California Family Law Blog

San Jose Family Attorney Discusses Division of Personal Injury Damages in Divorce

Personal injury awards are subject to special characterization and division rules in a divorce. Unlike most property, characterization of money or property received or to be received as personal injury damages depends on when the cause of action arose; it is not affected by when the actual proceeds are received. In other words, if the cause of action arose during the marriage, and prior to separation, the award for damages are considered community property. If the cause of action arose before marriage, or after separation, the award for damages are considered separate property. Additionally, personal injury damages received by one spouse pursuant to a personal injury claim against the other spouse, are always the separate property of the injured spouse, regardless of when the cause of action arose.

To the extent that the Court finds that a personal injury award is community property, it is subject to special division rules. Unlike most community property subject to equal division, community personal injury damages must be assigned to the injured party unless the court determines that the interest of justice require another disposition. In making this determination, the Court will take into account the following factors: (1) the economic condition and needs of each party, (2) the time that has elapsed since recovery of damages or accrual of the cause of action, (3) all other facts of the case. After consideration of the factors, if the Court determines that the personal injury award should not be entirely assigned to the other spouse, the non-injured is assigned a proportion which the Court determines to be just. The amount assigned to the non-injured spouse, however, may not exceed half the damages. Additionally, when more than half to he personal injury damages are awarded to the injured spouse, case law has determined that the other party is not entitled to an offsetting award of other community property to make the overall division of community property equal.

Circumstances in which community personal injury awards may not be awarded entirely to the injured spouse include those in which the community has incurred costs in caring for the injured party; or where commingling of the personal injury damages with other funds make tracing the source impossible.

If you or someone you know is going through a divorce, the team of attorneys at Sagaria Law, P.C. may be able to assist you. Our attorneys deal with all aspects of family law and can assist you through any stage of your divorce. We serve clients through the bay area and have offices Santa Clara, Alameda, and Monterey Counties. Contact our office today to set up a free consultation with one of our attorneys

Fremont Family Law Attorney Discusses Taxes and Divorce

With tax season upon us if you are currently going through a divorce or separation it is very important to consider tax implications. The first question to consider is how to file your taxes. There are generally three options available. Filing as "Head of Household" may save you the most money and varies with income. In order to qualify you must pay more than half the cost of keeping up the home and a qualified person, such as a child, must be living with you.
The second option is to file jointly which may be more beneficial to you and your spouse, according to experts. Joint filing means you are both responsible for all taxes and are each entitled to a prorated share of any refunds. It also might put you in a better tax bracket. If there are additional taxes or penalties because of fraud or negligence on past returns, you could potentially qualify as an "innocent spouse.” Filing separately is generally the last way to file. This option usually means paying the most taxes. However, you are only responsible for your own taxes.
It is important to discuss with your spouse who will be claiming the deductions available in order to avoid both parties duplicating the deductions when filing separately which can lead to problems and penalties. Generally if you are in the middle of a divorce it has already been decided who will claim the children but if not that issue must be worked out. The dependency exemption is usually decided when the parties have a child support order. The parties must also decide how property deductions for mortgage interest and property tax payments will be allocated.
Specific questions about your return should be asked directly of your tax preparer but if you have any questions related to your divorce such as how to agree on who claims the children for the dependency exemption or who can file as head of household please contact our office to set up a free consultation. Our team of attorneys can explain all aspects of a divorce from property division to child and spousal support. We have attorneys in Monterey, San Jose, and Fremont who would be happy to assist you.

San Jose Divorce Attorney Discusses Fiduciary Duty Between Spouses

In California, spouses owe each other a fiduciary duty, which is defined in California Family Code §§ 721 and 1100. In a nutshell, California Family Code requires each spouse to act in the highest good faith and not take unfair advantage of the other when doing things involving property division that involve the other.

