Posted February 23, 2012 in Family Law by Lonich and Patton.
Recently, L.A. Lakers basketball star Kobe Bryant’s divorce from Vanessa Bryant made national headlines. There has been speculation and discussion regarding the size of Vanessa’s potential divorce settlement, particularly due to the length of their marriage, which was more than ten years. See L.A. Times, Kobe Bryant divorce: Prenup could have ‘saved half of his fortune.’ It has been posited that Vanessa purposefully waited until after their ten-year anniversary to ensure spousal support for a lengthy period. However, while Vanessa will likely receive a significant amount of spousal support (Kobe’s net worth is estimated at $300 million), the focus on her “wisely waiting ten years to divorce” should not necessarily garner the attention it has.
According to California Family Code section 4336, there is a rebuttable presumption that a marriage of ten years or more (from the date of marriage to the date of separation) is a marriage of “long duration” for purposes of retaining spousal jurisdiction which could lead to lengthy support orders or even lifetime support. This does not mean, however, that shorter marriages will not be considered marriages of “long duration.” Courts have discretion to determine a marriage to be of “long duration” after evaluating and weighing underlying facts. So while ten years of marriage may appear to be the magic number, it is not the only way a court will retain spousal support jurisdiction. It is possible that a trial court could determine Kobe and Vanessa’s marriage was lengthy even if they were married for less than ten years.
The court’s ability to retain spousal support jurisdiction effectively creates an indefinite term support order, meaning spousal support could continue for life. But because the court retains jurisdiction, it also has jurisdiction to modify or terminate the order upon a showing of “changed circumstances.” Under Family Code section 4320, a court considers and weighs the various factors (including the duration of the marriage), and a “reasonable period” to become self-supporting, which could be shorter or longer than one-half the length of the marriage. There may be cases where (because of age, health, etc.) self-support may not be a realistic expectation at all. Thus, despite their ten-year marriage, a court retains the power to modify any support order following the divorce.
While Kobe and Vanessa’s divorce will likely not play out in the courts, it is likely that Vanessa will see receive a substantial amount of spousal support for an extended duration. The Certified Family Law Specialists* at Lonich & Patton have decades of experience handling spousal support issues in marriages of both short and long duration. If you are contemplating divorce, please contact the Certified Family Law Specialists* at Lonich & Patton, who can provide you with an in depth analysis of your issues. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.
*Certified Family Law Specialist, The State Bar of California Board of Legal Specialization
Posted February 22, 2012 in Family Law by Lonich and Patton.
While a prenuptial agreement may not be the most romantic gesture, every couple can benefit from creating one, even if at the time of marriage there are little assets. Assets may accumulate during the marriage and even young couples just starting their own careers should want to make sure that what they acquire during marriage is not left for a court to divide.
While prenups are often associated with divorce, discussing hypothetical scenarios can help to shed light on relationship expectations and help ensure decisions are made accordingly. Many people also do not realize that post-nuptial agreements are possible. The only catch is that they can be more difficult to procure and enforce as there are additional requirements. Waiting until the last minute to think about a prenuptial agreement can result in unnecessary pressure and force more couples into the more difficult post-nuptial route.
Of the many considerations in discussing a prenuptial agreement, none is more important than the fact that California is a community property state. This means that couples’ assets are typically divided 50/50 despite any special circumstances. Any couple that would prefer anything besides equal division needs a prenup to avoid it. Attorneys have compared prenups to life insurance policies, no one enjoys imagining the worst-case scenario but having a policy or prenup in place can make a significant life event less difficult.
The Certified Family Law Specialists* at Lonich & Patton have decades of experience handling complex family law matters. If you are interested in learning more prenuptial or post-nuptial agreements, please contact the Certified Family Law Specialists* at Lonich & Patton for further information. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.
*Certified Family Law Specialist, The State Bar of California Board of Legal Specialization
Posted February 15, 2012 in Estate Planning by Lonich and Patton.
A charitable remainder trust (CRT) provides the ability to control income flow as needed, which is very helpful when it comes to retirement planning. Given the current economy’s uncertainty, many may be reluctant to make donations to charity in case they encounter cash-flow problems in the future. However, many charities are also facing financial setbacks and need more support now than ever before. A CRT may be the answer for those who are charitably inclined but concerned about having sufficient income for the future.
