Orange County Divorce Lawyer Blog

In today's world, more and more couples are opting to stay married in hopes that the value of their homes rise. Indeed, thousands of home-owning couples owe more on their mortgages than their homes are worth. This is especially true in states such as Nevada.
Indeed, 60 percent of Nevada homeowners who have mortgages owe more than their homes are worth, says the Santa Ana, Calif., analysis firm CoreLogic. Because of this, more couples are staying together for the sake of their home only because they cannot afford to get out of the whole.

There are other couples who will go through with the divorce but continue to own their home jointly in hopes that the market will improve years later. But jointly owning a property after divorce is a cause of concern. Specifically, the newly divorced couple will have to decide who will pay for what. Who will cover the cost of the mortgage, taxes, insurance, utilities, repairs, maintenance?

Another option for couples is to short sale their home. But, real estate analysis say that this causes messy tax implications.

At any rate, if you are contemplating filing for divorce in Los Angeles or Orange County, contact an Orange County divorce lawyer for more information.

Source: Divorcing couples struggle with negative equity in their home

The divorce battle between Seattle Mariners co-owner Chris Larson and his soon to be ex wife, Julia Calhoun is unfolding even deeper. Last month, a trial valued Larson's share in the Seattle Mariners at $641 million. King County Superior Court Judge, William Downing, based the ruling on testimony of two sports team valuation experts, and compared the Mariners favorably to the Texas Rangers, which sold for $593 million and the Houston Astros, which sold for $610 million, during the past year.

With a 30.6% share of the team, Larson remains the largest minority owner in the Mariners. His ownership is exceeded by the majority owner, Hiroshi Yamauchi, 84, who owns 55% of the team.

Larson's wife originally sought a 50/50 split in assets for an approximate total of $300 million. However, the court ruled that a substantial part of Larson's joint estate -- Mudville Nine Inc., the company he used to purchase his stake in the Mariners starting in 1992, was his separate property and not subject to division with Calhoun. The asset has a value of $196 million with a discounted market value of $176 million if sold on its own as a minority share in the team.

The ruling gave his wife a much lesser award of $180 million -- $27 million to be paid in cash during the next two years. However, Larson countered with an offer of $104 million with $25 million in cash, but the ruling will still cause challenges for his ownership stake in the Mariners because it requires that he absorb all of the couple's outstanding debt, in excess of $150 million, as well as costs on his extravagant home estate.

For more information on filing for divorce in Orange County or Los Angeles County, contact an Orange County divorce lawyer for more information.

Source: Seattle Mariners' Chris Larson and Wife Julia Calhoun

The question of who owns the Dodgers will soon be determined next year in the latest saga of the McCourt divorce. The divorce trial is expected to take place in the Spring or Summer of 2012 and last about 30 to 45 days.

To recap, Frank McCourt claims sole ownership of the Dodgers while soon to be ex-wife Jamie claims that she owns half. It is unclear when the Dodgers will emerge from federal bankruptcy protection. After the Dodgers took a $150-million bankruptcy loan from Major League Baseball, Frank McCourt's attorneys said the team had funding to operate until well into next season.

Although Superior Court Judge Scott Gordon could decide ownership of the team before the bankruptcy proceedings end, he emphasized Wednesday that "the ultimate question of the disposition of the Dodgers" would need to wait for a resolution in Bankruptcy Court. Until the issue gets out of bankruptcy court, the team cannot be sold through the family law court.

The 2012 trial would resolve all remaining Los Angeles county divorce issues, including team ownership, permanent support and division of assets. Frank McCourt hopes to show the Dodgers are his alone by tracing their ownership to a company he founded before marriage, an effort both sides said would require tracking funds for more than three decades.

Additionally, this past Wednesday, the parties agreed that Frank McCourt would continue to pay $225,000 per month in temporary spousal support. However, the court eliminated the $412,000 per month he has been paying to maintain the couple's residential properties -- pending a November hearing.

One of the couple's two Holmby Hills homes was sold last month. The proceeds from the sale of said home will fill the support gap. Two properties in Massachusetts and another in Montana are for sale, according to court documents.

The McCourts are scheduled to return to court Nov. 17 and 18, when Judge Gordon is expected to hear arguments on spousal support and attorney fees and set a trial date.