This fiduciary duty includes, but is not limited to, the duty to disclose “all material facts and information regarding the existence, characterization and valuation of all assets in which the community has or may have an interest and debts for which the community is or may be liable,” as well as all material facts and information relating to the income and expenses of each party. Moreover, each spouse must “provide equal access to all information, records, and books that pertain to the value and character of those assets and debts, upon request.”

Spouses undergoing a divorce are under an obligation to disclose all material facts and information regarding the existence, characterization and valuation of assets and debts, and about income and expenses. The purpose of this section of the Family code is to ensure spouses do not conceal assets or intentionally mislead the other spouse about the extent or nature of assets or income. The code requires the disclosure of all material facts and information regardless of whether the asset is community property or separate property in nature.

The effects of a violation of the fiduciary duty provisions of the Family Code, intentional or unintentional, are substantial. The violation of any provision of California Family Code § 2102 results in mandatory sanctions. The court is required to order the party violating this code section to pay the reasonable attorney and expert fees incurred by the other party as a result of the violation, and to impose a form of punitive damages in the nature of “money sanction” unless there was “substantial justification” or “other circumstances” which makes the sanction unjust.

Whether you are in a marriage with millions of dollars in assets or just a few thousand, you are bound by these provisions in the Family Code. We strongly recommend all parties seeking a divorce consult with one of our attorneys. We offer a free thirty minute consultation, either in person or over the phone, where we can assess the nature and complexity of your case. We have offices in three Bay Area locations (Fremont, San Jose and Monterey), and handle cases throughout the region. Our experienced attorneys specialize in family law and can guide you through the somewhat complex and difficult process that is getting a dissolution. Call our office today to schedule your free consultation.

San Jose Family Law Attorney Discusses Division of Stock Options in Divorce

Generally, community property, or property that is not specified by statute to be separate property, will be divided equally between the parties in a dissolution action in California. Certain property, however, have specific rules for how the property is characterized and divided in a divorce; among them are stock options. With the big “internet boom” in Silicon Valley, and the proliferation of companies issuing stock options to their employees, more and more couples are presented with the questions of how to divide this asset in a divorce.

When stock options are granted to an employee before the date of separation but do not become exercisable until after separation, the Court has found that it has broad discretion in allocating the community and separate property interest. Stock options are generally considered community property, and therefore subject to division, to the extent that work done to earn them is performed between the date of marriage and the date of separation. Thus, in order to figure out if the option is subject to division, the period of employment to which the option may properly be allocated needs to be ascertained. According to case law, the circumstances of the grant must be discovered in order to allocate the option to a period of employment.

When stock options are granted to an employee after separation, at least one Court has found that those options were entirely the separate property of the employee spouse and not subject to division because the employee had no expectation of the grant, and could profit only if the stock value rose after the date of the grant.

If you or someone you know is going through a divorce, the team of family law attorneys at Sagaria Law, may be able to assist you with your case. We can answer any questions you may have regarding division and characterization of property and will assist you through the process. We also handle custody, support, and other family law matters; and work with client from Santa Clara County, Alameda County, Monterey County, San Mateo County, and surrounding areas. Contact our office today to schedule a consultation with one of our attorneys.

San Jose Family Law Attorney Comments on the Current Housing Market and Divorce

All across the nation and particularly throughout the Bay Area, the housing market has seen a slump in sales and an increase in foreclosures. Although a decline in real estate sales creates a difficult situation for people would-be sellers, throwing a divorce into the mix makes a difficult situation, even more complicated. News sources report that support groups for women going through divorce are finding that more and more real estate woes are creeping into the discussions.

Take for example, a couple who agrees to split the equity in their family residence as part of their divorce settlement. The longer their family residence stays on the market, a divorcing couple does not have the ability to purchase a new home. In a place like the Bay Area where rent is increasing and cost of living is high, couples may be forced in continue to live in the same house, or one spouse may be stuck in a house, with an overbearing mortgage. The main problem with both of these arrangements is it may make it difficult for the couple to leave the divorce behind and move forward with their lives. Perhaps one option for some divorcing couples may be for one spouse to refinance the mortgage on the property, and then buy out the other spouse’s equity in the house.

