The Law Office of Matthew M. Shafae will be changing its name and location as of August 1, 2011. I am proud to announce that the practice is growing and the legal advice is flowing. Please update your contact information to reflect the following:
ShafaeLaw (formerly Law Office of Matthew M. Shafae)
1156 El Camino Real
San Carlos, CA 94070
F: 650- 521-5823
I look forward to providing the same great legal services at our new location. Feel free to stop by and say hi!
In the last post, I raised some issues regarding most people’s approach to marriage. I touched on aspects of marriage that significantly impact both spouses’ lives and yet most people feel it is taboo to even discuss nuptial or cohabitation agreements. In this post, I will raise issues stemming from divorce. Specifically, how divorce impacts a newly-single person’s estate plan. Please note that the following assumes the following facts: the marriage was for over 5 years, there are young children from the marriage, and there were some assets divided between the ex-spouses, and the ex-spouses are both currently employed.
(Part I can be found here.)
Divorce: So you’re newly divorced. Congratulations! That must have been a strange, emotional journey. But, alas, you’ve made it to the other side–granted, a helluva lot poorer–but you’ve made it nonetheless. What’s even more important is that your minor children can move on with life and just be a kid again.
There are few issues, though, that are imperative to address before you get too happy over in divorceville. Mainly, now that you are single, did you make sure to cover all your bases with respect to your “new” estate plan? What I mean is that you don’t have a wife anymore, but you still have children. If you were to keel over and die right this second, what would happen to your 401(k), stocks, savings, car, house, etc.? Did you think that they would go directly to your children?
Yes and no. I guess the first question is, “Do you have a will?”
No will: Anytime someone dies without a will, his/her property is distributed to heirs as determined by what’s called an “intestacy statute.” By default, in California, a dead person’s property first goes to a surviving spouse. You got rid of that person. Next, it goes to one’s surviving children. Bingo! That’s what you wanted, right? Almost. Children under 18 years of age cannot hold property. Therefore, all that property going to a minor is frozen by the court, and promptly released to that child upon turning 18 years of age. That’s bad in two respects. One, the property is frozen (i.e., no one can do anything with it, including investing it). Two, an 18 year old will come into a whole lotta cash when he/she is way too young to do smart things with it. That’s bad all around.
Will: Phew! Ok, so you at least have a will in place. Well, if that will provides for a minor taking property, see above.
On a similar note, imagine if you listed your ex-spouse as a beneficiary to those things that do not pass through your estate when you die (e.g., 401(k), pension, life insurance, etc.). Without changing that beneficiary to someone else, that ex-spouse you took your time and money to get rid of is now the proud beneficiary of all of those assets!
If you were thinking, “Ah, who cares? It all goes to my kids someday anyway.” That’s a bit short-sighted. What if your ex-spouse re-marries with someone who has children from a previous relationship? Well, all of those assets that just passed to your ex-spouse upon your death may end up going to someone else’s children! The bottom line is that now is the time to declare what you want done. Once you’ve died, well… “speak now or forever hold your peace.” I’m sure you remember that one from your wedding day.
So what’s the solution, then?
First, upon final judgment of divorce, notwithstanding what was decided during the divorce, a newly-single person should review all of his/her beneficiary designations, all insurance policies, all deeds, and all forms of title. Make sure it’s consistent with your divorce and with your wishes. Second, think about seeing an estate planning attorney to discuss appropriate estate plans for you now that you are single, have minor children, and want to make sure your wishes are carried out post-death. One way is by way of a trust, where someone else holds property for the benefit of your minor children. Maybe just a thorough will suffices.
The bottom line is that you are a newly single individual charged with the task of caring for minors. Single parents do this all the time. They try their best to get by. However, you’re different. You used to be married. You’re used to a certain lifestyle. You’ve accumulated quite a bit of assets, and debts, that are now crudely divided. You worked hard to get through your divorce. Death is another form of divorce, where life leaves your body and takes all of your property with it. Don’t leave it up to chance.
A lot of people view life in terms of “chapters” or “stages” or “steps”. Some people view life as a series of events, each impacting the next in some fashion. Still others just get up in the morning, do stuff until they are tired, and then sleep at some point. (The latter will not be addressed in this blog post, and frankly, if you are in the latter camp, you are probably reading this post by sheer chance). Whatever the approach, there is some level of planning to each person’s life. The most effective planning takes into account one’s current circumstances and attempts to anticipate as many future circumstances as possible.
