Many family law clients believe that the only way that their matter can be properly and legally concluded is by going to court and appearing in front of a judge. That is simply not the case. In fact, provided both parties can agree to the terms of a settlement, neither party ever need appear in court to finalize their matter. Alternative Dispute Resolution (ADR) provides parties “alternative” ways to resolve their dispute without resorting to costly and often protracted litigation.

Litigation of family law matters, including divorce, can be expensive and can take months or even years to conclude, given the recent state budget cuts and the insufficient number of judges who are tasked with presiding over these family law matters. Litigation is often the option of last resort when the parties are unable to resolve their matter through a negotiated settlement. Litigation can cost thousands or even several hundreds of thousands of dollars depending on the complexity of the issues involved and the level of contentiousness between the parties and their attorneys. Litigation is also the option that affords the parties the least amount of input and control over the eventual outcome. Litigation in family court is often accompanied by repeated delays and mounting costs attendant with those delays. In a small minority of cases, litigation is necessary to adequately protect the interests of the parties. However, in the vast majority of family law disputes, the issues are capable of faster and more satisfying results through alternatives to litigation.

The most commonly utilized forms of Alternative Dispute Resolution in the context of a family law dispute are: Mediation, Collaborative Law and Cooperative Divorce.

Mediation. Mediation is a form of dispute resolution whereby a neutral third party, “mediator” assists the parties in resolving some or all of the issues in their dispute. In the case of a divorce, or other family law matter, this process may include resolving issues of child custody, child/spousal support, prenuptial/marital agreements, property division, and any other issues that may arise in connection with a divorce or other family law proceeding. The mediator does not tell the parties what to do, but rather assists the parties in fashioning a resolution that is satisfactory to both of them. The parties in mediation may or may not be represented by counsel. The benefits of mediation are: 1) it is less expensive than litigation; 2) it takes much less time to conclude the matter; 3) the parties have maximum input and control over the outcome; 4) implementation of the agreement is usually smoother and less prone to failure than if an order had been imposed by a court; and 5) the issues can be discussed in a confidential setting rather than in open court.

Family law mediation is often a faster, less costly, and more satisfying alternative to litigation. In selecting a mediator, it is wise to choose a mediator who is also a Certified Family Law Specialist to ensure that all of the required documents are prepared timely, correctly, and completely.

Collaborative Law. Collaborative law or collaborative divorce refers to a process to resolve family law conflicts in a respectful, non-adversarial, and mutually-beneficial manner. This collaborative approach has been successfully utilized in many other areas of the law, such as business, probate, and other civil proceedings.

The parties in a collaborative divorce agree to work cooperatively to resolve their issues. They sign an agreement that they will not litigate the matter. In the event that a party later chooses to litigate, that party must hire a new attorney and cannot continue to use the collaborative specialist.

Collaborative attorneys are specialists in settling disputes. They must undergo specific training in order to properly assist parties with a collaborative approach. Often, in the context of a collaborative divorce, the parties will employ a “team” of experts that may be needed to help resolve issues relating to finances and to the children, or to other issues pertaining to that family.

As with mediation, the benefits to the parties are many. They retain maximum control over the outcome of their case, as opposed to turning over the decision-making to a judge who does not have intimate knowledge of that particular family.

The parties, through their collaborative attorneys, agree to voluntarily provide necessary documents and information early in the process, which serves to drastically reduce the cost of the formal discovery that is often a hallmark of litigated divorces.

The collaborative approach to a divorce or other family law proceeding minimizes the hostility and the emotional toll that is often inflicted on the participants in a litigated dispute.

The collaborative divorce process is a respectful, peaceful, and dignified process that is designed to ensure that the participants and their children successfully transition to the next chapter of their lives.

Cooperative Divorce. This non-adversarial option shares qualities with both mediation and collaborative divorce. The parties each have a lawyer and engage in settlement negotiations cooperatively, rather than combatively, in order to reach a mutually-satisfying resolution of the divorce or other family law issue.

Cooperative divorce relies on the participation of the parties and their lawyers and often jointly-retained experts, as necessary, rather than each party retaining his or her individual expert.

The parties in a cooperative divorce agree to treat each other with respect and in a civil and professional manner. Both parties commit to voluntary, full disclosure of pertinent financial information to eliminate the need for depositions, subpoenas and more formal (and expensive) methods of discovery. As in collaborative divorce, the parties agree not to litigate, but unlike in collaborative divorce, there is no requirement for a written stipulation to that effect.

