Pretty amazing, huh? You really are expected to share your bonus with your ex! I know, I think that’s a bunch of hooey, too!
But here’s something CRITICAL to consider right off the bat: are your bonuses included in your W-2? This is important because your support payments are based on your gross W-2 earnings, and if your bonus is already included in your W-2 AND you’re ordered to pay her a percentage of your bonus, then you’re paying her TWICE for your bonus!!!
It’s not likely that anyone else will raise this issue (no one did in our case…or should I say, no one but ME!), so be prepared to raise it yourself.
Here’s our tale of woe:
My husband’s 7/23/03 Order After Hearing stipulated: “7. In the event Respondent receives any future bonus income as a result of employment, he shall pay to Petitioner an additional support amount equal to 23% of such bonus within 10 days of the date on which he receives any such bonus.”
He did as ordered and paid THE DEVIL 23%—or $1,120.79—of his 2003 bonus on 2/16/04, which he’d received on 2/6/04. But this order was stipulated in error. He should never have been ordered to pay THE DEVIL any part of his annual bonuses because they're already included in his W-2s and, as such, are already factored in to his monthly support payments. (!!!) This error wasn’t brought to his attention until I questioned it in 1/05. His attorney didn’t question it, the judge didn’t question it...and even he didn’t question it. In fact, no one considered that his bonus might already be included in his W-2!
This order was reversed in his 1/25/05 Order After Settlement Conference: "5. The order after hearing filed in this matter on 7/25/03, which sets forth the current support orders, requires Respondent to pay Petitioner 23% of any bonus income he receives. Respondent contends that his bonus income is included in the calculation of his gross wages and that to require him to pay an additional 23% of any bonus he receives results in a double calculation for that income for support purposes. Accordingly, Respondent’s obligation to pay Petitioner 23% of his bonus income is hereby stayed without prejudice…"
And while it is absolutely, 100% true that my husband's bonuses are, in fact, included in the calculation of his gross wages, it’s also very interesting to note that at no time was he ever made to substantiate this claim (note the language of his order: “Respondent contends that this bonus income is included in the calculation of his gross wages…”). Hmmm…
He, of course, was not reimbursed for any part of his $1,120.79 overpayment to THE DEVIL.
Showing posts with label Spousal Support. Show all posts
Showing posts with label Spousal Support. Show all posts
Sunday, April 5, 2009
Sunday, March 8, 2009
Family Code Section 4320 - Spousal Support
Note: Excerpts from two pertinent court of appeals cases are inserted in this transcript for further consideration and discussion with your attorney; they are not a part of the California Family Code.
Family Code Section 4320
In ordering spousal support under this part, the court shall consider all of the following circumstances:
......(a) The extent to which the earning capacity of each party is sufficient to maintain the standard of living established during the marriage, taking into account all of the following:
..........(1) The marketable skills of the supported party [your ex]; the job market for those skills; the time and expenses required for the supported party to acquire the appropriate education or training to develop those skills; and the possible need for retraining or education to acquire other, more marketable skills or employment.
..........(2) The extent to which the supported party's [your ex] present or future earning capacity is impaired by periods of unemployment that were incurred during the marriage to permit the supported party [your ex] to devote time to domestic duties.
......(b) The extent to which the supported party [your ex] contributed to the attainment of an education, training, a career position, or a license by the supporting party [you].
......(c) The ability of the supporting party [you] to pay spousal support, taking into account the supporting party's [you] earning capacity, earned and unearned income, assets, and standard of living.
......(d) The needs of each party based on the standard of living established during the marriage.
____________________________________________________________
In re the Marriage of RICHARD and BARBARA SIMPSON, No. B048099, COURT OF APPEAL OF CALIFORNIA, SECOND APPELLATE DISTRICT, DIVISION SEVEN, February 13, 1992, Decided: “After dissolution, a family may be entitled to be supported at what would have been a reasonable standard of living ... given what [Husband] would have earned had he worked at a reasonably human pace." … They are not entitled to continued guaranteed support at a standard of living which existed only because the supporting spouse ‘worked excessive hours during the marriage.’”
____________________________________________________________
......(e) The obligations and assets, including the separate property, of each party.
......(f) The duration of the marriage.
......(g) The ability of the supported party [your ex] to engage in gainful employment without unduly interfering with the interests of dependent children in the custody of the party.
......(h) The age and health of the parties.
......(i) Documented evidence of any history of domestic violence, as defined in Section 6211, between the parties, including, but not limited to, consideration of emotional distress resulting from domestic violence perpetrated against the supported party [your ex] by the supporting party [you], and consideration of any history of violence against the supporting party [you] by the supported party [your ex].
......(j) The immediate and specific tax consequences to each party.
......(k) The balance of the hardships to each party.
......(l) The goal that the supported party [your ex] shall be self-supporting within a reasonable period of time. Except in the case of a marriage of long duration as described in Section 4336, a "reasonable period of time" for purposes of this section generally shall be one-half the length of the marriage. However, nothing in this section is intended to limit the court's discretion to order support for a greater or lesser length of time, based on any of the other factors listed in this section, Section 4336, and the circumstances of the parties.
......(m) The criminal conviction of an abusive spouse shall be considered in making a reduction or elimination of a spousal support award in accordance with Section 4325.
......(n) Any other factors the court determines are just and equitable.
