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Recent Posts in Judgments Category
| October 11, 2010 |
| What does "COMMUNITY PROPERTY WITH RIGHT OF SURVIVORSHIP" Mean? |
| Posted By Thurman Arnold |
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Q. I am considering a divorce. I have found the deed to our home, and I see that the grant deed by which we took title is held like this "to Jim ... and Mary ..., husband and wife, as Community Property, with Right of Survivorship." What does this mean for me?
A. There are several very important consequences that flow from this language. The way is which title is held (or "form of title") is also called "vesting." Everything I say here applies to title for any form of property - bank or brokerage accounts, for instance, as well as any kind of real estate and the types of personal property for which we use title documents.
First, a "right of survivorship" means that if one party dies - but only before a final judgment of termination of the marriage of domestic partnership, or where a termination of marital status or partnership status occurs before the rest of the case is resolved in judgment form, the party that survives them inherits 100% of the dying party's share of the community property. It does not matter that there exist a Will or Estate document that purports to create a different transfer upon death. Where a right of survivorship exists there is no need to probate an estate in order to obtain full title - all that is required is that a Affidavit of Death of Joint Tenant be recorded with the County Recorder for the County where the real property is located. A Death Certificate must be attached to it. The transfer is then complete.
For other forms of property, as with jointly held bank accounts, the same results occur. However instead of recording an Affidavit of Death with the County Recorder's Office, a Certified Copy of the Death Certificate is simply provided to the banking institution. As a practical matter vehicle titles are different in the sense (a) they are filed with any DMV office in California and (b) the title language rarely references "community property" or 'rights of survivorship', and instead titles the property to Jim "and" "or" Mary. I will have to discuss the rules relating to inheritances and surviving widows and widowers in a different blog.
Second, if a party dies after a Final Judgment dissolving a marriage or domestic partnership, or after a "status termination" before final judgment, but title to the property has never been changed for whatever reason then there is no automatic right of survivorship - in legal effect, the survivorship rights were terminated (severed) upon the by operation of law as a consequence of the Status Termination.
Likewise, if a party to a divorce proceeding dies before the termination of status then the survivorship right controls (see below). Since people don't expect this, something lawyers call a "Blair warning" based upon a particular appellate decision is set forth in the Family Law Summons Form FL-110 that no one ever seems to actually read (hopefully your lawyer told you about it).
This is one reason by marital bifurcations can have unforseen consequences and should be taken seriously when another spouse in the course of a divorce seeks to terminate status before the entire case is resolved by Final Judgment.
Third, in California when property is vested in both parties as "CP with right of survivorship" it is the equivalent of a "joint tenancy." All the same rules apply. Thus, what we are speaking to applies whether the "CP with right of survivorship" language was used for more common "to Jim and Mary as Joint Tenants is used."
Fourth, there does not need to be any reference to whether the parties are "husband and wife" for these rules to apply. Non-married people can be joint tenants as to any form of real (land) or personal property and the death of one vests the remaining title in the other - however, since there will be no termination of marital status since there is no marriage (assuming no domestic partnership either), there is only one way to destroy the right of survivorship: By transferring at least one party's interest as a "joint tenant" to themselves as a "tenant in common". The transfer of tenant in common interests after death follow the rules of testacy (a will exists and directs who gets what) and intestacy (no will exists, and specific legal rules declare who gets one depending upon their familial relationship to the decedent.
Fifth, many lawyers and savvy unrepresented parties will destroy the right of survivorship before the termination of marital status through the method outlined directly above. It only requires one party to accomplish this and it does not require the other party's consent. This has risks, however, since if you destroy a joint tenancy interest prematurely and other spouse dies then you will not inherit their interest but you will of course inherit you own 50%. If you are a child of a parent married to a nonparent or estranged parent and wish to protect your inheritance rights for an ailing father or mother - and they want you to inherit - you should consult a lawyer to assist in destroying the right of survivorship in a legally enforceable way. Note that a termination of this survivorship right violates the automatic temporary restraining orders that arise at the moment that every California dissolution or legal separation proceeding is filed, and that special rules exist for terminating joint tenancies which - if ignored - may not only render the attempt transfer void but further subject you to contempt or other penalties including attorney fees for trying to sever it improperly. Family Code section 2040(b)(c).
Sixth, and most important for the average divorce and in answer to your question, important legal presumptions arise from the Form of Title that have a huge impact on whether property is considered as community or separate. Way simply put, title held as you describe will almost certainly be declared community property for purposes of divorce and each spouse will be entitled to an equal one-half equity interest. However, that outcome does not require the "community property" language to be present in order to apply - any form of title acquired in joint names (tenancies in common, joint tenancies, tenancies by the entirety) triggers the presumption. The relevant Family Code section here is 2581.