A CRT has the ability to fund the charity of your choice while potentially boosting cash flow, shrinking the taxable estate, reducing or deferring income taxes, and providing investment planning advantages. CRTs are irrevocable trusts which provide you, and potentially your spouse, with an income stream for life or a term of up to twenty years. Upon termination of the trust term, the remaining trust assets are distributed to the charity, or charities, of your choice.
Among other advantages, CRTs helps to facilitate tax-efficient investment strategies. For example, rebalancing your portfolio typically generates taxable income; however, contributing those assets to a tax-exempt CRT allows investors to freely reallocate assets without undue concern about immediate tax consequences. CRTs are also helpful in selling highly appreciated assets that would generate substantial immediate capital gain and capital gain taxes. Rather than selling those assets, contributing them to a CRT and allowing the trustee to sell them allows for reinvestment of the proceeds in more diversified assets with greater returns unburdened by capital gains taxes.
While CRTs offer a great deal of flexibility and retirement planning advantages, they require careful planning and solid investment guidance to ensure proper structure and funding. If you are interested in learning more about retirement and estate planning, please contact the experienced estate planning attorneys at Lonich & Patton for further information. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.
Posted February 13, 2012 in Estate Planning, Probate by Lonich and Patton.
Your parents have always been put together and independent. However, as time passes and you notice them becoming forgetful or unable to handle their day-to-day affairs, you are unsure of how to proceed as their mental states begin to deteriorate. Should they be conserved?
Generally, the legal definition of capacity is the mental ability to adequately function. In California, the Probate Code allows a court to appoint a conservator of the person for a person who is unable to provide properly for his or her personal needs for physical health, food, clothing, or shelter; a conservator of the estate for a person who is substantially unable to manage his or her own financial resources or resist fraud or undue influence; or a conservator of the person and estate for a person described in both of the previous categories.
If a conservator is appointed, he will be responsible for managing your parent’s affairs. The conservator does not have to be a family member, although it often is. Once appointed, the conservator will owe a duty of care to your parent and will be held accountable by the court.
There are other options, however, if conservatorship is too extreme. Sometimes, elderly parents realize they need assistance and ask for it. In this scenario, families can avoid the expense and emotional turmoil of having a parent conserved and family members can assist parents with their finances or hire a professional. Other options include creating a durable power of attorney for property or a living trust. These documents generally appoint an agent or trustee to manage your parent’s financial affairs.
If you are interested in learning more about ensuring your parents are able to manage their day-to-day lives as they grow older, please contact the experienced estate planning attorneys at Lonich & Patton for further information. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.
Posted February 9, 2012 in Estate Planning, Family Law by Lonich and Patton.
Premarital, or prenuptial, agreements are usually associated with pre-marriage planning and divorce. However, they also provide several benefits for estate planning. Premarital agreements can protect one spouse from liability for the other spouse’s separate debts and help to implement other estate planning strategies. When premarital agreements and estate plans are considered in concert, couples can maximize financial planning and estate planning goals and avoid potentially triggering unintended tax consequences or inconsistent estate planning.
In California, a community property state, a surviving spouse has a 50% interest in all community property. This right supersedes the terms of a will but may be waived in a premarital agreement, which does not necessarily equate with disinheritance. Waiving community property rights allows spouses to specify the manner in which their assets will be distributed and helps to ensure that estate plans will be carried out as intended. This may be helpful, for example, in a family business setting. If one spouse runs a family business with his or her children, a waiver of community property rights will allow the business to pass more easily to the children without the other spouse acquiring an interest in the business, through divorce or inheritance.
There are several other scenarios in which a premarital agreement may affect an estate plan. Premarital transfers may trigger income and gift taxes; estate tax exemption opportunities for surviving spouses may be missed; and premarital agreements may not comport with estate plans for a family home. Premarital agreements often provide for the disposition of the family home or give the surviving spouse a right to continue living there. However, these provisions in a premarital agreement should be drafted such that they will not impede an estate plan’s ability to execute home-related strategies such as transferring the home to a qualified personal residence trust.
If you are interested in learning more about premarital agreements and estate plans, please contact the experienced family law and estate planning attorneys at Lonich & Patton for further information. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.