Prenuptial Planning Agreements and Cotenancy Agreements
Anticipating living together, whether as spouses or partners, is one of the most joyous moments in life. Being able to share your days, to wake up next to someone who makes the world more complete, and to find romance in the most common happenings is a rare experience.
Faced with the myriad chores of moving in together, often compounded by the complex details of planning an upcoming wedding, who would want to think about a prenuptial agreement? What could be more abrasive than meeting with attorneys who may "trample on" the relationship while attempting to "protect" their clients? Even the suggestion of such an agreement may be met with suspicion or engender doubts about the other party's intended motives or their commitment to the relationship.
My approach is to assist my clients in dealing with potentially sensitive issues. Drawing from my background in law and psychology, I encourage couples to discuss their objectives and anxieties in a safe environment and help them to develop strategies for successly achieving their goals through greater mutual understanding.
Separation and Dissolution
Separating from your spouse or partner may be the most difficult experience of your life. You are faced with the difficult practical questions of where ill I live, when will I see my children, how will I afford the costs of living in two homes? And the process questions will my spouse be reasonable or will he or she be influenced by the emotional agendas of family and friends or professionals who have biased financial interests. Under these circumstances it is difficult to know who to trust and where you can turn to for help.
Whether by attorney negotiation, informal resolution or court intervention, you should work as quickly as possible to establish temporary agreements for living arrangements, access to children for each parent, and financial understandings.
Once temporary needs are met, you may shift to less immediate information gathering which will lead to long-term problem solving. After a petition is filed with the court, a case file is created which is the container for all subsequent documents and “discovery” begins, the formal process of gathering needed information. You will complete financial disclosures and exchange them with your spouse.
Whether there are hearings will be determined by the degree of success of out-of-court negotiations. The less that is able to be resolved, the more time will be spent in court. Eventually long-term resolution of all issues occurs either through a negotiated agreement or by court order.
California observes a form of marital ownership of property common in states that border Mexico and which resembles partnership law. Consider a small sales business. It doesn't matter whether a partner is the star sales person or the one who orders and maintains the warehouse. Each partner's job is equally important. In that context community property has traditionally been fair to women as a homemaker's responsibilities are equally recognized to a wage earner's.
Generally, everything earned and/or owned prior to marriage is separate property. From the date of marriage to the date the couple separates the assumption is toward community earnings and ownership even if the title is solely in one partner's name. After separation anything earned or purchased is presumed to be separate.
There are some assets which may have a mixed character such as a retirement account. Some may have been earned before marriage, some during, and some after separation. The respective separate and community ownership will have to be determined.
There are of course exceptions to the presumption of community ownership. Gifts or inheritances from others outside the community are presumed to be the separate property of the recipient.
The most common question is, "What happens if funds are mixed?" Prior to 1984 the answer would have been that the community had received a gift. Today the assumption is that if the funds or property can be "traced" back to the date of acquisition the separate component is preserved. If separate funds are used to purchase or improve an asset, or reduce debt against an asset, they may be reimbursed during separation. Funds spent for bills or non-acquisition will generally not be reimbursed.
Your children are of greatest concern during a separation. There are always so many unanswered questions. How will we share custody?
Where will we live? How will I pay for their needs and expenses. And most importantly, how will they adjust? There may be guilt that you are "hurting the kids" by separating.
Mediation offers an opportunity to work constructively with your spouse or former partner toward a stable, calm and nurturing transition for your child. There will be discussions concerning recent research on child and family development and adjustment. You'll establish time-sharing arrangements that are unique to your family and that enable you to care for your children and free you to work effectively.
Through this process you'll establish guidelines for healthy growth and positive cooperation and communication. Your co-parenting skills will be enhanced leading to your ability to share joyous moments together with your children.