________________________________________________________________
In re the Marriage of JEANNE and ROBERT H. ANINGER, No. B038780, Court of Appeal of California, Second Appellate District, Division Seven, 220 Cal. App. 3d 230; May 11, 1990: “The only factor adversely affecting [Wife’s] ability to meet her needs was an increase … in her housing cost resulting from her purchase of a $280,000 condominium. … …it would defeat the intent and reasonable expectations of the parties that [Wife] would achieve self-support … by going into debt far beyond her means. … By undertaking a debt beyond her reasonable means to pay presently or in the foreseeable future, [Wife] failed to make a reasonable effort to become self-supporting.”
_________________________________________________________________
NOT Insuring Your Ex after Divorce
The only possible way to keep your ex on your employer’s group health insurance plan is to file for a legal separation instead of a divorce (see my "Legal Separation or Divorce" post).
Otherwise, regardless of what your ex expects or demands, the good news for you is: YOU CAN’T. Not through your employer’s group plan, anyway. And not even if you wanted to! You can only insure family members through your employer’s group plan, and your ex is no longer a member of your family!
However, if you’ve been covering her up to your divorce date, and your employer has more than 20 employees, you might want to let her know (if you want to) that she’s eligible under COBRA for coverage equal to yours for 36 months after your divorce. She’ll have to pay for it out of her own pocket, of course…but at least she’ll be able to get health insurance if she can’t get it through her own employer.
And don’t go and try to be “Mr. Nice Guy” by keeping her on your health insurance even after your divorce is final, because it could bite you in the butt! A friend of ours did, and ended up having to reimburse his employer for every last penny that they’d spent toward her health insurance from the date his divorce was final! We were lucky: my husband waited a couple of months before dropping his ex, but because their end date was fuzzy (it was left open because it was based on her being seen by a specialist first), his employer let it slide. Same employer as his friend, but different circumstances...so, again, be careful!
Our story…
My husband’s divorce took YEARS, and in all that time the devil was eligible for FREE health insurance through her employer. But she refused it out of spite…she wanted my husband to have to pay for her coverage because it was costing him an additional $5,000 a year! Well, as you can imagine, my husband took great satisfaction in finally being able to drop that bitch from his plan! But to add insult to injury, when he finally DID drop her--2 years after he should’ve been able to--she actuallly had the nerve to be petulant and insulting about it! What a surprise!
Otherwise, regardless of what your ex expects or demands, the good news for you is: YOU CAN’T. Not through your employer’s group plan, anyway. And not even if you wanted to! You can only insure family members through your employer’s group plan, and your ex is no longer a member of your family!
However, if you’ve been covering her up to your divorce date, and your employer has more than 20 employees, you might want to let her know (if you want to) that she’s eligible under COBRA for coverage equal to yours for 36 months after your divorce. She’ll have to pay for it out of her own pocket, of course…but at least she’ll be able to get health insurance if she can’t get it through her own employer.
And don’t go and try to be “Mr. Nice Guy” by keeping her on your health insurance even after your divorce is final, because it could bite you in the butt! A friend of ours did, and ended up having to reimburse his employer for every last penny that they’d spent toward her health insurance from the date his divorce was final! We were lucky: my husband waited a couple of months before dropping his ex, but because their end date was fuzzy (it was left open because it was based on her being seen by a specialist first), his employer let it slide. Same employer as his friend, but different circumstances...so, again, be careful!
Our story…
My husband’s divorce took YEARS, and in all that time the devil was eligible for FREE health insurance through her employer. But she refused it out of spite…she wanted my husband to have to pay for her coverage because it was costing him an additional $5,000 a year! Well, as you can imagine, my husband took great satisfaction in finally being able to drop that bitch from his plan! But to add insult to injury, when he finally DID drop her--2 years after he should’ve been able to--she actuallly had the nerve to be petulant and insulting about it! What a surprise!
Thursday, March 5, 2009
What’s a QDRO?
A QDRO, or Qualified Domestic Relations Order, is a court order issued to your wife that grants her the right to receive all or part of your vested interest in a private retirement plan.
Your attorneys must determine the present value of your plan, and if you and your wife don't agree on the value, the judge will decide it for you based on expert testimony ($$$). So unless the difference is substantial, you’d be better off negotiating the difference.
If your wife isn’t counting on a deferred settlement for retirement income later on, her attorney will likely offer an immediate offset settlement, which would treat the value of each of your marital assets (including debt) as tradable commodities to use as bargaining chips. You’d each take one asset to offset one being retained by the other party. In this case, you might consider offering your wife a larger share of the marital home by offering her a credit of 100% of the value of the marital portion of your pension (vs. the usual 50% she’d normally get), which would increase her share of the home's equity, while you could retain all of your pension.
For example: Let’s say that you have $150K equity in your home; her half is $75K. And let’s say that the value of the marital portion of your pension is $50K; her half is $25K. But rather than give her $25K of your pension, you offer her a 100% credit of your pension’s value toward her share of the home’s equity, which increases her equity share to $125K ($75K + $50K = $125K). While this reduces your equity share by $25K, you'd make up the $25K by retaining the full value of your pension.
An alternative to an immediate offset settlement is a deferred settlement, which requires a QDRO for private retirement plans. You'll still need a Domestic Relations Order for a public plan (federal, state, local or military), but not a “Qualified” order.