Seventh and last for this Blog article, title presumptions are a kind of "super presumption" under the law in the sense that generally in order to rebut (disprove) them, the evidence that you submit must be "clear and convincing." A garden variety presumption in comparison is the rule that property acquired during marriage in whatever form (including title) is presumed to belong to the community. Family Code section 760.
Although FC section 760 doesn't use the word "presumption" that is what it means, and this presumption is the ordinary "by a preponderance of the evidence" presumption - meaning 51% likely or better. Clearing and convincing can be considered as 75% or better - although that is a simplification. Take a look at FC section 2581(a) and (b).
Unfortunately, that is not the end of the analysis because even where property is titled jointly, a party who can trace separate property contributions to its acquisition or certain improvements to it can recover those (Family Code section 2640) if they can follow the money through written records in a legally sufficient way in the event of a divorce. In the event of a death, these reimbursements are extinguished. I discuss "tracings" on this Blog.
Different but similar rules apply to Living Trusts which are beyond the subject of today's Blog. I can see this is a good topic and "I'll be back."
T. Wesley Arnold
http://www.ThurmanArnold.com
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| September 20, 2010 |
| How Can I Be Sure a Court Will Enforce My AGREEMENT Reached With My Spouse OUT OF COURT? |
| Posted By Thurman Arnold |
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Q. My wife and I have reached some agreements about support and property division in our dissolution proceedings. Neither of us have attorneys. I want to write something up that is enforceable. Is there anything I should know?
A. If a case has already been filed and so is "pending", and whether you have attorneys or not, if you and your wife reach an agreement on any issue outside of court and you want to be sure that she can't back out of it before it is signed by a Judge and becomes an order, it is essential that you make reference to California Code of Civil Procedure section 664.6 in any written agreement you prepare.
The terms of all types of agreements that you reach as an incident to pending family law litigation must be independently approved by a court commissioner or judge. Usually these judicial officers just want to know that both parties are in agreement, and will not substitute their opinions for what you've decided, but not always. Particularly where children are involved, judges have an independent obligation to ensure that a child's best interests are protected. Still, judges will not usually reject your agreements - however, if one side backs out before the agreement becomes an order or a judgment, when children are involved a court may be more inclined to refuse to enter the disputed order than it would be if the issues involved property division, debts, or spousal support.
Often times people reach agreements in the hallway outside the courtroom, and then come into court and tell the judge what their agreement is - once that agreement is 'on the record', most courts are going to enforce it. Those agreements often require, however, some further writing like a stipulation and it when the stipulation is presented days or weeks later that the other party may have changed their mind. You now need to enforce that agreement, possibly by a Motion under CCP 664.6.
The problem also arises when cases get settled away from court, during the lunch break, or when the agreement doesn't get put on the record for any number of reasons. Maybe they won't sign some other document that the signed agreement contemplated or obligated them to comply with.
Any agreement you reach with anyone is a contract if certain conditions are met. Unfortunately, failure to abide by such promises may only give rise to a claim for breach of contract under civil law - which is pretty worthless in family law proceedings because you have to file an independent civil action to enforce them, which takes months or years to resolve.
You want enforceable orders. These are something more than mere verbal or written promises, or contracts that haven't ripened into Orders or Judgments.
C.C.P. section 664.6 is extremely important and useful for enforcing written agreements, because it gives the Court the power to enforce the terms of those the agreements as court orders, and to interpret them later if there is disagreement about what was in fact agreed to.
However, in order for 664.6 to work for you, you need to either reference the statute in the document that is signed or in an oral statement on the record. You don't need to mention the section specifically, but I recommend that the following language should appear in the agreement or court transcript: "The parties request the Court to retain jurisdiction to enforce the terms of the settlement agreement per CCP 664.6" is the optimal language to use.
Thurman Arnold
http://www.DesertDivorceandFamilyLawyer.com
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| September 08, 2010 |
| What do I do if my spouse or domestic partner does not complete their DECLARATION OF DISCLOSURE? |
| Posted By Thurman Arnold |
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Q. What do I do if the other party to a divorce or dissolution of domestic partnership proceeding refuses to file their Preliminary Declaration of Disclosure?
A. Declarations of Disclosure must be exchanged in all California proceedings for dissolution of marriage or domestic partnership, for legal separations, and for annulments. They do not need to be served in any other form of family law proceeding.