From an Orange County divorce lawyer's perspective, its never easy going through such a heated and contested divorce, especially when millions of dollars are at stake.

Contact an Orange County divorce lawyer for more information.

Source: Final Frank and Jamie McCourt divorce trial? Wait till next year

An excellent article published earlier this month by Fox Business News outlines some of the pitfalls that dissolving a marriage holds for one's credit rating. The article makes several points that anyone contemplating an Orange County divorce would be well-advised to keep in mind.

First and foremost - and, it must also be said, unfortunately - it pays to be a bit wary of your soon-to-be-ex while going through the divorce process. "People do unpredictable things during emotional times," the article notes, citing a credit counselor. It goes on to describe a woman whose husband apparently ruined her credit on purpose by failing to honor a number of bills he had promised to pay.

From the perspective of an Orange County family law attorney, this is a reminder of why care and caution are always important. If a couple holds joint credit cards or other accounts it is critical that there be a written understanding of who will become responsible for what, and equally critical that each party prove to the other that its joint credit obligations have been met. Changing the names on everything from utility bills to in-store loyalty cards can be a surprisingly lengthy and frustrating process. The sooner it begins - and the more carefully each party monitors it - the smoother it is likely to be.

This is one of the aspects of divorce and the separation of assets where you might not think about your Orange County divorce lawyer, despite the fact that he or she can play a critical role. Drawing up legal documents in a careful and thorough manner, and then ensuring that both parties keep up their respective ends of the agreement is one of the most important services attorneys can offer clients. With it can come peace of mind during an otherwise chaotic and emotional time.

Fox Business: How to protect your credit during Divorce

Last spring I wrote about an obscure tax provision known as the "Innocent Spouse Rule" and the potential effect it can have on an Orange County divorce settlement. Needless to say, that is far from the only tax issue that can arise when one is contemplating a divorce. Recently, the Wall Street Journal's Smart Money column offered some useful pointers on major (and, in most cases, more common) issues that also bear consideration.

While state law governs many aspects of divorce - such as the community property rules that apply here in California - many of the tax implications of a Los Angeles or Orange County divorce are ultimately federal in nature.

As the Journal outlines, a key tax aspect of divorce involves what are known as Tax-Free Transfer Rules. "The general rule is that you can divide up most assets... without any federal income or gift tax consequences," the paper notes. If such transfers take place after the divorce becomes final, however, it is important that they be written into the settlement. If, for example, the settlement gives ownership of the house to one spouse but gives the other a share of any future sale price, that cash would come to the second spouse tax-free because the sale was made "pursuant to your divorce or separation agreement." Similar, though often more complex, rules lay out specific treatment for stocks and bonds and for any capital gains realized from them.

The article warns, however, that tax advantaged retirement accounts (such as a 401K or 403B) are a very different matter. "You must jump through some hoops to get tax-free treatment if you transfer all or part of your account balances to your ex in divorce," the article states. It also warns that IRAs are subject to yet another separate set of rules.

The lesson here is that a divorce's complexities do not end with a basic agreement on the division of assets. An Orange County divorce attorney can help advise you on these complex situations - including letting you over whether your financial affairs are sufficiently complex that an accountant or other tax professional ought to become involved in the discussions.

Wall Street Journal/SmartMoney: What Divorce Means For Your Taxes

The seemingly endless, and endlessly acrimonious, California divorce of Frank and Jamie McCourt is due back in Los Angeles family court later this month. According to Bloomberg News, a judge has scheduled the couple's latest hearing to consider Jamie's request that Frank be forced to sell the Los Angeles Dodgers immediately "so they can divide the proceeds." The agency reports that the judge "will at the same hearing consider an earlier request by Jamie McCourt for information about the Dodgers' business."

Frank, in turn, is asking the judge to rule that Jamie has no right to be involved in the media rights deal he is reportedly close to completing with Fox Entertainment.

And so it goes. Legally-speaking the couple have been divorced for some time, but a lengthy fight over a post-nuptial agreement (the court eventually ruled in Jamie's favor - throwing the agreement out) as well as deep differences over the future of the baseball team have prevented them from reaching a final settlement.

