Family, Wills and Estate Planning

Tuesday, October 11, 2011

Tracing the Money When You Sell Pre-marital Separate Property During Marriage

Darryl owned a piece of real estate in London while he was single (which is why excerpts from the opinion below make reference to English Pounds rather than U.S. Dollars). He married Tracey. They lived together in the London property. Then during the marriage he refinanced, and eventually sold, that property. As part of the refinance Tracey's name was added to the title on the property, and the refinance monies and sales monies were deposited into a joint bank account and later used to buy and improve other property.

When they split up, Darryl wanted to be reimbursed for the value of the London property he owned before marriage, and the loan proceeds. At trial he could not adequately prove the value of the London property when it was sold, and he could not show that it was only the London property portion of the money in the commingled account that was used for the other properties. Does he win? No. The unpublished opinion is helpful because it shows us what kind of transactions can be reimbursed, and also explains the process -- called "tracing" -- by which you deliver the proof to support the reimbursement.

Generally, where the family residence was originally the separate property of one party only, and converted to joint tenancy during marriage, the measure of reimbursement is the fair value of the residence at the time of conversion, less outstanding encumbrances and any nongift community property contributions to principal before conversion. (In re Marriage of Walrath (1998) 17 Cal.4th 907, 920-921, fn. 5.) In In re Marriage of Walrath, the Supreme Court held that a section 2640 reimbursement claim includes not only the specific community property to which the separate property was originally contributed, but also any other community property that is subsequently acquired from the proceeds of the initial property, and to which the separate property contribution can be traced. (In re Marriage of Walrath, at pp. 918-919.)

The Walrath court also determined the method to trace separate property contributions through multiple properties. (In re Marriage of Walrath, supra, 17 Cal.4th at p. 921.) The Walrath tracing method was not used here because the trial court assumed that the £150,000 withdrawn from the Spencer property after refinancing was husband's separate property, and unlike Walrath, these funds were commingled with community funds in the couple's Bank of America account. (Id. at pp. 920-921, fn. 5.) Commingling does not alter the status of the separate property interest despite the presumption that property acquired during the marriage is community property (§ 760) as long as the contribution can be traced to a separate property source. (In re Marriage of Cochran,supra, 87 Cal.App.4th at pp. 1057-1058.) The spouse claiming the separate property interest must prove that he or she used separate property funds to purchase the community asset. If the spouse cannot make that showing, the property is characterized as community property because it was acquired during the marriage. (§ 760.)

While the general rule is that the testimony of a single witness is sufficient to support a finding, there is a heightened evidentiary standard to rebut the presumption that property acquired during marriage is presumed to be community property. (In re Marriage of Mix (1975) 14 Cal.3d 604, 610-611, 613-614.) When a spouse has commingled separate property funds with community property funds, and at dissolution the spouse seeks to trace a particular expenditure to the separate property funds, the courts require more than the spouse's testimony that he or she intended to use the separate property funds in the commingled account for the expenditure. (Id. at p. 614.) The spouse is required to present the court with evidence (apart from a mere statement of intent to use separate property funds).

Courts recognize either direct or family expense tracing methods to ascertain whether a party's contribution was derived from a separate property source. (See In re Marriage of Walrath, supra, 17 Cal.4th at pp. 920-921, fn. 5; In re Marriage of Mix, supra, 14 Cal.3d at p. 612.) Under the "direct tracing" method, the disputed asset is traced to the withdrawal of separate property funds from the commingled account. (In re Marriage of Braud, supra, 45 Cal.App.4th at p. 823.) "This method requires specific records reconstructing each separate and community property deposit, and each separate and community property payment as it occurs." (Ibid.) Separate property status cannot be established by "mere oral testimony of intent" or by "records that simply total up all separate property funds available during the relevant period and all separate expenditures during the period[.]" (Ibid.) Using the "family expense" method, the records must show the community income was exhausted by family expenses, leaving only separate property funds available to make the payments. (In re Marriage of Cochran, supra, 87 Cal.App.4th at pp. 1058, 1059.) Estimates are not sufficient to meet this burden.

As you can see, it is not as simple as saying "it's mine." The courts require specific evidence, purusant to specific methodologies, to prevail on a reimbursement argument. That specific evidence is usually present by an accountant with special expertise in divorce work.

For more information on these matters, please call our office at 305 548 5020.

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Monday, October 10, 2011

Mother Performs Do It Yourself Circumcision on Her Baby … With a Box-Cutter

Oregon Mother has three month old Baby.

