Articles Posted in Separate Property Assets

On Tuesday Los Angeles Superior Court Judge Scott Gordon issued a key ruling in the seemingly endless, blockbuster divorce of LA Dodgers owners Frank and Jamie McCourt. According to the Los Angeles Times, Judge Gordon invalidated the postnuptial agreement (technically known as a Marital Property Agreement, or MPA) signed by the couple in 2004.

MPA’s, like a prenuptial agreement, are meant to remove agreed-upon assets from the purview of community property laws in California and other states. Under the terms of the McCourt post-nup Frank would, in the event of a California divorce, retain sole ownership of the baseball team while Jamie became sole owner of the couple’s numerous homes. Granted that a 50% interest in the Dodgers would be worth immensely more than the couple’s reportedly large collection of houses Jamie held that the agreement was unfair and, therefore, invalid.

Perversely, both McCourts claimed to have neither read nor understood the document before signing it. Judge Gordon rejected this testimony as “not credible,” but focused his ruling on a more troubling legal issue. Specifically, in holding that the MPA does “not conform to California law” he cited the fact that Frank’s Boston-based lawyer, who drew up the document, altered it after both McCourts had signed it and without telling either of them. “The Court finds that there has not been sufficient evidence presented to indicate which of the two materially inconsistent MPA’s represented the actual intent of the parties,” the judge wrote, according to the Times.

A fascinating article recently published on the Fox Business website looks at the complex ways in which debt can effect marriage and divorce here in California and elsewhere. As the article notes, “any debts incurred” during marriage or residence in a community property state, such as California, “are considered jointly owned, regardless of who spent the money or why.”

The article is an advice column, and the author was responding to a specific question regarding a surviving spouse’s responsibility for debt incurred by the other person in the marriage in the event of that person’s death. As the column noted, the couple in question are separated.

Though focused on death, questions like these are also relevant to many California divorces. Sorting out assets and debt obligations can be one of the most complex elements of the Orange County property division required under California’s community property laws as part of a California divorce. Issues such as these can be one of the most challenging aspects of negotiating a Los Angeles or Orange County divorce.

Both the LA Times and a host of celebrity publications are reporting that Heidi Montag has filed for a Los Angeles Divorce from husband Spencer Pratt. The reality TV star, who recently made headlines for announcing earlier this year that she had undergone a head-spinning number of cosmetic surgery procedures in a single day, at the age of 23, initially went to Southern California family law court seeking a legal separation from Pratt two months ago. Media reports say she amended that filing to request a California divorce at the end of last month.

According to People magazine, “the public and Montag’s own former co-stars from The Hills initially expressed doubts about whether the split was legitimate or another publicity stunt.” A consensus appears to have formed, however, that the divorce filing is, indeed, real.

A cynic might note that Montag and Pratt appear to deserve each other (“We love each other, but I’m a fame whore and I’ll never grow out of it,” Pratt told People), but their California divorce can also be seen as a cautionary tale for those of us who live far from Hollywood’s lights. The lesson: plan ahead… and if you fail to do that, be prepared for a potentially difficult time in court.

A variety of celebrity websites are reporting that Charlie Sheen and his wife, Brooke Mueller, have signed divorce papers. According to the site PopEater, however, the couple’s California divorce settlement agreement has not yet been formally submitted to a court for consideration.

The couple’s marriage began to unravel last Christmas when police were called to a residence in Aspen. Sheen is now facing domestic abuse charges in Colorado. In the wake of that incident Sheen and Mueller’s progress toward divorce, and a Southern California family law court, has been swift.

The California divorce settlement may be filed in Orange County or elsewhere in the region. According to HollywoodNews.com, the document stipulates that the couple will share custody of their 15-month old twin boys, with Sheen paying $55,000 a month in child support. Media reports say the settlement specifically says that Mueller’s level of child support may not be lower than the sum Sheen pays to his first wife, Denise Richards. In addition to the child support, Mueller will reportedly receive a large cash payment, as well as having Sheen buy out her equity in their home (Sheen will keep the house itself).