If you or someone you know is going through a divorce, the team of family law attorneys at Sagaria Law, may be able to assist you with settlement negotiations on property issues and any other aspect of your case. We regularly handle all aspects of family law and work with client from Santa Clara County, Alameda County, Monterey County, San Mateo County, and surrounding areas. Contact our office today to schedule a consultation with one of our attorneys.

San Jose Divorce Attorney Discusses Real Property Issues

If you are thinking about a divorce or are already going through divorce proceedings then the current housing market issue is of concern to you if you own real property. It is imperitive that you seek the aid of a San Jose Family Law Attorney. It can be very difficult when facing divorce proceedings to consider how to dispose of assets. Many people do not even seriously consider what to do with their community property family residence until much further along in their divorce proceedings. Unfortunately in the current housing market this is an issue that should be considered and when possible discussed with your spouse. If your home is in a price range that is subject to the lowering of the housing market then time is of the essence. The longer you wait to list your home for sale the more its value could fall. There is also the issue of how long it will take to sell. Once you have completed your divorce you will most likely prefer not to be tied to your ex-spouse by a house that has not sold. Therefore the sooner this issue is decided the sooner you can take action.

Selling your home is not the only option available. You may consider whether or not it makes sense to buy out your spouse’s interest in the residence or even defer a sale of the residence. A buy out of your spouse’s interest is a decision that requires a careful look at your overall finances with your spouse. There may be other assets that instead of splitting equally could be used to off-set your spouse’s interest in the residence you wish to buy-out. Additionally if it is necessary to refinance the property to accomplish the buy out then you must consider whether you can afford that monthly payment without your spouse’s financial assistance. A deferred sale of the residence is another option but requires a consideration of a number of factors including tax implications.

At Sagaria Law our team of attorneys is experienced in all areas of community property and real property implications. We have offices located in Santa Clara County, Alameda County and Monterey County where we would be happy to meet with you for a free consultation.

Under the California Family Code, debt incurred during a marriage is considered community property or each party owes half of it. While community debt common for auto loans, mortgages, or credit card debt, does it also apply to gambling debt? For example, if a husband went to Reno and bet $10,000.00 on the Oakland Raiders to win last week’s football game and they lost, then is the community should be responsible for that $10,000.00? Is the wife responsible for $5,000.00 of the debt even though she never knew of the bet?

Although a wife whose husband gambled away the retirement fund as well as marriage has no recourse against the casino, she may have recourse in the divorce. Under the California Family Code, gambling loss during marriage is considered a debt not in the benefit of community property and, therefore, the husband’s separate debt. That means that the husband owes the community for the money lost and the wife can offset that lost money against other property in a divorce. This is not surprising since no wife would ever agree to a bet on the Raiders regardless of the odds. Therefore, the wife could get her $5,000.00 back by taking more of the equity in the house, getting the better car, or just taking more of the remaining cash left in the community account.

However, California is not so kind to the husband who bet against the Raiders and won big. All gambling winning made during marriage is considered community property and the wife is entitled to half of that at divorce. Therefore, the husband will have to give half his winnings to the wife in the form of more equity in the house, the better car, or just more cash. The moral of the story is that the house may have an edge on the odds but the wife can’t lose, sort of.

If you need to consult an attorney regarding a divorce with gambling involved, please contact Sagaria Law to setup a free consultation.

