Monthly Archives: September 2015

Can My Husband Force Me To Sell My Jewelry In A California Divorce?

I had a client come into my office the other day who asked this question. She was married to Beauty with Jewelreyher soon to be ex for about eleven (11) years. Her current spouse is quite a bit older than she. She is a very attractive woman.  In a manner of speaking, she is a trophy wife. He is a successful entrepreneur, whom she married for financial security. The marriage worked out well for both of them during the eleven years they were together. But, as often happens, they grew apart and will  be going their separate ways.

During the course of their marriage, he bought her expensive  jewelry twice a year. That was a ritual they had. Now that they are  parting ways, she wants to know if she will be forced to sell the jewelry and give him half the proceeds when they divorce.

The general rule in California is that all property acquired by the parties during the time that they are married and living together, is considered to be community property and will be equally divided among them when they get divorced. However, as with most everything else, there is an exception to that rule. The exception is carved out in California Family Code section 770 (a) (2) which provides, inter alia, that all property acquired by a married person by gift or bequest, is separate property.

In order to prove that the jewelry was intended to be a gift, the wife must show three things. First, that her ex-husband  intended  that the jewelry he bestowed upon her was to be a gift.  This should not be hard to prove. For instance,  if she can provide evidence of a gift card that accompanied the jewelry at the time she received it, that would be evidence that he intended for it to be a gift. Evidence that they went out to celebrate a special event, such as their anniversary or her birthday, at the time she received the jewelry, could also be evidence that he intended the jewelry to be a  gift. Second, she will have to prove that he gave her the jewelry.  This should not be hard to prove, since they had a bi-annual ritual of him giving her expensive jewelry.   Third, she must show that she accepted the jewelry. This last element can be proved by her testimony, as well as evidence of the surrounding circumstances when she received the jewelry and took it into her possession.

If the trophy wife can prove the above three elements, she may be able to keep all of her jewelry when she and he ex-husband part ways. It would be considered her separate property.

Suppose a slightly different set of facts. Suppose that the successful husband in the above scenario, was a well know jeweler, rather than an entrepreneur. Suppose that he too, gave his wife expensive jewelry twice a year. Suppose further, that the jeweler husband testified that the reason he gave his wife fine jewelry twice a year was so that he could promote his business. When people saw his wife wearing the jewelry, it drove business to his office. In that situation, a court could conceivably find that the jewelry was not a gift. Rather, that it was given to the wife for the purpose of promoting the husband’s business. In that situation, a court may find that the jewelry was, in fact, community property, and order it sold and the proceeds divided between the parties. Alternatively, a court could allow the wife to keep the jewelry, and award the husband other assets of equal value.

In sum, whether or not a wife will be able to keep her jewelry in a California divorce, will depend upon her ability to prove that it was a gift.  If it was a gift then it is her separate property, even if she received it during marriage.

Are Professional Degrees Earned During Marriage Classified as Community Property?

I sometimes get asked about professional degrees, and whether the costs involved in obtaining Professional degreesthe degrees, or the future earnings one gets from having a professional degree, can or should be divided  when the parties divorce.

California courts have ruled that a professional degree is not property, therefore, it cannot be divided or inherited. It also cannot be a gift. A degree belongs solely to the individual who earned it.

The best that the non earner or non degreed spouse can do, is get reimbursed for any expenses s/he may have contributed to the education of the professional spouse, while they were married and living together.

Of course during the time that the parties are married and living together, income obtained from the professional spouse is community property, as in any other marriage. Also, as in any other marriage, after the parties are separated and living apart, all income obtained by the professional spouse is the separate property of the earner spouse.

Should I get a Prenuptial Agreement before I get married in California?

When making this decision, it is important to have an understanding of what Prenuptial Agreements can and cannot include in California.

A prenuptial agreement is a contract between an engaged couple which takes effect when they get married. It is enforced if and when the parties divorce. It is generally a tool used by wealthy people who have assets, and who want certainty as to how their assets will be divided in the event that their marriage winds up in divorce. The parties can alter the general rules regarding spousal support and division of community property with this agreement.

In order to be enforceable, the party seeking to limit spousal support must fully disclose the Prenuptial agreement in Californiaextent of his or her assets and financial resources. There must be no coercion involved, and the other party must understand what s/he is signing and giving up. Along those lines, the party who is agreeing to limit or waive spousal support must have the agreement reviewed by his or her own independent counsel before signing it.  California law requires seven days between the time when the party, whose rights will be limited, is first presented with the agreement, and the time when s/he signs the agreement.