Indeed, according to Bloomberg, the fate of the Dodgers has again taken center-stage in this long-running Los Angeles divorce case. Earlier this year Baseball Commissioner Bud Selig took control of the team's business affairs. Jamie is reportedly asking the court to order Frank to go ahead with a sale to be arranged by the McCourts as a couple, on the grounds that any other resolution is likely to fetch a lower price and, therefore, is not "in the best interests of the club or the marital estate." That claim by Jamie highlights an important aspect of California family law that any Orange County divorce lawyer should make clients aware of: spouses should do nothing to damage community assets during the negotiation of their settlement. Doing do can only create greater legal difficulties down the road.

As an Orange County divorce attorney, this case has been fascinating to watch. In some ways it has come to embody almost everything that most family law attorneys counsel their clients to avoid. Of course, few divorces are perfectly smooth, but skilled, caring legal advice can go a long way toward ensuring that they are no more drawn-out, and no more acrimonious, than they need to be.

Bloomberg: Judge sets June 22 hearing for Jamie McCourt's request for Dodgers sale

A few days ago I blogged about the ATROs that go into effect upon the filing of a Petition for Dissolution of Marriage. Today's blog will focus on item #2 of the ATROs:

"2. Cashing, borrowing against, cancelling, 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."

If you are in the middle of the divorce and all of your accounts designate your soon to be ex spouse as the sole beneficiaries, can you change the beneficiares pending a divorce? First of all, you should always consult your Estate Planning attorney to ensure that you can do so. Typically, you must wait until the divorce is finalized before you start transferring and changing beneficiaries of financial accounts.

A good article that I found here, summarizes what you should consider prior to changing beneficiaries. Here is an excerpt:

"[i]deally you should consider changing your will and all your other estate planning documents before filing for divorce. This includes updating your living will (medical directives) and financial power of attorney so that someone other than your soon-to-be ex-husband has the ability to make financial and/or medical decisions on your behalf should you become incapacitated. (Do you really want him making possible life and death decisions on your behalf at this point in your relationship?) You may also want to name new beneficiaries on your life insurance policies, retirement accounts, annuities and other investments where applicable. Beneficiary changes to some accounts such as 401Ks and pension plans may require the consent of your spouse and, in all likelihood, you will not be able to change them until after your divorce has been finalized.

Also, once divorce proceedings have begun, the ability to change/move various accounts, name new beneficiaries and/or revise other documents might be prohibited. What's known as an Automatic Temporary Restraining Order (ATRO) may be in place to ensure that both parties' assets and ownership interests stay the same until they have been divided pursuant to the final divorce decree."

Contact an Orange County divorce lawyer if you have any questions or concerns about filing for divorce in Orange County or Los Angeles County.

Source: Should you disinherit your husband?

An issue that often times is dealt with in a divorce proceeding is how to handle the disposition of the former family residence upon a divorce. Specifically, how do you remove one party's name from the loan. Do you refinance? Is refinance your only option? There is another, little-known option that can avoid refinancing and its costs, which generally run 3% to 6% of the outstanding loan principal, according to LendingTree. One spouse simply has to ask his or her lender to remove the former spouse's name, leaving the loan note in the other spouse's name only. This is called release of liability.

To qualify for release of liability, the lenders and servicers will have to run a separate credit check on the applicant. For example, this requires that the applicant meet minimum the credit scores (typically from Fannie Mae, the giant government buyer of loans), and they also need to ensure that you are current with the monthly mortgage payments. They may also require that any investors in the loan, after it is sold off, agree to the deal. If you owe more on the loan than what the property is actually worth, this option is not available.

So, if the homeowner can prove that he or she can afford the payments and meet the required credit criteria -- typically those of the investor in the loan -- then release of liability may work.

For more information on how to handle the disposition of a community property residence or if you have any questions in general about divorce, contact an Orange County divorce lawyer for more information.

Source: Avoiding Refinancing Costs After Divorce

When last we left Frank and Jamie McCourt - a couple who, over the last 18 months, have engaged in what is arguably the biggest, bitterest and highest profile Southern California divorce in recent memory - Jamie had just won a major victory with a Los Angeles family law court's ruling that a disputed post-nuptial agreement is valid and she, therefore, is a co-owner of the Dodgers.