The general rule when it comes to dividing marital property at dissolution, also referred to as community property, is equal division. For example, if a married couple purchases a home together, each party is entitled to a one-half interest in the equity of that home they purchased together. However, these days it is not uncommon for one spouse to enter a marriage having already purchased a house. Imagine a situation in which one spouse (Spouse A) purchases a house before marriage. Spouse A makes the down payment, and starts paying the mortgage. Spouse A then marries Spouse B; they continue to make mortgage payments on the house. Spouse A and B then decide to get divorce. The question is how much of the equity in the house is each spouse entitled to? Under the law, when community funds are used for mortgage payments on property purchased by one of the spouses before marriage, the community acquires a pro-tanto interest in the ratio that the payments on the purchase price made with community funds bear to the total payments on the purchase price, and any appreciation must be apportioned accordingly. (Marriage of Moore, 28 Cal. 3d. 366 (1980)). The approach, further clarified in the Marriage of Marsden 130 Cal. App. 3d 426 (1982), indicates that the community interest is determined by the ratio that the payments on the purchase price made with community funds bear to the total payments on the purchase price. Similarly, the separate interest is determined by the ratio that the payments on the purchase price mad with separate funds bear to the total payments on the purchase price. Going back to our interest above, Spouse A is entitled to one half of the community interest and the separate interest. Spouse B, is entitled to one half of the community interest.

As a practical matter, the following are the “key figures” that each spouse needs to determine their respective interest: (1) purchase price, (2) amount of down payment, (3) amount of payments on loan principal made with separate funds, (4) amount of payments on loan principal made with community funds, (5) fair market value of the house at date of marriage, and (6) the fair market value at time of division. While an appraiser can determine the value of the house at various points and time, it is critical that spouses keep accurate records of mortgage payments in order to accurately assess their separate and community interest.

If you or someone you know is going through a divorce, our team of attorneys at Sagaria Law can help assess your interest in marital property under varying circumstances. Moreover, our office deals with all aspects of family law including divorce, property settlement, child custody, child and spousal support. We represent clients throughout the bay area and have offices in Santa Clara, Alameda, and Monterey County. Contact our office to schedule a free consultation with one of our attorneys today.

Our Fremont divorce lawyers recognize that the decision to move forward with a divorce is never an easy one. The family attorneys in our Fremont and San Jose offices stumbled upon a recent article in USA Today that explains five common mistakes people make when dividing their finances during a divorce, and the information contained in this article could be very helpful to anyone facing a similar situation.
1. Many couples scrambling to obtain a divorce settlement wish to keep the house at any cost. However, financial experts say that more attention should be given to who can afford to maintain the property, pay the mortgage, and manage the taxes. While it is possible to ask for spousal support to help make the mortgage payments, unexpected maintenance costs may pop up, and make home ownership more of a liability than a luxury.

Continue reading "USA TODAY: TOP 5 MISTAKES COUPLES MAKE IN A DIVORCE" »

They say that money cannot buy happiness. Yet, to those who desire luxurious material goods, the pricey homes, manicured lawns, and luxury automobiles nestled among the rolling hills of Palo Alto and the tree-lined streets of San Jose’s Rose Garden District symbolize a level of comfort highly coveted by the average American. Nevertheless, while a life steeped in wealth may seem intriguing and desirable to many, a new report published by Forbes Magazine today indicates that spending power does not equal staying power when it comes to moneyed marriages. According to the study, conducted by Connecticut firm Prince and Associates, nearly 50% of America’s wealthiest citizens indicate that they are stuck in unhappy marriages, and over 50% of those surveyed report that they have been or are currently involved in an extramarital affair. It comes as no surprise to our family law attorneys in Santa Clara County that one third of the individuals surveyed for the study were examining divorce as an option.
In the experience of family attorneys in Monterey County or Santa Clara County, where there are many wealthy residents, divorce is a financially intimidating prospect, but not an impossibility. If a person is in an irretrievably broken marriage, it is better to research divorce as a solution than to give up and exist in a miserable or unfaithful relationship.

