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When spouses wish to terminate or alter their marital status, they have three options for doing so- legal separation, annulment or dissolution. If spouses choose annulment or dissolution, the marriage is terminated and the spouses become single persons. If they opt to obtain a legal separation, the marital status is not terminated and they are unable to remarry unless or until the marriage is terminated by a later judgment of dissolution; however, legal separation does deal with property rights, child/spousal support, and custody and visitation issues.
Dissolutions terminate existing marriages on grounds arising after the marriage (such as irreconcilable differences). In contrast, annulments are based on the theory that no valid marriage ever occurred (i.e., the marriage was void or voidable (incestuous, bigamous, induced by fraud, one party was under the age of consent, etc.). It can be difficult and/or costly to prove these grounds.
Generally speaking, people who choose legal separation rather than dissolution do so for religious or other personal reasons, such as retaining eligibility for medical insurance that would otherwise be lost by a termination of the marriage.
If you are considering terminating your marriage, please contact Lonich & Patton to set up a free 30 minute consultation with an attorney to discuss which option may be right for you.
Under California Family Code Section 2337, a party may obtain what is called a “Status Only Judgment,” which is a judgment that terminates the marriage only, leaving all other issues (division of property, support, custody) to be decided at a later time. The most common reason that a party seeks a status only judgment is because that party wants to remarry. In other cases, the reason is psychological: a party feels that obtaining the divorce will help them move on from the relationship. Whatever the reason may be, it is important to understand the serious consequences that stem from a status only judgment.
1.Loss of Health Care Coverage: Once you are divorced, you are no longer eligible for health care benefits as a “spouse” under your spouse’s employer-sponsored health care plan. The cost of COBRA or an individual heath care plan can be astronomical. If you have any pre-existing conditions or current illness, it may be wise to wait for all issues in the case to be resolved to lengthen the time for which you are eligible under your spouse’s plan. If your spouse demands the status only, he or she will have to agree to continue coverage at his or her own cost until the divorce is final.
2.Loss of Surviving Spouse Retirement Benefits: Similarly, once you are divorced, you are no longer considered a “surviving spouse” for purposes of surviving spouse retirement plan benefits. Accordingly, it is critical that you obtain a Qualified Domestic Relations Order preserving your rights in the retirement plan before agreeing to the status only.
3.Application of Probate Rules: Should your spouse die at any point after the status only but before the final judgment that divides the community estate, the probate code, not the family code, will apply. This could mean the loss of your rights in property that is held in the deceased party’s name alone even if it would otherwise be a community property asset by virtue of the date of purchase or other agreement between the spouses.
These are just a few of the possible consequences of a status only judgment. In recognizing these and other significant consequences, the legislature recently modified the statute governing status only judgments to provide more protection for the spouse whose rights are adversely affected. Typically, the party seeking the status only will be required to “indemnify and hold harmless” the other party; this means that should there be any adverse consequences as a result of the status only, the requesting party will be required to pay for any such losses incurred by the other party.
In California, both spouses have fiduciary duties towards one another that require them to act in good faith in their dealings with each other and to disclose all material facts and information regarding community assets and debts. While there are several formal and informal methods of obtaining necessary information from the other party during a divorce, being proactive can cut down on the amount of time and expense needed to evaluate and prepare your case. The Minnesota Divorce and Family Law Blog has a helpful list of documents to gather upon deciding to file for divorce. Specifically, it suggests gathering:
1.Copies of financial statements;
2.Copies of tax returns;
3.Copies of computer hard drives;
4.Copies of insurance policies;
5.Copies of wills and/or trusts;
6.Inventory of safety deposit boxes, with a witness;
7.Copies of deeds and/or titles to real property;
8.Copies of small business ledgers, financial journals, payroll, sales tax returns and expense account records;
9.Copies of appraisals for art, antiques, jewelry and collectibles;
10.Record the contents of each room in your home through video;
11.Copies of retirement account statements; and
12.Copies of your spouse’s pay stubs for the last few months.
http://www.mnfamilylawblog.com/2009/12/articles/contested-divorce/staying-ahead-of-the-curve-12-proactive-steps-to-take-if-you-are-contemplating-divorce/
Suspecting her husband of 32 years was having an affair, Cynthia Shackelford of North Carolina hired a private investigator who confirmed her fear: her husband was involved in a longstanding liaison with a woman whom he’d met at a local college. Shackelford took legal action, suing her husband’s mistress for “alienation of affection.” She won, and was awarded $ 9 million in damages. Shackelford says the lawsuit wasn’t about the money; it was about sending a message.
The little-known law, which doesn’t exist in California or 42 other states, allows for aggrieved spouses to bring a claim in civil court – separate from family law proceedings – against third parties who knowingly have an affair with a married person. Generally, the plaintiff in such actions must show: 1) the marriage entailed love between the spouses in some degree; 2) the spousal love was alienated and destroyed; and 3) the defendant’s malicious conduct contributed to or caused the loss of affection.
Critics of “alienation of affection” and similar laws consider them to be archaic relics of a bygone era. Jacob Appel of Huffington Post describes them as “vestiges of legal codes that also prohibited divorce and criminalized premarital sex, … a consummate example of the sort of private controversies in which the government has no business meddling.” Likewise, some attorneys feel that such laws unnecessarily escalate family law proceedings and are inconsistent with the policies behind “no fault” divorce, which seek to minimize inquiry into the he-said-she-said interpersonal drama that is often behind the breakdown of marriage. Nevertheless, a handful of states still have “alienation of affection” laws on the books, something to make would-be-marriage-meddlers think twice.
Sources: People Magazine, Huffington Post
Following a lengthy trial, the Santa Clara County Family Court ruled in favor of Mr. Patton’s client, awarding full custody of the children to the mother and giving her the right to move to another state with the children.