Mother reads the Old Testament and decides that she wants Baby to be circumcised.

But Mother fears Baby is too old for a doctor to agree to perform the circumcision.

So Mother watches YouTube videos on circumcision.

And decides to perform the circumcision on Baby herself.

Using a box-cutter.

Only Baby bleeds excessively and suffers great pain during the circumcision.

So Mother dials 911 for assistance.

Mother is arrested for harming Baby.

Mother pleads guilty to criminal mistreatment.

Mother is sentenced to five years' probation…

And ordered to undergo a psychiatric evaluation.

The Court finds that she loves Baby and had no intent to hurt him.

Baby has since recovered and lives with his three siblings … in the child welfare system. Mother has supervised visits with Baby and his siblings.

For more information, please call our office at 305 548 5020.

China Fires 12 After Inquiry on Adoptions

BEIJING — Twelve government employees have been fired and stripped of their Communist Party membership after an investigation into allegations that family planning officials kidnapped children in an impoverished rural area in the southern Chinese province of Hunan, People's Daily, the party's official newspaper, reported Thursday.

While investigators concluded that the government workers did not engage in "baby trading," they did find "severe violations" of regulations, according to the newspaper's Web site, People's Daily Online. A Hunan-based Web news portal said the officials were guilty of "negligence and handling work in a simplistic way."

In a scandal that has drawn widespread coverage, parents and grandparents claim that officials from Longhui, a county that is administered by Shaoyang, illegally seized at least 16 children between 1999 and 2006 because of allegations that family planning rules were violated. Caixin Century Weekly, a Chinese magazine, reported in May that some were later adopted by foreigners.

Government investigators examined 14 cases. In one, parents voluntarily surrendered their child because they were unable to provide care. Five other children were deemed abandoned because the facts about their parentage were hidden by "involved persons," People's Daily reported. Eight more were taken because they had been illegally adopted by local families.

Investigators found no evidence that the city's orphanage, the Shaoyang Social Welfare Institute, paid kickbacks to officials who delivered babies, according to the newspaper's report.

Edy Yin contributed research.

For more information on these matters, please call our office at 305 548 5020.

Spousal Support: A Paradigm Switch

Thanks to a case out of Tennessee, the topic of spousal support is garnering national media attention. The outcome of that case is consistent with obervations I have been commenting on in this blog, and warrant further discussion.

I have been practicing divorce law in California for three decades. Some things have stayed the same. Other things have changed. Spousal support has done a bit of both. When I was a new lawyer, the wife -- and only the wife -- always got spousal support. That is now changing by virtue of husbands actually getting spousal support. The law never said men could not get it, they just never asked for it before. Now they are asking for it, and the law being gender neutral, supports an award to them if the wife is in a superior position financially.

Historically, whether she needed it or not, if the wife asked for spousal support she got it. With time the amount that was awarded has gone down. Also, California courts have been quicker to impose seek work orders, and to otherwise constrain spousal support awards to wives. I attribute this to several social developments. As an example, the number of male judges is decreasing, and the number of female judges is increasing. In my opinion there is more political fall-out if a male judge affronts a female's request for spousal support. That same pressure does not stick to female judges. Also, again in my opinion, female judges are not as receptive to the idea of spousal support as a need. Female judges have accomplished a lot on their own, and the idea of dependency on a spouse may not resonate as loudly with female judges. Also, with the passage of time, economic opportunities outside of the home have increased for women, and as a society the need for spousal support may not be as strong. Still the presumption that spousal support will be awarded to the wife controls as a norm in family law.

However, a spousal support case out of Tennessee has garnered national attention because what it did was so unusual, and because it brings a new focus to spousal support as a potential consequence of divorce rather than an entitlement. The Tennessee Supreme Court denied a wife's request for spousal support. To be technically precise the Tennessee Supreme Court reversed a lower appeals court's decision to award long-term and lump-sum alimony to a suburban Nashville woman who is in good health, has a stable and relatively well-paying job and received significant assets in the divorce. The Supreme Court's unanimous decision Friday reinstated the trial court's decision not to award lifetime alimony and substantial attorneys fees to the wife even though she earned less than her husband of 21 years.

For more information on these matters, please call our office at 305 548 5020.

Holiday Access Blues

by ScottTaylor

Three helpful tips to avoid the holiday access blues!