Most of life’s changes happen incrementally over time in small, almost unnoticeable steps. For example, it would be tough to pinpoint when hair started to grow on our legs, or on which day we had our first crush on a boy or girl. Similarly, it’s tough to pinpoint a single day in the middle of high school and identify exactly how we felt, looked, etc., without a photo or journal entry to remind us. We often have those feelings where we think, “Wow, how did five years just fly by?”
However, there are a few distinct events in a person’s life where he/she is irreversibly different (in some legal manner, of course) immediately upon the occurrence of that event. Some examples, in no particular order, are reaching 18 years old, marriage, having children, divorce, and of course death.
Each of the above events carry with it certain legal ramifications. The most important being taxes, holding property, and inheritance rights. Two events that I am particularly interested in discussing here are marriage and divorce, for obvious reasons. Here, in part I, marriage will be addressed. In part II, I will address divorce.
Marriage: So you just got married. Congratulations! Wow, that’s fantastic. You know that everything is different now, right? I know, you still think that nothing’s changed, that you’re in love blahblahblah and you guys just made it formal.
Well, you’re wrong.
When both of you go to work, every single dollar you earn after you say “I do” is half-owned by your spouse. Anything you purchase with that money that you’ve earned during marriage is also half-owned by your spouse. Likewise for any debt. And what if you die without a will? Well, by default, everything you owned when you were alive automatically goes to your surviving spouse. Things are significantly different now. The IRS won’t even let you file your tax return without telling them what your spouse is going to do. Things are so different now that you and your new spouse now have special privileges that your single friends don’t have. For example, if you and your spouse have secrets that only you guys know, nobody can make you testify against the other. Pretty cool, right?
It’s all really cool unless or until you two develop problems. Those problems could stem from trust issues, resent, boredom, finances… really just about anything. Here’s another cool facet of marriage: only one spouse, unilaterally, needs to decide that this arrangement isn’t for him/her. That’s right, on any given day, one spouse can petition to dissolve the marital bonds. No consent is needed from the other spouse. No warning is necessary. No reason is even demanded by the courts.
With marriage intertwining two lives in such a comprehensive manner, and that arrangement so easily dissolved, why then risk not being clear with your spouse about expectations that you have for each other and for your marriage? It’s a fair question, really. Your spouse is ostensibly the person you are closest to in life. You should be able to talk about anything with each other, right? Any partnership has clearly defined expectations. Any team (either athletic or workplace) has clearly defined roles and clearly defined expectations for each team member. Every marriage should as well.
Those expectations can be, and should be, documented. Commonly documented agreements between spouses are called “pre-nuptial” agreements for those who are not married yet, and “post-nuptial” agreements for those who are already married. I favor “post-nuptials” for people in their first marriage because it’s tough to guess what someone’s role should be when you have never been married before. Most people erroneously associate nuptial agreements with some sort of strong-arm tactic employed by a higher earning spouse for avoiding paying any support to the lower earner spouse. It’s seen as fundamental distrust between two spouses. But why?
Many things can be detailed in a nuptial agreement. Property issues can be addressed. Support issues can be addressed. Handling liabilities after a potential divorce can be addressed. The emphasis should be placed on the fact that these issues are being addressed before any ill feelings toward each other. Imagine that your spouse was diagnosed with some rare, fatal disease. The doctors aren’t sure whether, or for how long, your spouse will remain living. But they say there is a good shot that an experimental new treatment may just do the trick. So you and your spouse do what any reasonable team would do: plan for the worst and hope for the best. You two plan the worst case–the treated spouse dying–and then do whatever they can to keep the treated spouse alive. So the couple write wills, draft health care directives in case one or both of the spouses are incapacitated, and most likely make pre-planned funeral arrangements. It sounds so reasonable, doesn’t it? Why deal with this stuff when things turn for the worse? The best part is if the sick spouse is fully treated, this stuff will never come up or take effect! So, really, there’s no harm in doing it.
