This document describes important information regarding separate property as well as terminology on basic rights in California regarding family law. This document does not constitute legal advice. This is how I perceive family law and how I practice family law in San Francisco as a certified family law specialist.
Important Principles
The first principle that comes up when my clients come to my office and inquire about divorce is the date of marriage. The date of marriage is important because it is the point where community property starts accumulating. The second most important principle is the date of separation. The date of separation has been litigated in the last couple of years and a case of appeal regarding it was reversed. In any case, the date of separation, simply put, is when one party either moves out or there is a clear understanding where one party expresses, “I do not want to be together”. This can be looked at as irreconcilable differences as the parties don't want to be together and it is irreversible.
So, let's say the date of marriage is 1/1/2000 and the date of separation is 1/1/2010. Anything that either party brought into the marriage is called separate property. For example, one party had a separate bank account, a separate car, etc. These items remain separate property, which means they do not become part of community property.
Then, on or after the date of marriage, anything that is accumulated through personal skill set is called community property and is divided 50/50 between the parties.
For example, let’s say I have a tree (this tree could be considered a bank account, retirement fund, house, etc.) and that tree produces apples. If the tree produces apples on the tree’s separate property the apples that the tree produced would remain separate property.
Now during the marriage, let’s say, I water the tree. Not only do I water the tree, but my husband also improves on the house that I purchased. Let's say I purchased the house here. I have my name on it and we all live in that house. I put the down payment and pay the mortgage and he also makes mortgage payments. This is where the division happens. Technically the house is separate property but because I'm investing and my husband is also investing his personal skill set and paying a portion of the mortgage from his salary, division may be possible. The division that would result is dependent on the number of years spent together. This would be helpful to know in order to figure out how much community property the house will eat up from the community. If it's 40 years and I paid $200,000 for the house, one code section says I get my $200,000 back for monetary payments and the rest is eaten up by the community if I didn't pay the down payment or mortgage payments. In this example, I just paid a down payment.
The next most common issues that come up with my clients are property division, spousal support, child support, child custody, and how the overall divorce process works and costs.
What about retirement accounts?
Let's say I am married with zero income and then I start earning and putting money into a retirement account. What do you think will happen?
To simplify, the legislature developed the so-called Qualified Domestic Relationship Order (QDRO), basically an order to give 50% of the retirement. Individuals with retirement accounts cannot just take money out and cash it out without paying a penalty and taxes. The penalty and taxes can be very high.
In response, the legislation developed a way to solve this issue in the context of a divorce. Spouses who are going through divorce can avoid paying taxes and penalties through a QDRO (quadrille order). We lawyers usually hire a firm, Madden Schwartz, for example, who will create the quadrille order that we then submit to the court and pension provider. From there, the pension will roll over to the party’s account. The QDRO process ends right there.
How do we calculate the equitable division of a house?
The house as an asset is calculated differently. If the parties still own the house, we don't evaluate its worth as of the date of separation, we evaluate the house as of the date of trial, unless agreed otherwise. Why? Because from that date, I always recommend my clients to open their own separate bank account from the date of separation, in order to avoid double-dipping. Again, this is not legal advice but what I recommend. In creating separate accounts, the separate income goes into that account and does not need to be divided, you just keep it. The same principle applies with retirement, if you separate the money you earn, it doesn't become part of the money that needs to be split 50/50. But the house is handled differently, houses go up in value without either party doing anything. That's why the house is evaluated at the date of trial, to get the most accurate number for its worth. There are of course other topics that can come up like stock options, RSUs, and how to deal with houses, like: do I sell? Do I buy my spouse out? All of these issues are case specific.
How do we address spousal support?
For spousal support, again, we're looking at the date of marriage and then the date of separation. The law says that if the marriage is longer than 10 years it's considered a long-term marriage. Why is that important? Because there's another code section that says if the marriage is longer than 10 years then spousal support can be permanent. Permanent meaning until the receiving spouse dies, remarries, or cohabitates with someone who supports that receiving spouse receiving support. Cohabitation involves the spouse who receives support living with someone who helps them with the bills in some way.