Your wife will most likely receive a monthly income from your pension once you’re eligible to retire, but with a 401(k), ESOP, Profit Sharing Plan, etc., she'll be paid out immediately once the plan receives and approves the order.
However, in our case, the devil accepted an offer from the plan administrator to be paid out IMMEDIATELY from his PENSION.
And here’s the kicker: The plan administrator has assured my husband that paying the devil a one-time, lump-sum $6K payment will have NO effect whatsoever on the amount of his retirement!
So, hell yeah, we were excited about that!
Your attorneys must determine the present value of your plan, and if you and your wife don't agree on the value, the judge will decide it for you based on expert testimony ($$$). So unless the difference is substantial, you’d be better off negotiating the difference.
If your wife isn’t counting on a deferred settlement for retirement income later on, her attorney will likely offer an immediate offset settlement, which would treat the value of each of your marital assets (including debt) as tradable commodities to use as bargaining chips. You’d each take one asset to offset one being retained by the other party. In this case, you might consider offering your wife a larger share of the marital home by offering her a credit of 100% of the value of the marital portion of your pension (vs. the usual 50% she’d normally get), which would increase her share of the home's equity, while you could retain all of your pension.
For example: Let’s say that you have $150K equity in your home; her half is $75K. And let’s say that the value of the marital portion of your pension is $50K; her half is $25K. But rather than give her $25K of your pension, you offer her a 100% credit of your pension’s value toward her share of the home’s equity, which increases her equity share to $125K ($75K + $50K = $125K). While this reduces your equity share by $25K, you'd make up the $25K by retaining the full value of your pension.
An alternative to an immediate offset settlement is a deferred settlement, which requires a QDRO for private retirement plans. You'll still need a Domestic Relations Order for a public plan (federal, state, local or military), but not a “Qualified” order.
Your wife will most likely receive a monthly income from your pension once you’re eligible to retire, but with a 401(k), ESOP, Profit Sharing Plan, etc., she'll be paid out immediately once the plan receives and approves the order.
However, in our case, the devil accepted an offer from the plan administrator to be paid out IMMEDIATELY from his PENSION.
And here’s the kicker: The plan administrator has assured my husband that paying the devil a one-time, lump-sum $6K payment will have NO effect whatsoever on the amount of his retirement!
So, hell yeah, we were excited about that!
Wednesday, March 4, 2009
Uh-oh...I Worked 'Crazy' Overtime Before! Now What?!
In ordering spousal support, the court considers the needs of each party based on the standard of living established during the marriage.
I bet right about now you’re thinking that you really screwed yourself by busting your ass and working all that overtime to give her the luxury of staying at home all day!
Yeah, we know...my husband was in the same boat. He'd provided the devil with a lifestyle beyond their means by working an unreasonable amount of overtime, and sacrificed all of his limited free time to give it the luxury of being a stay-at-home wife and mother (even though they didn't have any kids, and it wasn't even pregnant when it quit her job to sit on its ass all day).
So, do you want the good news? Take a look at this California Court of Appeal decision:
In re the Marriage of RICHARD and BARBARA SIMPSON, No. B048099, COURT OF APPEAL OF CALIFORNIA, SECOND APPELLATE DISTRICT, DIVISION SEVEN, February 13, 1992, Decided: “After dissolution, a family may be entitled to be supported at what would have been a reasonable standard of living ... given what [Husband] would have earned had he worked at a reasonably human pace." … They are not entitled to continued guaranteed support at a standard of living which existed only because the supporting spouse ‘worked excessive hours during the marriage.’”
This means that the court can NOT base spousal support on the crazy overtime you worked during your marriage...and you've got the Appeallate Court decision to prove it!
I bet right about now you’re thinking that you really screwed yourself by busting your ass and working all that overtime to give her the luxury of staying at home all day!
Yeah, we know...my husband was in the same boat. He'd provided the devil with a lifestyle beyond their means by working an unreasonable amount of overtime, and sacrificed all of his limited free time to give it the luxury of being a stay-at-home wife and mother (even though they didn't have any kids, and it wasn't even pregnant when it quit her job to sit on its ass all day).
So, do you want the good news? Take a look at this California Court of Appeal decision:
In re the Marriage of RICHARD and BARBARA SIMPSON, No. B048099, COURT OF APPEAL OF CALIFORNIA, SECOND APPELLATE DISTRICT, DIVISION SEVEN, February 13, 1992, Decided: “After dissolution, a family may be entitled to be supported at what would have been a reasonable standard of living ... given what [Husband] would have earned had he worked at a reasonably human pace." … They are not entitled to continued guaranteed support at a standard of living which existed only because the supporting spouse ‘worked excessive hours during the marriage.’”
This means that the court can NOT base spousal support on the crazy overtime you worked during your marriage...and you've got the Appeallate Court decision to prove it!
Does My Girlfriend/Wife’s Earnings Count Toward My Support Payments?
I know that most of you will find this shocking (NOT!), but the devil actually tried to increase my husband’s support payments based on MY earnings.
At that time, I was a single mom, working full time to provide the sole support of my THREE children. And, yes, SHE KNEW THIS!!!
And not that it would've changed the outcome, but my (now) husband and I weren't even engaged and, in fact, didn't even live together yet. And, again, it wouldn't have changed anything, but once we did move in together, we maintained separate banking and credit accounts, didn't combine our incomes, and (except for rent and utilities) didn't share expenses.