The same should be, but is not, true for marriages. No, your marriage is not a rare, fatal disease. But the same approach should be employed. Who knows whether your marriage lasts 70 years, 1 year, 3 days? No one knows. What we all know, though, is that the time to reasonably and objectively dissolve any partnership is not when the partners are most emotional and irrational. That in itself is an irrational thing to do. Dissolution should for the most part be pre-determined. I truly believe discussing the possibility of dissolution early on in a marriage, and educating yourself on the legal ramifications of marriage, will help maintain a stronger marital bond. Those that discuss the potential of divorce when the times are good will likely benefit from the open, candid discussion. Plus, wouldn’t you like to learn of your partner’s hang-ups earlier rather than later?
Marriage is not just a “formalized” relationship. It’s not just a ceremony that costs the same as a down payment on a house. It’s a legal relationship between two people. All the love and religion are merely backdrops. Because when it comes down to divorce, all the love and religion in the world aren’t going to be worth much in a court of law. Get educated. Plan for the worst and hope for the best.
Coming soon… Part II on the effects of divorce.
Thanksgiving just passed and the holidays and New Year’s Day are upon us. These are times traditionally spent with family and loved ones. However, those of us in the family law realm know that it can also be a time of stress, conflict, and emotionally charged situations. I want to take an opportunity just to add a bit of perspective.
Oftentimes people feel trapped and helpless in their family situations. Whether or not this is reality is immaterial, since experiencing the feelings are bad enough. Please take a deep breath and a step back the next time you decide that you want to escalate conflict. Let’s work together as a community and society to remove conflict from family situations.
Let’s face it, if you’re standing in a court room, both sides have already lost (whether it’s time, money, dignity, or all of the above). Sometimes relationships don’t go as we planned, or change into something else altogether. And sometimes things just run their course and it’s time for people to go their own way. But there is no requirement for conflict.
“Fear is the path to the dark side. Fear leads to anger. Anger leads to hate. Hate leads to suffering.” –Yoda
Be brave, and don’t hate. Happy Holidays.
What makes a law or policy “good” or “bad”? Often, we measure how good or bad a law or policy is by how effective it is–how precisely it met its objective, with as little unintended consequences as possible. For example, most people would say that the “seat-belt” law is a good law because it is a very cheap and easy solution to save a lot of lives, and by extension, makes society a better place. Conversely, some people may argue that the ban on talking on a cell phone while driving is a bad law because it is tough to enforce and leads drivers to more dangerous methods of communication like texting or holding the phone below the window line and using speaker phone. It’s tough to measure, really. However, when unintended consequences manifest themselves, then we should be proactive about correcting the law or policy.
One law and policy that has me up in arms lately is California’s current system of awarding spousal support to divorcing spouses. Spousal support is often commonly referred to as “alimony.” The simple purpose of spousal support is to compensate a lower wage earning (or unemployed) spouse with assistance from the higher earning spouse in order to allow both spouses to maintain the “marital standard of living” during the divorce, and possibly for a period after the divorce.
What the hell does that mean in plain English?
Imagine a couple who was married for ten years. Midway through the marriage, the wife became pregnant with the couple’s child. The couple decide that one spouse (doesn’t matter which) should stay home and the higher-earning spouse should continue to work to support the family. Five years pass, and for whatever reason the couple decide the marriage is so damaged that it is beyond repair. The couple divorce. The spouse who has not been working for the past five years is now finding trouble meeting his/her bills, and additionally having trouble finding work as a result of being out of the workforce for such an extended period of time.
What is the unemployed spouse to do?
Their marital arrangement (where one spouse stays home and one works) should not be subsidized by taxpayers, so government benefits seem inappropriate here. The taxpayers didn’t decide that one spouse should stay home, so the taxpayers should not have to come to the rescue, either. Fair enough. That means, then, that it’s the other spouse’s responsibility to pick up the slack. Right? After all, the two spouses chose the arrangement, so they should have to bare the burden of figuring out how to make the bills and care for their child in the process.
We would be hard-pressed to find someone who would read the above situation and disagree with the outcome. But, that’s the easy case. One spouse is employed, one was caring for the child, and now it makes sense to help the non-working spouse back on her feet. What if we add some complicating factors in? What if the child was school-aged, thus not needing all-day child care, and the stay-home spouse worked seasonally? What if the stay-home spouse worked part-time? What if the stay-home spouse could have worked but instead chose to volunteer? What if the stay-home spouse went to school instead? More commonly nowadays, what if the stay-home spouse did side-jobs (think carpentry, handyman, cleaning services, etc.) and did not declare his/her income?