Let's assume the marriage is not 10 years, the marriage is eight years. If the marriage is below 10 years, it's considered short-term marriage. And then the spousal support is calculated at half of the length of the marriage, which would be four years.
Example: Here is a cliche scenario, dad who works and let's say he earns 100k a year and mom, who stays home and takes care of the kids. It’s a huge business to take care of the kids. However, financially let's say she's not working right now and only dad makes money. In this case, the approximate amount she will receive is 40% of his net income.
There are formulas used in court and there are also online DissoMasters that can be used. The program is called DissoMaster Calculator, anyone is able to use it to calculate what their spousal support would be. Just type into Google, “California child support calculator” and then there will be a free software. Then when you scroll down to the very bottom you will find temporary spousal support. If you're, let's say in Santa Clara then you click Santa Clara and then the software will calculate. From there you might see many categories that can be considered deductible like mandatory retirement. For example, you can't say, “oh, my house is so expensive I'm spending $10,000 I can't pay child support,” That doesn't work. So, using the online tool you can see what qualifies as actually being deductible.
There are two ways that spousal support is defined. One is temporary spousal support, and one is permanent spousal support. As the word temporary suggests it's only temporary for the time being while divorce is pending, however, divorce can be pending in court for years. My clients usually ask me how long divorce will take, usually I would say in a regular average case without any significant disagreements a divorce can take around nine months to be complete. So, for the time being, based on the calculation from the DissoMaster and during the divorce that's how temporary support is calculated.
Then we have permanent support. Permanent support occurs after divorce is final and it's based on the so-called “4320 factor” of the 4320 factors family code section. There are 20 factors, for our purposes we will only cover three: standard of living, need of the receiving party, and the ability of the paying party to pay. Standard of living is simply based on a party’s tax returns and expenses for the last five years. For example, let's say, if a husband earned a million dollars but for the last five years has earned only 100k then the expectation to receive spousal support is different based on the DissoMaster calculator. The calculation would be somewhere around 40% or 37%. If there are no children, the average was around 37-40%, and if the needs are still reasonable then the outcome will be a completely different number here.
Next, spousal support can be terminated whether it was an agreement or not. For many people ending a long-term marriage it is a nightmare to think that spousal support will not be terminated and that the court will reserve jurisdiction over the party’s lifetime. So, when parties negotiate, it can be helpful to ask that the other spouse who is self-supporting agrees in a long-term marriage to terminate spousal support forever and to terminate the court's jurisdiction to decide on it later on, in exchange for a lump sum. This kind of agreement gives a little bit of insurance to the party that they will not have to worry about spousal support later on in life.
Here’s an example, if a husband says, “I don't want to pay your spousal support I'm going to stop working” and he earns $200,000 and now he's not working and living in Mexico with his new girlfriend, well, what do you do? In this situation a party seeking spousal support would file with the court and ask for imputation of his income. This means the party would ask the court to impute the level that he used to earn for spousal support calculation because he voluntarily stopped paying in order to avoid paying support. The court then has the authority to calculate spousal support based on the husband’s prior income. There are of course some burdens of proof that need to be shown and the husband gets to respond.
Another example: Let's say a wife was employed for five years and then she decided not to be employed and became freelance instead, but she has the ability to earn a significant amount of money. In this situation, the party seeking support would have the opportunity to ask the court to get a vocational evaluator to look at her ability to work on the market and how much money she would receive. Then, based on this information the court would have the authority to impute her income.
What about child custody and child support?
Child custody is important for many reasons, but especially because child custody and visitation will determine how much support a spouse will get. Child custody is based on the terminology sole, joint, legal, and physical. Many clients tell me they are dealing with infidelity and want to request sole custody of their children and do not want their spouse to see the children at all. My response is always the same. California is no fault state, this means that while being cheated on by a spouse is a terrible experience, it has nothing to do with the topic of child custody.
