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Family Home in Divorce Part IV

By Warren R. Shiell

The following information is specific to California.

How do we determine the value of the house?

 

            If you decide to either to buy out the other spouse’s community interest in the house or to exchange it for another asset, you will need to know the equity and financial value of the house. The equity in the house is equal to the house’s fair market value less any debts connected to the house such as mortgages and liens. The fair market value of the house is usually assessed by a certified real estate appraiser. The parties may agree to jointly retain an appraiser to keep down costs. A certified appraiser who knows the local market may provide a more accurate appraisal than the local realtor. Sometimes couples place the house on the market to see of anyone makes any offers.

 

            It is important to note that if the Court is asked to calculate each spouse’s share in the house it will only consider the equity value. The court will not consider other costs that might reduce future sale proceeds such as closing costs, sales commissions and tax bills because those costs are not considered “immediate and specific.” FN5.  Therefore, if the fair market value of the house is $500,000 and the balance of all outstanding mortgages is $200,000, the equity value of the house is $300,000. If this is all community interest then each spouse will be entitled to $150,000.

 

            If you are trying to negotiate a settlement, you may wish to argue that the financial value of the house should be considered after taking into account taxes after sale and closing costs. This is important because once you get divorced and awarded the house you are only entitled to a $250,000 exemption on any gain. Therefore what may look like a fair bargain may not seem so fair after you factor in taxes. Consider this example: the equity value of the family home is $500,000 and the equity value of stocks and shares is also $500,000. Is this a fair exchange if the husband keeps the stocks and shares in exchange for the house? It depends. Assume that the shares have a high tax basis so that if they are sold the husband is liable for $100,000 of gain. The wife on the other hand is liable for $250,000 gain if she ever decides to sell the house. Is this still a fair exchange?

 

(read more on our website)

 

Contact a Los Angeles Divorce Attorney at Law Offices of Warren R. Shiell

Call for a free consultation now 310.247.9913.

Divorce and Money

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California Prenuptial, Prenups 

 


Family Home in Divorce Part III

By Warren R. Shiell

 

The following information is specific to California.

What are the options for dividing the house?

 

There are three options if you are trying to reach a settlement:

  • One spouse buys out the community interest share of the other spouse;
  • The house is sold and the proceeds are divided; and
  • The house remains in joint names for a limited period of time and is then sold to the        other spouse or is put on the market.

During economic downturns when house prices are depressed couples increasingly turn to the last option.

            But there is a catch. If you litigate, option (c) is called a deferred sale order (or a “Duke Order”) and the Court can only order a deferred sale in very limited circumstances where it is in lieu of child support and economically feasible. FN3.

Should I keep the house or exchange it for other assets

 

            It is very important to consider the financial as well as the legal realities of electing to keep the house. It is used to be very common where the husband owns a business to suggest that the wife keeps the house and the husband keeps the business. Before even getting into whether this is a fair exchange of assets of equal value, one has to consider whether the spouse who wants to keep the house can afford to do so. Often the spouse who has primary custody of children wants to stay in the house for the sake of the children but this may not be economically possible. The spouse who wants to stay in the home should sit down and work out a budget. They should estimate housing costs and compare this with their estimate earnings from employment, support and other sources.  Housing costs are more than just mortgage and property taxes and one should factor in utilities, repairs, insurance, fees etc. You may also be entitled to mortgage interest deduction relief lowering your costs. If you can still afford to stay in the house, only then should you consider this option.


 

(read more on our website)

 

Contact a Los Angeles Divorce Attorney at Law Offices of Warren R. Shiell

Call for a free consultation now 310.247.9913.

Divorce and Money

Los Angeles Family Law Attorney

Divorce Lawyers|Attorneys Los Angeles, Beverly Hills

California Prenuptial, Prenups 


Wife Shames Cheating Husband During Rush Hour

Cheater-pic Burning shame combined with the August morning sun and about a gazillion highly amused stares was the punishment one man endured for cheating on his wife.


William Taylor of Centreville, Va., got caught getting a little action on the side when he forgot to remove the incriminating evidence from his cell phone.