As with mediation, cooperative divorce is a faster process than litigation and it also affords the parties an optimum level of input and control over the outcome. While experts may be involved and are typically jointly retained, the “teams” of experts that are often utilized in a collaborative divorce may not be needed. Thus, cooperative divorce can be a bit more cost effective than the collaborative approach, depending upon the issues involved.

It is wise to seek out a Certified Family Law Specialist who also practices in areas of dispute resolution, such as mediation and collaborative law. While an attorney may not have taken the specialized training as a collaborative practitioner, that attorney could be well-suited to assist parties with cooperative divorce which does not require the specialized training that is required of a collaborative attorney.

In California, there are three ways to end a marriage or registered domestic partnership: divorce (legally referred to as “dissolution”), annulment (or, “nullity”), and legal separation.

An annulment (or, a “nullity of marriage”) changes the status of the marriage such that legally, it never existed. Whereas a dissolution proceeding seeks to terminate marital status, a nullity proceeding seeks to determine whether any such status ever existed. In other words, while a judgment of dissolution terminates a valid marriage, an annulment declares that the marriage was not legally valid from its inception. This means that in order to be granted an annulment, the court must determine that the marriage is either void or voidable. Marriages that are “void” include those that are incestuous or bigamous. Marriages can be declared “voidable” if, at the time of the marriage, one of the parties was under the age of 18, of unsound mind, or had a physical incapacity. Additionally, “voidable” marriages include those that are the result of fraud or force.

Like a divorce, a judgment of nullity of marriage restores the parties to the status of “unmarried persons.” However, because an annulment treats a marriage as if it never existed, parties do not have the same rights and obligations as those seeking a divorce or legal separation. For example, spousal support cannot be granted after a judgment of nullity. The timing requirements for filing for an annulment in California often depend on the grounds for which the annulment is sought. The state’s laws set forth a statute of limitations for each of the voidable grounds for annulment. If the statute of limitations has already expired, filing for a nullity of marriage will no longer be an option, and the parties will have to file for a dissolution of marriage or legal separation instead.

Where one or both spouses enjoy an interest in a business or professional practice, that interest will need to be valued. Different valuation methods are employed for businesses that are wholly or partially owned by the parties, and for those which are closely held.

In assessing the value of that business or practice that is wholly owned by the parties, the court will consider the business’ fixed assets, other non-fixed assets (such as accounts receivable), goodwill (if any), and liabilities. (See generally Marriage of Lopez (1974) 38 CA3d 93, 110.) “Goodwill” refers to the ongoing value of a business from continued public patronage and is often included where valuation of a professional practice (e.g. a law firm) is concerned. (See e.g. Marriage of Watts (1985) 171 CA3d 366, 370). It is common practice for each party to retain a forensic accountant who will opine as to these components of value. Alternatively, the court may appoint its own expert pursuant to California Evidence Code §730 where valuation of the business is at issue. Accountants (or other valuation experts) employ a number of methods, such as a market approach, cost approach, or income approach for determining the value of a business.

With respect to business interests held jointly with other persons, such as partnership interests, the value of the parties’ interest may be defined by agreement. By way of example, the formation documents of a partnership, or a buy-sell agreement, may provide credible evidence of the value of the business interest. (See generally Marriage of Fonstein (1976) 17 C3d 738, 745-746). In assessing whether the terms set forth in a buy-sell agreement should be used in setting the value of the business interests in a dissolution, the court should consider the proximity of the date of the agreement to the date of dissolution, whether the value produced by the buy-sell agreement is similar to the value produced by other approaches, and any other reasons why the parties may have entered into the buy-sell agreement. (See generally Marriage of Nichols (1994) 27 CA4th 661.) Where the value of the business is disputed by the parties, it is common practice for each party to retain a forensic accountant.

A “closely held” corporation is one which has few shareholders and is not traded by the public. To assess the value of the parties’ interest in a closely held corporation, the court must attribute either a ‘hypothetical market value’ or an ‘investment value’. (Marriage of Hewitson (1983) 142 CA3d 874, 882.) A hypothetical market value is determined based on comparable recent sales of the unlisted stock in that corporation or upon a price-earnings ratio approach. The investment value of closely held shares is determined either by capitalization of earnings, capitalization of dividends, or by book value. Independently retained accountants will render opinions as to which approach is most equitable and appropriate for the circumstances of the case.

