How Much Does Divorce Cost?

Posted July 22, 2014 in Family Law by Rachel Leff-Kich.

Divorce can be really expensive. For example, the 2007 Connecticut divorce  between travel entrepreneur, Peter Tauck, and his ex-wife racked up around $13 million in legal fees. The bill reflected two years of highly-contested litigation costs, including nearly 700 filings and an 86-day trial. It is common for such strikingly high-cost divorces to reach news headlines, but how much does getting a divorce really cost?

Plenty of websites have popped up that promise an “easy and affordable divorce” ranging from $99 to $300. These cheap alternatives may be enticing, and could be useful for couples who have few assets and agree on every aspect of child custody and visitation – they just need lawyers to fill out the required forms.

However, most spouses disagree about at least a few things in connection with their divorce. One of the most hotly contested issues is often child custody and visitation. California courts require divorcing parents to attend mediation to see if custody issues can be resolved without a trial, and they often can be. However, in some cases it is necessary to have a child custody evaluation, which can be either broad or specific in scope.  This involves retaining a child custody evaluator, who is an expert, usually a forensic therapist or psychologist. The evaluator meets with both parties, the children, and sometimes collateral contacts, and then prepares a report to assist the court in making custody and visitation orders. Evaluations range substantially in cost, which is usually divided equally between the parties.

Aside from custody disputes, divorces mostly concern money and can require complicated financial calculations to determine and equitably divide the community’s interest in your marital estate. Such calculations may include the percentage you contributed to your 401(k) during marriage, or the amount of post-separation mortgage payments on the family home. Sometimes these issues are complicated enough to require hiring a CPA or a forensic accountant. In addition, many people receive stock options, or RSU’s as part of their employment compensation packages, and it can be necessary to retain an expert for division. Further, sometimes it is necessary to obtain real property appraisals or fair rental surveys, which range in cost depending on the size of the property.

If you and your spouse have acquired a substantial estate, the work to  determine the community’s interest and agree on an equitable division can really add up. Even in what seems like a simple case, the cost can be high depending on many factors. Hourly rates for attorneys can range anywhere from $150, at the very low end, up to $1,000. Spouses can definitely expect to pay attorney fees and court costs, and there may be additional costs for parent education classes, co-parent counseling, private mediation, or retaining various experts.

The good news is that most of the cost is a function of how quickly you and your spouse can reach an agreement – it is in part under your control. If agreement cannot be reached, it may be necessary to file motions, which can cost between $3,000 and $10,000 for preparation and appearance at a hearing. The need for depositions and trial will also increase the cost of your divorce. If you have no assets and no children, it is possible to walk away only spending the filing fees. If you are able to reach a global or partial settlement agreement then the cost of dissolving your marriage will be greatly reduced. However, if you cannot be in the same room as each other without becoming outraged, your divorce could easily cost more than your wedding.

However, if your spouse makes more money than you, or has a greater “access to income,” you may be able to obtain an order for “need-based” attorney’s fees, payable by your spouse. In addition, if your spouse or their attorney is being really unreasonable, you may have the right to obtain sanctions in the form of attorney fees and costs from your spouse. These sanctions can be ordered when conduct frustrates the policy of the law to promote settlement.

On July 13, 2014, a Nebraska man, Michael Peterson, plead no contest to the first degree murder of his divorce attorney. After an unsuccessful malpractice suit seeking reimbursement for over $57,000 in attorney fees, Peterson shot his divorce attorney in the back with a high-velocity rifle. In order to avoid murderous rage upon receiving your bill, it is important to have an open and honest conversation about fees and costs, and ask for an estimated budget before going to trial.

Please be aware, however, that it is simply impossible to accurately estimate the cost of your divorce – there are too many possible factors for anyone to promise a certain outcome for a certain amount. If you have questions or are worried about the cost of your upcoming divorce, please contact our California Certified Family Law Specialists. Our attorneys have decades of experience handling complex family law matters and offer a free consultation.