Holidays, such as this weekend's Thanksgiving, can be times of great family joy and celebration. But for separated or divorced parents holidays can often be times of great sadness and disappointment.

In fact as a family lawyer I've found most court applications for access usually precede holidays such as summer, or Christmas holidays.

So here are three helpful tips to hopefully keep you and your ex out of court.

First, and foremost, you should ensure, (whatever the agreed access) that the holiday access terms are accurately set out in a court order, Separation Agreement, or other legally enforceable written agreement.

I know what some of you will say. "I'm on great terms with my ex and we've never had any issues around holiday access".

You'll just have to trust me when I tell you; unfortunately, it is unlikely that this state of holiday access nirvana will persist indefinitely.

Whether it has to do with your or her "new" partner, or something else, far better to have holiday access terms that you can legally enforce, if necessary, rather than relying on (now) non-existent goodwill.

Secondly, DON"T ACCEPT the phrase "reasonable and generous access", (unless modified as set out below.) to describe your holiday access. That's because such holiday access is virtually impossible to enforce, since your interpretation of "reasonable and generous" may be one half of any holidays, while your ex believes one day during the holidays is "reasonable and generous".

Remember, if you and your ex can't agree on a certain interpretation it will be left to your judge to figure out holiday access, always a potentially risky (and totally unnecessary) gamble.

Thirdly, to minimize holiday access disputes you should include what is known as "specified access". This means clarifying the holiday access terms, for example does it mean the school Christmas holidays, ie two weeks, or just the statutory holiday?

In addition, if there are other holidays or occasions of special importance to you and your new family, ie Fathers/Mother's day, children's birthdays, etc, these special occasions should also be defined.

Follow these three tips and you'll improve your chances of avoiding the holiday blues!

For more information on these matters, please call our office at 305 548 5020.

Saturday, October 8, 2011

Tild Death Do Us Part (Or Two Years, Whichever Occurs Sooner)

Legislators in Mexico City have come up with a unique solution to help citizens avoid the "torturous process of divorce" (as one assemblyman put it): marriage licenses that could expire in a minimum of two years, depending on the preferences of the bride and groom. This would, according to the drafters of the legislation, allow couples to simply decline to renew their marriage contract if the connubial bliss has faded.

While a limited-term marriage license might help some couples avoid divorce litigation, it seems unlikely that the process of breaking up would be any simpler for couples with children or assets/debts that need to be divided – especially given the fact that in many divorces, ending the marriage is the only thing that warring couples agree on.

For more information on these matters, please call our office at 305 548 5020.

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Friday, October 7, 2011

Wills and Estates

Wills and estates – Part I

AS a legal consultant actively involved in the administration of deceased estates, the drafting of wills and matters incidental thereto, I receive many queries from family members and other interested parties. I endeavour as far as possible to respond to these and, in the process, eliminate certain misconceptions.
This series of questions and answers have been arranged sequentially so as to maintain some semblance of order.
Q.What happens to my estate if I leave no will?
A. The assets are distributed according to the laws of intestacy.
Q.How does intestate succession operate?
A. Itis governed by the Intestate Succession Act no 81/1987(as amended).
Q. Is there a particular formula?
A. Yes- where the deceased left no descendants the surviving spouse inherits the greater of 1) a child's share, or 2) so much of the intestate estate as does not exceed in value the amount fixed from time to time by the minister of justice (the current amount is R125'000). Of course, should there be no descendantsand no spouse, the devolution route is more complicated.
Q.Is it true that a deceased's estate can be taken by the State?
A.Only when there is a total failure of blood relations is the estate forfeited to the State. It is the duty of the executor to conduct a thorough investigation to try and establish the existence of a relative.
Q.How is the degree of relationship between the deceased and blood relations of the deceased determined?
A. 1) In the direct line, the number of generations between the ancestor and the deceased or the descendant of the deceased as the case may be,e.gthe father of the deceased is related to him in the first degree, as is the son of the deceased; or 2) in the collateral line, the number of generations between the blood relations and the nearest common ancestor, plus the number of generations between such ancestor and the deceased. Thus an uncle of the deceased is related to him in the third degree.
Q. How is an executor appointed if someone dies intestate?
A. Generally speaking, the next of kin will agree as to whom should be appointed and that recommendation and acceptance by the nominee to act (on the prescribed forms) are sent to the master who then issues what is known as an Executor Dative appointment.

Author: Louis Nel - Mosdell Pama & Cox Knysna