It gets rather complicated, and issues of proof are abundant. Very few couples have the foresight (nor should we require them to) to predict the precise time he/she will contemplate divorce. Sometime it becomes difficult to prove what the stay-home spouse earned, or could earn if employed.
Let’s throw in another wrinkle: what if the stay-home spouse had a long-term motive to make as little as possible in order to necessitate the other spouse to pay him/her support? We are not all naive enough to presume that divorcing spouses all have good intentions.
Let me give you a specific, real example of how this plays out. Mother and Father are married for 14 years. Mother earns a good six-digit income as a professional. She has had this position for upward of 23 years. Father held down a job as a delivery driver a few years back, but due to an injury and not being the most motivated individual, has not worked recently. On the side, he designs and sells t-shirts at ballgames and sells them on consignment at some stores. Mother and Father have two teenage children who are both attending a private high school. Both children are excellent students, participate in extra curricular activities, and are the children anybody would be proud to have raised. One giant elephant in the room: for the past 15 years, Father is highly physically and verbally abusive toward Mother. There are well-documented events of domestic violence, one that even rose to the level of a 6-month restraining order. For whatever reason, they stuck it out until now. Mother pays all the bills, including the children’s very expensive school tuition. Now that they are divorcing, custody, visitation, and support are all contested issues. Father, immediately before the hearing on all the mentioned issues, was training to be a bus driver with a big city transit line. He was a probationary employee. After six weeks of training, the employer inexplicably terminated Father as a probationary employee. (What likely happened was that Father’s attorney told Father to play up an injury thus disqualifying him from the job.)
Fast forward to the hearing on spousal support. Mother makes a good income. Father makes nothing. Mother knows that Father loafs around and probably makes money on the side, but has no proof to his income. Even though there is documented domestic violence, continuously for over a decade, California only pays attention to the preceding five years, and in that time there is nothing definitely demonstrating that Father was abusive toward Mother. Furthermore, Father was awarded joint physical custody, having his time with children predominantly on weekends. The children were interviewed by the custody mediator, but both children were too frightened by their Father to really throw him under the bus. Since they are well-adjusted, academically flourishing children the mediator took them at their word and thought nothing of the past instances of domestic violence.
Outcome? Mother pays to Father both spousal and child support, and only gets to have one to two weekends per month with her children. And ohyeahbytheway, Mother’s obligation to pay Father support will now make it extremely difficult to pay for the children’s tuition. The children will likely have to be pulled out of private school to attend public school. Public school is not per se inferior, but the children must leave their friends and comfortable surrounding to a new, unfamiliar environment.
Gender stereotypes aside, does this seem like a fair outcome? Hardly. As I stated above, the purpose of spousal support was to prevent the situation where the stay-home, child-rearing parent from becoming homeless at the sudden loss of family income. This is far from that situation. It is imperative that we, as a state and society, come up with a better way to prevent deadbeat spouses from parasitically sucking resources away from productive members of the family. This is not a gender issue. This is not a payback issue. This is a children issue. There are surely situations where spousal support is not only appropriate, but absolutely necessary. However, blindly awarded spousal support creates a disincentive for non-working spouses to work. Something must be done. As a side note, reform of spousal support determinations and payments will also avoid unnecessary costs derived from support litigation. If the pot at the end of the rainbow is reformed such that it isn’t a guarantee to those that don’t work, then parties will at least think twice about pursuing that avenue of litigation.
“Oh my little pretty one, pretty one
When you gonna give me some time Sharona
When you make my motor run, my motor run
Gun it coming, off the line Sharona”
–”My Sharona” by The Knack
Spring is upon us and love is in the air. Well, until all the love crumbles down and all that you are left with is resent, bitterness, and contempt. What did you expect? This is a family law blog. In California, your odds are better than a coin flip that your “My Sharona”-eque pining for the object of your affection will eventually result in a divorce. Surprisingly, that’s not even the depressing fact. What’s worse, out of the over 200,000 divorce petitions filed annually, 70% of those cases involve at least one self-represented party (i.e., somebody without a lawyer). (source) Since California law has to come up with a fancy Latin phrase for everything, we call “not having a lawyer” as in propia persona, or for short, in pro per.
