California Family Law Attorney
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November 11, 2010
  Is It Possible to Get My Ex's TAX RETURNS Without Any MOTION to MODIFY Pending Between Us?
Posted By Thurman Arnold

Q. We were divorced three years ago and I haven't taken my ex-husband back to Court. I think he is earning a lot more now. Is there anything I can do to find out what his situation is short of actually filing a modification motion?


Absolutely. There is a little known trick for obtaining useful information, possibly with a minimum of trouble, once each year. This is the Request for a completed Income and Expense Declaration (Form FL-150) pursuant to Family Code section 3664.

When there is no motion or OSC pending for a modification, termination, or set aside of earlier support orders you are limited in terms of your discovery rights in California - assuming the proceedings were completed in the sense that nothing is pending or presently calendared (if there is no final judgment in a divorce, partnership dissolution, or paternity action then you are entitled to continue to utilize discovery and what I say here doesn't apply). You cannot, for instance, schedule a deposition or send out interrogatories or even subpoena records, at least not properly. I have seen lawyers send subpoenas when nothing was pending and if I had done nothing they probably would have gotten the information requested since the receiving party doesn't know the status of the case, but when I objected they backed off and canceled the subpoenas at once because it was abuse of process to do what they were attempting.

But in your case you only have the option provided for by FC section 3664. This entitles you to send out on an approved FL-396 Request for Production of An Income and Expense Declaration After Judgment a request no more than once each year (Family Code section 3663) for the other party to produce for you an updated Income and Expense Declaration.

Importantly, the responding party is required to attach to it their last year's federal and state personal income tax returns. (Family Code section 3665).

If they do not respond to you within 35 days, or if there information is incomplete as to wages, you may serve Judicial Council Form Request FL-397 upon their employer per Family Code section 3664(b) and (c). Unfortunately, compliance by the employer is voluntary and so this provision lacks teeth. Yet if you later do file a motion and can show a history of noncompliance by the employer and/or the other party you are more likely to recover attorney fees or sanctions as well as prove that the other party is being evasive or possibly dishonest and this may help you not only to carry your burden of proof and obtain a modification but it may impact how strongly the court acts towards your ex. In the case of family businesses where there is a lack of cooperation it helps the Court to see that you are being stymied.

Section 3664 is also a very useful tool for parties who are trying to modify or terminate support payments that they have been ordered to make. If you are a payor former spouse or domestic partner and want to terminate the other party's support rights, you would begin by sending them the Request. Again, if they fail to cooperate and comply it makes them look like they are hiding something.

Finally, Family Code section 3667 entitles you to recover certain sanctions where the Income and Expense declaration wasn't provided you, was incomplete, or lacked the required tax return attachments. While you cannot recover attorney fees if you don't actually have an attorney (and this section doesn't provide for them anyway), you can recover deposition and related costs, like for subpoenaed records (which can be significant charges), even where you are a self-represented party.

Good luck!



Thurman W. Arnold III,

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September 25, 2010
  How Do I Use a MARITAL BALANCE SHEET to Figure Out How to Best DIVIDE OUR PROPERTY?
Posted By Thurman Arnold

Q. I am considering filing for divorce, and am beginning to pencil out what the division of our assets and debts might look like. What is a good way to go about this?


A. Prepare a Marital Balance Sheet. This will give you an idea of how your property could be divided in a dissolution or legal separation, and to allow you to try out different combinations of division.

Its usefulness will depend the accuracy of your assumptions. Often times more information or outside opinions are required to do this with any degree of correctness. Sometimes the outside opinion that is required is the judge's decision on a disputed issue. Marital balance sheets can range from being exquisitely simple to exceedingly complex. Remember that it is the duty of the Court to divide the community estate equally - this division means an equal division in dollars, not that you divide the family residence with a chain saw.

The format itself is simple. You want two columns, one for you and one for your partner or spouse. You will categorize, value, and assign the community property between each of you. Some categories might be listed on a different balance sheet, like pensions.