So how do we know that it tried to pull this? Because, in addition to numerous verbal inquiries made to my husband, it also made at least two written inquiries to its attorney...which it stupidly and eagerly shared with us!
Well, thank goodness for Senate Bill No. 145:
In re the Marriage of LINDA MICHELE and PAUL LOUIS ROMERO, No. E030759, COURT OF APPEAL OF CALIFORNIA, FOURTH APPELLATE DISTRICT, DIVISION TWO, 99 Cal. App. 4th 1436; July 11, 2002, Decided; July 11, 2002, Filed. “In 1993, however, the Legislature … passed Senate Bill No. 145, which added subdivision (b) to Family Code section 4323. That provision, which became effective in 1994, consisted of the following limitation: "The income of a supporting spouse's subsequent spouse or nonmarital partner shall not be considered when determining or modifying spousal support. … In addition to adding subdivision (b) to Family Code section 4323, Senate Bill No. 145 made similar amendments to the child support provisions."
So, to answer your question: "NO, your girlfriend/wife’s earnings can NOT be used in establishing your child and/or spousal support payment amounts"!
At that time, I was a single mom, working full time to provide the sole support of my THREE children. And, yes, SHE KNEW THIS!!!
And not that it would've changed the outcome, but my (now) husband and I weren't even engaged and, in fact, didn't even live together yet. And, again, it wouldn't have changed anything, but once we did move in together, we maintained separate banking and credit accounts, didn't combine our incomes, and (except for rent and utilities) didn't share expenses.
So how do we know that it tried to pull this? Because, in addition to numerous verbal inquiries made to my husband, it also made at least two written inquiries to its attorney...which it stupidly and eagerly shared with us!
Well, thank goodness for Senate Bill No. 145:
In re the Marriage of LINDA MICHELE and PAUL LOUIS ROMERO, No. E030759, COURT OF APPEAL OF CALIFORNIA, FOURTH APPELLATE DISTRICT, DIVISION TWO, 99 Cal. App. 4th 1436; July 11, 2002, Decided; July 11, 2002, Filed. “In 1993, however, the Legislature … passed Senate Bill No. 145, which added subdivision (b) to Family Code section 4323. That provision, which became effective in 1994, consisted of the following limitation: "The income of a supporting spouse's subsequent spouse or nonmarital partner shall not be considered when determining or modifying spousal support. … In addition to adding subdivision (b) to Family Code section 4323, Senate Bill No. 145 made similar amendments to the child support provisions."
So, to answer your question: "NO, your girlfriend/wife’s earnings can NOT be used in establishing your child and/or spousal support payment amounts"!
Your Ex Was Awarded the House?
Your ex was awarded the house,* and she agreed to refinance the loan and buy you out of your share of the equity.** This has been verbally agreed to by you, her, and your attorneys, and approved by the judge, as well.
But wait! Has it been STIPULATED in your Order After Hearing?
If not, you’d better get it specifically stipulated in your Judgment…NOW!
What’s the big deal?
If you don’t make sure that your name is removed from HER mortgage, then it’s YOUR mortgage, too!
You’re no longer making the payments, so you don't have the ability to build equity or deduct the interest on your income tax returns, but you will STILL be financially liable for the loan, and will STILL have all of the same financial worries as before (has she been late on a payment…missed a payment…defaulted…paid her property taxes?), only now you won't have the benefit of homeownership because you no longer have a financial stake in the house!
And what happens if you want to buy another house?
- Best-case scenario: you’ll have to hassle with producing a court order to prove that you no longer have any financial liability for the existing loan even though your name is still on it (which may be an exercise in futility because the lender will likely recognize you as a co-borrower regardless. After all, you applied for the existing loan, you signed for the existing loan, and your name is STILL on the existing loan…so as far as the lien holder is concerned: it’s your loan).
- Worst-case scenario: Your loan application is rejected because your income-to-debt ratio is too high (your mortgage isn’t supposed to exceed 31% of your gross income), even though you don't have a financial stake in the house!
So if you don’t take care of this NOW before everything is finalized, you’ll have no chocie but to take care of it later…which will translate in to more $$$...LOTS and LOTS of $$$. Your attorney will most likely ask the judge for the court to hold jurisdiction over the house until your ex refinances it; he will also ask that it be specified exactly how long your ex has to refinance the loan, and what will happen if she doesn’t do it within the specified period of time (e.g., a forced sell if she can’t – or won’t – refinance, regardless of the reason).
The devil had 45 days to refinance the loan, which she (of course) didn’t meet. But because there was no stipulation concerning what would happen if she failed to meet the deadline, there wasn’t much my husband could do other than take her back to court and spend $$$ that he didn't have.
So be sure your court order is worded properly right from the get-go. It should stipulate (1) that she “shall be permitted an opportunity to buy out Respondent’s [or Petitioner’s, as the case may be] interest in the family residence,” (2) that she must refinance the existing loan, (3) that she must “remove Respondent’s name from any loan or mortgage within 45 days from this date,” and (4) specifically what will happen if she fails to refinance the loan for any reason within the stipulated period of time.
My husband’s Order After Hearing failed to stipulate that the devil had to refinance the loan; it only stipulated that she had 45 days in which to "remove his name from the loan." That’s not the same thing. We're just lucky that this didn't become an issue.