There are two forms of Declarations of Disclosure: Preliminary Declarations of Disclosure (PDD's) and Final Declarations of Disclosure (FDD's). PDD's are governed by Family Code section 2103 and FC section 2104. FDD's are governed by Family Code section 2105. While parties to a dissolution or legal separation action can waive the exchange of the FDD in writing (although it is not a good idea to do so for reasons discussed in my blogs about fiduciary duties), they cannot waive exchanging the Preliminary Declarations with one exception: Where a dissolution or legal separation judgment is obtained by default, the defaulting party need not provide the PDD to the other party. Family Code section 2110.
Note that I used the words "exchange" and "serve." This is because the forms themselves are not required to be filed with the Court itself - instead, the proof of service upon the other party to the proceeding is what is to be filed. Judicial Council Form FL-141 is what you file with the clerk's office. In practice many people do file the actual schedules with the clerk, which can be a good idea because whether these forms were really exchanged and their contents can have a big impact on future set aside motions.
Here is the California Judicial Council Form FL-140 cover sheet that accompanies the PDD or the FDD. As you can see, it is the same form but different boxes are checked for each. A form FL-150 Income and Expense Declaration must accompany both, in addition to the FL-142 Schedule of Assets and Debts and the FL-160 Property Declaration.
The FDD is supposed to have much more detailed information, including supporting attachments, then is expected in the PDD.
Where the proceedings do not conclude by way of a default Judgment, the problem you have where the other party fails or refuses to exchange at least their PDD and thereupon to file the FL-141 proof of service is that the clerk cannot (a) set the matter for trial or (b) cannot accept for submittal to a judge and later filing a Stipulated Judgment or Marital Termination Agreement. This can make it impossible to conclude a case even by way of settlement where both parties are in perfect agreement, or to obtain a trial date where they are not. One party can hold up the entire process, and it is true that this often happens intentionally.
There is no set time for when parties must complete and exchange their preliminary declarations. Family Code section 2104 states in part that "after or concurrently with service of the petition for dissolution or nullity of marriage or legal separation of the parties, each party shall serve on the other party a preliminary declaration of disclosure...." The problem with this language is the word "after." The expectation is that this will be done within a reasonable time not usually exceeding 60 days from the date a party appears in the action by filing a Petition or a Response, but the statute does not explicitly say that.
The only remedy you have is file a notice of motion (or OSC application) pursuant to Family Code section 2107 asking that the court order the other party to serve their PDD and file the proof of service within a given number of days, not usually exceeding thirty. That motion should request an order that the other party's Petition or Response be stricken if they then fail to do so in a timely manner, so that your matter may effectively proceed by default hearing.
Expect the Court to give the other side one or two opportunities to get themselves into compliance with their fiduciary obligations to provide this exchange.
Thurman W. Arnold III
http://www.DesertDivorceandFamilyLawyer.com
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| May 20, 2010 |
| What are the TAX CONSEQUENCES of CHILD SUPPORT and SPOUSAL SUPPORT? |
| Posted By Thurman Arnold |
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Q. My husband and I have separated, and pretty much agreed to work everything out without going to Court. But I would like some information about how any support we agree upon is taxed.
A. Child support is not taxable to the recipient, nor is it deductible by the payor.
Spousal support, or "alimony" as it is known in some states, is taxable to the recipient and deductible to the payor as long as certain Internal Revenue Code requirements are met. It is important that you obtain a professional explanation and review of these requirements in terms of what you write up in the settlement agreement (the agreement should be filed with the Court), because in some situations people have the highly unpleasant surprise of believing their support agreement passes muster only to find years later that it violated one of the provisions of the IRC - if that happens, the paying spouse may be forced to recapture the deductions in such a way that they are denied by the IRS, which now means not only that the payor owes monies for increased taxes, but they also owe substantial penalties.
To be deductible spousal support must meet the requirements of IRC section 71. These are known as DRTRA (pronounced "durtra"). The general requirements are that the spousal support obligation must be set forth in a written instrument (i.e., a Marital Termination Agreement), the payments must terminate at death, the payments must be in cash (and not as a swap of property, although it is possible to structure a property settlement in periodic payments of spousal support if done properly), and the parties must reside in separate households.
A common mistake includes "front-loading" or concentrating spousal support in the period immediately after divorce. Spousal support awards that decrease by no more than $10,000 per consecutive years are usually safe, but if you are contemplating a progressive decrease in spousal support over some years, you must have this agreement examined by a qualified professional in order to assure you are protected - this could be an accountant.
A common inadvertent mistake is to terminate spousal support on a date coinciding with a child's age of majority (turning 18). The IRS views this as an attempt to classify or hide what is really child support as deductible spousal support, and when this occurs the IRS may declare these payments that you believed were alimony for tax purposes all to have been child support - regardless of your true intentions - and so disallow the deductions from the time of the agreement forward. This will mean that the receiving spousal who has declared them as income may then be entitled to file an amended return to recover the taxes he or she paid. (Incidentally, the way this problem is often brought to the IRS's attention is where the recipient spouse doesn't declare the income, but you declare the deduction). There should be at least a six month differential between the timing of the termination of spousal support and a child's 18th birthday.