A prenuptial agreement must not be unconscionable at the time of enforcement. Since a parties financial circumstances may change during the course of his or her marriage, that makes it difficult to predict in advance whether or not the agreement will be legally enforced when the parties separate or divorce.

A prenuptial agreement cannot include issues regarding child support or child custody. It also cannot include agreements regarding obligations that arise during marriage, such as household chores, sexual relations or penalties for adultery.

It is advisable to be represented by counsel when entering into a prenuptial agreement, to ensure that you have compiled with all of the legal requirements. Otherwise, there is a good chance that the agreement may invalidated by the court when the parties get divorced.

 

What Are the Consequences of Not Having a Prenuptual Agreement?

Jessica Simpson was recently quoted as saying that her biggest money mistake was her first marriage to Nick Lachey.  She was spot on. In addition to her notoriety as an actress,

Jessica Simpson and Nick Lachey during 2005 MTV Video Music Awards - MTV ShowBox at American Airlines Arena in Miami, Florida, United States. (Photo by Michael Loccisano/FilmMagic)

Jessica Simpson and Nick Lachey during 2005 MTV Video Music Awards – MTV ShowBox at American Airlines Arena in Miami, Florida, United States. (Photo by Michael Loccisano/FilmMagic)as an acclaimed actress, Jessica has also become a fashion Icon. Today, her fashion empire is said to be worth close to $1 billion.

she has become a fashion Icon.

In contrast, her ex husband, Nick Lachey, never achieved the same level of fame that she did. Accordingly, when they split up, Jessica wound up paying.  Nick Lachey walked away with half of the value Jessica Simpson’s estate when their divorce became final, back in 2006.  At that time, the parties settled for about $2 million. Fortunately for Jessica, she made most of her fortune in the fashion industry after the parties split.

Before getting married, carefully weigh the economic consequences. Be very clear about what you may be giving up, before saying “I do.”  Under California law, one spouse could be giving up a lot for the other.

There are two solutions to avoid this outcome. The first, and most obvious, would be not to get married.

The second would be to get married, but to make sure to have an air tight prenuptual agreement. A well written prenuptual agreement can avoid harsh laws regarding spousal support and the division of community property.

The problem with a prenuptual agreement is that no one can predict the future.  No matter how carefully the agreement is drafted, things inevitably change over the course of a few years, including one’s financial situation. Accordingly,  at some future point when the parties split, the agreement may no longer be a true representation of the parties current financial situation.  Thus,  the agreement may be hard to enforce.

What Are The Consequences of Violating a Court Order in a Custody Battle?

The Bitter Custody Battle of Kelly Rutherford

I have been following the custody battle of actress Kelly Rutherford. My understanding of that matter is that her and ex-her husband, Daniel Giersch, a German national, split up a few years ago. Giersch returned to Europe because his working visa in the US expired. Their two Child custody court violation case. Los Angles Family Lawyerchildren, 8 year old Hermes, and 6 year old Helena, have been living with the father in Monaco per a 2012 court order.

This past summer, a Judge in Monaco ordered that the children may visit their mother, Kelly Rutherford, in the United States during the summer months. The order also contained a provision that Kelly was to return the children to their father’s custody at the end of the summer. Ms. Rutherford refused to return her children to Monaco at the end of the summer vacation.

I had a case exactly like this, last year, at this same time. The case was directly on point. The only difference was that in my case, the parties lived in different states, rather than different countries. I represented the out of state parent, who was the mother. Her child was visiting his father in California during summer vacation. The father refused to return their son to his mother at the end of the summer, per the clear terms of the court order.

I went into court ex parte to request that the father be ordered to return the child. The father was so ordered. The Judge was not happy that the father willfully violated a court order. The fact that he did that set the tone for the remainder of the court case. The father had asked for a change in custody, among other things. The father lost on every single issue thereafter.

It is never wise to violate a court order. Kelly Rutherford, stated publicly that the US did not have jurisdiction to order her to return her children to Monaco. Her having done that was a clear sign to Judges in both the US and Monaco, that she has no problem disobeying a court order. This will affect her credibility in the future.

The fact that she lambasted the Judge who ordered that she return the children to the custody of their father, also damaged her credibility.The Bitter Custody Battle of Kelly Rutherford

She would have been wise to have returned her children to Monaco per the terms of the court order, and have simultaneously filed a motion for change of custody. She could have also filed a motion for declaratory relief, and have requested clarification of the 2012 court order which gave the father temporary custody in Monaco.

