Attorney Fees for California Family Court Proceedings
Commonly Asked Questions
The problem of finding the funds to retain an attorney is commonly a source of great anxiety for family law litigants. Not having an attorney can have negative life altering economic consequences, particularly in divorce. It certainly has emotional consequences because at times the law seems impossible to decipher and you have no idea how Family Court operates. Without a skilled advocate to guide you, much remains invisible. At times you have so much hurt or anger you feel as though you are shutting down, and that you just can't process all this alone. You know you need a family law attorney, but this takes money. How do you get an attorney retained, and paid through to the conclusion of the proceedings?
- Are you entitled to use your own funds or monies held in joint bank accounts?
- You have access to a credit card - whether in your name, joint names, or the other party's name - can this be utilized?
- Maybe you need to borrow from friends or family to get a lawyer retained, but how do these people get repaid?
- Shouldn't your spouse be paying or contributing towards your fees? Maybe they have significant assets of their own - can this separate property be used to help you be represented?
- What does it take to obtain a court order for attorney fees and what do Judges consider?
- Will a lawyer accept a lien on real estate, or possibly some contingent fee where they are paid from what they recover for you?
The California Family Code directs trial courts to award attorney fees in a number of family law settings, including marital dissolutions, legal separations, support applications, domestic violence proceedings, paternity actions, and custody disputes, among others.
Retaining A Divorce Lawyer Before Or At Case Commencement
Before family law proceedings are actually filed you are entitled to access joint funds, or funds that would be considered as your separate property, to retain a lawyer. Family Code section 1100 provides that "either spouse has the [right to]management and control of the community personal property,..."
Especially where joint bank accounts exist, you might do well to use those funds to hire your attorney before the other party empties the account, since these monies have a habit of disappearing - particularly at the panicky early stages of divorce. However, we do not recommend that people contemplating separation or legal action seize all joint funds. In the midst of the fear that is characteristic of divorce crisis, there is a natural desire to want to grab as much as possible and place it beyond the control of the other party. Generally speaking we view this is a bad idea - the other party will righteously howl that you have 'stolen' all the money, and frankly if you take it all you may be viewed as having done so. How you begin your divorce, and your behavior early on, tends to impact or infect the tone of the proceedings and the attitudes of judges towards you (not to mention triggering reactive responses by the other spouse or domestic partner). Losing the confidence of your Family Court judge may be a kiss of death if you must find yourself later asking him or her for help. Instead we recommend that you do not take control of more than half the liquid funds, or if you are a non-working spouse that you take control of half plus pay your attorney his or her initial retainer from what remains, and leave the balance intact. We strongly urge you to first consult with an attorney before taking any action, and to listen to the advice you receive which will be based upon your particular circumstances. Family law recommendations are not one-size fits all and the information presented here is offered to be educational by introducing you to this new territory, and to offer some practical tips, but the application of what you learn here needs to be filtered according to your situation.
Things change the moment you file for a Dissolution or Legal Separation. Certain "automatic temporary restraining orders" (ATRO's) go into effect that are intended, among other things, to freeze the status quo so that neither side loots the community estate while a case is pending. These apply to you when you sign the Petition for Dissolution (Legal Separation, or Annulment). The restraining orders are set forth in the
Family Law Summons. When the other party is served with the Summons and the Petition, he or she likewise becomes bound by them. It doesn't matter whether either of you actually read them - both parties are deemed by law to know what they say, and violation of ATRO's may form the basis for a contempt of court. However, ATRO's do not exist absent the initiation of divorce proceedings, meaning the restrictions they impose only become effective once an action has begun. Pre-divorce planning is therefore a wise exercise to undertake.
Family Code § 2040 spells out the ATRO restraints. Among them is an injunction that neither spouse or domestic partner may transfer, encumber, conceal, or dispose of any property without the written consent of the other party, or a court order. ATRO's apply to the community property and to what you believe to be your separate property, equally.