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.

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Your Business Exit strategy should start today

Posted July 15, 2014 in Business Law, Estate Planning by Rebecca Sternbach.

If you draft a will in order to ensure that your heirs are taken care, developing a business succession plan will ensure your company continues to thrive after you are gone.

As the economy slowly emerges from the shadow of The Great Recession of 2009, businesses are also starting to thrive again. While storefront businesses are still a staple of the American dream, use of the internet and the relatively low cost of creating a website and selling a unique product or idea has lowered the barrier to entry for entrepreneurs who wish to start a family business.

If you own or are starting a family business, you are in good company: Forbes estimates that family businesses account for 50 percent of the current Gross Domestic Product in the U.S. This includes 35 percent of Fortune 500 companies (the top 500 U.S. publicly and privately held companies ranked by their gross revenue and published by Fortune magazine) that are controlled exclusively by families.

However, there is a problem with the family business model. According to a Pricewaterhouse Coopers survey, only 52 percent of family businesses expect members of the next generation to be able to run their business. Junior members lack of experience for running a company coupled with poor succession planning are the main culprits.

Get a Prenup for Your Business

If a premarital agreement can reduce headache and anxiety in the event of a divorce, then a similar mechanism for a family business – labeled a Shareholder’s Agreement* – will reduce anxiety and hard feelings when it becomes necessary to distribute assets or make tough decisions regarding the family business.

An agreement among shareholders or family owners lays the ground rules of a family business in terms of important topics such as governance, succession, transfer of assets, liquidity and taxes among others. A Shareholder’s Agreement may address such questions as:

  • Board composition:
    • Will each sibling be represented?
    • Will there be a board of directors?
    • Will executives from outside the family be allowed?
    • What training experience will be required?
  • Decision-making process:
    • What is the number of votes needed to approve key issues?
    • What is the method for dispute resolution?
    • What are the rights of family members?
    • Family members not involved in the business?
    • Non-family involved in the business?
  • Business and Owner Estate Plan:
    • Who are the business successors (both managers and owners of the business)?
    • What is the compensation for owners?
    • What is the remaining profit distribution?
    • What are the taxation implications upon sale or transfer of ownership?
    • Is there an estate plan? Is it in writing? Is there a timeline for implementation?

Although many small businesses fail, by addressing these issues a small business owner takes steps towards ensuring his or her family’s interests while saving money, and avoiding conflict.

Careful estate planning can ensure that a family business continues to benefit family members and that ownership of the business is not diluted until the business is ready to accept outside investors. Owners’ estate plans should use trusts or other mechanisms to restrict the ability of their heirs to transfer shares. A successful family business is an excellent means to provide financial security for the small business owner and his or her loved ones as well as employment opportunities for interested family members.

Estate planning is a complex field. Whether you are concerned with devising a plan for either a family estate or that of a business, it is important to get good advice. The attorneys at Lonich & Patton have decades of experience handling complex estate planning matters including business succession plans, wills, and living trusts. If you are interested in developing an estate plan or reviewing your current estate plan, contact the experienced estate planning attorneys at Lonich & Patton for further information as we are happy to offer you a free consultation.

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 detail general legal issues, it is not legal advice.  Use of this site does not create an attorney-client relationship.

*Source

 

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Halle Berry Owes $16,000 a Month in Child Support: How Much is Too Much?

Posted July 10, 2014 in Family Law by Rebecca Sternbach.

Halle Berry’s last breakup came with a price tag: $16,000 a month for the next 13 years.

On May 30, a Los Angeles court ordered that the Academy Award-winning actress must pay $16,000 a month in child support to her ex-boyfriend, Gabriel Aubry, to support their 6-year-old daughter, Nahla, until she turns 19 or graduates from high school. This amounts to $192,000 a year and almost $2.5 million of nontaxable income over Nahla’s childhood (not including another $115,000 Halle must pay retroactively, plus $300,000 to cover Aubry’s legal fees).