After finding the proof, his wife doled out a rather interesting punishment -- she forced him to stand at one of the busiest intersections in the D.C. metropolitan area wearing a sandwich board telling everyone he's a cheater. Consider it a modern-day version of a scarlet letter -- humiliating, but less catastrophic than some scorned women's destructive revenge tactics.

"I thought she was kidding, but she was serious," Taylor said.
"I figured I got to do what I got to do to makes things right. So here I am."

His punishment is set to last all week. Each day when morning rush hour winds down, William gets a text from his wife, giving him permission to stop the public humiliation for the day, although repeat sightings of Taylor suggest this is at least a week-long punishment. Those daily texts will probably make him happier than all the ones he got from his mistress combined.

NICE!!!!


Child Custody FAQs

1. What is "custody and visitation"?

2. What are the types of custody orders?

3. What are the types of visitation orders?

4. What is a "time-share plan" or a "parenting plan"

5. What does the law consider when deciding custody and visitation?

6. What is "the best interest of the child"?

7. If we have joint legal custody, do we have to agree on everything?

8. If we have joint physical custody, do our children have to split their time equally between us?

9. Do grandparents have the right to visitation?

10. What is the process for getting a custody and visitation court order?

11. Can a custody and visitation order be changed?

(Read more on Child Custody)


Contact a Los Angeles Divorce Attorney at Law Offices of Warren R. Shiell

Call for a free consultation now 310.247.9913.

Divorce and Money

Los Angeles Family Law Attorney

Divorce Lawyers|Attorneys Los Angeles, Beverly Hills

California Prenuptial, Prenups 


Family Home in Divorce Part II

By Warren R. Shiell

The following information is specific to California.

What are the options for dividing the house?

There are three options if you are trying to reach a settlement:

  • One spouse buys out the community interest share of the other spouse;
  • The house is sold and the proceeds are divided; and
  • The house remains in joint names for a limited period of time and is then sold to the        other spouse or is put on the market.

During economic downturns when house prices are depressed couples increasingly turn to the last option.

            But there is a catch. If you litigate, option (c) is called a deferred sale order (or a “Duke Order”) and the Court can only order a deferred sale in very limited circumstances where it is in lieu of child support and economically feasible. FN3.

 

Must the house be sold?

            If the home is only asset of value in the marriage, the house may have to be sold unless

one spouse is able to raise sufficient funds to buy out the other. Otherwise there are several ways to buy out a spouse’s interest in the family home.

            1.         One party may be able to buy the other out if they can re-finance and qualify for a new mortgage on their own using their own income. The selling spouse should never agree to remain on the mortgage.

            2.         If refinancing does not generate sufficient income, the selling spouse may be persuaded to accept an installment note secured by a deed of trust on the home.  This is generally a bad idea. A spouse who cannot afford an immediate buy out upon divorce, in the long run is probably not going to pay all the costs associated with maintaining a home and pay back the installment loan.

 

            3.         Another option is buying out all or some of the community interest in the house with a release of spousal support. You will need to consult with an attorney and a tax specialist to determine the present and after tax value of the total support payments that are being exchanged.

            4.         It may also be possible to borrow from a retirement plan to finance the buy out. Again you should consult with a pension and tax specialist to discuss the costs of borrowing from your retirement plan. You may have to pay income taxes on the withdrawal and 10% early withdrawal penalties. You should also find out whether such a loan qualifies for mortgage interest deduction on your taxes. FN4

            5.         If there are other assets in the marriage, one spouse may elect to keep the house and the other may keep assets of equal value. For example, if the equity in the house is $200,000 and the value of pensions is $200,000 one spouse may keep the house and the other may keep the pensions. This is discussed in more detail below.

 

(read more on our website)

 

Contact a Los Angeles Divorce Attorney at Law Offices of Warren R. Shiell

Call for a free consultation now 310.247.9913.

Divorce and Money

Los Angeles Family Law Attorney

Divorce Lawyers|Attorneys Los Angeles, Beverly Hills

California Prenuptial, Prenups 


Family Home in Divorce Part I

By Warren R Shiell

 

The following information is specific to California.

In many divorces, the biggest financial question is who gets the family home. Should the wife get it, should the husband, or should they sell it and split the proceeds? And if they sell it how should the proceeds be divided.