FC section 2040(2) contains an exception relating to using community or separate funds, or other personal property (including the other party's separate assets or credit), for attorney fees. It states: "nothing in this restraining order shall preclude a party from using community property, ..., or the party's own separate property to pay reasonable attorney's fees and costs in order to retain legal counsel in the proceeding." While the exception speaks only in terms of 'retaining' an attorney, as opposed to using such funds to pay ongoing fees after the retainer is used up, many Family Court judges interpret 2040(2) as authorizing the continuing use of community property to pay ongoing fees. However, a strict interpretation of the statute doesn't necessarily support this view.
It is not uncommon to see people misuse this license to access joint funds to pay their attorney. For instance, one party may take money from a joint account and claim that they used it to retain a lawyer but in fact they didn't, or they only used a portion of it but spent the rest elsewhere. The best practice is to draw the funds from the joint account and pay your attorney directly from that account, whether by check or debit card - although there may be reasons why this is a bad idea, as where there is a history of domestic violence and hence a reasonable fear of physical retaliation if your spouse notices the debit from an on-line statement. If you take what you withdraw as cash, you would be well-served to insist on a contemporaneous written receipt from your lawyer showing the monies were actually paid over to establish that your activity did not violate the ATRO's.
There is an obligation to account for all those funds at some point in the future, commonly at the time of trial. You may or may not be charged for these withdrawals on the marital balance sheet when the case concludes, or you may have an obligation downstream to reimburse some or all of them to the other party.
The foregoing analysis also applies to the use of credit, even though Family Code section 2040 doesn't expressly say so. Subsection (2) doesn't prohibit "borrowing" but it does limit a party's ability to "encumber" or "hypothecate" personal or real property without the written consent of the other spouse. Generally those words describe the creation of secured debt instruments - i.e., a trust deed or some other security interest. Often a person may be borrowing on a credit card, or accessing loan funds that are available as part of a LOC (line of credit) on a family home or other asset. It is rare that they are taking out new loans on such property, mainly because lenders won't lend without both spouse's signatures. Certainly there is no prohibition against charging fees against credit in your name. Sometimes one party holds a credit card that is issued in the other's name (where a husband gives wife a card issued to him to use for household expenses), or maybe you are a 'secondary' card holder but the lender/borrower relationship is between the other spouse and a credit card company. You will likely not be considered as having run afoul of ATRO's if you do so, but typically the moment of obligor spouse learns of it he or she will notify the card issuer to reverse the transaction - and that is exactly what will happen.
Use common sense in accessing marital assets or credit in anticipation of divorce. The trap is this: If at some later point based upon your relative financial circumstances you must approach a Family Court judge with your hand out asking for attorney fee orders, the reasonableness of your conduct overall will be discussed. One test of whether your decisions will be viewed favorably or unfavorably is whether they seem objectively fair. People suffering the new reality of the end of relationship tend to have a very difficult time seeing "fairness" except from the perspective of the experience of what is happening to them alone. Expect that the other side will point out any missteps you make to the judge, hoping to bias the Court against you. Don't be or appear greedy, and don't give the opposition what they need!
Attorney Fees During The Proceedings
Maybe you began your case as a self-represented party, but this is not working and you've decided not to continue going it alone. Possibly you've decided that your present attorney is not a good fit for you, so now you have to come up with a second retainer to retain new counsel. The same rules apply to using these funds to retain counsel after the case has been going on awhile as at the inception of the case. But what if you are by then unable to access further joint funds?
If you are self-represented, one option is to file a motion or OSC request under Family Code section 2031 for the fees you need to hire your lawyer. This is a good vehicle to employ where you've selected the legal professional, if that professional is unwilling to substitute into the case or to file a fee application for you without receiving some retainer up front. I recommend that you include in your filing a declaration naming the attorney, setting forth their willingness to undertake your representation and the terms of the engagement, and offering that the amount the Court orders the other party to pay will not pass through your hands but will be turned over directly to that new attorney. Most family law attorneys will provide you with a declaration confirming their availability to come on board, which you should file together with your motion.
A Family Code section 2031 request can even be made orally in open court.