Where one party owned a business interest prior to marriage and that interest increased in value during marriage as the result of either party’s efforts, the court may apply the approaches of Van Camp v. Van Camp (1921) 53 Cal.App.17 or Pereira v. Pereira (1909) 156 Cal.1 to apportion the increase value between the parties and determine the separate property and community property components of the business’ value.

Business interest(s) of the parties will ordinarily be valued as near as practicable to the time of trial. (California Family Code §2552(a).) For good cause shown, the court may value business interest(s) at a time before the date of trial, including, by way of example, where one party’s lone hard work increased the value of the business post-separation.

The issues of child custody and visitation can be one of the most difficult areas to work through in a divorce and oftentimes continue post-divorce until the children reach adulthood.

The overriding public policy with respect to custody/visitation is to assure that children have frequent and continuing contact with both parents (so long as both are fit to parent).

There are two types of custody:

Legal custody refers to a parent’s authority to participate in the major life decisions affecting a child’s health, education, and welfare. If parents share joint legal custody, both parents can participate in all of the major decisions regarding the child, and each have equal access to all information about the children from schools, physicians, etc.

Physical custody refers to the time the children reside and/or spend time with each parent on a regular basis. Although some parents are able to effectively communicate and co-parent with the other, and the children are able to freely move from one parent to the other without a set schedule, most parents need a defined schedule clearly spelling out his/her custodial (parenting) time with the children.

There are a multitude of ways that parents can structure a custodial timeshare that works for them and the children. There is no right or wrong parenting schedule; the best plan is one that works for the parents and is in the best interest of the children.

Some examples of schedules include the following: The children may be with one parent one week and the other parent the following week; or the children may be with one parent during the week and with the other parent on alternating weekends with mid-week visits; or the children may be with one parent every Monday and Tuesday, with the other parent every Wednesday and Thursday and then they alternate weekends from Friday after school to the drop-off at school on Monday. Typically, holidays and special days are split equally and the parents may have designated vacation times every year. While some parents adhere to the same schedule during the summer months, others choose a different schedule with larger blocks of time when the children are with each parent.

The two types of custody can be joint or sole.

With sole legal custody, one parent has the exclusive right and responsibility to make all decisions relating to the children’s health, education, and welfare. It is the exceptional case wherein the Court awards sole legal custody. There are instances where the Court may award sole legal custody for specific parental decisions, such as medical care or schooling issues. However, unless sole physical custody is granted as well, the sole legal custodial parent does not have sole control over the children’s residence and supervision.

With sole physical custody, the children reside with and are supervised by one parent, subject to the other’s visitation rights; however, the custodial parent does not have sole decision-making power (absent an order for sole legal custody) regarding other matters affecting the children.

California law favors joint legal and joint physical custody when both parties are able to agree. Parents who are able to agree can develop their own individual parenting plan with respect to both legal and physical custody.

When custody is contested, the law requires that both parents participate in mediation with court mediators prior to a contested court hearing. If the parties are unable to come to an agreement during mediation, the Court decides on a parenting plan based on the child’s best interest. Sometimes, the Court will order an Evidence Code Section 730 Custody Evaluation (whereby the Court appoints a neutral mental health professional to comprehensively interview the parents, children, and other third parties and determine a custody arrangement based on the best interests of the children). The evaluator then renders a report with recommendations to the Court as to custody and/or custodial timeshare. The Court has the widest possible discretion in considering the recommendations of the custody evaluator and to fashion a custodial schedule taking into account the children’s best interest standard.

The law makes it clear that custody and visitation determinations are to be made from the standpoint of the child’s best interest. The wishes of the parents are only one factor to the extent that they affect the children’s best interest. In making such a determination, the Court can consider any relevant factors, including but not limited to the following:

The children’s health, safety, and welfare – these are paramount policy concerns. (Habitual drug and/or alcohol abuse are factors relating to a child’s health and safety);

Any history of physical and/or emotional abuse;

Continuity and stability of the environment. Public policy favors maintaining stability and continuity in a child’s environment, including but not limited to maintaining established patterns of care and emotional bonds with a primary caretaker;

Separation of siblings. Public policy affords strong protection to sibling relationships. Absent compelling circumstances, such as extraordinary emotional, medical, or educational needs, a Court will not likely order such a separation; and

Children’s preferences or wishes. With children aged 14 or older, the Court must consider his/her preferences unless the Court has good cause not to so consider. With children under the age of 14, the Court may consider his/her preferences if the Court determines it would be in his/her best interest to do so.