And, NO, a Quit Claim Deed won’t suffice! (http://en.wikipedia.org/wiki/Quitclaim_deed)
*Do NOT let her get away taking you back to court to increase your support obligation just because she can’t afford her mortgage payment: it’s not your fault if she "fails to make a reasonable effort to become self-supporting by undertaking a debt beyond her reasonable means to pay presently or in the foreseeable future." (1)
The devil acknowledged in court that she wouldn't qualify to refinance their marital house on her own because she was unemployed, and that she wouldn't be able to afford the mortgage payments once she became employed, so my husband was awarded the house and agreed to refinance it and pay the devil half of its equity. Two months later, they returned to court and the devil tried to pursuade the judge that she should be given an opportunity to buy the house; it swore that it and her mom would jointly refinance the house, and that its mom would move in and share expenses. This is the ONLY reason my husband agreed to allow the devil and its mom to buy him out of the house. So what happened? The devil refinanced the house on its own, and to this day relies on the entire amount of my husband's child support to make its mortgage payments. Needless to say, we're armed and ready for battle if the devil ever tries to take my husband back to court for increased child support based on its inability to pay its mortgage.
(1) In re the Marriage of JEANNE and ROBERT H. ANINGER, No. B038780, Court of Appeal of California, Second Appellate District, Division Seven, 220 Cal. App. 3d 230; May 11, 1990: “The only factor adversely affecting [Wife’s] ability to meet her needs was an increase … in her housing cost resulting from her purchase of a $280,000 condominium … it would defeat the intent and reasonable expectations of the parties that [Wife] would achieve self-support … by going into debt far beyond her means … By undertaking a debt beyond her reasonable means to pay presently or in the foreseeable future, [Wife] failed to make a reasonable effort to become self-supporting.”
**Do NOT let her stick you with paying any part of her closing costs! The BUYER traditionally pays the closing costs, and you are NOT the buyer…SHE is! The devil tried to force my husband to pay for half of its $6,966 closing costs (or $3,483)! We were dating by then, so he asked me to look over its proposed equity disbursement. If I hadn't looked at this, he would've (unwittingly) paid for its costs because sharing in the devil's closing costs had never been agreed to or even discussed! He protested through his attorney, and the fight was on! I don't know how the devil did it, but it managed to convince the Escrow Officer to set aside the ENTIRE amount of its closing costs (all $6,966!) from my husband’s equity disbursement, which its attorney then held in trust for TWO YEARS (!!!) before they went to trial and the judge deemed that it was rightfully his. He eventually received the money that remained (less what the devil’s attorney had helped herself to, to pay for things like, oh, the ENTIRE cost of their QDRO [vs. half], among other things)!
But wait! Has it been STIPULATED in your Order After Hearing?
If not, you’d better get it specifically stipulated in your Judgment…NOW!
What’s the big deal?
If you don’t make sure that your name is removed from HER mortgage, then it’s YOUR mortgage, too!
You’re no longer making the payments, so you don't have the ability to build equity or deduct the interest on your income tax returns, but you will STILL be financially liable for the loan, and will STILL have all of the same financial worries as before (has she been late on a payment…missed a payment…defaulted…paid her property taxes?), only now you won't have the benefit of homeownership because you no longer have a financial stake in the house!
And what happens if you want to buy another house?
- Best-case scenario: you’ll have to hassle with producing a court order to prove that you no longer have any financial liability for the existing loan even though your name is still on it (which may be an exercise in futility because the lender will likely recognize you as a co-borrower regardless. After all, you applied for the existing loan, you signed for the existing loan, and your name is STILL on the existing loan…so as far as the lien holder is concerned: it’s your loan).
- Worst-case scenario: Your loan application is rejected because your income-to-debt ratio is too high (your mortgage isn’t supposed to exceed 31% of your gross income), even though you don't have a financial stake in the house!
So if you don’t take care of this NOW before everything is finalized, you’ll have no chocie but to take care of it later…which will translate in to more $$$...LOTS and LOTS of $$$. Your attorney will most likely ask the judge for the court to hold jurisdiction over the house until your ex refinances it; he will also ask that it be specified exactly how long your ex has to refinance the loan, and what will happen if she doesn’t do it within the specified period of time (e.g., a forced sell if she can’t – or won’t – refinance, regardless of the reason).
The devil had 45 days to refinance the loan, which she (of course) didn’t meet. But because there was no stipulation concerning what would happen if she failed to meet the deadline, there wasn’t much my husband could do other than take her back to court and spend $$$ that he didn't have.
So be sure your court order is worded properly right from the get-go. It should stipulate (1) that she “shall be permitted an opportunity to buy out Respondent’s [or Petitioner’s, as the case may be] interest in the family residence,” (2) that she must refinance the existing loan, (3) that she must “remove Respondent’s name from any loan or mortgage within 45 days from this date,” and (4) specifically what will happen if she fails to refinance the loan for any reason within the stipulated period of time.
My husband’s Order After Hearing failed to stipulate that the devil had to refinance the loan; it only stipulated that she had 45 days in which to "remove his name from the loan." That’s not the same thing. We're just lucky that this didn't become an issue.