There are, of course, reasons that contribute to such a high percentage of parties in family law cases that proceed in pro per. I won’t get into the contributing factors here since there are sites that have done an adequate job explaining the phenomenon. I’m not a fan of reinventing the wheel. Instead, how can we resolve this disparity between represented and non-represented parties in family law cases without requiring additional resources from the County or the local bar? Here’s my take on it.
All over the web are blog posts by and about disgruntled, bitter law graduates who can’t find jobs. Some blame it on the recent economic downturn. Others blame it on the legal education institution that is fast becoming a lawyer mill that provides its graduates no real training upon graduation. (I will not link to the various posts because I do not think such discourse is very useful or worthwhile, but you will have no trouble finding them through a web search). Assuming someone went to law school to, say, practice law (I know, this assumption sounds obvious, but after you read the aforementioned blog posts you’ll quickly realize that a lot of peoples’ motivations to go to law school rarely relate to practicing law), then getting real world “reps” will provide a truly valuable benefit to his/her law career. Such clinical experience is substantially lacking in today’s legal education/training. So, if we have a population of people who cannot obtain legal representation for one reason or another, and we have another population of un- or under-employed attorneys, then why can’t we kill two birds here? The resources required would be nominal. Someone would need to provide some sort of initial training seminar to the new attorneys and then experienced lawyers would need to act as “mentor” attorneys with which the new grads may consult. As a safeguard (for all of you people crying malpractice), the parties who could not previously obtain counsel would also sign some sort of informed consent to be represented by the new grads.
I may have made light of divorce at the beginning of this post, but in all seriousness many family law cases involve very grave custody and support issues. Parties who proceed in pro per risk prejudicing not only their own case and rights, but it also affects their children. Having relatively inexperienced counsel surely cannot be worse than having no counsel at all.
We’re all going to die. I don’t mean that in a Chicken Little sort of way. I mean that in a stating-the-obvious sort of way. The jury is still out as to what happens to us after we die, but one thing that is fairly certain is that once you die you have little say over what happens to your property, to whom you give your property, and any other instructions you’d like to make from “beyond the grave.” Of course, you can have a say if you properly draft and execute a will.
Wills are cheap and easy to create. I even saw a commercial on TV where a famous lawyer advertised will drafting services online for less than $100. Even still, there are few people out there who have a will. Statistics vary, but one study shows that 55% of adult Americans do not have will.
If that’s the case, it seems like it’s not that big of a deal to die without a will, right?
Not exactly. When someone dies without a will, the person is said to have died intestate. For those keeping score at home, that means “without a will.” When you die intestate, your property (which becomes your estate’s property, since you’re dead and all) is distributed using your state’s intestacy statute. Well, we all know what intestate means, but what exactly does statute mean? A statute is a law created by the legislature, or law-making body of the government (think, Congress). So somewhere in the California Code (Probate Code sections 6400, et seq. to be exact) there is a statute (remember, that just means “law”) that says where a person’s property goes if he or she dies intestate. Well, that then suggests that if you don’t have a will when you die, then the legislature decides who gets your property.
Who cares? I don’t even own anything!
The cool thing about a will is that it doesn’t “speak” until you die. So it can dispose of property that you don’t even own yet. You don’t have anything now, but what if you start accumulating property? Or what if you are later the beneficiary of someone else’s estate? Or you marry someone else who has some property? Just as importantly, you can “cut” people out of any share of your estate if you so decide.
Let me use an example to illustrate an extreme circumstance where a will would certainly clarify any ambiguity. Hypothetically, let’s assume Harry is in a relationship with Wendy. Harry and Wendy have a child, Cheryl. Unfortunately, Harry and Wendy start having problems and decide to split up. They were never married. Harry moves on, and although he remains a loving father to Cheryl, he decides to marry his new girlfriend Greta. Greta has two children from her previous marriage. As tragedy would have it, Harry chokes on a pretzel and dies. Harry never got around to drafting a will. Under California’s intestacy statute, all of Harry’s community property and one-half of his separate property go to his surviving spouse, Greta. When Greta dies, all of her property (including the property she acquired from Harry’s estate) is now disposed of through her will, or if there is no will, by the intestacy statute. In other words, unless Greta provides for Cheryl through her own will, Cheryl will have to somehow intervene in order to assert her rights, if any, to take some of her father’s property. However, if Harry had a will providing for Cheryl, then disaster could be averted… or, at least Harry’s true wishes would be clear.