Child custody and visitation orders may be modified after the parents’ divorce is finalized. The Court retains jurisdiction over these issues until the children reach the age of majority. The parent moving to modify a final custody/visitation order must show that there has been a change of circumstances affecting the welfare of the children since the last order. Such changes of circumstances include, but are not limited to, the following: Change in residence of one parent (this may require a motion for a “move away order”); the desire of an older child to increase or decrease visitation with a parent; evidence of abuse of a child; or alteration of the children’s school schedule.

Divorce is difficult for children in the best of circumstances when parents are able to get along. Studies and research indicate that if both parents are active and involved in the children’s lives, are able to communicate well, and do not fight over custodial issues, the children usually fare much better (both emotionally and physically) during childhood and continuing on into adulthood.

While some custody/visitation cases can be settled, others must be litigated in Court. Either way, PWGGC is here to assist clients with all custody and visitation issues. We draw upon our firm’s vast experience in negotiation and advocacy to develop creative solutions for you and your children.

Child support is a monthly payment that parents make to help cover the costs of raising a child. Generally, the parent who cares for a child most of the time (called the custodial parent) tends to receive child support payments. This is because the law assumes that the custodial parent already spends money directly on the child. The parent with less parenting time (called the non-custodial parent) usually makes the payments, but a court can order both parents to pay child support.

Typically, parents must pay child support until the child turns 18. There are some exceptions, however. By law in California, child support continues until the age of 19 if the child is still in high school and lives with a parent. The child support period is shorter, however, if the child marries or registers a domestic partnership, joins the military, or otherwise becomes self-supporting. On the other hand, parents could agree to support a child for a longer period of time or, if a child is unable to become self-supporting due to a disability, a court may order support for an adult child.

A parent who intends to avoid paying child support by refusing to work or working less rarely gets away with it. This is because a court can “impute” income, meaning, come up with an amount of income that this parent should be earning based on factors like employment history, education, and training. The state’s intent is to hold a deadbeat parent accountable to the family, and not punish the parent who stayed home with young children.

All California judges and courts follow the same guidelines when calculating child support. Because the guidelines/formula, as set forth in the Family Code, is so complicated, the court depends on a computer program (Dissomaster or X-spouse) to calculate monthly child support amounts. Although courts have the authority to deviate from the computer generated child support number (in either direction and/or in certain situations), they rarely do. Courts may also order additional child support payments, known as “add-ons”. A court will order one or both parents to provide for the child’s health care – including vision and dental – and to pay for child care needed for a parent’s employment, education, or training. The court also has discretion to order additional payment for the child’s education or special needs, and for a parent’s travel expenses for visitation.

Determination of the guideline child support amount takes into consideration many factors. The formula is based on the parties’ relative custodial time-share with the child(ren) as well as both parents’ net disposable income. Net disposable income is the difference between gross income and what counts as deductions for child support purposes.

Gross income includes everything from salaries and commissions to unemployment, disability income, and social security benefits. Most other income sources (interest, dividends, rental income, partnership distributions, etc.) are also included as gross income. Because the computer programs consider state and federal taxes, gross numbers are used as inputs. The computer programs also provide for other deductions, including mandatory union dues and health insurance premiums.

In cases where the payor’s income varies, child support is often comprised of two components: a base monthly payment and a supplemental payment paid periodically when the payor’s income includes compensation (over and above a regular salary) paid on a periodic basis such as a bonus or commissions. This latter method is commonly referred to as the Ostler-Smith method.

Once a child support order is in place, it is not necessarily set in stone. If a child support order is below the guideline amount, a parent can ask for a change (called a modification) at any time. If the order is for an amount at or above the guideline, then either parent can still seek a modification, but there must be a change in circumstances (typically a change in financial or time-share circumstances). Some of the most common reasons for modifying support are (i) when a parent involuntarily loses a job; (ii) when there is a change in a parent’s income; or (iii) when there is a shift in the custodial time-sharing arrangement. Another good reason for changing a child support order is when the payor has a new baby from another relationship.