And, NO, a Quit Claim Deed won’t suffice! (http://en.wikipedia.org/wiki/Quitclaim_deed)
*Do NOT let her get away taking you back to court to increase your support obligation just because she can’t afford her mortgage payment: it’s not your fault if she "fails to make a reasonable effort to become self-supporting by undertaking a debt beyond her reasonable means to pay presently or in the foreseeable future." (1)
The devil acknowledged in court that she wouldn't qualify to refinance their marital house on her own because she was unemployed, and that she wouldn't be able to afford the mortgage payments once she became employed, so my husband was awarded the house and agreed to refinance it and pay the devil half of its equity. Two months later, they returned to court and the devil tried to pursuade the judge that she should be given an opportunity to buy the house; it swore that it and her mom would jointly refinance the house, and that its mom would move in and share expenses. This is the ONLY reason my husband agreed to allow the devil and its mom to buy him out of the house. So what happened? The devil refinanced the house on its own, and to this day relies on the entire amount of my husband's child support to make its mortgage payments. Needless to say, we're armed and ready for battle if the devil ever tries to take my husband back to court for increased child support based on its inability to pay its mortgage.
(1) In re the Marriage of JEANNE and ROBERT H. ANINGER, No. B038780, Court of Appeal of California, Second Appellate District, Division Seven, 220 Cal. App. 3d 230; May 11, 1990: “The only factor adversely affecting [Wife’s] ability to meet her needs was an increase … in her housing cost resulting from her purchase of a $280,000 condominium … it would defeat the intent and reasonable expectations of the parties that [Wife] would achieve self-support … by going into debt far beyond her means … By undertaking a debt beyond her reasonable means to pay presently or in the foreseeable future, [Wife] failed to make a reasonable effort to become self-supporting.”
**Do NOT let her stick you with paying any part of her closing costs! The BUYER traditionally pays the closing costs, and you are NOT the buyer…SHE is! The devil tried to force my husband to pay for half of its $6,966 closing costs (or $3,483)! We were dating by then, so he asked me to look over its proposed equity disbursement. If I hadn't looked at this, he would've (unwittingly) paid for its costs because sharing in the devil's closing costs had never been agreed to or even discussed! He protested through his attorney, and the fight was on! I don't know how the devil did it, but it managed to convince the Escrow Officer to set aside the ENTIRE amount of its closing costs (all $6,966!) from my husband’s equity disbursement, which its attorney then held in trust for TWO YEARS (!!!) before they went to trial and the judge deemed that it was rightfully his. He eventually received the money that remained (less what the devil’s attorney had helped herself to, to pay for things like, oh, the ENTIRE cost of their QDRO [vs. half], among other things)!
Monday, March 2, 2009
Buying a House?
I bet you're wondering, "What does me buying a house have to do with anything?" Well, we wondered the same thing once upon a time. So before we bought our house during my (now) husband's long, drawn out divorce, he asked his attorney how it might affect things, if at all.
She, of course, didn't respond.
After we bought our house, his ex started crying about him including his mortgage interest on his income and expense report. We wondered what this was all about, so we again asked his attorney. That's when we were told that buying a house DOES affect your support payments! How? By increasing them, of course!!!
Yes, that's right. Your mortgage interest is used in the Dissomaster calculation to calculate your support payments because, even though you're spending more money each month now that you have a mortgage payment, you're able to claim your mortgage interest on your tax return, which means that you could get a larger refund from the IRS each year. (No guarantee, of course...we ended up OWING money that first year, and yet his support payments increased regardless!)
So while you're decreasing your available cash each month, you MAY be getting an increased refund from the IRS each year (income). Of course, your refund certainly won't be equal to your increased monthly expenses, but the court doesn't care about that...your refund is additional income as far as they're concerned. So buying a house means you'll now have even less available cash because your newfound wealth (that annual tax refund) is going to make your spousal and/or child support payments go up!
I know...it's bullshit, to be sure! But it is what it is...and it sucks!
She, of course, didn't respond.
After we bought our house, his ex started crying about him including his mortgage interest on his income and expense report. We wondered what this was all about, so we again asked his attorney. That's when we were told that buying a house DOES affect your support payments! How? By increasing them, of course!!!
Yes, that's right. Your mortgage interest is used in the Dissomaster calculation to calculate your support payments because, even though you're spending more money each month now that you have a mortgage payment, you're able to claim your mortgage interest on your tax return, which means that you could get a larger refund from the IRS each year. (No guarantee, of course...we ended up OWING money that first year, and yet his support payments increased regardless!)
So while you're decreasing your available cash each month, you MAY be getting an increased refund from the IRS each year (income). Of course, your refund certainly won't be equal to your increased monthly expenses, but the court doesn't care about that...your refund is additional income as far as they're concerned. So buying a house means you'll now have even less available cash because your newfound wealth (that annual tax refund) is going to make your spousal and/or child support payments go up!
I know...it's bullshit, to be sure! But it is what it is...and it sucks!
Sunday, February 22, 2009
What if She Quits (or Threatens to Quit) her Job?
Yeah, unfortunately, we’ve been there, too…
From our 2007 Sequence of Events: [The Devil]’s Angry, Threatening Voice Message. 7:40 p.m.: “[Angel], this is [the devil]. Um, I wanna know why I got a check for 10 dollars [instead of the $20 she unreasonably demanded]. … I w-[ant] I need a call back and I need you to tell me why you’re not paying me what I n-[eed] deserve to be paid. Um … if I hafta quit my job and take you back to court so you can pay me 23 hundred a month then maybe that’s what I hafta do.”
At that time, between child support and earnings, the devil’s monthly income was at least $4,237.50, so we didn’t take her threat seriously. But if she had quit her job, the court would have “imputed” her income to calculate child support, spousal support, and/or attorney fees being as she would have been purposefully unemployed or underemployed.