California recognizes two somewhat different types of custody: legal and physical. First, there is legal custody which concerns the health, education and welfare of the children. There may be either sole or joint legal custody. Custody confers the right to make decisions and have access to information, such as medical or educational records. The status during the marriage is that both parents have legal custody and have the ability to make decisions for their children such as treatment of illnesses, choice of care providers and educational choices such as schools, curriculum, involvement in sports and other after school activities. The great majority of parents retain joint legal custody after separation.
Physical custody concerns the right to determine the child's residence. Once again custody may be sole or joint. In sole custody the concept is of one primary residence, that of the custodial parent. The other, the non-custodial parent, is awarded visitation. Joint custody infers residency with each parent. As having custody effects where the children will live, the right to physical custody may give rise to legal disputes.
Often parents confuse physical custody with time sharing arrangements. The actual time a parent shares with the children is not predicated on physical custody. My experience with two couples underscores this difference. Consider a parent, a pilot who visited the Bay Area but once a month but was a joint custodian. Compare this to two parents who lived across a park from each other and each shared 50% of the time with the children. Yet, one parent had sole custody the other visitation.
Custody and time share are always subject to modification until each child is an adult. All such arrangements may be modified by agreement or court order.
Child support is the subsidy paid by one parent to the other to assist in the standard of living the children experience in both homes. Support is paid to offset the basic costs of life including housing, food and other necessities. Without support a smaller wage earner would be severely handicapped in attempting to provide for the children. Similarly, if there is a more affluent life-style in one home and the other is impoverished, the children, particularly if they are older may want to spend more time with the wealthier parent.
In addition to child support, the parties will be expected to share other variable costs. Particularly, the costs of all medical and health treatments and providers, all child care costs used when a custodial parent is working or at school, and all educational and peer recreational costs. To contain costs and establish guidelines, both parties are to be notified in advance of any voluntary expenses prior to the children receiving services. Neither parent will be permitted to arbitrarily refuse to participate if it is within his or her means.
California uses two variables to determine child support. The first is the income of each party from any source; the other is the percentage of time each parent shares with the children. If the both parents earn the same income and each share equal time with the children there will be no support paid by either party to the other. As soon as either variable change, support is appropriate. Today there are software programs which are used to compute support.
My office is one of the leading providers for collecting unpaid child support through retirement assets such as a 401(k) plans when the payor is unable or unwilling to provide support. For more information, see QDRO→
Spousal support, known previously as alimony, is the subsidy paid by one party to the other to assist in the standard of living of the supported spouse. Conceptually, if the parties are young, support is likely to decrease over time as the recipient's income increases. Should the supported spouse be older or not able to retrain or increase her or his earnings, support is more likely to remain level.
Spousal support is either temporary or permanent. Temporary support is established to preserve the status quo until there is sufficient information to make a permanent award. Permanent support may be higher or lower than the temporary support amount.
Today there are software programs which are used to compute temporary spousal support. In Marin County Support Tax is used; Alameda and Contra Costa use the DissoMaster. Both programs have been approved by the Judicial Council and properly used will yield nearly identical results.
California uses several variables to determine "permanent" spousal support including the age of the parties, their health, employment history, the length of the marriage, assets and obligations of the parties, and other factors which are reasonable, Family Code Sections 4320-4325. In addition, California statute draws a distinction between short-term marriages, those lasting less than ten years and long-term marriages exceeding ten years. Typically, short term marriages give rise to specific periods of support, typically half the length of the marriage. Long-term marriages may yield lengthy or indefinite support until the death of either party or remarriage of the recipient.
Unlike child support which is always modifiable, spousal support may be modifiable, variable, or it may be non-modifiable (fixed). This is decided by joint agreement between the parties based upon their respective emotional and financial preferences..
Spousal support is deductible for the payor and is includible in the recipient earnings for the purposes of income taxes. It is viewed as a pass-through; as if the recipient had "earned" the funds. Therefore, the recipient will be required to make quarterly estimate payments with the federal and/or state tax agencies.