These issues can create a real shock, and totally undermine parties' expectations. Please have your settlement agreement reviewed by a competent attorney, and seek advice beyond the scope of this Blog in order to safeguard your interests!
Thurman W. Arnold III
http://www.ThurmanArnold.com
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| March 06, 2010 |
| What does a VOLUNTARY DECLARATION OF PATERNITY (VDOP) do in California? |
| Posted By Thurman Arnold |
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Q. My ex girlfriend gave birth to our son three years ago. I was at the hospital with her, and signed a document they handed me that said I was the father. She and I were never married. We lived together for another year, but then split up. For six months, since I got a new girlfriend, the ex has refused to let me see our son. What can I do?
A. This is a common situation. We always know who the mother of a child is, but it isn't always certain who the father is. The law has developed ways of dealing with this, keeping in mind it is the policy of the state to try to find legal fathers for children so that they, and not the taxpayers, have the burden of supporting that child.
Under the law, when a woman gives birth to a child during a marriage there is a legal presumption that he is the biological father if certain conditions are met. There are a number of statutory ways of establishing parentage since there are a number of different situations where children are conceived and born. Here I only write about situations where there was no marriage.
Establishing you are the father is a precondition to establishing two very important things: Your right to share the custody and visitation of the child and your right to receive child support, or your obligation to pay it.
Family Code section 7611 establishes this presumption where
1) the man "and the child's natural mother are or have been married to each other and the child is born during the marriage, or within 300 days after the marriage is terminated, ... or after a judgment of [legal] separation is entered by a court"; or
2) before the birth, he and the mother attempted to marry each other but where the marriage was for some reason invalid, if the child is born during the attempted marriage or within 300 days after it termination OR if the attempted marriage is invalid without a court order, the child is born within 300 days after the ending of cohabitation; or
3) After the birth, he and the mother marry or attempt to marry each other but the marriage could be declared or is declared invalid, where (a) with the father's consent is named on the birth certificate or (b) he is obligated to support the child under a written voluntary promise or under a court order; or
4) If the man receives the child into his home and openly holds him out as his natural child.
Since you don't mention a marriage or attempted marriage, only the fourth category may apply to you.
Family Code sections 7570 to 7577 govern the establishment of paternity by voluntary declaration. This is called a VDOP. It is really for establishing paternity between a child and unmarried persons.
Since 1995, hospitals in California have been required to have on hand this declaration and informational documents about establishing paternity by this method. Hospitals are required by law to "provide [these documents] to the natural mother and [to] attempt to provide, at the place of birth, to the man identified by the natural mother as the natural father...." Family Code section 7571(a). Family Code section 7572 sets forth what the informational materials of the legal effects of signing the VDOP, including the rights that a father may be assuming and those that he is giving up (like limitations on his ability to dispute parentage later). Hospitals are then required to submit these documents to the California State Department of Child Support Services [DCSS].
Family Code section 7573 provides that, with certain qualifications, once this VDOP has been submitted to DCSS, the VDOP "shall establish paternity of the child and shall have the same force and effect as a judgment for paternity issued by a court.... The voluntary declaration of paternity shall be recognized as a basis for the establishment of an order for child custody, visitation, or child support."
Family Code section 7574 sets forth the minimum requirements of what the VDOP must say to the father.
The VDOP may only be rescinded (reversed) by either parent by filing a recission form with DCSS within 60 days of its date of execution unless a court has already entered orders for support or custody based upon it. Family Code section 7575.
Nonetheless, if a challenge is made within certain time frames to the VDOP after the recission period is passed, Family Code section 7575(b)(1) may permit the Court to set the judgment it has created aside "if the court finds that the conclusions of all the experts based upon the results of genetic tests ... are that the man ... is not the father," UNLESS the court finds that denial of an action to set aside the VDOP is not in the best interest of the child. Take a look at subsection (b)(1) to get a sense of what those considerations include.
Family Code effectively sets a 2 year statute of limitations for filing a motion with a court to set aside the VDOP; otherwise it cannot be set aside. Genetic testing must prove the supposed father is in fact not the bio dad.
In your case the VDOP cannot be set aside since it was signed more than 2 years ago. Based upon it, you are the legal father. If you need the court's assistance to enjoy visitation rights with your son, you need to file and serve a Paternity action, attach the VDOP (which you can get from DCSS), and file a separation OSC or motion to have custody and visitation rights determined. The case then becomes much like any other custody dispute.
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