It is important to keep in mind that one parent’s lost job or new baby may not be the only change impacting the amount of child support. When one parent asks a court to modify a child support order, the court is required to consider both parents’ financial circumstances and the custodial time-share arrangement with the child(ren) at the then current time. This has the potential to mean that even though a parent’s income has decreased, that parent’s child support obligation may go up. An unexpected increase could occur when that parent’s time-share has gone down, or simply because the parent requesting a modification is unaware that the other parent also experienced a loss in income or perhaps lost the health benefits that had been covering the child.

In California, unmarried parties who live together, parties who intend to marry, and parties who are married can enter into valid agreements creating or altering certain rights, interest, and obligations.

Although the rules relating to the validity and enforceability of these agreements vary widely, all such agreements are designed to provide certainty and predictability to the parties in the event their relationship terminates.

Often, parties intending to marry wish to define and preserve the separate property character of assets they own and to determine the disposition of that property and property acquired during marriage upon separation, marital dissolution, or death. Frequently, they wish to address their obligations for support, if any, to each other in the event the marriage dissolves. Married couples often wish to clarify, define, or redefine the character of property in the event of the dissolution of their marriage. Agree or through their conduct may impliedly agree to the treatment of their assets and/or income upon termination of their relationship.

Enforceable agreements can be reached between parties before they marry (prenuptial agreements) conditioned upon their marriage, or after they marry (postnuptial agreements). Most postnuptial agreements are, in effect, transmutation agreements wherein the parties seek to change the character of property from community to separate, from separate to community, or from one’s separate property to the other’s separate property. Transmutation agreements must be in writing to be enforced and must contain an express declaration by the spouse adversely affected.

Additionally, couples who live together and engage in sexual relations may enter into contracts which define their rights and obligations, if any, owing to each other as a consequence of their cohabitation. The enforceability of cohabitation agreements was recognized by the California Supreme Court in Marvin v. Marvin (1976) 18 Cal.3d 660). Unlike premarital agreements and transmutation agreements, cohabitation agreements need not be in writing to be enforceable. In fact, such agreements may be implied from the conduct of the parties. Non-marital cohabitants are permitted to enter into enforceable agreements regarding their earnings and property rights.

California Family Code §1600-1617 is cited as the Uniform Premarital Agreement Act. Because premarital agreements are negotiated and executed by parties not yet married, they are considered “arm’s length” transactions, the underlying fairness of which is considered in only limited circumstances. Where premarital agreements nullify, limit, or otherwise define obligations relating to spousal support, the party adversely affected by such provision(s) must be represented by counsel for such provision(s) to be enforceable. Additionally and notwithstanding the representation by counsel, if such provision is deemed unconscionable at the time it is sought to be enforced, it will be deemed invalid. “Conscionability” has not been defined by statute nor clearly by case law. Therefore, premarital agreements remain susceptible to challenge even after its terms are negotiated in good faith.

Once spouses marry, they owe fiduciary duties to each other, including the duties to act fairly and in good faith to each other. Accordingly, if, as a result of an interspousal transaction, one spouse gains an unfair advantage over the other, a presumption arises that such advantage was gained as a consequence of coercion or duress. In such event, the party seeking to enforce the provision has the burden of proving that the advantage was not obtained as a consequence of duress or coercion.

Rules regarding the creation and enforceability of premarital agreements and transmutation agreements are prescribed by statute. Cohabitation agreements and other post-marital agreements are subject to contractual interpretation, case law, and public policy application. In all instances, careful draftsmanship is necessary. It is recommended that parties seeking a premarital agreement arrange for the drafting and negotiation of its terms as far in advance of the intended marriage as possible. Factors giving rise to urgency or pressure to marry can affect the subsequent interpretation of the validity of the agreement. Full disclosure of assets, income, and obligations are essential to the validity of these contracts.

All three types of agreements described can substantially impact a party’s rights in the event of a termination of his/her relationship with a spouse or cohabitant. The validity and enforceability of these contracts may be considered many years later under far different circumstances than existed at the time of execution. Both sides should have competent legal counsel.

Collaborative law or collaborative divorce refers to a process to resolve family law conflicts in a respectful, non-adversarial, and mutually-beneficial manner. This collaborative approach has been successfully utilized in many other areas of the law, such as business, probate, and other civil proceedings.

The movement toward collaborative divorce has taken root throughout the country and here in California, as the costs of litigation have mounted and the state’s resources with which to fund our court system have become increasingly strained.