The pricey child support settlement raises the question: Does a 6-year-old really require $16,000 a month?

In California, child support is calculated using a uniform statewide guideline formula that considers both parents’ income, if one parent makes more money than the other, the amount of time each parent spends with the child, and a variety of other related factors. The guideline formula is presumed to be correct and courts should only depart from the guideline in rare circumstances. Under Family Code section 4057(b)(3), one of these circumstances is when “the parent being ordered to pay child support has an extraordinarily high income and the amount determined under the formula would exceed the needs of the children.”

Determining what exceeds a child’s needs is subjective, can be tricky, and involves somewhat circular reasoning. The ability of support must be suitable to the child’s circumstances and can depend on whether the parent is merely wealthy, such as a senior engineer at Google making $300,000 per year, or extremely wealthy, such as Halle Berry, who has a net worth of $70 million and earns approximately $16 million per year. For example, in Marriage of Chandler, based on the Husband’s monthly income of $117,000, the trial court reduced the guideline amount of $9,000 to $3,000 to reflect the child’s reasonable needs. The appellate court then reversed, finding that reducing support to one-third of the guideline was erroneous, and that $3,000 would not come close to providing the child with the lifestyle she was used to.

In Marriage of Bonds, which involved the baseball player Barry Bonds, the trial court awarded his ex-wife $20,000 per month in child support. Bond’s pre-tax salary was $8 million per year and the guideline child support would have been $67,000 per month. His ex-wife appealed, claiming that $20,000 only covered “bare necessities.” The appellate court dismissed ex-wife’s argument, stating that the trial court has discretion to order whatever amount it decides will meet the reasonable needs of the children, consistent with the basic principles behind child support.

The court in Marriage of Catalano noted that a child is an innocent victim of a divorce, with no choice in the breakup, but with reason to expect that both parents will continue to provide for him or her in whatever manner they can.  Indeed, the Legislature has expressly provided that children should share the same standard of living as both parents, and child support may be used “appropriately” to improve the standard of living in the custodial household to “improve the lives of the children.” Thus, the parent receiving child support from a high-income earner may derive some personal benefit from the extra cash. With Halle forking out $16,000 a month, Nahla will likely continue to live a comfortable life while Gabriel benefits personally from some extra cash, as well.

If you are a high-income earner and are concerned about making excessive child support payments, please contact our California Certified Family Law Specialists. Our attorneys have decades of experience handling complex family law matters and offer a free consultation.

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.

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How Facebook Can Affect Your Divorce

Posted July 2, 2014 in Family Law, In the Community by Gretchen Boger.

Last February 2013, a New York Father was awarded sole custody after a Mother utilized Facebook to “insult and demean” her ten year old child. The Court found that Father was “more able to provide a stable and nurturing environment” for the children, citing Mother’s “inappropriate use of the Internet and lack of remorse or insight into the appropriateness of such behavior.”

Social media can play a dangerous role during divorce proceedings. Facebook, which now has more than 800 million active users, has become an important and undeniable presence in today’s culture. Your profile shares and records everything from your personal information, to your new profile picture, and your mood. Your posts may be valuable evidence to your ex-spouse’s divorce attorney.

In recent years there has been an increase, especially in family law cases, of the amount of evidence collected from social media sites. Photographs, updates, and conversations you post online may be admitted into evidence. Further, it might not be a good idea to post about your divorce proceedings. If you do, choose your words carefully and express yourself diplomatically – on the same level as you would present yourself to your judge. This rule of thumb extends to iMessages, emails, Twitter, dating websites, your blog, etc.