Here are some suggestions for drafting a Marital Balance Sheet you can work with.

  • Use net value numbers, i.e., equity in homes and automobiles. Secured debt is subtracted from fair market value - it is not divided as unsecured debt would be. If you take the house, you take 100% of the mortgage.
  • Be sure to use realistic fair market value numbers. Don't make your final decisions based on Zillow. If your assumptions are flawed, your balance sheet analysis will be of limited use.
  • Use wholesale Kelly Blue Book values for cars or at least make sure whatever yardstick you use is consistent for both parties.
  • Obtain accurate and current pay-off information as to debts. Typically that will be the value of the debts on the date they are assigned, as adjusted for Epstein Credits.
  • Don't treat apples and oranges as apples. For instance, list pension assets as a class separate from other assets - the present value of IRA's, 401k's, and other defined contribution plans is always different than the present value of a bank account. These pension accounts are not valued in real dollars but must be discounted, and that may require a pension forensic or CPA.
  • Don't include separate property (the other spouse may dispute that characterization). Pure SP doesn't go on the marital balance sheet.
  • Assign the debts, placing those numbers in parentheses to ensure they are subtracted and not added in your running total. Remember that it doesn't matter in whose name a credit card is parked. If a debt was incurred during marriage the general rule as between spouses is that each owes 50-50.
  • Separate property debts don't go onto the balance sheet because they don't get evenly divided and if they were listed you may inadvertently charge yourself for half.
  • Use total values rather than 1/2 community values. These numbers get divided as one of the last steps.
  • Don't include support or support arrears.
  • Include Epstein credits.
  • Calculate and note Watts' and Jeffries' claims
  • List professional practices and businesses but realize you probably have no practical way to put a number on them, would be entirely guessing as to their value, and would probably be wrong anyway. Understand that business are worth more than the sum of their balance sheets or book values.
  • If you share this document with your spouse, be sure to write "Confidential Evidence Code section 1152 Materials" on it, which makes them inadmissible as evidence against you. Otherwise you may find yourself stuck with your preliminary numbers when that is not what you intended.
  • Realize that if you share this document, no matter how preliminary it is, with your spouse you will be creating in them expectations concerning value or division that they may become stuck on.
  • Be careful how you treat negative equity on property. For instance, if you own a car that is worth $15,000 but you owe $25,000 and want that vehicle awarded to you, the other party will not be charged for one-half of the $10,000 in negative equity.
  • Leased vehicles should be identified but have no value. I believe it is a good idea to list everything that you own or owe whether or not it has a value or can be valued at that time, since this list becomes an important road map for you and your lawyer.
  • Make a note of alleged breach of fiduciary duty claims, but don't value them.
  • Don't include your separate property. Include their separate property if you claim it to be all or partly community, but understand those aren't real numbers until a judge rules.
  • Don't leave the document lying around where someone else might find it.
  • If property is held in one spouse's name alone but a mortgage or taxes were paid during marriage, or if it was improved or refinanced during marriage, understand that the community probably has some Moore-Marsden interest in that property but that you will have great difficulty figuring out what that is without expert assistance.
  • Similarly, if one spouse owned property (i.e, real estate) prior to marriage and the other was placed on title during the marriage, note to yourself that the property has community and separate property attributes and understand you will need more information or help to value those competing interests.
  • Make a note of all separate property contributions you made for the acquisition or improvement of any property. These are called Family Code section 2640 reimbursement credits.
  • List all other reimbursements due to the community. For instance, there are many situations where the community property is used to pay one party's separate obligations (i.e., child support from a previous marriage) and if you know to assert the claim the community may be entitled to a reimbursement.
  • List consumer goods like furniture at garage sale prices unless there is something truly special about the items. Nothing is valued at its purchase price or even its replacement cost new.
  • Be sure to include loans from parents, work, or family members that were made during the marriage and assign those that relate to your family or work to you.
  • Make a note of any gifts to one or the other of you alone that were used to purchase or improve community property, whether they were received before or during the marriage.
  • Look at your bank balances at the date of separation and assign those balances appropriately. If your husband emptied the savings account the day before he walked out, list the amount he took under his column.