The parties in a collaborative divorce agree to work cooperatively to resolve their issues. They sign an agreement that they will not litigate the matter. In the event that a party later chooses to litigate, that party must hire a new attorney and cannot continue to use the collaborative specialist.

Collaborative attorneys are specialists in settling disputes. They must undergo specific training in order to properly assist parties with a collaborative approach. Often, in the context of a collaborative divorce, the parties will employ a “team” of multi-disciplinary experts who work interactively with the parties and their attorneys. Such experts usually involve a financial specialist, various coaches, and a child specialist or mental health professional. These experts all subscribe to the core values and beliefs that are the hallmark of the collaborative process and all team members are obligated to withdraw from a case in the event that a case ends up in litigation.

As with mediation, the benefits to the parties are many. The parties retain maximum control over the outcome of their case, as opposed to turning over the decision-making to a judge who does not have intimate knowledge of that particular family.

The parties, through their collaborative attorneys agree to voluntarily provide necessary documents and information early in the process which serves to drastically reduce the cost of the formal discovery that is often a hallmark of litigated divorces. Full disclosure and open communication at every stage of the collaborative process facilitates a faster and, oftentimes, more satisfying resolution than if the matter had been litigated in court.

The collaborative approach to a divorce or other family law proceeding minimizes the hostility and the emotional toll that is often inflicted on the participants in a litigated dispute. When assessing the “cost” of a disputed family law proceeding, the emotional cost is often overlooked, but in reality, it can exact a more long-term, negative effect on a family than the actual dollars and cents expended.

The collaborative divorce process is a respectful, peaceful, and dignified process that is designed to ensure that the participants and their children successfully transition to the next chapter of their lives.

As with all family law matters, it is wise to select a Certified Family Law Specialist who practices in the area of family law dispute resolution to ensure that the participant has the benefit of both the practitioner’s substantive knowledge in the area of family law, as well as the skills necessary to successfully resolve what are often difficult and emotionally-driven disputes.

California is one of eight states to adopt a community property system. Absent a valid pre-marital or post-nuptial agreement between spouses, a spouse’s marital property rights are fixed in accordance with California community property law. In a marital dissolution (“divorce”) proceeding, a court must characterize property as either community property, quasi-community property, or separate property in order to determine the rights and liabilities of the parties with respect to a particular asset or obligation. See In re Marriage of Valli, 58 Cal. 4th 1396, 1399 (Cal. 2014).

Generally, community property consists of all property (real and/or personal property, no matter where situated) acquired by a spouse during marriage prior to separation while domiciled (i.e. residing) in California, except for property acquired by gift or inheritance. Cal. Fam. Code § 760. This includes out-of-state real property (although the manner by which an “equal division” of out-of-state community real property is carried out may be affected by the laws of the state where the property is located). California recognizes that spouses share “present, existing, and equal” ownership interests in community property. See Cal. Fam. Code § 751. In other words, under California law, each spouse has an equal one-half ownership interest in the whole of community property and is entitled to equal rights of management and control (subject to intra-spousal fiduciary obligations). Upon dissolution of the marriage, community property is to be divided equally between the parties unless the parties mutually agree to an alternative disposition.

In the event that spouses relocated during marriage, California community property law also determines a spouse’s rights and interests in marital property acquired during the duration that they were an out-of-state resident. Quasi-community property consists of all property acquired by a spouse during marriage while they were domiciled outside of California (for example, in a common law state). Although the act of crossing state lines itself does not affect the character of property, for purposes of defining marital property debt liability and property division rights upon marriage termination, marital acquisitions will generally be treated as community property. See Cal. Fam. Code §125.

Property which is not characterized as community (or quasi-community) is the separate property of the spouse. Typically, separate property consists of that which was owned by a spouse prior to marriage or otherwise acquired by a spouse during marriage without the expenditure of time, effort, or labor, such as by gift or inheritance. Additionally, a spouse’s “earnings and accumulations” while living separate and apart from the other spouse and/or after a judgment of legal separation are his or her separate property. See Cal. Fam. Code §§ 771 and 772.