As things are now, she is unlikely to ever win an argument for change of custody. Her actions will also affect her visitation rights in the future.

Her lawyer argued that the children had a fundamental right to be in the US since they are US citizens. Her lawyer was grasping at straws. That argument would have been effective if the parties were in the midst of arguing a custody battle in the US. But here, the court orders regarding custody were already in place. Furthermore, there are treaties in effect which govern international custody disputes. Thus, it was erroneous for her lawyer to have argued that the court lacked jurisdiction to order return of the children to Monaco.

The moral of the story is to never, ever, violate a court order.

Does No Fault Mean No Revenge In A California Divorce?

California is a “no fault” divorce state. That means that a California judge will not listen to arguments about the fact that your ex spouse had extra marital affairs. In fact, you could be sanctioned and ordered to pay a fine for bringing that issue up in a California divorce proceeding.

But does that mean that your spouses conduct is without consequences? Or that you are left holding the bag and without a remedy?

The answer is a resounding NO! There is always more than one way to skin a cat, or, in this context, to get revenge.  Remember, California is a community property state. Therefore, while a spouses infidelity may not be an issue in a California divorce proceeding, the way s/he spends his or her money ALWAYS is! Particularly if s/he squanders the assets of the marital estate, or makes a GIFT of community funds without the consent of the other spouse.

Since, California is a community property state, judges are supposed to equally divide the assets and debts of the community between the spouses when they divorce. However, like everything else, there are exceptions to that general rule.

The exception that is most on point here, is that neither spouse can make a GIFT of the community property without the consent of the other.  Here are two familiar examples.

Arnold and Maria

I am sure that most of you remember the split of of former Governor ArArnold and Marianold Schwarzenegger and his famous wife Maria Shriver, just a few years ago. Maria, as well as the rest of us, learned that Arnold fathered a child with another women while he and Maria were married and living together. This “love child” was born around the same time that their youngest son Patrick was born.

To add salt to the wounds, Arnold purchased a home for his former mistress and their love child in Bakersfield. The approximate cost of the home was $268,000.00. As stated above, Maria could not litigate or bring up the issue of Arnold’s infidelity during the divorce proceedings. If she had attempted to do that, she could have been sanctioned or fined.

However, if Maria could prove that the Bakersfield home was purchased with community funds, such as Arnold’s wages or assets acquired during marriage, and that she did not have knowledge of this purchase,  then she could have used that as evidence that Arnold had made a gift of their community property without her consent. Thus, she may have been able to have the purchase of the Bakersfield home set aside.  This, in turn, could have also be grounds for an unequal division of the community property.

As a caveat, I don’t know what finally happened between Maria and Arnold. If they wound up getting back together, or if they remained apart. Reference to their situation was merely used an example of the remedies Maria had available to her, had she chosen to use them.

Donald and Shelley

A more recent example, is the situation of Donald Sterling, the  former owner of the Clippers, and his now famous ex mistress V Stiviano. V Stiviano lived in a condo in LA that was worth $1 million dollars. She drove a nice car. She wore expensive jewelry. She enjoyed many comforts that she did not earn. Donald Sterling footed the bill for these items so that his mistress, V Stiviano, could live in luxury.Donald Sterling and V Stiviano

Donald Sterling made gifts to V Stiviano without the consent of his wife Shelly! Shelly found the paper trail, filed a law suit,  and was able to get all of those transactions set aside!

The basis of Shelly’s law suit was that Donald used community funds to make lavish gifts to his mistress, without Shelly’s consent.

Shelly is going to be able to set aside $3,000,000.00 worth of gifts to Donald’s mistress! Shelly got her revenge. Don’t you think?

Have a look at this article from the dailymail! http://www.dailymail.co.uk/news/article-3039372/Shelly-Sterling-emerges-victorious-bitter-court-battle-judge-rules-V-Stiviano-pay-2-6-MILLION-claimed-ex-Clippers-owner-Donald-gifted-her.html

Conclusion

As stated above, the moral of the story is that No Fault does NOT mean No Revenge. While a beleaguered spouse cannot mention the indiscretions or affairs of his or her former spouse, s/he can always mention the manner in which the former spouse spent their money. Remember, every monetary transaction, whether through a bank account or credit card, always leaves an electronic trail. Therefore, if a scorned spouse can prove that an ex used community property earnings or assets to buy lavish gifts for a lover, s/he can have the transaction set aside. This may also be grounds for an unequal division of the community assets when the parties divorce.