In order to get sole custody, the other spouse’s actions have to be very significant. The other spouse would need to have been physically abusive, have drug addiction, or is just unfit to be a parent at their current state. Solo legal custody and physical custody is awarded in rare cases. Joint means both parents. Sole means just one parent, physical means where the child resides most of the time, and legal means who makes the major decisions about the child's life. Usually, in 99% of cases, legal and physical custody is awarded to both parents. If the child is very young or the mother stays with a newborn baby and the father sees the baby every other weekend, then sole custody would be awarded to the mother because that's the primary residence of the child. Some people call this “full custody” but the real term is solo.
There is also a term called 50/50 custody. 50/50 custody has nothing to do with visitation. You can have 50/50 custody but 10% visitation. How is that? Well, visitation is the percentage of time you spend with your child. And if you aren't aware how to calculate percentages, just go online and Google again “child support calculator California '' and then use that calculator. Then the calculator will output a percentage spent with parent one and parent two. If you click on “advance” there will be a whole line of calculations that you can manually put in. For example, every other weekend might turn out to be 17%. You can put many different time frames in the calculator, and it will output a percentage. So remember, 50/50 custody has nothing to do with visitation.
Moving on to child support— there are two different child support topics. Basic and Ads on. Basic child support is based on the percentage spent and the income of each parent. Basic child support is based on calculations from the DissoMaster calculator. Ad-ons are childcare. This typically means babysitting costs. If dad goes to work or is out looking for a job and needs a babysitter, then childcare costs usually are shared 50/50 between the parties unless there is such a disparity in income that it would be unjust to have a 50/50 split. The court may also consider childcare costs in proportion to the income split. The costs associated with visitation visits also count as Ad-ons, as do driving costs for the visitation, medical expenses outside out-of-pocket medicals, extracurricular activities, the cost of school and others. There are many things that both parents can agree to split 50/50 and can be calculated into the DissoMaster calculator.
What about general procedure and attorney's fees?
There are two ways to get divorced. One way is called uncontested. An Uncontested divorce occurs where there is no fight and no trial. The other way to get divorced is through contested means. Both ways start the same way— either party has to file a petition. The majority of the time it does not matter who files first. The only time when it matters who files first is if you live in a different state or country. For example, if I live in California and my husband lives in Germany then if I want the divorce handled in California then I would file in California and serve him through convention.
Once the petition is filed together with summons, and sometimes with an arbitration notice depending on your county, all of this paperwork needs to be served on the other party. Why does it need to be served? Well, service is the delivery of the paperwork that was filed with the court that notifies the other party that the case has started. Once the paperwork is served the fastest a couple can be divorced is in 6 months and 1 day. It is not possible to be divorced before that amount of time. The divorce does not happen automatically. Some people think that after six months and one day of doing nothing, they will become single. Unfortunately, this is not the case. In California court, nothing happens automatically. Most of the time you have to be proactive. If you want to finish a divorce you need to file a petition, you need to hire someone older than 18 and not related to the case to serve the paperwork— you cannot serve the other party yourself. There are also professional process servers which the court relies on even when a party denies being served.
In both uncontested and contested cases, the same forms need to be served. The person who files the initial petition is referred to as the “petitioner”. The receiving spouse is called respondent. The respondent has 30 days to respond if he or she doesn't agree with what the petition says in order to clear up the record. For example, if the petition says something like “I would like to keep all of the accounts in my name and in my partner’s name” then filing a response will allow you to address this. If the petition says that the conditions of the divorce are to be determined in the future then filing a response doesn't matter as much because it's hard to have a default case where issues are still open and to be determined.
