California Family Code Section 2552 generally requires that for purposes of dividing community property that assets and debts be valued “as near as practicable to the time of trial”. If you are settling a case this usually amounts to as close as possible to the date the case is settled.

There are a few exceptions to this rule, pursuant to which a court upon the filing of a proper motion would allow an alternative valuation date.

As an example, if there is a community business in which one spouse actively participates and can have a significant impact on the the value of the business most courts would value that business as of the date of separation. The logic is that if the “in spouse” put post separation efforts into the business, those efforts would result in separate and not community property. This also protects against the “in spouse” driving the business into the ground after separation to lower the value at which it is awarded to them.

It should also be noted that assets that generally will not fluctuate in value except for post separation deposits or withdrawals, such as a checking account, are in all actuality going to be valued as of the parties’ date of separation. This is because presumably post separation deposits would be separate property contributions and a party expending funds from an account post separation would be depleting community property and should be charged with it.

This is different than an investment account which might significantly fluctuate in value from the parties separation until the date of trial. As to those types of assets you are back to the general rule that they are valued as close as possible to trial or separation.

In the State of California, immediately upon filing a divorce, both spouses or domestic partners are restrained from:

1.  Removing the minor child or children of the parties, if any, from the state without the prior written consent of the other party or an order of the court;

2.  Cashing, borrowing against, canceling, transferring, disposing of, or changing the beneficiaries of any insurance or other coverage, including life, health, automobile, and disability, held for the benefit of the parties and their minor child or children;

3.  Transferring, encumbering, hypothecating, concealing, or in any way disposing of any property, real or personal, whether community, quasi-community, or separate, without the written consent of the other party or an order of the court, except in the usual course of business or for the necessities of life; and

4.  Creating a nonprobate transfer or modifying a nonprobate transfer in a manner that affects the disposition of property subject to the transfer, without the written consent of the other party or an order of the court.  Before revocation of a nonprobate transfer can take effect or a right of survivorship to property can be eliminated, notice of the change must be filed and served on the other  party.

Further, upon filing for a divorce, the standard Family Law Restraining Orders include a provision that you must notify each other of any proposed extraordinary expenditures at least five business days prior to incurring these extraordinary expenditures and account to the court for all extraordinary expenditures made after these restraining orders are effective.  However, you may use community property, quasi-community property, or your own separate property to pay an attorney to help you or to pay court costs.

Perhaps the most important of these Restraining Orders is the fact that immediately upon filing a divorce and serving the other parent, neither parent is allowed to remove the minor children from the State of California without the prior written consent of the other parent or the order of the court.  Too many times, before a divorce if filed, one of the parents leaves the state with the child or children.  The simple filing of divorce prevents that.  Further, the mere filing of divorce does not require that both parties proceed, it merely puts in place the standard Family Law Restraining Orders.  The filing fee is $435.  It is far more expensive to hire investigators, attorneys or other professionals to track down children and assert jurisdiction in other states.  A simple filing of divorce is one of those examples where an ounce of prevention is worth a pound of cure.

Richard A. Dinnebier

The recent case of In Re Drake M., decided December 5, 2012, makes clear that the mere usage of drugs by a parent, in and of itself, is not sufficient evidence that the minor child has been harmed or was placed at risk of harm from the parent’s drug use.  While the Drake case dealt with marijuana use, it is applicable to other cases.

It is also important to note that the only type of drug testing allowed in the State of California at the present time is urinalysis.  The court can only order urinalysis.  The court could make such testings random.  A client should also know that before the court will order drug testing by urinalysis, there must be corroborating evidence of drug use.  It is not sufficient for the mother or father to accuse the other parent of drug usage, but, the court must find independent corroborating evidence before the court will issue a random drug test.  Such corroborating evidence could be a police report, friends, neighbors, etc.

If a parent was to test positive for drug use, we would work with that parent to rehabilitate he or she to regain custodial time.  Every case is different and depends upon the type of drug usage, the frequency of drug usage and the circumstances of drug usage.  A parent who has used drugs in the past should not give up their custodial rights without consulting an attorney.  Please remember that the accusing parent has to have corroborating evidence.  Additionally, even if the parent has been found through a urinalysis to have used drugs, there are many avenues to pursue to rehabilitate that parent in a custody dispute.