That made last week's headline in the Los Angeles Times a bit surprising: "Frank and Jamie McCourt working quietly on a settlement." 'Quiet,' 'settlement' and 'McCourt' are words we are not accustomed to seeing together in the same sentence. The confluence of that headline and Opening Day made this seem like a good time for an update.

The Times report says attorneys for the couple sought and received postponement of a hearing scheduled to take place early next week regarding settlement issues. The hearing had been scheduled to consider Jamie's demand "that Frank be ordered to provide her with extensive financial documentation regarding the Dodgers' business operations." The Times notes that media reports over the winter have indicated that Jamie is willing to cede her share of the team back to Frank in exchange for a payout "but she has balked at the proposals he has offered" so far. The postponement request, coming after about a month of renewed settlement talks, may indicate that the two sides are making progress.

One need not be a baseball fan to observe that the McCourts' may stand a better chance of coming to a final California settlement agreement if they manage to continue to keep their negotiations out of the media spotlight. Complex settlement litigation can become a problem for high net-worth couples, and publicity rarely helps if the goal is to make property division issues go smoothly. Resolving cases like these involving business valuation issues and the separation of high-value marital assets often requires specialized legal assistance. In the McCourts' case, for example, issues surrounding the Dodgers appear to have become a sticking point (now that courts have ruled that Jamie is a part-owner of the team).

As a result, this case is emerging as a textbook example of the important role a Los Angeles or Orange County family law attorney can play resolution of complex and contentious California family law issues.

Bloomberg: Dodgers Owner McCourt's Ex-Wife Seeks Documents on Baseball Team finances

Los Angeles Times: Frank and Jamie McCourt working quietly on a settlement

A court's ruling in a Southern California divorce case from San Diego, along with a bill making its way through the legislature in far-away Oklahoma, are bringing new attention to military retirement pay and how it is treated in divorce cases here in Orange County and elsewhere around the country.

According to a press release republished by PR Log, the San Diego case turned on the proper implementation of a 1997 California divorce settlement of a couple in which the husband was in the military. After the ex-husband retired in 2007, the ex-wife alleged, he failed to uphold their agreement.

The California case focused on what were essentially technicalities regarding the drafting and implementation of the original agreement and the wife's contention that these led to her being denied the full portion of her husband's military retirement pay to which she was entitled. If proposed legislation in Oklahoma passes, however, that share could shrink for spouses in future cases - a prospect that has other legislatures paying close attention and has sparked warnings that Oklahoma might become a haven for armed forces members seeking to dissolve their marriages.

The Oklahoma legislation would overrule a long-held federal standard that grants divorcees half of their ex-spouse's military pension. It would give those married less than ten years no right at all to an ex's military pension and would cut off pension payments if the spouse remarried. Even more significantly, it would make the pension distinct from other military benefits, such as danger pay and hostile fire pay, eliminating the ability of non-military ex's to claim a portion of those monies as part of a military divorce.

We will have to watch the Oklahoma legislation closely over the coming months, both to see whether it passes and to judge its effect here in California and in other states. As I have written on previous occasions, military service poses special problems and especially complex legal issues during an Orange County divorce proceeding. Division of assets and child custody issues are often stretched across state lines and can become unusually thorny. It is important for any Orange County divorce lawyer to stay on top of developments, like those in Oklahoma, which have the potential to impact divorcing couples here in California, whether by prompting new legislative moves in our own state, or by creating an apparent 'safe-haven' in which unscrupulous spouses may attempt to hide their assets during a contentious divorce proceeding.

PR Log: The Edmunds Law Firm Earns Favorable Decision in Military Divorce Case

Newson6.com: Proposed legislation on military benefits drawing national attention

Now that the Real Houswives of Orange County season has kicked off, it cannot go without controversy. A few years ago, it was Tamra Barney who became the center of a divorce matter. Now, its VIcki Gunvalson. Ironically, I recall watching the episode where Vicki and her husband jetted off to Turks and Caicos to renew their wedding vows. I guess the renewal could not hold muster as now the Gunvalsons are involved in an Orange County divorce. In fact, Vicki has stated to US Weekly the following:

"We're still living together. We're [mediating] our divorce. We still have our finances co-mingled [and] joint accounts." She went on to say: "My love tank has truly been empty for many many years. We stopped communicating. My happiness came from my work and my children."