It is the general rule in California that the character of property is fixed as of the time the property is acquired. In other words, a spouse’s community property interest arises at the time the property is acquired; it is not affected by a change in the form of the property and may be altered only by judicial decree or joint action between the parties. See In re Marriage of Rossin, 172 Cal. App. 4th 725, 732 (Cal. App. 6th Dist. 2009). Business during marriage usually does not change its character to community property. See In re Marriage of Koester, 73 Cal. App. 4th 1032, 1037 (Cal. App. 4th Dist. 1999). Likewise, it is the general rule that property derived from a community property source typically remains community property, and property derived from a separate property source remains separate property. See Hicks v. Hicks, 211 Cal. App. 2d 144, 152-153 (Cal. App. 4th Dist. 1962). For example, absent a valid agreement between the parties specifying otherwise, rents, issues, and/or profits from a pre-marriage residence received during marriage remain that spouse’s separate property. Thus, the resolution of characterization disputes in a divorce often boils down to ascertaining and characterizing the source of the property in question.

Nonetheless, other factors impacting the characterization of property in a marital dissolution proceeding may be raised to rebut the general rule above, including the operation of various legal presumptions (specifically those concerning the manner in which title is taken or presently held), the determination of whether the spouses “transmuted” the property in question (i.e. agreed to change its character from separate to community or from community to separate), and/or whether the spouses “commingled” their property to the extent that tracing the source of funds used to acquire property during marriage to a separate or community asset is impossible. See In re Marriage of Rossin, 172 Cal. App. 4th 725, 732 (Cal. App. 6th Dist. 2009). In some cases, the character of property can be mixed or have separate and community components of value. For example, if one spouse uses his or her separate property to acquire or improve community property, that spouse is entitled to reimbursement for all or a portion of their contribution upon dissolution of the marriage; or if a spouse has a 401(k) plan in existence prior to marriage and continues to contribute to the 401(k) plan during the marriage, there will be both separate and community interests in the same 401(k) plan benefits.

In most dissolution cases, the parties’ assets (and/or debts) must be (1) identified, (2) characterized (separate or community), (3) valued, and (4) divided. It is not uncommon that some or all of these issues are in dispute in a marital dissolution proceeding. Experienced and knowledgeable counsel can assist in avoiding litigation, but, on occasion, underlying factual questions must be submitted to the court for resolution. Given the integral nature of characterization in this process, in many instances, experienced forensic accountants are engaged to assist the attorney in the areas of identification, classification, tracing, valuation, and division. Forensic accountants are also used to assist in determining the income available for the payment of child and/or spousal support and determining the marital standard of living as a component in the spousal support evaluation (see Spousal Support and Child Support sections).

Obviously, a number of factors, such as the length of the marriage, the wealth of the spouses, and the manner in which such wealth is held, determine the complexity of community property issues in a given case. Discovering the identity of all property, community or separate, involves the discovery process: oral depositions, written interrogatories, subpoenas, and orders for production of documents – especially where one spouse is much more informed and/or has exercised management and control of the family’s assets and wealth. Although spouses owe fiduciary duties to each other, including an obligation to fully disclose the identity of all assets and debts, it is not uncommon for spouses to be less than forthright in fulfilling these duties. Aggressive and thorough counsel will discover the nature and identity of assets so as to achieve a complete and fair division of the community estate.

Issuing threats, stalking behavior, physical assault, sexual assault, abusive conduct, or threats of abuse where the person being abused and the abuser are family members or have been in an intimate relationship (married or domestic partners, are dating or use to date, live or lived together, or have a child together) constitute domestic violence in California. Domestic violence laws in California define “abuse” as:

– Physically hurting or trying to hurt someone, intentionally, or recklessly

– Sexual assault/molestation

– Making someone reasonably afraid that they or someone else are about to be seriously hurt

OR

– Behavior like harassing, stalking, threatening, battering or hitting someone, disturbing someone’s peace, or destroying someone’s personal property

Keep in mind that physical abuse is not just hitting. Abuse can be kicking, shoving, pushing, pulling hair, throwing things, scaring or following someone, keeping someone from freely coming and going, and can even include physical abuse of family pets. Further, abuse does not have to be physical. Abuse can be verbal, emotional, or psychological. You do not have to be hit to be abused. Often, abuse takes many forms, and abusers use a combination of tactics to control and have power over another person.

If you are involved in a domestic dispute, are the recipient of domestic violence, or have been wrongfully accused of domestic violence, you need help as you navigate through the court process. The consequences of having a California domestic violence restraining order entered, for or against you, can be severe. Requesting or defending against a restraining order is of paramount importance. A restraining order can lead to the following consequences:

If a restraining order is issued by the judge, it will be filed with the court and lodged with every police agency in the state of California via the California Law Enforcement Telecommunications System referred to as a “CLETS” Order. The CLETS Order has the effect that if a law enforcement officer stops a person against whom the CLETS order is issued, the officer will be aware of the restraining order and deal with the individual accordingly.