We are familiar with blood testing, hair follicle testing, and urinalysis and can advise a client whether or not to take a such tests.  Many times it may be the type of proof that is needed to convince the other parent or the court that drug usage has not occurred.  Too many times parents have suspicions that interfere with the other parent’s willingness to allow custody or visitation to the other parent.  A simple hair follicle test can alleviate those fears.  However, again, an attorney should be consulted before you ever submit to a hair follicle test.  Hair follicle testing can detect drug usage as far back as six (6) months for a heavy user and perhaps three (3) months for a light user.  Again, these are all items that should be discussed with an attorney.

Richard A. Dinnebier

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Broadly speaking, in divorce, there are essentially four (4) potential financial issues:

1.     Child support,
2.     Spousal support,
3.     Division of property,
4.     Attorney’s fees.

In order to initially evaluate issues concerning you and your spouse’s income as it relates to child support, spousal support and the potential for one party to pay for or reimburse the other for attorney’s fees, it is a good idea to bring your last 1 to 3 years’ of income tax returns.  As to the division of property, a list of all of you and your spouse’s assets and debts as well as their approximate values would be beneficial.  These documents should at least get you through an initial consultation with an attorney who can then ask for additional detailed information as needed.

Kenneth T. Demmerle

California is referred to as a “no fault” state with respect to divorces.  In other words, generally speaking, judges do not want to hear testimony concerning infidelity.  However, with respect to custody, courts are sensitive to introducing and involving children with a new boyfriend or girlfriend too soon after a party separates from a child’s other parent. Furthermore, if someone going through a divorce is spending significant time with a third party at the expense of spending time with the children, such conduct could detrimentally affect them in a custody dispute.

Kenneth T. Demmerle

The decision on whether or not to pursue a Premarital Agreement with your fiancé can be complicated and the benefits of a Premarital Agreement can be significant depending upon the financial situations of both parties.  Generally speaking, in the event that a marriage ends in a divorce, an individual can greatly benefit from a Premarital Agreement which treats certain assets that they had before they were married and assets then acquired during marriage as their separate property as opposed to community property.  This can particularly be true with respect to an individual that owns real estate prior to marriage that is secured with a loan on which payments will be made by the parties during marriage.  A Premarital Agreement can also significantly protect an individual who owns a business prior to marriage in which that individual is going to actively devote his or her time, skill and effort.

In addition, if it is anticipated that, in the event of a divorce, someone might have significant spousal support exposure due to a significant disparity in the parties’ incomes and/or overall financial net worth, such an individual can significantly benefit from a Premarital Agreement. More particularly, potential protection can include either with a waiver of spousal support or reasonable limits on support.

Kenneth T. Demmerle

Parents often ask this question when dealing with their divorce. When minor children are involved, a custody schedule will eventually be established and the parents will no longer file taxes jointly with each other. Therefore, the dependent tax deductions and corresponding child tax credit become an issue as both parents attempt to lay claim to them. The ensuing discussion applies to children, not relatives.

The answer to the question is found in the Internal Revenue Code (IRC). Section 152 of the IRC provides four main criteria in determining whether a taxpayer qualifies to claim a child as a dependent. These factors are: relationship, age, residency, and support.

1. Relationship. The child must be a son, daughter, stepson or stepdaughter of the taxpayer or a descendant of such a child.
2. Age. The child must be under the age 19 or be a full-time student under the age of 24 as of the close of the calendar year. This does not apply to permanently and totally disabled children.
3. Residency. The child must have the same principal place of abode as the taxpayer for more than one-half of the taxable year.
4. Support. The child cannot have provided over one-half of his or her own support for the calendar year.

If these criteria are met, you can claim the child as a tax deduction along with the corresponding child tax credit. Note that the information provided herein is not intended as tax advice. Please seek the independent advice of tax counsel with regard to your own circumstances.

Finally, there are special rules where two or more people claim the deduction for the same child. If one of the claimants is the child’s parent, that parent gets the exemption. If both claimants are the child’s parents, the parent with whom the child resided for the longest period of time during the taxable year gets the exemption.

Dallas C. Simkins