From an Orange County divorce lawyer's perspective, it is not uncommon for couples to continue living in the same residence. However, doing so could cause plenty of stress and tension. Often times, one party does not want to move out because they don't want to lose leverage in the divorce and they intend to keep the house after the divorce is over. Another reason could be that one spouse (typically, the stay at home spouse) will not have enough money to move out of the residence. If this is the case, usually that spouse will petition the court for an order that the other spouse pay the stay at home spouse a distribution of funds to be able to initially move out into a separate residence.

Vicki also states that they still share the same joint bank account. Why do couples do this during a divorce? Simply because pending the divorce litigation, the higher earning spouse will have to pay the stay at home spouse temporary spousal support and/or child support pending the divorce action. By giving the stay at home spouse access to the joint bank account, enables the stay at home spouse to pull funds as he or she sees fit to meet their living expenses in order to continue to maintain his or her lifestyle peniding the divorce. Eventually, once the divorce is final, all bank accounts will have to be split and the disposition of the former family residence will have to be resolved.

If you would like more information on filing for divorce in Orange County or Los Angeles County, contact an aggressive Orange County divorce lawyer for more information.

Source: Vicki Gunvalson "Real Housewife of Orange County Talks Pending Divorce"

With tax time fast approaching this is a good moment to examine some of the ways in which an Orange County divorce can affect one's tax status. A fascinating article posted yesterday on the financial website Smartmoney.com examines the consequences of an obscure IRS provision known as the "Innocent Spouse Rule," touching on its particular role in divorce cases.

Briefly stated, the innocent spouse rule allows one spouse to avoid tax penalties related to a joint return if he or she can plausibly claim to have had no knowledge of what the other was doing in filling it out. As the article at Smartmoney.com makes clear, the term "spouse" can be slightly misleading, since the rule can also apply to divorced couples. That, of course, is good news. One of the sad realities of divorce, be it in Orange county, Los Angeles, San Bernardino or elsewhere, is that dissolving a couple's financial links can sometimes be a more complex process than dissolving the marriage itself.

Smartmoney, for example, cites a case from the 90s in which a woman "was denied an appeal after the IRS wouldn't let her claim the innocent spouse rule over a return prepared by her ex-husband." The point here being that tax obligations incurred during the marriage followed the woman even after her divorce. Smartmoney notes that the law was changed in 2004 to make innocent spouse claims easier to file. That, however, has led to a huge spike in the number of claims made under the law and has led the government, in turn, to view such claims with increasing skepticism.

On another key divorce-related tax issue, the IRS' innocent spouse rule Q&A page notes in several places that anyone whose name is on a joint tax return is responsible for the tax, interest and penalties related to that return - a fact which does not change "even if a divorce decree states that a former spouse will be responsible for any amounts due." In other words: your settlement may say your ex is responsible for the tax penalty, but, as far as the IRS is concerned, that is none of their concern; until someone pays the money you are both liable for it.

Issues such as these illustrate the important role an Orange County divorce lawyer plays throughout the process of dissolving a marriage and dividing up a couple's property. Without careful, detail-oriented legal advice a break-up can prove to have unanticipated, and far-reaching, consequences. An experienced California family law attorney can help clients avoid these pitfalls.

Smartmoney.com: More spouses off the hook for tax mess

IRS Innocent Spouse Questions & Answers Information Page

When last we left the soon-to-be-California-divorced Christina Aguilera and her husband Jordan Bratman they were feuding over his refusal to move out of their home (see this December post by my colleague, Winiviere Sy). Now, according to the celebrity press, the couple have finalized their California divorce settlement.

Under California law a divorce cannot be final until at least six months have elapsed since the initial filing of court papers. Thus, according to E! Online, the Aguilera-Bratman divorce is now set to become official on April 15. The website writes that the couple "have reportedly reached financial and custody agreements that will presumably make the next couple of months of their "marriage" go down easier."

The site reports that the couple, who have been married a bit over five years, have agreed to a Southern California child custody arrangement under which they will share custody of Max, their son, who is three. A statement from Bratman did not elaborate on financial arrangements, but said that money issues have been "resolved by signed agreement." That would at least imply that non-financial issues - such as who gets the house - have been settled as well.

