SEPARATION, TRANSMUTATION OF PROPERTY IN CALIFORNIA MARRIAGE

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Separate property in regards to marriage in California is covered under Family Code § 771.  It states that:  “The earnings and accumulations of a spouse and the minor living with, or in the custody of, the spouse, while living separate and apart from the other spouse are the separate property of the spouse.”

This period can include any time after initial separation but before reconciliation.  There is nothing in the statute to indicate that any property earned during a period when the parties were living ‘separate and apart’ should be characterized as community property.  Additionally, section 771 does not prohibit multiple separation dates when characterizing a community’s property.

If parties possess the intent to separate and end their marriage, California law dictates that any property acquired thereafter by a spouse is his or her separate property.  However, the law is clear in stating that behavior alone cannot transmute property.

California case law dictates that the character of property as separate or community is fixed as of the time it is acquired.  The character cannot be altered unless by some means recognized by law, judicial decree, or the parties’ agreement.  This is what transmutation is all about.

If it is community property when acquired, it remains so throughout the marriage unless the spouses agree to change its nature or the spouse charged with its management makes a gift of it to the other.  Moreover, separate property does not change its character automatically as a result of marriage, or use during marriage.

California has strict requirements as to what is required to transmute property.  It cannot be done by conduct alone.

Family Code § 852 imposes certain requirements on marital transmutations, including that a transmutation “is not valid unless made in writing by an express declaration that is made, joined in, consented to, or accepted by the spouse whose interest in the property is adversely affected.”  Furthermore, section 852 states the requirements for a valid transmutation in California.  A change in character is not valid unless made in writing by an express declaration that is “made, joined in, consented to, or accepted by the spouse whose interest in the property is adversely affected.”

COMMUNITY PROPERTY SEPARATION DATE IN CALIFORNIA

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California is a community property state.  Basically, this means that all property acquired by the two parties of a marriage in California is considered to be community property.

This presumption of community property is based on the premise that each partner to a marriage contributes services of value to the whole, and, with certain limitations and exceptions, both parties share equally in the profits.  So long as a spouse or registered domestic partner is contributing his or her special services to the marital community he or she is entitled to share in its growth and prosperity.

This, in essence, is what the community property system is all about.  And remember that the parties’ respective contribution to the community is what justifies and forms the basis for their joint ownership of the fruits of their respective labors.

California and Washington are the only states in the union that terminate the marital period at the date of separation of the parties, as opposed to the termination of status as a married couple.  This is due to the fact that upon separation, the parties no longer make joint contributions to the community.

Family Code § 771 covers this area:  “…the earnings and accumulations of a spouse and the minor children living with, or in the custody of, the spouse, while living separate and apart from the other spouse are the separate property of the spouse.”  This means that a judgment of dissolution is not necessary to terminate the community.  California case law has defined ‘living separate and apart’ as the parties having come to a parting of their ways with no present intention of resuming their marriage.

GOVERNOR BROWN VETOES BILL TO ALLOW MORE THAN 2 PARENTS

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Last month California Governor Jerry Brown vetoed legislation that would have allowed children to have more than two parents.  The bill would have permitted judges to recognize multiple parents if doing so would be “required in the best interest of the child.”

California state Senator Mark Leno had proposed the multiple-parents measure, SB 1476, in response to surrogate births, same-sex parenthood, assisted reproduction and other technological and societal changes that create new possibilities for nontraditional households.  In his veto message, Gov. Brown urged more study of the bill’s potential ramifications.  The Governor believes the bill’s ambiguities may lead to “unintended consequences.”

Under the proposed bill, if three or more people who act as parents for a child could not agree on custody, visitation, and child support, a judge would have discretion to split those things up among them.  Supporters of SB 1476 believe that, when necessary, designating multiple parents could enhance a child’s prospects for financial support, health insurance or Social Security benefits, thus reducing the state’s potential financial responsibilities.  This bill did not necessarily envision giving multiple parents equal time with a child, however, stating that the minor’s best interest and stability “may mean that not all parents share legal or physical custody.”

Opponents of the bill argue that it did not adequately consider the legal ramifications of designating multiple parents for a child in other areas of the law, including tax deductions, probate, Social Security, wrongful death and education benefits.  The new law would also have required California to set new guidelines and reprogram its automated system for determining child support.

7 DAY REQUIREMENT OF FAMILY CODE §1615(c)(2) NOT APPLICABLE TO PARTY REPRESENTED FROM OUTSET

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An important case came down last year that helped to further define California family law regarding premarital agreements.  In the case of Marriage of Cadwell-Faso & Faso (2011) 191 CA4th 945, 119 CR3d 813, the California Courts of Appeal determined the requirement of Family Code §1615(c)(2) that a party against whom enforcement of a premarital agreement is sought have at least 7 calendar days “between the time that the party was first presented with the agreement and advised to seek independent legal counsel and the time the agreement was signed” does not apply when that party was represented by counsel from the outset of the transaction.

The facts of Cadwell-Faso were as follows:  Before their marriage, a couple entered into a premarital agreement.  Husband’s attorney prepared the initial draft of the agreement, presented it to the prospective wife and advised her to seek independent counsel.

Prospective wife hired an attorney, who, over the course of several months, prepared five draft addenda.  The 5th addendum was faxed to prospective husband, who transmitted it to his attorney 3 days later.  Three days after that the parties met with his attorney and signed the agreement, after final working changes were made.  They married two days later, separated four months after that.

In later marital dissolution proceedings, Husband moved to set aside the premarital agreement, which imposed both spousal support and property obligations.  He claimed that he signed the agreement without the benefit of the statutory time period of Family Code §1615(c)(2), which requires “seven calendar days between the time that [the] party was first presented with the agreement and advised to seek independent legal counsel and the time the agreement was signed.”

JAMIE MCCOURT MOVES TO SET ASIDE DODGERS SETTLEMENT WITH FRANK

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According to the Los Angeles Times, Jamie McCourt, the former wife of the former owner of the Los Angeles Dodgers, Frank McCourt, plans to set aside the couple’s divorce settlement, claiming Frank vastly understated the value of the team that sold earlier this year for more than $2 billion, the most money ever paid for a pro franchise.

According to Jamie’s attorney, Bert Fields, Jamie “thought” long and hard about whether to do this, but, obviously dollar figures danced in her visions.  Frank got about “93 percent of the family assets, and Mrs. McCourt got about 7 percent,” Fields was quoted as saying.  “We would’ve much preferred to have this massive imbalance resolved with some modification, but we got no response to that approach.  We didn’t want to have more family litigation, but now it’s up to the court.”

The motion that was filed last Monday in Los Angeles Superior Court claims Frank committed fraud by misrepresenting the couple’s Dodgers’ assets as worth less than $300 million during their protracted divorce.

The couple divorced in October 2010.  At the time, Jamie settled for $131 million.  The motion just filed, claims that after the sale and subtraction of relevant debts, Frank’s assets turned out to be worth $1.7 billion, well over 10 times what Jamie received.  The motion further requests that even if Frank’s figures were the result of mistakes rather than fraud, the settlement should be tossed out on the basis of those errors.  A hearing on the motion to set aside the divorce settlement was scheduled for November 16th.