If there is a restraining order violation, the person could face up to $1,000 in fines and up to one year in jail.

The court may order that the restrained person be excluded from the protected person’s place of residence and stay at least 100 yards away from that person’s residence, their place of employment, their vehicle, and if children are included as “protected persons” in the Order, the restrained party may be ordered to stay 100 yards away from the children’s school. Additionally, the court may order personal conduct restraints precluding the restrained party from contacting (including telephone, mail, email, or other electronic means) either directly or through another, harassing, attacking, hitting, striking, assaulting, stalking, following, molesting, destroying personal property, disturbing the peace, keeping under surveillance, or blocking the movements of the protected party.

The ability to travel may be restricted.

Orders may be entered that require the restrained party to complete a 52-week anger management course or batterer’s program.

If the CLETS order includes minor children, then this may impact existing and future orders regarding custody and visitation, including the amount of time the restrained person can spend with their children and limitations on the party’s visitation rights, such as requiring that the visitation be supervised by a professional monitor.

The restrained party will have to immediately surrender any firearms in their possession or which they own.

A court may order that upon request, and the party who is protected by the CLETS order be allowed to tape record all conversations with the party who has the CLETS order issued against them.

Domestic violence proceedings in the family law courts can have serious and long-lasting consequences affecting one’s rights as briefly described herein.

As a result of the confidential relationship established by law upon marriage in California, spouses owe each other certain fiduciary duties in transactions between themselves and in the management, control, acquisition, and disposition of community property and/or the other spouse’s separate property assets, liabilities, income, investment opportunities, business opportunities, and other income-producing opportunities.

As codified in Family Code Section 721, spouses have a fiduciary obligation to conduct themselves in the highest good faith and fair dealing and to avoid taking unfair advantage of the other during the tenure of their marriage.

During marriage, spouses have a fiduciary duty to provide full and accurate disclosure of all material information to the other spouse regarding the existence, characterization, and valuation of assets in which the community has or may have an interest and debts for which the community is or may be liable; and provide equal access to all information, records, and books pertaining to the value and character of such assets and debts.

Upon separation, additional disclosure duties arise, which require similar disclosure of all assets and liabilities in which either party has or may have an interest or obligation, regardless of community or separate property characterization, and to current earnings, accumulations, and expenses. These duties “arise without reference to any wrongdoing” and are not conditioned upon request by the other party. In other words, parties in a marital dissolution action are required to immediately, fully, and accurately update and augment prior disclosures upon any material change.

In order to effectuate full and accurate disclosure in a marital dissolution or legal separation proceeding, spouses are required to initially exchange a Preliminary Declaration of Disclosure at the commencement of the marital dissolution action, and prior to trial or entering into a Judgment (unless waived in writing) and Final Declaration of Disclosure. The Declarations of Disclosure require the inclusion of a schedule of assets and debts, a current income and expense declaration, and the previous two years’ tax returns.

A spouse’s right of management and control over the community estate during marriage and thereafter operates consistent with the other fiduciary relationships recognized in California. Except with respect to businesses, spouses are equally entitled to share management and control over the community estate “with like absolute power of disposition, other than testamentary” and possess the same general rights and duties of non-marital business partners. Although spouses may enter into transactions involving community property unilaterally, doing so nonetheless requires the acting spouse to provide the other with an accounting and to hold, as a trustee, any benefit or profit derived from said transaction.

The fiduciary obligations owed between parties in a marital dissolution or legal separation proceeding continue post-separation until distribution of the respective asset or liability, or, with respect to the disclosure of income and earnings, until a binding resolution on all issues affecting child support, spousal support, and professional fees is achieved.

Should a party suffer any loss to a community asset or any harm as a result of the other spouse’s failure to fulfill the fiduciary duties described above, courts are required to order sanctions against the breaching party for attorney fees and costs plus restitution for the amount lost, or, where the breach is intentional or fraudulent, for entire value of any asset undisclosed or transferred in breach of duty. In addition to monetary relief, any settlement agreements entered into as a result of the party’s failure to comply with all disclosure requirements may be set aside (i.e. undone or cancelled).