Here’s how it works:
If the Court believes that a parent has voluntarily reduced his or her wages, no matter how justified, it may compute child support based on that parent’s “imputed income”—or the amount they could be earning.
Minimum wage is $1,300 a month, and the court assumes that everyone can work at a minimum wage job. To impute more than minimum wage, you would need to plan on a vocational examination of your ex to have the admissible evidence needed to impute her higher income.
Imputed income can also be used when an individual is self-employed and her earnings would be greater if she were not. But to be able to impute her income, there needs to be opportunity as well as ability, which means that not only does your ex need to be qualified to do a job, employers also need to be hiring for that job.
So as far as we were concerned, the devil’s threat was a non-threat.
But if she had quit her job, she would’ve been jeopardizing the children’s wellbeing simply because she was pissed off. If that had happened, we would’ve asked the judge for sole physical custody until the devil was able to secure steady, full-time employment sufficient to once again support herself and the children (in combination with my child support). In the meantime, our child support obligation to her would’ve been reduced to zero.
End of problem.
From our 2007 Sequence of Events: [The Devil]’s Angry, Threatening Voice Message. 7:40 p.m.: “[Angel], this is [the devil]. Um, I wanna know why I got a check for 10 dollars [instead of the $20 she unreasonably demanded]. … I w-[ant] I need a call back and I need you to tell me why you’re not paying me what I n-[eed] deserve to be paid. Um … if I hafta quit my job and take you back to court so you can pay me 23 hundred a month then maybe that’s what I hafta do.”
At that time, between child support and earnings, the devil’s monthly income was at least $4,237.50, so we didn’t take her threat seriously. But if she had quit her job, the court would have “imputed” her income to calculate child support, spousal support, and/or attorney fees being as she would have been purposefully unemployed or underemployed.
Here’s how it works:
If the Court believes that a parent has voluntarily reduced his or her wages, no matter how justified, it may compute child support based on that parent’s “imputed income”—or the amount they could be earning.
Minimum wage is $1,300 a month, and the court assumes that everyone can work at a minimum wage job. To impute more than minimum wage, you would need to plan on a vocational examination of your ex to have the admissible evidence needed to impute her higher income.
Imputed income can also be used when an individual is self-employed and her earnings would be greater if she were not. But to be able to impute her income, there needs to be opportunity as well as ability, which means that not only does your ex need to be qualified to do a job, employers also need to be hiring for that job.
So as far as we were concerned, the devil’s threat was a non-threat.
But if she had quit her job, she would’ve been jeopardizing the children’s wellbeing simply because she was pissed off. If that had happened, we would’ve asked the judge for sole physical custody until the devil was able to secure steady, full-time employment sufficient to once again support herself and the children (in combination with my child support). In the meantime, our child support obligation to her would’ve been reduced to zero.
End of problem.
What is Dissomaster?
Dissomaster is a program that calculates TEMPORARY guideline child and spousal support.
Temporary Spousal Support
The support that you're ordered to pay from the time you file for divorce until your divorce is final (a minimum of 6 months in California) is considered “temporary” support. Temporary support is usually set at a higher rate than permanent support.
In re the Marriage of ANDREA L. and MICHAEL P. SCHULZE, No. G015895, COURT OF APPEAL OF CALIFORNIA, FOURTH APPELLATE DISTRICT, DIVISION THREE, 60 Cal. App. 4th 519; 70 Cal. Rptr. 2d 488; December 29, 1997, Decided: “Temporary support … usually is higher than permanent support because it is intended to maintain the status quo prior to the divorce.”
By the time my husband’s divorce was final, he'd paid at the higher “temporary” rate for more than 2 years (versus the 6-month period that it's intended to cover).
Dissomaster v. Permanent Support
Permanent spousal support is NOT supposed to be based on Dissomaster; it's supposed to be calculated by the Judge...and the Judge is NOT supposed to use Dissomaster as a guide.
In re the Marriage of ANDREA L. and MICHAEL P. SCHULZE, No. G015895, COURT OF APPEAL OF CALIFORNIA, FOURTH APPELLATE DISTRICT, DIVISION THREE, 60 Cal. App. 4th 519; 70 Cal. Rptr. 2d 488; December 29, 1997, Decided: “The spousal support component of a permanent family support order must be based on the statutory factors enumerated in section 4320 of the Family Code, not pegged to a number generated by a computer program intended for use in calculating temporary support [DissoMaster].”
But be prepared: Even though--BY LAW--spousal support is NOT supposed to be based on Dissomaster, IT IS! It ALWAYS is!
My husband's permanent spousal support was also based on Dissomaster. When specifically questioned about this, his attorney chose to avoid the question rather than answer it. Attorneys don't want to argue this point with the judge. In fact, they're probably counting on the fact that you don't know this law.
You CAN fight this...but you'd better make sure that it will be worth the potentially enormous attorney fees that you're likely to incur, because you’ll probably have to take your case all the way to the Calfornia Court of Appeals. Then again, if you were (un)lucky enough to be married for 10+ years, it may be worth your while to fight this if you're looking at paying a large amount of spousal support for the rest of your ex's life!
Temporary Spousal Support
The support that you're ordered to pay from the time you file for divorce until your divorce is final (a minimum of 6 months in California) is considered “temporary” support. Temporary support is usually set at a higher rate than permanent support.
