Wednesday, October 29, 2008

Modification of Spousal Support

California policy is that spousal support orders should be made in a way that encourages the supported party to become self supporting within a reasonable period of time, and that the failure to make a good faith effort towards self support may be a factor for modifying or altogether terminating support. (See Family Code Section 4320(l) which states that one goal of spousal support is that the supported party shall become self-supporting within a reasonable period of time. And that except in the case of a marriage of long duration - see below- a “reasonable period of time” generally is one-half the length of the marriage).

The standard rule that modifications in support orders may only be granted if there has been a material change of circumstances since the last order was designed to prevent repeated attempts to modify support orders without justification, not to circumvent the goal that supported spouses become self-supporting within a reasonable period of time. (In re Marriage of Schaffer)

California Family Code Section 3651 states that an order for spousal support may not be modified or terminated to the extent that a written agreement, or an oral agreement entered into in open court between the parties, specifically provides that the spousal support is not subject to modification or termination. This statute specifies that a spousal support order may not be modified if the parties agree that the spousal support order may not be changed (either in writing or verbally, in court). Therefore, if there is no agreement amongst the parties that spousal support cannot be modified, it follows that spousal support can be modified.

Family Code Section 4336(a) states that
except on the written agreement of the parties to the contrary or a court order terminating spousal support, the court retains jurisdiction indefinitely in a proceeding for dissolution of marriage or for legal separation of the parties where the marriage is of long duration. This means that if a marriage is considered to be of long duration (generally over 10 years in length), the court retains the jurisdiction to modify the support order.

Paragraph (c) of Section 4336 states that
the court maintains discretion to terminate spousal support (in later proceedings) on a showing of changed circumstances.

Section 4335 of the Family Code limits a court's jurisdiction in spousal support actions as follows: an order for spousal support terminates at the end of the period provided in the order and shall not be extended unless the court retains jurisdiction in the order or under Section 4336. Cases decided under section 4335 clearly state that a court does not maintain jurisdiction to extend spousal support if the period for payment of spousal support has ended, unless the court can do so under section 4336 (or unless the court has reserved that right).

Tuesday, October 28, 2008

Divorce Basics

Many people who are contemplating divorce have basic questions regarding the process. Here is a very brief guide to help you answer some basic questions.

Can either party initiate and get a divorce?
Yes, either party is entitled to a divorce under California law.

What are valid reasons for getting a divorce in California?
California has a no-fault divorce policy. This means that either spouse can request and be granted a divorce based upon the grounds of "irreconcilable differences". "Irreconcilable differences" basically includes anything from "not getting along" to much more serious issues. Therefore, California allows divorce for any reason whatsoever.

Are there any other important requirements in order to get a divorce in California?
At least one party must be a resident of California for six continuous months, and a resident of the county in which the divorce proceeding is filed for three continuous months, prior to filing.

How long does it take to get a divorce in California?
California requires a time period of at least six months before a divorce can be finalized. This time frame can be longer if there are serious disagreements between the spouses.

Who will get custody of the children?
California uses the standard of “the best interests of the children” in order to determine who the primary caregiver will be. This often results in both parents having some custody of the minor children, and in some cases, joint custody. If custody and visitation becomes an issue between the parents, mediation is often employed in order to reach agreement between the parties. If no agreement is reached, the Court can impose the recommendation of a mediator, or decide upon a different solution based upon “the best interests of the children”. In some instances, litigation may be required in order to reach a solution to intractable differences.

What is the difference between physical custody and legal custody?
Just like the name implies, physical custody relates to who the children live with. Visitation is usually granted to the spouse who does not have physical custody; sometimes, both parents are granted joint physical custody. Legal custody deals with the responsibility of parents toward their children, and generally refers to a parent's right and responsibility to make decisions for the children (usually relating to their health, education, welfare, etc.).

Monday, October 27, 2008

How to Avoid Probate?

Probate is a complex procedure which requires lots of time, effort, and worst of all, is very expensive. Because of the expense, time, and hassle involved, it should be avoided if possible.

One simple way to avoid probate is to set up a living trust. Assets in a living trust do not have to be probated. This makes living trusts the perfect vehicle for avoiding the cost and hassle of probate.

Another way to avoid probate is to title assets in joint tenancy. Assets titled as joint tenancy avoid probate because when one owner of joint tenancy property dies, his or her interest in the property automatically vests in the surviving owner(s). So, if two people own property as joint tenants, if one of them dies, the other automatically becomes the sole owner (without having to go through probate). There are some drawbacks to owning property in joint tenancy, so please contact us if you are considering titling an asset in joint tenancy. (For example, the property will not avoid probate on the death of the surviving joint tenant; in addition, there are tax basis consequences to owning property in joint tenancy, which can have a negative tax impact on the surviving joint tenant.)

The same holds true for California property titled as community property with right of survivorship. The surviving spouse will automatically become the sole owner of the property upon the death of the first spouse.

One easy way to avoid probate for bank accounts is to hold them as "payable on death" (P.O.D.) accounts. These accounts have the benefit of being paid automatically on death to a named beneficiary. These accounts can be set up through your local bank. One common question we get regarding P.O.D accounts is whether the named beneficiary has any right to funds in the account prior to the death of the primary account holder. The answer to this is no. The beneficiary has no right to the funds prior to the death of the primary account holder, and the beneficiary can be changed or eliminated by the primary account holder prior to death.

Another way to avoid probate through beneficiary designation involves retirement accounts and pension plans. Retirement accounts such as IRAs or 401(k) accounts go directly to a named beneficiary or beneficiaries at death. This will avoid the necessity of going through probate, as the beneficiary can simply claim the plan benefits from the account custodian.

Two other ways to avoid probate in California are: 1) for estates which have less than $100,000 in probate assets, and 2) for estates where a spousal property petition can be utilized. Smaller estates, which have less than $100,000 in probate assets (the estate can be much larger than $100,000, but the probate assets must not exceed $100,000) can go through a summary procedure where affidavits are utilized to transfer assets.

For estates where a spouse, or registered domestic partner, is to receive assets outright, a spousal property petition can be used to transfer assets. When using this procedure, there is no limit as to the amount of assets which can be transferred. The assets to be transferred must pass by either will or intestate succession (where there is no will, but California laws mandate that the assets are to be transferred to the spouse or domestic partner). Additionally, part of an estate can be transferred utilizing a spousal property petition even if other assets must still be probated.

In sum, there are numerous ways to avoid probate under California law. Please contact us if you have any questions regarding California probate law or ways to avoid probate in California.