Blogging about other people’s Southern California divorces is one thing, but your own? While it is still being adjudicated? Say what you will, author Justine Musk is taking an unusual approach to negotiating her Los Angeles County divorce settlement. The real negotiating is, of course, taking place behind closed doors involving Southern California divorce lawyers. Musk, however, has used her blog to lay down a marker about what she wants and to defend it in public. The case of Musk and her husband, billionaire investor Elon Musk, is especially interesting because, as Reuters reports, Justine’s demand for a stake in Elon’s latest venture – the Tesla electric car company – may complicate plans for the company to go public.

According to LA Observed the couple have been married eight years and have five children. Elon Musk is a co-founder of PayPal. Justine Musk is a successful novelist, specializing in supernatural thrillers. LA Observed, quoting her blog, says she is demanding a 10 percent stake in Tesla, as well as five percent of another Musk venture, Space X. She also wants $6 million in cash, the couple’s house, child support and alimony… and a Tesla Motors Roadster (retail price: $109,000).

Reuters reports that Justine Musk’s demand for a stake in Tesla Motors as part of her California divorce settlement “could complicate plans… to take the company public and retain $465 million in U.S. government funding to launch a mass-market electric car named Model S.” The news agency reports that lawyers for both spouses did not return calls seeking comment.

Several celebrity websites report that Oscar-winning actress Halle Berry and boyfriend Gabriel Aubry recently broke up after four-plus years together. Their rupture raises potential California child custody issues because the couple, though never married, have a two year old daughter.

The Huffington Post quotes entertainment websites reporting that the split actually took place several months ago, but has only now leaked out into the media. Quoting Radaronline, the website reports: the couple “have already hammered out a custody and financial agreement.” The article goes on to say that the document calls for “50/50 custody” of their child. Aubry, a model, was not reportedly interested in receiving money from Berry.

When a couple are not married Orange County custody issues may become more complex than they might otherwise be. In this particular case, the fact that the father is foreign (Aubry is Canadian, according to the website Monsters & Critics) adds a further potential twist to whatever Los Angeles or Orange County custody agreement the couple may have worked out. Significantly, celebrity website TMZ, quoted by The Huffington Post, describes the couple’s arrangement as “a temporary custody agreement,” adding: “there is no long-term custody arrangement or property settlement agreement.”

The ongoing Southern California divorce case of San Diego real estate mogul John Moores and his estranged wife Rebecca took a new twist recently with the two sides arguing over whether one of Mr. Moores’ companies was capitalized with joint funds and, therefore, subject to California’s community property laws.

At issue, according to the San Diego News Network, is JMI Guaranty LLC, a lending company John Moores set up to finance his “various real estate projects.” Rebecca Moores claims the $14 million in seed money used to start the company came from the couple’s joint funds. The dispute, if it drags on, has the potential to affect financing for a variety of real estate developments.

The high-profile Southern California divorce case highlights the complexities of California community property law. Consulting with a Southern California family law attorney is a key step in making your way through this unfamiliar area of divorce law, even when the stakes are far lower than the $1 billion-plus dollars the Moores family is reportedly worth. As the Moores’ case demonstrates, dividing up assets is often not as simple as it might seem – particularly when disagreements arise over what, exactly, constitutes a joint asset.

A Prenuptial Agreement is an agreement which couples use to determine how their assets will be divided in the event of a divorce. You may want to consider a prenuptial agreement if you….

1. Have a separate property family business: With a prenuptial agreement, you can draft an agreement to prevent your spouse from acquiring an interest in the appreciation of your separate property business. Otherwise, your spouse may be entitled to half of the value of the business.

2. Have substantial separate property assets: Similarly, if you own separate property assets such as real estate, you may want to draft language in a prenuptial agreement which safeguards your separate property interest in the appreciation of the property.