Father in this case sought 100% custody of the children and wanted to prevent Mother from taking the children to another state.
The court found that using the “best interests” standard followed in California for initial custody determinations, Mother should be awarded full custody and be permitted to move out of state with the children. The custody battle included allegations of domestic violence and inappropriate physical punishment of one of the children. The court took testimony from a court appointed expert, who had completed a custody evaluation involving both parents and the children, as well as testimony from experts hired by Father.
Upon considering all the evidence presented, the court found Mr. Patton’s evidence and arguments to be persuasive and granted Mother the right to move away with the children to another state.
Mr. Patton is a Certified Family Law Specialist and limits his practice exclusively to family law (divorce, child custody, domestic violence, restraining orders, spousal support, etc.). His certification is provided by the State Bar of California Board of Legal Specialization.
April 16, 2010 is Health Care Decisions Day, a national campaign to encourage Americans to complete their advance directives, living wills, and basically document their preferences regarding medical treatment at the end of life.
Researchers at the University of Michigan in Ann Arbor have discovered that almost a third of patients over the age of 60 would eventually become so incapacitated that they would be unable to express their preferences regarding end of life treatment. Patients who specified all care possible in their living wills were far more likely to receive aggressive care as opposed to those who didn’t.
The number of individuals who possess living wills has increased over the years. Without these documents, they patient remains vulnerable despite whether or not they had end of life discussions with their doctors. With 40 million new patients in the healthcare system and the decreasing number of physicians , end of life discussions are becoming nearly impossible.
An attorney is not needed to obtain these documents. Patients can designate a healthcare proxy. A healthcare proxy is a trusted friend or relative who can make decisions for a patient. Proxies won’t have as much of an effect as a documented living will, but it’s a good backup.
For Full Article: http://www.nytimes.com/2010/04/16/health/15chen.html
If you’ve recently divorced and haven’t yet revisited your estate plan, or don’t have one, you may be in for some surprises. It is important to review your estate plan to be sure that it does not confer any unintended benefits or rights on your former spouse. Here are some questions to consider:
1. Does your former spouse have access to any jointly owned assets, such as bank accounts, investments or real estate?
2. Is your former spouse still the designated beneficiary of any life insurance policies, IRAs or other retirement plans?
3. If an ERISA plan, was an appropriate ERISA waiver obtained at the time you negotiated your divorce settlement?
4. Did you give your former spouse any powers of attorney or designate him or her as your agent for health care decisions?
5. Did you name your former spouse as a beneficiary of any trusts? Are they irrevocable? If so, do they provide for your spouses’ interest to terminate automatically in the event of divorce? If not, do the trust documents and applicable state law allow you to change beneficiaries or modify the disposition of the trust assets?
6. Does your divorce settlement or judgment address any of these issues?
After a divorce, or any other major life change, such as marriage, birth of a child or death of a family member, you should meet with your estate planning advisor as soon as possible to review your plan. Failure to modify your plan to reflect these changes can lead to unexpected and, in many cases, undesirable results.
Buy/Sell Agreements and Estate Planning
Generally, for a buy/sell agreement to establish the value of a business interest for estate planning purposes it must:
1. Be a bona fide business arrangement;
2. Not be a device for transferring the business to family members at a discounted value;
3. Have terms comparable to similar, arms length agreements;
4. Fix a purchase price that is reasonable when the agreement is executed; and outline a pricing formula to consider evaluation changes in the intervening years;
5. Require an owner’s estate or beneficiaries to sell the shares at a specified price; and
6. Restrict owners’ disposition of their interests during life and at death.
If at least 50% of a company’s value is owned by non-family members subject to the same terms as family members, a buy/sell agreement is presumed to meet these requirements.
The Economic Growth and Tax Reconciliation Act of 2001 eliminated estate taxes for 2010, though they will return with a vengeance in 2011. (The maximum rate, previously 45% with an exemption of 3.5 million, rises to 55% next year with an exemption of just 1 million.) Although many expect Congress to retroactively apply estate taxes for this year, others are calling 2010 the “throw mama from the train” year. Adding an element of suspense is a push in Congress to make permanent the previous $3.5 million exemption. California’s estate lawyers are awaiting the outcome of HR4154. Even if Congress extends the 2009 exemption going forward there were many plans written with the current code in mind and once a permanent decision is made many plans will need rewriting.
Many observers doubt the HR4154 will pass unless it includes a provision to “reunify” gift and estate taxes which were split into different rates in 2001. That, in turn, could mean a two or three year boom in tax and estate law as gift givers scramble to take advantage of the shift.
With all of the changes happening recently as well as potential changes yet to be decided, many estate plans could have holes and will probably have some issues once the law is changed. If it ends up being no estate tax in 2010, it will make for an interesting year.
A new study suggests that more than one in four of the elderly population will need someone to make their end-of-life decisions for them. This finding places a significant emphasis on the importance of creating a living will and stating after-life wishes explicitly. A living will is a statement that is written by the patient that explains their choices for treatment if he/she becomes incapacitated. Researchers also stated that someone must be designated to make the treatment decisions for the patients. The results of a recent study concluded that those who explicitly stated their end-of-life wishes in a living will were more likely to get the treatment that they wanted. In 2009, the end-of-life care topic became a part of the health care reform debate. During the debate, the legislation proposed that if they were given a provision, Medicare would be allowed to pay doctors in order to counsel patients about end-of-life decisions. This idea got denied because critics thought end-of-life counseling was similar to a death panel.
The study also showed that due to dementia, a stroke, or a debilitating illness, the elderly are unable to make their own decisions near the end of life.
(This study included 3,746 people who were 60 and over. They passed away between the years of 2000 to 2006. )