This is just a starting point and is valuable as a roadmap to get you thinking about what needs to be done to conclude the divorce. Once you discipline yourself to begin to overcome any paralysis you might feel, the marital balance sheet will speak to you about what is important for you, what the issues are, and will give you some idea of what important paperwork you need to obtain to evaluate your interests now or in the future. Get that paperwork at once. You are going to have to do this exercise anyway once a legal action is filed.

This the some of the information that you must provide in your Declarations of Disclosure. It is an efficient idea to use those forms from the beginning. These California Judicial Council Forms include:

Getting started on this early will make any meeting with a family attorney cheaper and far more useful then if you've not even thought about these things.

To the extent you can determine values or ranges of values, add up the net equity in your column for the community property you want or get, and subtract 100% of the debts that are to be assigned to you. Again, chances are there will be categories where you can't put a number on the items. But if you had the numbers, then after totalling the total net to the other party, subtract the two net numbers. One of you will show a higher number. This number will reflect the over-credit amount to that person which needs to be equalized between you. Divide this number by 2, and the person who netted more owes that resulting number to the one who received less. This amount is called an "equalization payment."

This is just one way to do a marital balance sheet. Often times there is no money to pay the equalization payment because all or most of the community is held in the form of personal and real property. An equalization payment is no good to you unless you can collect it. Perhaps you can get a promissory note secured by a deed of trust on the family residence that is awarded to the wife. That is usually a bad idea - you don't want to become a bank, with all the attendant risks of default and depreciation.

Another option once you have these numbers are pencilled out is to go back and rethink how the property was divided. Maybe you should take those Peter Max lithographs after all. Maybe the residence or that vacant lot must be sold to raise money for the equalization payment. It is frequently seen in Stipulated Judgments or Marital Termination Agreements. It is not common in litigated judgments because courts generally must equalize the division at the time of trial, not in the future. This is why property may be ordered sold to ensure an equal, current division of the estate.

If defined contribution pension plans exist these are a good place to find the money to assure the equalization payment is actually honored. But a 401k with a net asset value of $100,000 might only be worth $80,000 after penalties and ordinary income taxes are charged on it. Pensions can be divided without tax consequences (QDRO's) but if you are owed a $100,000 equalization, creating a new pension in your name and transferring $100,000 from the other party's interest in it is like being handed a check for $80,000.

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


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April 13, 2010
  How Do I Defend a Request by My (Former) Spouse to SET ASIDE our Support Orders?
Posted By Thurman Arnold

Q. My former spouse claims that I lied on my Income and Expense Declaration and has filed a motion to set aside that order, seeking more money. How do I oppose this?


A. This type of support modification request typically occurs in two situations: Where the other party alleges that you aren't paying enough because you understated your income, or where you wound up paying too much because the other party lied in their Income and Expense Declaration [FL-150], or some other sworn pleading filed with the Court.

If you are defending a support set aside motion, here are some suggestions beyond simply denying that you lied about anything, particularly if it does appear that your numbers were to any extent questionable or inaccurate.

First, remember that the moving party has the burden of introducing evidence that establishes more than that the support order was a) inequitable when made, or b) that subsequent circumstances caused the the supported ordered to be inadequate or excessive. Family Code section 3692. Argue that, at best, that is all they have shown and by itself that is not enough.

Second, the time for filing a set aside request is strictly limited by statute. An action based upon fraud or perjury must be brought within six months after the date on which the complaining party discovered or should reasonably have discovered the fraud or perjury. Family Code section 3691. Be sure to assert all time based defenses, and even if the request was technically within the permitted time frame, nonetheless urge that the other party unreasonably delayed filing their motion, and that this caused you specific detriment (i.e., that you took some action in reliance upon the amount of the support award, like signing a lease agreement for an apartment you otherwise could not have afforded).