Your ability to retain counsel or to obtain fee awards for existing counsel has improved recently by reason of legislation that became effective January 1, 2011. Judges are now required to consider two new layers in evaluating whether to order one party to contribute attorney fees to the other, or to make money otherwise available for that purpose: Whether there is a "disparity in access to funds to retain counsel" that justifies an order to help the "out" spouse, and a public policy that attorney fees be awarded "early on" in the proceedings to encourage efficient litigation and settlement of these cases.
The chief California statute governing attorney fees in marital or domestic partnership dissolution is Family Code § 2030. That section applies to initial orders for fees, and to later modifications and post-judgment proceedings. Its purpose is to "ensure that each party has access to legal representation to preserve each party's rights by ordering, if necessary based upon the income and needs assessments, one party,..., to pay to the other party, or to the other party's attorney, whatever amount is reasonably necessary for attorney's fees and for the cost of maintaining or defending the proceeding...." Courts are directed to look at the "respective incomes and needs of the parties" and "any factors affecting the parties' respective abilities to pay." They must also consider disparities between the parties' access to resources." If the findings demonstrate disparity in access and ability to pay, the court shall make an order awarding attorney's fees and costs." Section 2030(a)(2).
The 2011 revisions to Family Code section 2032 similarly expand what the Court must consider in making or refusing an attorney fee request. The considerations include "the need for the award to enable each party, to the extent practical, to have sufficient financial resources to present the party's case adequately,..." Section 2032 continues that "[t]he fact that the party requesting an award of attorney's fees and costs has resources from which the party could pay the party's own attorney's fees and costs is not itself a bar to the order that the other party pay part or all of the fees and costs requested." The revisions to section 2032 are quite important because the legislature has declared that the other party's separate property can be accessed to pay your fees. "The court may order payment of an award of attorney's fees and costs from any type of property, whether community or separate, principal or income."
Thus, there are four basic themes that govern whether you are entitled to receive or be required to pay attorney fees. These are: (1) the ability of each party to pay attorney fees to the other party or to their own attorney; (2) the
relative financial needs of each party; (3) relative
disparity of access to funds; and (4)
conduct by either party that justifies awarding attorney fees to sanction bad behavior. In all cases the relative financial circumstances of the parties must be evaluated, which includes looking at what assets each party controls as well as their respective income streams. Even if you have money sufficient to pay an attorney, you are not necessarily required to use or exhaust your resources if circumstances like the relative net worth or income streams of each of you justify a contribution from the other.
When Courts make an award of attorney's fees, the amounts ordered may be ordered payable at once, or over time. If there is sufficient cash assets for the other party to pay the award at once, the order is usually made payable "forthwith." If the fees are coming from the other party's income as opposed to cash sitting in the bank, the Court's order will probably be payable at a fixed monthly rate over time. This is not something that bothers most attorneys. Interest at 10% runs on unpaid attorney fees from the time any payment becomes due and remains unpaid. Where attorney fees are to be paid over time, be sure to ask the Court to include in its order an acceleration clause - these provide that should any one payment be missed or be more than 5 day's late, the balance immediately becomes due.
Attorney Liens: What is a FLARPL?
Attorneys in California (and most states) are not permitted by State Bar ethical rules to accept contingent fee arrangements. So what to do when you have no money, and the Court has refused to issue an attorney fee award for you to retain one, or to pay for these expenses as the proceedings progress? One option is a FLARPL.
A FLARPL is a Family Law Attorney's Real Property Lien. It allows a party, by their attorney, to encumber equity in real estate for fees that are earned or anticipated to be incurred in a proceeding for dissolution of marriage or domestic partnership, legal separation, or annulment. Family Law section 2034 was revised in 2011 to expand the power of courts to approve FLARPL's to ensure that people in complex cases involving substantial issues have access to representation.
FLARPL's are not favored by attorneys. We consider them to be the least attractive means for securing that we will be paid. To be a reliable form of security, the property that the lien is recorded as to must have significant equity.
For information about how family law attorneys customarily fix their rates, and the fee related policies at the Thurman Arnold law firm, please visit us here.
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