What changes to my estate plan can I not make during divorce?

You may not transfer, encumber, hypothecate, conceal, or in any way dispose of any property, real or personal, whether community, quasi-community, or separate, except in the usual course of business or for the necessities of life without consent of your spouse. 

You cannot create a “nonprobate transfer” or modify a “nonprobate transfer” in a manner that affects the disposition of property subject to the transfer without consent of your spouse.A “nonprobate transfer” includes, but is not limited to, revocable trusts, pension plans, employee benefit plans, IRAs, and life insurance. (Note: Pension plan beneficiaries are controlled by the Employee Retirement Income Security Act of 1974 (ERISA) (29 USC §§1001–1461), and the nonparticipant spouse is entitled to be the beneficiary under federal law.)

What is Moore Marsden and do I need it?

Experienced San Francisco Bay Area Family Law Attorneys will tell clients about reimbursement rights for property purchased prior to marriage with separate property funds.

For example, if one spouse owns a residence or other real estate as separate property before marriage, and then community funds are used to reduce the principle owed on the mortgage, then the community estate will acquire a pro-tanto interest in the property. This is commonly known as Moore/Marsden based on two cases in the 1980s.

Stated another way, Moore/Marsden Rule provides that when community property funds are used to reduce the principal balance on a loan used to acquire a separate property residence owned prior to marriage by one of the spouses, the community acquires an interest in that property.

A different approach has been used when community property is used to improve separate property. In family law, separate property funds that are contributed to a community property are entitled to reimbursement under Family Code 2640 (without interest or appreciation). Be careful because the statute limits reimbursement to the net value of the property at the time of division.  An additional wrinkle in Moore Marsden calculations can be a refinancing - so contact a family lawyer or Certified Divorce Financial Planner if you have questions about separate property reimbursement.  

Learn more about property division:

MY SPOUSE LIQUIDATED OUR ACCOUNT DURING OUR DIVORCE, CAN HE DO THAT?

WHAT IS COMMUNITY PROPERTY?

 

 

Is Spanking Considered Child Abuse in California?

Experienced California Family Law Attorneys will advise their clients about what constitutes abuse in a custody dispute.  I recently looked into whether spanking of a elementary aged child by parent of opposite gender could be a basis for diminishing custodial time, or joint legal custody. 

The answer is surprising, and it's No - spanking is not abuse.  Under California Welfare and Institutions Code Section 300(a), reasonable and age appropriate spanking where there is no evidence of physical injury does not constitute abuse.  This also includes harsh words.

If you are surprised, so was I. There have been several legal attempts to change this provision of the Welfare and Institutions Code, however, none have been successful.  Gordon Family Law advocates for co-parenting relationships without violence, and if you are concerned about your co-parent's behavior, please reach out to a mental health professional first to assess the situation. 

 

What Is a QDRO or “QUADRO”?

A QDRO (or Qualified Domestic Relations Order) is Court order after a divorce or that splits and changes ownership of a retirement plan to give the divorced spouse their share of the asset or pension plan.

QDROs apply only to employee benefit or pension plans under ERISA.  
Retirement benefits are among the largest assets parties can own and these benefits are considered community property unless there is a premarital agreement stating otherwise.

QDROs were created by Congress to allow a Retirement Plan to pay a portion of the retirement fund to the non-employee spouse or the alternate payee. There is no limitation on the amount awarded to a non employee spouse. While many family lawyers may not tell their clients this fact, a QDRO distribution is not limited by federal law to 50% distribution.  In fact, under ERISA, the non employee can be awarded “all or a portion of” the benefits payable to or on behalf of a payee.  ERISA 206(d)(3)(B)(l)

If you are doing a QDRO yourself, you can request information from the Plan, in writing, including such as the Summary Plan Description and Annual Statement or Account Balance.  A word to the wise, do not count on a plan doing the actuarial valuation – that is something you will need to speak with a forensic accountant. 
Each retirement plan is different and many have specific rules. For example,in California, there is a joinder process for Family Court and the Court must have jurisdiction over a third party and you must join the Plan before administration.  
Additionally, you have to tell the Plan you are asking for a QDRO before you ask for a Court order.  It is best to speak with an attorney because you could cost yourself time and money if you simply fill in the blanks of a mock QDRO without carefully tailoring the document to your circumstances.  One more thing:  QDROs should be filed and served before your divorce is final.  Don’t wait to get your QDRO done – if the employee spouse dies before the QDRO is signed – then the non employee spouse will not be entitled to any benefits.

Looking to figure out if your retirement plan qualifies for a QDRO? Check out our nifty chart. 

Is my speculative bonus income used for a child support calculation?

No. This is different than Ostler/Smith Orders. Under California Family Code Section 4508, speculative bonus income – such as the potential to make a large commission at the end of the year, cannot be included in income used for calculations of spousal and child support. This is because a court may not base monthly support amount on predicted receipt of large bonus that may never materialize.

Other types of money that cannot be included as income are: Student Loans not used for books and tuition and Life insurance death benefits.

However, Gordon Family Law does not advise that you hide all your cash in speculative bonuses or student loans to avoid payments. Why? Because even if the Court rules that a certain category of income is not includable as gross income for the purposes of calculating guideline support, a party can ask the court to deviate from the guideline based on the income received as a “special circumstance,” which would allow the court to increase child or spousal support.