So, what’s the point? I still don’t have any more property than when this post began.
The point is that peoples’ living situations are changing constantly. These days, a Thanksgiving feast involving ex-spouses, step-children, biological children, half-siblings, etc., are commonplace. Divorces are par for the course. People are living longer and dying with considerable amounts of property. Property is being re-characterized all the time. Everyone should take the time to at least consider drafting a will.
Recently I have been working on some custody/visitation cases that have similar fact patterns. Biological mother (M) was dating biological father (F). F gets M pregnant and they decide to have the child. Before getting married, F decides to leave M and the child, either before the child is born or shortly thereafter. M moves on and finds a new boyfriend (BF) who then becomes model dad and super boyfriend. In the meantime F becomes a suspect fellow and comes in and out of M and Child’s lives, usually creating a few dramatic episodes which may have lead to altercations between F and BF. Now that Child is a toddler, F wants visitation rights.
More likely than not, M and BF walk into a lawyer’s office with the papers asking for a custody/visitation hearing that BF served on M. M and BF have had enough of F’s antics and want to get him out of their lives. Here’s where the lawyer attempts to explain all the things that M and BF did not want to hear, let alone pay someone to hear.
Assuming F is in fact the biological father, he’s not going anywhere. Courts are very reluctant to prohibit a biological parent from regular, continuous contact with his or her child. Unless there is a history or allegations of sexual abuse, domestic violence, or general risk to the child’s well-being, courts believe a child is best raised with contact with both biological parents.
“But, you don’t understand Mr. Lawyer… F is a real a-hole, he’s never been around for Child, and Child isn’t happy whenever he visits.” Sorry, without more showing that child is in danger, the court may elect to award F visitation, or in the least, supervised visitation. F will likely be awarded some kind of visitation.
“But, you don’t understand Mr. Lawyer… F threatened to take child away from us and he’s only out to make our lives a nightmare. We have 34 friends who are willing to testify to the same.” Same deal. No dice. Guess what, F will have 35 friends saying how much he loves his child and M and BF won’t let him see her.
What’s the solution, then?
Most counties provide for mediation before any custody or visitation hearing. My recommendation is usually to work out a visitation plan that is comfortable for M and BF and that F will agree to. Instead of going into the mediation with “F U” printed on your shirt, go into it accepting the fact that F will have some sort of visitation. Remember, the courts are not interested in differences, petty or not, between the parents. The courts are ONLY interested in the best interest of the child. Going into the proceedings with the intention of showing how terrible of a parent F is may backfire and come off as M and BF preventing F access to his child. By agreeing to a schedule, it will be apparent to the court how responsible F is by whether or not he sticks to the schedule. Plus, M and BF will gain favor with the court for cooperating and being mature. If F is as big of an a-hole as M and BF make him out to be, he will likely fail at upholding the schedule anyway. That’s when the best interest of the child are not being honored and the court will surely see this.
This is all under the assumption that F is the biological father. If there is ANY chance he is not, then a parentage determination may be requested to prove that F is in fact the biological father. If he is not, then and only then do M and BF have a good chance of “getting rid of” F.
This morning I had the summons in a divorce case published in a newspaper in order to “serve” the respondent by publication. Pursuant to CCP 415.50, upon proving to the court that a party you are trying to serve is very difficult, or unable, to be found, the court may order the summons to be published in a newspaper. But who reads the newspaper anymore… and even then, who reads the classifieds?? There have been several articles, blog posts, even TV show story lines (see: The Wire) where people contemplate the end of newspapers. Let’s face it, with so much other media competing for our attention, the newspaper is losing the battle.
So, for purposes of service of summons, shouldn’t we start changing with the times as well? Craigslist has pretty much become synonymous with “classifieds.” I know many who read various Craigslist sections for fun. I’m sure if there was a “summons” section, more people would read that for fun than people read the “public notices” section of a given newspaper.