Remember that anything online is extremely accessible. If you post anything that contradicts what you have stated in your pleadings, it can impeach your credibility and given the discretionary nature of family law cases, may negatively impact your case. For example, the following Facebook activity often makes its way into the family courtroom:

  • Posting pictures of an extravagant vacation – you at a resort indulging in the day spa can provide evidence of financial misconduct with regards to spousal support or child support.
  • Updating your status while inebriated – constant updates with slurred-speech or checking-in to five happy hours each week can suggest you have drug or alcohol dependency problems and sway the judge in awarding custody.
  • Bad mouthing your divorce proceedings – complaining about your judge or your ex-spouse’s nasty opposing counsel can appear as if you do not take the process seriously.

Even if you have de-friended people who know your ex and made your privacy settings air-tight, your ex may still be able to access your updates. Recently, Facebook was put in the spotlight over a controversial social experiment it conducted to determine whether emotions are contagious (conclusion: they are). Without first getting consent, Facebook manipulated 689,003 user’s News Feeds to display either positive or negative posts and then monitored the users’ reactions. People have had various reactions towards this experiment. Some feel violated for being used as a lab rat. This study is a reminder that regardless of your consent, you never know who has access to or has saved what you posted.

The bottom line: think before updating your Facebook status, especially during divorce proceedings. Online statements are similar to face-to-face conversations but they are much easier to document. Further, the court may consider your posts in your divorce proceedings.

If you have any questions or concerns about your or your spouse’s online presence and how it may affect your divorce, feel free to contact our California Certified Family Law Specialists. Our attorneys have decades of experience handling complex family law proceedings and offer a free consultation.

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.

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A sperm donor who signs a document waiving his parental rights doesn’t have to pay child support, right?

Posted June 30, 2014 in Family Law by Rebecca Sternbach.

The answer is: not necessarily. Early in 2014, a Kansas man who donated sperm to a lesbian couple while also signing documents waiving his parental rights may have to pay child support anyhow. “I donated sperm and that was it for me,” he told CNN.

A judge ruled otherwise, saying that he must pay child support. This was because the lesbian couple conceived the child through an artificial insemination procedure that was carried out at home, which fails to conform to Kansas law. In Kansas, a licensed physician must be involved in an artificial insemination process.

After following up on an ad on Craigslist in March of 2009, sperm was donated and documents were signed waiving parental rights. Now that the child is four years old, Kansas law says he is the father and has to pay up.

The issue has come up in California as well. In 2012, a California appellate court held that the renowned bodybuilder Ronnie Coleman was not required to pay child support for triplets (one of whom tragically died) he fathered through artificial insemination after a court ordered him to pay over $4,000 per month.

In 2006, Coleman agreed to donate sperm at a California Sperm bank for a friend. He admitted having no interest in having parental duties but was willing to donate his sperm to a woman who allegedly had an on-again off-again sexual relationship with the bodybuilder in his past. Four years later he was slapped with a paternity suit forcing him to pay child support. After dutifully paying the child support for several years, an appellate court overturned the verdict.

California Family Code section 7613 says that the donor of semen provided to a licensed physician or licensed sperm bank for use in artificial insemination or in vitro fertilization of a woman, other than the donor’s wife, is treated in law as if he were not the natural father of a child thereby conceived.  The court found that because the facts of Coleman’s case fell squarely within the parameters of 7613, any agreements between them as to parenthood were void.

The language of Code section 7613 can also help women who want to withhold parental rights from men who have donated sperm. A previous California case, Steven S. v. Deborah D., is a prime example. There, a man attempted to establish paternity for a child he fathered through artificial insemination with a woman he was intimately involved with but to whom he was not married. The woman argued against paternity and the court agreed that 7613 guaranteed the right of women to bear children without fear of paternity claims.

Paternity cases can be dramatic and complicated. If you find yourself in a difficult child custody situation, please contact our California Certified Family Law Specialists (as certified by the State Bar of California Board of Legal Specialization). Our attorneys have decades of experience handling complex family law proceedings and offer a free consultation.

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.

See California Family Code § 7613.

Source: http://www.cnn.com/2014/01/23/justice/kansas-sperm-donation/

http://www.sandiegodivorcelawyerblog.com/2012/06/a-california-appellate-court-held.html

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