Uncontested aspects of a marital agreement can be settled before marriage and after. The so-called “marital settlement agreement” is where parties sit down and create a prenuptial agreement. A postnuptial agreement occurs after marriage and is where each party has a fiduciary duty to disclose to each other all of their assets and settle all of the undetermined aspects discussed above. If parties do not have lawyers, then their signatures might need to be notarized depending on the county you're in to be considered as valid. Once the agreement is signed the petitioner has to file uncontested or default if the respondent didn't respond or the petitioner could file default with agreement if the other party responded. An uncontested divorce might take three to four months to finalize. In Santa Clara finalization may take a year and half to occur— if you're in Santa Clara it might be more helpful to hire a private judge to sign off on your paperwork. Marin County is typically the fastest, sometimes being finalized by the judge as fast as two weeks.
In a contested divorce case, the process is very similar. The only exception is that the divorce does not end with a marital settlement agreement but with going to court. When parties end up in court, nothing happens automatically. If a party would like to get spousal support, attorney's fees, or to establish child custody then a motion must be filed. This motion is called a Request For Order, form FL-300. Once a party files then a hearing date is issued to the parties. The hearing date only gives parties 20 minutes in court. In some counties, recently, parties may be able to have the judge make an order a day before. So, if parties do not go online and look at the docket, they have the potential to miss their hearing. It is important to pay attention and go online to see if there is a tentative ruling.
Because parties only get 20 minutes to have their case heard, if a child custody issue is filed the judge will send the parties to a mediator. A mediator is someone who the court assigns to speak with both parents. Mediation can take about three hours in order to figure out a fair custody schedule. Depending on the mediator’s recommendation the court may adopt the recommendation of the mediator and use it as an order. If parties are not satisfied with the mediator’s recommendation or feel like there is more evidence to show, then a future trial date to address this is possible.
The length of a trial can range from two hours to nine days, depending on the complexities of the case. It is also possible that the court will order a Mandatory Settlement Agreement. This involves a mandatory settlement conference date where the parties meet with an attorney. Typically, the attorney is usually a volunteer who helps negotiate the case. Some courts have judicial conference settlement where a judge not related to the case will aid in settling the case. If neither of these alternatives help the parties agree, the case will go to trial.
The next issue is attorney’s fees. At my firm, an uncontested divorce costs $5,000. The $5,000 is based on an hourly wage of $475. The price may be less depending on the amount of work needed. If the case proceeds smoothly with no negotiations, then the fee may be $3,500. Typically, there are some topics in a divorce that become extremely contested and the fee will depend on the other side's cooperation
In any divorce case it is mandatory to exchange financial disclosures or “PDD’s” (Preliminary Declaration of Disclosure). PDD’s can become an issue when we have to send discovery requests, subpoenas to banks, and request other financial information while we gather all the necessary documents. On occasion the opposing party is busy or doesn’t want to respond and that can raise the attorney fees. This can be a frustrating part of divorce. While other firms have charged $267,000 for doing Preliminary Declaration of Disclosures my firm starts at $10,000. The highest fees my firm has charged for a client has been $80,000. This occurred because the parties wanted to litigate every single issue possible.
In civil law, the prevailing party receives compensation for attorney’s fees. In family law there is no prevailing party, so this process is different. Family law concerns the well-being of children, dividing assets, and there is no winning side. In family law there are two main ways of getting attorney's fees. In one way, if a party earns $100,000 and the other party earns zero, the higher earning party has to pay attorney's fees. In order to be fair, the spouse who doesn't have the higher amount of money needs to have equal representation rights to ask for support and to file motions. This is especially relevant because the legal process is complicated and being proactive, executing proper service, and correctly navigating the details of discovery are important.
For example, if a wife comes to the office and says her husband has access to all of the assets and they have 5 million in total and has closed her credit card and gives her an allowance per week— and she asks, “what do I do?” This situation is typically where the wife would receive spousal support and attorney's fees so that she has the resources to hire a CPA, to divide the assets equitably, and so that the firm can adequately do discovery.
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