Look to see whether the party seeking the set-aside ever said something in their court filings that might bite them now, and draw the court's attention to them.

On April 8, 2010, the case of In re Marriage of Zimmerman (2010) 183 Cal.App.4th 900 was decided. In Zimmerman a mother filed a motion to have all child support recalculated going back five years, on the ground that the father had committed fraud and perjury by concealing income in his earlier FL-150's, which the court had then relied upon.

However, because she had - within those five years - filed with the Court a declaration making reference to these very same claims, the trial court properly found that more than six months had passed since she had discovered, or reasonably should have discovered, that she fraud and perjury claim existed and so her claim was time-barred.

This outcome is important to keep in mind, since family law litigants are frequently claiming in their papers that the other side is lying or concealing information, but often cannot prove it yet. Zimmerman cautions us that it is an unwise practice to mention these claims prematurely (beyond at the initial hearing), because if such statements appear in the record the defending party can seize upon them to point out that "you see, she knew she had this claim two years ago."

It is always unwise to make statements to the Court about dishonest conduct on the part of the other side where there is no solid proof, yet, in any event, because unsubstantiated personal attacks don't sit well with family law judges.

For more articles discussing how to set-aside support orders in custody and divorce cases, join us here!

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Thurman W. Arnold III


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April 13, 2010
  What Are My Rights When I Believe My Spouse Committed Fraud in Their Income & Expense Statement?
Posted By Thurman Arnold

Q. What remedies do you have if you believe your spouse concealed income or lied about assets in their Income and Expense Declaration [Form FL-150]?


What If He Lied to You and the Court In His Income Statement?

The FL-150 Income and Expense Declaration must be filed by each party in every California family law case involving requests for money (whether support or attorney fees), and it must accompany the FL-142 Schedule of Assets and Debts that is part of the Preliminary Declaration of Disclosure that must be exchanged in all action for dissolution of marriage or domestic partnership, legal separation, and annulment. In addition, Rule of Court 5.427 requires these Income and Expense Declarations to be current, which means they need to be updated so that they are, generally speaking, not more than 90 days stale.

Family Code section 2100 states the public policy of the State in requiring accurate income and expense disclosures. It is a good thing to remind your judge about, since it underscores that providing false information is not to be dismissed lightly. Also be sure to read FC section 2102(a)(1), which discusses fiduciary duties and income disclosures specifically.

Family Code section 3691 sets for the grounds and time limits for filing a Motion or OSC to set aside and correct an order for child support or spousal support which was obtained by your present or former spouse, or the other parent. You need to be very careful with these time limits, because they are shorter than other set aside remedies contained in the Family Code (for instance, Family Code section 2122 dealing with property settlements and judgments). It is important get the applicable code sections right, because different time limits apply for seeking relief from the Court.


What Are Grounds for Setting Aside a Support Order?

Family Code section 3691 lists the grounds for a support set aside as a) actual fraud; b) perjury; and c) lack of notice.

a) Fraud - this occurs when 1) the defrauded party is kept in ignorance or 2) in some manner other than their own lack of care or attention was fraudulently prevented from fully participating in the proceeding. This set aside ground is different from perjury. It applies to a situation, for instance, where you were told that your spouse was not seeking certain orders and so you failed to attend to the hearing only to learn later that in your absence much broader relief was requested than represented. It also applies any time information is provided by the other side that was materially false and when you relied on that false information not knowing that it was false (for instance, a party fails to disclose another job, much higher earnings, or property).

b) Perjury - where the other side has simply lied outright under oath in their Income and Expense Declaration or in the supporting verified application. Be sure to allege fraud as well since a perjurious statement is often a fraud.

c) Lack of Notice - this generally applies to situations where the other side claims you received notice of the proceedings but in fact you were not served. This can be difficult to prove where a proof of service was filed with the Court which itself is perjurious (i.e., your husband's best friend he claims he hand delivered to the documents to you on a day you were in New York).