 

Many times, the wife has an emotional tie to the home and she wants to keep it. This is where she raised their children and decorated and entertained. But she needs to consider whether she can afford to keep the home. If she keeps the house she is getting an illiquid asset that does not buy groceries for her children or create any income. 

The first issue that must be considered is who owns the house. Is it entirely community property that should be split equally or does one spouse have a claim to a greater share. 

 

Who owns the house?

            Often the family home is the most important asset that a family owns. In a divorce the first question that a couple must consider is who owns the family home. Is it entirely community property that should be divided equally or does one spouse have a separate property interest that would result in an unequal division.

            In California, there is a presumption that property acquired during the marriage is community property and each spouse is entitled to an equal share upon divorce. However, in the case of the family home this presumption may not apply if title is not in joint names. For example, if a house is purchased during the marriage but only one spouse’s name is on the title that spouse may be able to claim that the entire property is their separate property and that they do not have to share it with the other spouse.  FN1.  This can lead to very unfair results if the mortgage was paid during the marriage with community earnings or the downpayment was made with community savings. To avoid this result the disadvantaged spouse has to prove that there was a breach of a fiduciary duty and the Court should treat the house as community. If you are ever in this situation you need to immediately consult with an experienced family lawyer. Further, if your credit is bad and your spouse ever tries to convince you that the only way to get a mortgage is to put title in their name you should immediately consult with an attorney.

            Another common situation is where one spouse owns a house prior to marriage. During the marriage the title remains in that spouse’s name but the outstanding mortgage is paid with community earnings. The spouse who is not on title may still have a community property interest by virtue of the mortgage payments made with community earnings. This is commonly referred to as a “Moore-Marsden” interest based on the two cases that establish the formula for calculating the community interest. FN2. When a couple have been married a long time and substantial amounts of community earnings have paid off an existing mortgage, making improvements or the parties have re-financed, this  “Moore-Marsden” interest can be substantial.

You may wonder why this situation is so different to the one above where the home is acquired during the marriage in one spouse’s name. The simple answer is that’s what the Courts have decided. If you are ever in this situation you need to immediately consult with an experienced family lawyer.

 

(read more on our website)

 

Contact a Los Angeles Divorce Attorney at Law Offices of Warren R. Shiell

Call for a free consultation now 310.247.9913.

Divorce and Money

Los Angeles Family Law Attorney

Divorce Lawyers|Attorneys Los Angeles, Beverly Hills

California Prenuptial, Prenups 


Jackson's mother wins kids' custody despite drama

LOS ANGELES — The wishes Michael Jackson expressed in his will began to come into reality Monday during a lengthy court hearing, with his mother placed firmly in charge of rearing his children and the two men he designated still at the reins of his financial empire.

As a media frenzy buzzed outside, a surprise motion from Jackson's longtime dermatologist injected some drama inside the courtroom: An attorney for the doctor, Arnold Klein, tried to enter objections to the parenting of Jackson's children.

Klein has had a lengthy part in Jackson's story line. He not only served as Jackson's doctor, but one of his employees, Deborah Rowe, married Jackson in 1996 and gave birth to two of the singer's children. Most recently, Klein's medical records have been subpoenaed as part of the police investigation of Jackson's death.

Given tabloid reports that he is the biological father of Jackson's two oldest children, the attorney, Mark Vincent Kaplan, quickly told the judge and dozens of reporters covering the hearing that biology wasn't the source of the objections.

"Legally, he is not a presumed parent," Kaplan said. Rather, he said Klein knew Jackson and his children well and had concerns about their education and other day-to-day parenting issues.

Kaplan's objections created a few tense moments in the courtroom, but Los Angeles Superior Court Judge Mitchell Beckloff quickly dispatched him, saying Klein didn't have legal standing.

In a statement issued Monday evening, Klein's attorneys, Mark Vincent Kaplan and Bradley Boyer, wrote he was not objecting to Katherine Jackson, but rather "acting on promises he made to Michael with respect to assuring the long term health and stability of the children and their ability to enjoy as normal of a life out of the spotlight as could be reasonably possible."

"Dr. Klein has always had a special relationship with Paris Katherine and Prince Michael, loves and cares deeply for these children and is looking out for their best interest."