The negotiation of California divorce settlements and child custody arrangements can be difficult in the best of circumstances. That fact alone makes the choice of a divorce lawyer in Orange County, Los Angeles, San Bernardino or elsewhere in Southern California a particularly crucial step. While it is possible for couples to negotiate financial, custody and support issues by themselves it is rarely advisable. An experienced Orange County divorce lawyer can be an essential partner and advisor, ensuring that whatever you eventually agree to is fair and protects your rights.

Fanbolt.com: Christina Aguilera and Jordan Bratman Finalze Divorce

E! Online: Christina Aguilera Settles Divorce Drama

A fascinating column published recently on the Reuter News Agency's "Prism Money" blog examined issues we sometimes do not think about when contemplating Orange County divorce. In the popular imagination, break-ups are the province of couples married for two, five, 10 or 12 years. Of course, we all know this is not true. An Orange County divorce attorney sees clients in every conceivable stage of a marriage, and most of us know of at least one couple married for decades who decide to call it quits at a time when others are picking out retirement properties (Al and Tipper Gore, for example).

As the Reuters piece highlights, the issues faced by a couple who have been married for decades are often fundamentally different from those where both spouses are in the prime of their working lives.

According to the article, more older couples are signing settlements that forego alimony or spousal support in favor of a single division of assets, generally including a lump sum payment. Some women, the author notes, are "foregoing alimony in order to front-load money in case their ex-spouse can't come up with the payments down the line." It is an interesting concept - though, as the article notes, one fraught with potential pitfalls that make it something one should not venture into lightly. It is also worth mentioning that while the article offers some fascinating stories it does not back them up with any hard data.

The article also notes that what it calls "the non-alimony route" remains unusual here in California. It is also worth remembering, of course, that either party to a California divorce can go back to court at a later date to argue for a modification based on changed circumstances.

Not surprisingly, the bottom line is that every divorce is different. Here in Orange County it is important to have an attorney on your side whose local knowledge can provide you with an edge when negotiating the terms of your Southern California divorce. For older divorcees, those who will be living directly off the terms of their settlement now or in the immediate future, such assistance can be even more important if the goal is to achieve a resolution that is both fair and livable.

Reuters: Gray Divorce: The question of alimony

An essay on the subject of pets and divorce published earlier this month at The Huffington Post has been blogged and commented-upon widely over the last ten days or so. The article, by Jill Brooke (an author who describes herself as a "Blended Families Expert"), looks at the increasing prevalence of pet-related issues in divorce cases.

"According to the American Academy of Matrimonial Lawyers, attorneys have seen a 23 percent jump in pet custody cases," Brooke writes. A similar analysis at the pet-focused website Paw Nation notes that "today half of the 190 accredited law schools in the United States, including Harvard and Yale, offer courses in animal law" - a field that barely existed as recently as a decade ago.

Brooke presents a long string of anecdotes outlining the strife that pet custody can cause in a divorce proceeding. She writes that "dogs used to be viewed as property... But now courts realize that pets are members of the family and their best interests are being considered." That, however, is not an entirely accurate reading of the law, at least here in Orange County and elsewhere in California.

Perhaps the problem is one of terminology. We talk of "custody", and we may think in those terms regarding pets but, legally speaking, your dog and your kids are very different things. It is true that, here in California, legislation signed by Gov. Arnold Schwarzenegger in 2007 (SB 353) allowed courts to issue both custody orders and restraining orders in relation to pets. It is also true that many California divorce settlements contain provisions specifically related to pet custody and visitation. None of that, however, changes the fact that animals, legally speaking, are property and deciding who gets the pet is a property division issue. The terminology ("custody", "visitation") may be similar but the standards for deciding who gets the dog or cat should not be - and, indeed are not - the same as deciding which parent a child should live with.

Terminological distinctions like these are among the most important issues an Orange County divorce lawyer can help clients with. None of this is meant to minimize the emotional trauma that losing your pet in a divorce can engender. In negotiating an Orange County divorce, however, it is important to have the help of a skilled attorney who can help you understand how assets (pets included) differ from one another and who can help you sift through your own priorities in deciding what, exactly, is most worth fighting for.

The Huffington Post: Who Gets the Pet in a Divorce?

Paw Nation: Who gets the dog in a divorce?