This section applies equally to orders which were way too high based upon any of the above grounds as those that were way too low.

Family Code section 3691 will not help you in situations addressed in Family Code section 3692, where your support order was merely unfair or subsequent circumstances caused the order to be excessive or inadequate. Section 3692 is your first argument in defending a support order set aside motion.

In any of the above cases, you must file your motion within six months of the time you discovered or reasonably should have discovered the fraud, perjury, or reasonably adequate notice of the order.

For more information about setting aside support orders because of lies, visit us here.

If you want to learn about your set aside rights generally, click here!

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Thurman W. Arnold, III


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December 28, 2009
  How is TEMPORARY SPOUSAL SUPPORT Determined in California?
Posted By Thurman Arnold

Q. How is temporary spousal support calculated in California?


Temporary "Pendente Lite" Spousal Support Awards in CA Divorce

In order to be entitled to spousal support, parties must be married or be registered domestic partners. Spousal support (which is not usually referred to as "alimony" in California) is available in dissolution proceedings, actions for legal separation, and in connection with domestic violence applications.

Spousal support orders may be temporary, or they be what is called permanent. Different rules apply to how temporary support is figured than to 'judgment' or long-term support. I address permanent spousal support separately. Know that judgment spousal support is rarely truly 'permanent', except in very lengthy marriages.

Temporary spousal support is designed to preserve the status quo pending a final judgment. Family Code section 3600 provides that during the pendency for dissolution of marriage or legal separation or in any proceeding where there is at issue the support of a minor child, the court may order the husband or wife to pay any amount that is necessary for the support of the husband and wife (subject to limitations contained in FC section 4320 and FC section 4325). Again, parties dissolving domestic partnerships may also be awarded "partner" support and the price of equality in recognizing same-sex marriages and domestic partnerships includes being subject to the same rules concerning support that have long been assumed to be due for opposite gendered couples. I have found with some gay partners that this comes as a real shock.


Temporary Guideline Spousal Support Programs

Temporary spousal support generally has nothing to do with the length of the marriage (except possibly with extremely short periods between the date of marriage and physical separation). A party seeking spousal support isn't deprived on the right to receive support even if they have income - the question is the relative income circumstances of the two parties. The greater the difference, the higher the support.

Most California counties have formulas that determine temporary spousal support, but the two most important are Santa Clara and Alameda counties. Essentially the spousal support formula for Santa Clara County - which is the dominant one - is as follows: From any amount which is not allocated to child support, take 40% from the net income of the payor spouse, less 50% from the net income of the recipient spouse. The resulting number is the temporary spousal support. You do not need to have children to be entitled to receive spousal support.

As a practical matter, courts almost universally use one of two computer programs that generate these numbers: Either the Dissomaster or Xspouse. The Indio courts use the Xspouse and the Santa Clara guidelines.

Into one of these programs are inputted the respective gross incomes of the parties. If there are children of the parties, the custodial timeshare in percentages is inputted (because only a party who has physical custody for more than 50% of the year can claim the tax benefits of HH/MLA or head of household status, the programs require one to be considered to have 51% even in true joint custody arrangements).

Only certain expenses matter for purposes of temporary support in California. What doesn't matter much at the temporary phase are most personal expenses (like credit card bills, rent and other costs of living). This effectively ignores the entire debt structure of the parties at time of separation. Health insurance, union dues, and mandatory contributions to retirement (i.e., typically not IRA contributions), and obligations existing to other minor children living in one party's home, or as to which an actual court order requires they make support payments, are also entered. The support program 'tax effects' these numbers and figures out the net incomes of the parties. Mortgage payments are relevant to the extent of tax write-offs that increase net after tax cash flow. The support programs render a number that tells the Court how much the higher earning spouse must pay for purposes of the court order. Most judges will not deviate from that amount. Expenses that judges ignore for support purposes, and the parties' marital standard of living, can be highly relevant to requests for attorney fees that commonly accompany support applications, however. If you are opposing a support and attorney fee request, be sure to point out what is left for you to pay your own living expenses - especially if a fee order is also issued. Depending upon all the facts, you might gain some sympathy leverage.