The statement said he hoped to have ongoing involvement with the children and "offers his guidance and protection forever."

The appointment of Katherine Jackson as permanent guardian of her son's children didn't disperse the crowds of reporters who convened on the downtown courthouse. Satellite trucks lined the street outside the courthouse, reporters arrived more than an hour before Beckloff took the bench to try to get a courtroom seat, all while a smattering of onlookers waited outside and played to the cameras.

"Who gets the Ferris wheel," one man questioned an attorney for the men administering Jackson's estate after the hearing, which stretched from 9 a.m. until mid-afternoon.

The hearing itself was decidedly more low-key.

Katherine Jackson arrived at the courthouse early and entered the courtroom from a back entrance, flanked by daughters LaToya and Rebbie and son Randy. She and Beckloff exchanged pleasantries shortly after the judge named her permanent guardian of Jackson's three children.

John Branca, one of the men who Beckloff ruled can continue to administer the singer's estate, sat across the aisle from the Jacksons. Branca served as Jackson's longtime attorney and was named along with music executive John McClain to serve as co-executors of Jackson's will, signed in 2002.

To date, court records show the men have recovered some of Jackson's personal belongings, $5.5 million in cash, and the singer's life insurance payout, all of which will end up in a private trust account.

That money will help pay for a monthly stipend that Beckloff approved for Katherine Jackson, 79, and for each of the singer's three children, Prince Michael, 12, Paris Michael, 11, and Prince Michael II, 7. The youngest is also known as Blanket and was born to a surrogate mother who has never been identified.

Diane Goodman, an attorney for Katherine Jackson, said the surrogate did not have any parental rights. No one else formally filed for custody of the children, although a pair of women who dogged Jackson throughout his life claiming relationships had sought the youngsters, and exorbitant amounts of money.

Beckloff did not acknowledge either of their filings on Monday.

He also did not reveal how much Katherine Jackson and the children will receive per month from the singer's estate. Similarly, he did not disclose any terms of a deal reached by concert promoter AEG Live and other groups involved with the King of Pop's planned comeback concerts in London and the singer's estate.

Beckloff ordered AEG Live to turn over records related to the settlement and the contract for the 50 shows to Katherine Jackson, but placed restrictions on who else could see the information. The judge has a week to review the settlement and decide whether to approve it.

The settlement is another piece of Jackson's finances that is being placed into a private trust set up primarily to provide for his mother and children. The four have a combined 80 percent stake in Jackson's estate, with the rest going to unspecified charities.

Howard Weitzman, an attorney for the estate's co-administrators, said the agreements had the potential to earn the Jacksons millions of dollars.

Branca, one of the co-administrators, said the deals included Columbia Pictures, which owns rehearsal footage of Jackson's preparations for the concert, and another company that had merchandising rights.

Weitzman said co-administrators were "quite pleased" with the rulings. Branca and McClain will remain in charge of Jackson's estate until at least October, Beckloff ruled.

The judge will consider a motion by Katherine Jackson's attorneys on whether she can disqualify the men from administering the estate on grounds of their capacity or potential conflicts of interests.

Beckloff said he needed more information about the motion, including a copy of the private trust that contains a "no contest" clause stating that anyone who challenges Jackson's will should be disinherited.

The judge said he thought the law allowed Katherine Jackson to challenge Branca and McClain based on narrow arguments and scheduled an Aug. 28 hearing on the issue.

One of the quickest issues resolved was also one of the most important — Beckloff admitted Jackson's five-page will drafted in 2002 for probate, a procedure that grants it significant weight.

"It means it is the will that has been legally recognized as the will of Michael Jackson for the purposes of the administration of the estate," said probate attorney Michael G. Dave, who is not affiliated with the case.

The will was entered without fanfare, objection or any hint of drama.

AP Special Correspondent Linda Deutsch contributed to this report.

Contact a Los Angeles Divorce Attorney at Law Offices of Warren R. Shiell

Call for a free consultation now 310.247.9913.

Divorce and Money

Los Angeles Family Law Attorney

Divorce Lawyers|Attorneys Los Angeles, Beverly Hills

California Prenuptial, Prenups