In re the Marriage of ANDREA L. and MICHAEL P. SCHULZE, No. G015895, COURT OF APPEAL OF CALIFORNIA, FOURTH APPELLATE DISTRICT, DIVISION THREE, 60 Cal. App. 4th 519; 70 Cal. Rptr. 2d 488; December 29, 1997, Decided: “Temporary support … usually is higher than permanent support because it is intended to maintain the status quo prior to the divorce.”
By the time my husband’s divorce was final, he'd paid at the higher “temporary” rate for more than 2 years (versus the 6-month period that it's intended to cover).
Dissomaster v. Permanent Support
Permanent spousal support is NOT supposed to be based on Dissomaster; it's supposed to be calculated by the Judge...and the Judge is NOT supposed to use Dissomaster as a guide.
In re the Marriage of ANDREA L. and MICHAEL P. SCHULZE, No. G015895, COURT OF APPEAL OF CALIFORNIA, FOURTH APPELLATE DISTRICT, DIVISION THREE, 60 Cal. App. 4th 519; 70 Cal. Rptr. 2d 488; December 29, 1997, Decided: “The spousal support component of a permanent family support order must be based on the statutory factors enumerated in section 4320 of the Family Code, not pegged to a number generated by a computer program intended for use in calculating temporary support [DissoMaster].”
But be prepared: Even though--BY LAW--spousal support is NOT supposed to be based on Dissomaster, IT IS! It ALWAYS is!
My husband's permanent spousal support was also based on Dissomaster. When specifically questioned about this, his attorney chose to avoid the question rather than answer it. Attorneys don't want to argue this point with the judge. In fact, they're probably counting on the fact that you don't know this law.
You CAN fight this...but you'd better make sure that it will be worth the potentially enormous attorney fees that you're likely to incur, because you’ll probably have to take your case all the way to the Calfornia Court of Appeals. Then again, if you were (un)lucky enough to be married for 10+ years, it may be worth your while to fight this if you're looking at paying a large amount of spousal support for the rest of your ex's life!
Wednesday, February 18, 2009
"Half the Length of Your Marriage" Rule
How many years have you and your wife been married?
That's a very important question because the answer will determine how long you’ll be forced to pay spousal support if she goes after you for it.
In general, you'll be ordered to pay for an amount of time that's equal to half the length of your marriage. For example, if you were married for 6 years, you’ll probably have to pay for 3. And you'll probably pay for 4 years, 9 months, for a 9-1/2-year marriage.
But if you're (un)fortunate enough to have been married for more than 10 years, you could end up paying indefinitely! (See "The 10-Year Rule.")
So pay close attention to which anniversary you're coming up on while you contemplate divorce...it just might speed up your decision-making process.
That's a very important question because the answer will determine how long you’ll be forced to pay spousal support if she goes after you for it.
In general, you'll be ordered to pay for an amount of time that's equal to half the length of your marriage. For example, if you were married for 6 years, you’ll probably have to pay for 3. And you'll probably pay for 4 years, 9 months, for a 9-1/2-year marriage.
But if you're (un)fortunate enough to have been married for more than 10 years, you could end up paying indefinitely! (See "The 10-Year Rule.")
So pay close attention to which anniversary you're coming up on while you contemplate divorce...it just might speed up your decision-making process.
How Do I Calculate Our Separation Date?
Your separation date is the date that you first told her (or she told you, or you both agreed) that you wanted to separate/get a divorce.
On August 28th, my husband told his ex that he wanted a divorce. She filed for legal separation 2 months later on October 28th. He countered with divorce papers 3 weeks later on November 21st. Their first court date was December 5th. He moved out later that day. Even though he didn’t move from their marital home for more than 3 months, the Court set August 28th as their separation date because that's when he'd first told her that he wanted a divorce.
So if you're seriously considering a divorce, you should lock the date in by telling her of your intentions, and then write it down. In fact, start writing everything down from this point forward (see "Document, Document, Document").
On August 28th, my husband told his ex that he wanted a divorce. She filed for legal separation 2 months later on October 28th. He countered with divorce papers 3 weeks later on November 21st. Their first court date was December 5th. He moved out later that day. Even though he didn’t move from their marital home for more than 3 months, the Court set August 28th as their separation date because that's when he'd first told her that he wanted a divorce.
So if you're seriously considering a divorce, you should lock the date in by telling her of your intentions, and then write it down. In fact, start writing everything down from this point forward (see "Document, Document, Document").
The 10-Year Rule
Under Californian law, you must pay alimony until your ex remarries if the marriage lasted beyond 10 years (i.e., a "long term marriage"). In other words: if you've been married for 10 years or more, you could potentially be ordered to pay spousal support for the rest of your ex's life.
But if you haven't been married for 10 years yet, you'd better think about your future: do you want to stay married to her for the rest of your life, or do you want out?
If you want to get a divorce, then you'd better do it before the 10-year mark. (Why do you think Tom Cruise divorced Nicole Kidman when he did? They were approaching the 10-year mark, baby!)
But if you haven't been married for 10 years yet, you'd better think about your future: do you want to stay married to her for the rest of your life, or do you want out?
If you want to get a divorce, then you'd better do it before the 10-year mark. (Why do you think Tom Cruise divorced Nicole Kidman when he did? They were approaching the 10-year mark, baby!)
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