What is the Effective Date for Support Commencement?

Since the court determines the support obligation some weeks after a request for support is made (by way of filing a 'Request for Order), family law bench officers usually make the support order retroactive to the date of the filing for the request. Most courts order support payable one-half on the first and fifteenth of the month. For this reason, if you file for support on the 5th day of the month, the court will not make support retroactive to the 1st but will start of the obligation on the 15th day of the month. Get your application filed before the next 1st or 15th.

If applicable, be sure to ask the court to credit the payor spouse voluntary support payments made to, or for the direct benefit of, the other party made since the support request was filed - if this claim for set-off is disputed, specifically ask the court to reserve jurisdiction to time of trial so that your right to a credit or reimbursement gets decided later, or it may be lost or waived.

This might sound like temporary spousal support is easy to fix, and who needs a lawyer? This is not at all the case. The final support numbers depend upon how much income the Court is attributing to each party. Each is required to submit before the hearing an FL-150 Income and Expense Declaration. While the support amounts are uniform and predictable once the income numbers are determined and inputted, there is huge court discretion and variability in fixing the income numbers themselves. You can really hurt yourself financially if you don't understand the twists and turns.

For instance: A husband's (and wife's) income numbers are usually but not always based upon historical earnings, and the California judicial council form (FL-150) requires both to set forth their total gross for the past 12 months and also the past month. The legal assumption is that historical earnings are a reliable guide to future earnings, but this may not be at all true. Especially in today's economy, historical earnings may not be indicative of what the income stream will be going forward. This information needs to be credibly presented to the Court.

In cases where one party is a self-employed spouse, their net pre-tax earnings must be determined after deducting business expenses. This is a common and complex area of dispute, because what is deductible for purposes of Schedule C accompanying a tax return according to the federal government is in no way binding upon California courts for purposes of figuring support. If somebody works from home and charges part of the mortgage expense as a business deduction, that expense may be added back into the income stream as being available for support. You may cheat the government, or have otherwise righteous deductions, but discover that your local family court judge views it differently.


Imputed Income Issues

Another support battleground involves imputed income. What if one party refuses to work, or insists on working at a lower paying job than what they might attain? Perhaps a support recipient believes they will get more money from their spouse if they have no job, but if they tried to get one they could? What if one party claims that they aren't working because no (suitable) jobs are available? Imputing income cuts both ways, and can be an extremely sophisticated legal and evidentiary question. You will be sorely challenged to represent yourself. Likewise, commission and bonus income present their own unique problems. Another day, a few more Blogs! Check our on-board search engine for later dated tips, as these are topics I will cover.

Incidentally, while only temporary alimony is calculated using the guideline formula in this way, child support is always figured in this manner regardless of whether there is a spousal support obligation.

Finally, if you are voluntarily supporting your spouse following a separation, you MUST obtain a court order (or court filed stipulation) for support if you hope to deduct what you have paid on your separate income tax return! But, if you and your spouse agree to file jointly because this is, on balance, more tax favorable to you then know that you cannot claim the support you paid as tax deductible in that return. I have met so many payor spouses who went for years following physical separation without thinking to themselves affirmatively seek a court to render a support order. It is probably obvious that there needs to be an underlying disso or legal separation pending. If your marriage or RDP is over but you hunker down in ambivalent limbo, you will harm yourself in terms of money and future financial security.

Conversely, if you are receiving voluntary support from a separated spouse, in some situations you may net far more money if you let that limbo grind on forever - but there may be countervailing factors as to other aspects of your case that outweigh such potential benefits. The bottom line is that you are likely being quite foolish by failing to at least buy an hour of an experienced family lawyer's time, and I am regularly amazed by how casually many people behave in this regard. Denial may be a river in Egypt, but it can drown you nonetheless!

Author: Thurman W. Arnold, III

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