. Do any of these resonate?

    I don't want to cause pain to my loved ones.

    I don't want my children to suffer.

    I don't want to repeat my own parent's experience.

    I don't want to be angry.

    I don't want to be scared.

    I am tired of blame.

    I am tired of shame.

    I don't even want to cause pain for myself.

    I don't want to be stuck.

    I don't want to be self-centered all the time.

    I don't want to impose my story of suffering on those around me.

    I don't want to feel vulnerable all the time.

    I don't want to feel a victim.

    I don't want to be sad.

    I don't want to feel physically unwell.

    I don't want to react all the time.

    I don't want to need to apologize because of what I've said or done.

    I don't want ______

Do this exercise with gentle humor and patient kindness and understand what is written above may be a long list for you, or maybe a short list. The key is keep listing until you've exhausted the thoughts and feelings that arise and wish to express themselves. You can also run another sheet at the same time, or wait until you are finished with your first one, but however you approach the list, each item will suggest its opposite.

    I want to love.

    I want to be loved.

    I want peace.

    I want to be a positive force.

    I want to be awake.

    I want to be mindful.

    I want to forgive.

    I want to be forgiven.

    I want to get on with my life.

    I want _______.

Now, when you are done with both lists, ask yourself this question: Is the best of what I want for myself, the same as what I want for all others? Is the best of what I want, what I want for my divorce? Is it what I want for my spouse or partner? Is is possible that they would want the same things for themselves and for me? And even if they don't want the same things for me, does that matter - for me?

Finally, write down what resonated for you in making these lists. Entitle it "Mission Statement" or something else. And consider making a prayer, or whatever you wish to call it, that these goals remain your highest intention and that you may remind mindful of them, in pursuing them.

Then, congratulate yourself. You have just examined more than most people ever consider! You have glimpsed deep mindfulness, and have a sense what it looks like and where to access it. You have expressed an intention to be present and well, and so begun a journey to healing. You have realized that just because you have a story of who did what to whom, that doesn't make the story true - indeed, you now have a reason to be immediately suspicious of such stories.

And you have arrived at the door to a way of being that may guide and carry you safely through the journey, all the way home.

What Happens In Divorce When One Spouse Owned A Residence At the Date of Marriage?

Thurman Arnold — Thu, 23 Feb 2012 22:28:00 GMT

Q. I am not on title to a home my husband owned before we married but we paid the mortgage for 7 years. If we divorce, do I have any interest in it?

A. There is an important concept under California Law involving what is generally known as "Moore-Marsden apportionment." It applies to a common situation where a home is acquired before marriage, title is in the name of the acquiring spouse alone, and during the marriage and up to separation or divorce filing the mortgage is paid down with community funds. Please note - this concept applies whether you went on title or not after the marriage, but may be your only remedy if you did not.

Where this occurs the community estate acquires a legal, reimbursable, interest in what would be otherwise be entirely the separate property of the titled spouse IF community funds (earnings of either spouse, for instance, or both) are used to make the mortgage payments.The idea is that joint funds are being used to benefit a separate property interest, i.e., the separate property equity. Many legal scholars (and the courts) consider this to be a breach of fiduciary duty - that whenever one or the other spouse's separate property interests are increased with community funds, or community time, skill, and efforts of either spouse during the marriage, the community is disadvantaged and that this disadvantage violates the statutory duties of the parties that place the party's joint interests above their separate interests.

The formula for apportionment is that the community acquires a pro tanto (dollar for dollar) interest in the ratio that principal payments on the purchase price made with community property bear to payments made with separate property. Hence, any increase in value (appreciation) must be apportioned between the separate property and the community property estates upon separation or dissolution.

Note that this only applies to separate property owned prior to marriage with a mortgage that was paid during marriage where an equity position has been increased. For instance, if a mortgage exists but it is an interest only mortgage, payments during marriage do not reduce principal. Therefore, the separate interest of the owner spouse is not improved because the debt remains exactly the same. As a general rule, the amounts paid for interest, taxes, and insurance on the house are disregarded since that portion does not to contribute to the capital investment.

Also, it assumes that the mortgage was paid with joint (community) funds, or that the funds used were so commingled that the "separatizer" is unable to trace them to a separate property source (meaning they don't have records showing where each payment was made or are unable to provide a recapitalization of the source of the funds). If your husband reduced the mortgage throughout the marriage but he did it with an account that was his separate property then the community would not have this reimbursement right.

The Moore Marsden formula requires a number of bits of information at important points in time to be properly calculated. These include:

what was the original purchase price
what was the original mortgage and downpayment
what was the property worth at the date of marriage (DOM)
what was owed to the lender at that time
what was the property worth at the date of separation
what was owed at that time
what is the property worth on the date of the calculation (i.e., the trial date) and
what is the principal pay-off at that time?

This is an example of why family law and divorce cases can become complicated and expensive. Obtaining these records, particularly if you are the 'out spouse' can be difficult, and sometimes a forensic accountant is the best option for calculating these apportionments. You need an experienced family law attorney for these types of matters.

In your case, with a lengthy marriage, you have significant Moore-Marsden entitlements. However, these may be adversely affected by the crash in the real estate market since so much equity has evaporated. In any event, we need the numbers outlined above in order to calculate the reimbursement due to the community.