Continue reading "Santa Clara Family Attorneys Examine the Lifestyles of the Rich and Unfaithful" »

Divorce lawyers in Santa Clara, Alameda, and Monterey Counties are certainly familiar with the relationship between divorce and real estate. Spouses who have not worked could view the real estate market as their ticket to financial freedom, provided that they are able to win a settlement that is sufficiently bolstered by a large amount of equity. Conversely, the breadwinner could decide that a division of community property would still afford him or her a comfortable single life. Therefore, the decision to separate may be palliated, or even solidified, by a profit made from selling the marital home. According to a recent article in the Chicago Tribune, unhappy couples caught in the middle of a “real estate-enabled divorce” are scrambling to cash in on their homes and make a quick profit on their equity. This trend is especially notable in areas where those who have managed to hold on to their homes in the midst of a faltering real estate market could stand to generate a sizeable profit.

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Donna Black is asking a San Diego court to grant her the status of “Putative Spouse.” James and Donna Black filed for divorce a few years ago—although the proceedings hit a snag when Black admitted to still having been married to someone else when he married Donna in 1978. Apparently, his first marriage was several days away from being officially terminated when he tied the knot a second time. A court in Tennessee therefore found his second marriage to be not valid and, therefore, Donna was not entitled to their community property, such as the shares he owns in the Biopraxis, the biotech company in San Diego that he helped build. The admission also prevented James, 75 from having to pay spousal support to Donna. Donna and James have three children together.

In California, if any member of a couple believes that they were in a valid marriage that was actually void, a court can declare that one or both parties be given the status of putative spouse. This person could then be entitled to receive alimony and a division of the former couple’s joint property.

Community property is characterized as all of the property, assets, and debts that each party in a couple acquired during a marriage. As California is a community property state, when a couple divorces, they must equally divide their community property unless they signed a prenuptial or postnuptial agreement where other arrangements was made.

Hiding assets to prevent the other party in a divorce proceeding from obtaining their equal share of the community property is illegal.

Examples of How Someone Might Hide Their Assets:
· Paying a salary to an employer that does not exist
· Not letting the government know about certain streams of income
· Asking one’s employer to delay the date of bonuses or raises
· Hiding money in their child’s name
· Hiding assets in a safe deposit box

Continue reading "Woman Is Asking California Court To Grant Her “Putative Spouse” Status, As Bigamy And Dementia Complicates Divorce Proceedings " »

Singers and former real life/reality tv couple Nick Lachey and Jessica Simpson have finally settled the division of their financial assets. Although the couple’s divorce was finalized earlier this year, they just recently signed a "written stipulation" regarding their financial situation in Los Angeles Superior Court.

As the couple did not have a prenuptial agreement prior to their marriage, each spouse was entitled, under California law, to half of the financial assets acquired by both of them during their marriage. Simpson was reportedly the moneymaking spouse, earning $36 million during that time. She reportedly refused, however, to give half of her earnings to Lachey.

Under the new agreement, Lachey won’t receive $18 million, but he will receive significantly more than the $1.5 million she had initially offered to give him. Details of this new agreement are being kept private.

Community Property State
The state of California is a community property state, which means that all property acquired by a couple during the marriage is considered "community property" and—unless otherwise agreed upon or barring a premarital agreement—must be equally divided in terms of total net value when the marriage is dissolved.

Continue reading "Divorced Couple Jessica Simpson and Nick Lackey Settle Division of Financial Assets" »

Our office represents clients with many different issues in regards to divorce, child custody and visitation, and spousal and child support. Recently, the court ruled on a case that pertains to an issue that occurs after a judgment for divorce has been entered. The Second District Court of Appeals recently held that the presumption of undue influence arising from interspousal trasaction in which one spouse obtains an unfair advantage over the other does not apply to a postmarital agreement in which (1) both spouses obtain advantages, both are represented by independent, comptetnent counsel, (3) the "disadvantaged" spouse is offer full access to other spouse's business records relating to marital assets, and (4) both spouses acknowledge in their agreement that netiher has obtained an unfair advantage.

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