When couples marry in California, there are laws that automatically apply to their assets and income. For instance, income received as a result of either spouse’s labor, skill and efforts is community property and belongs to the marital partnership. Assets owned prior to marriage or received during marriage as a gift or inheritance is separate property unless it increases in value during the marriage due to either spouse’s efforts.
These default rules can be changed in a premarital agreement. The process for creating such a contract is an important consideration. The relationship needs to be valued and the communication about financial topics facilitated to encourage open and heart felt discussions about the terms to be included. Instead of having a proposed premarital agreement prepared by one client’s attorney and delivered to the other client, in a collaborative process the couples and both attorneys work together to develop a Premarital Agreement. The process should be commenced well before the intended wedding date to assure the topics can be considered thoughtfully without any pressure related to timing.
Collaborative practitioners begin the premarital agreement process with a meeting between the prospective spouses and drafting attorneys where we learn together about the clients’ personal and professional backgrounds, as well as their goals for their marriage as a couple and as individuals. Full disclosure of all assets, obligations and income is required regardless of process. During the meeting, we review each person’s financial information and ask questions to ensure understanding. A review of what California law provides is given so those rights and responsibilities are known. Then we identify topics to be included in the document and brainstorm options for solutions. After all possible options are identified, each is evaluated to determine viability and connection to the clients’ marital goals and interests. If consensus about the terms is reached, the attorneys will then prepare a draft agreement for review. If the couple needs time to further reflect on the options together, another meeting is scheduled to hear the results of this conversation. After the draft is read by all, there is a final discussion to confirm the document is understood and consistent with the couple’s intent.
Susan Stephens Coats is certified as a Specialist in Family Law by the State Bar of California Board of Legal Specialization. http://www.collaborativepracticemarin.org/members/Coats
Photo Credit: Ann Buscho, Ph.D.
The simple answer is the inheritance belongs to the person who inherits it. It is their separate property. However, as with most things, this question is not as simple as it may seem.
Often inheritance comes in one form, say money, and is later used to purchase something else. Or, sometimes, it comes in the form of personal property. As an example, if your grandmother left you a piece of jewelry, that jewelry belongs to you and is your separate property. However, if you sell that jewelry and use the money to, for example, contribute toward a down-payment of a house purchased with your spouse - what happens then? Now the answer is not as simple.
During the course of a marriage, people often make choices as to how they want to use their resources, often focusing on the needs of their family or partnership. But, when it comes time to uncouple, they may rethink their prior choices. People may also change their intentions when facing a divorce.
If the inheritance was used to pay for living expenses, as example, that money is gone and unless you and your spouse agree otherwise, it would not be reimbursable.
If you take your inheritance and use it to buy something with your spouse, you may be able to ask for a reimbursement of that contribution--if you and your spouse can agree or if you can effectively "trace" the use of the inheritance through records, such as canceled checks, that show the trail of the inheritance. If you received an inheritance and you believe it was used to purchase something with your spouse during the marriage, the first step would be to review your records or obtain any records you don't have as soon as possible. This will help you better understand your concerns so that you can consider how best to approach this in the process of your divorce.
Lissa Rapoport is an attorney practicing in Marin County. You can learn more about her here: http://www.collaborativepracticemarin.org/members/Rapoport
Photo credit: Ann Buscho, Ph.D.
One of the first things people want to know when they are seriously thinking about a divorce is – what does the law say? I often hear “I want to be fair, but I don’t know what fair is.” People tend to think the law will determine what is fair. However, when they hear what the law says, it often seems unfair to at least one if not both of them. Even when people want to follow the law, it is not always clear.
In a litigated divorce, when the law is “gray” rather than “black and white,” arguing about how it should be applied or interpreted can drive up costs. In addition, many other variables come in to play, such as – who is the judge, who are the respective attorneys, what is the amount of money available to spend on arguing, etc. Furthermore, issues and circumstances that are really important to people are often deemed irrelevant under the law, so they never get discussed nor argued.
In client-centered processes, like Collaborative divorce or mediation, the law only has as much power as the people choose to give it. Clients get to decide what role the law will play in their divorce. They are free to use it for some purposes and to ignore it for others. Whenever the law is introduced, however, it can feel very powerful and can easily take over. The law can be like an elephant in the room - taking up all the space and sucking up all the air. So, in Collaborative divorce, we take care to work with the clients about when and how the law will be introduced in the process. Clients may find the law useful to understand the reasoning underlying the law, the standards of society expressed in the law, and to compare their potential agreements against what they could expect in the legal marketplace. Knowing all this often helps the clients to make their own customized agreements.
What else, apart from the law, can people look to for help in making decisions in their divorce? They may want to consider: 1) agreements they may have made with each other during their marriage, either verbally or in writing, that they want to honor, 2) their individual needs and interests that are important to them, 3) the needs and interests of other people, such as their children, other family members, friends and colleagues, 4) basic financial realities: what the law provides may not fit their situation, 5) something that happened in their relationship they may want to honor or account for, and 6) any other factor that is important to one or the other. Thus, the law is only one of seven reference points for making decisions in a Collaborative divorce.
The goal for most clients in a Collaborative divorce is to reach a mutually acceptable durable resolution. An agreement is not durable, or lasting, if a person realizes some years later that they never would have made such an agreement if they had known then what the law provided. So, Collaborative attorneys want to educate the clients about the law at some point in the process, but will take guidance from the clients as to how and when to introduce it. Instead of the law being “elephant-size,” we want to “people-size” it. Then, clients can customize their decisions to fit their particular situation, needs, and interests.
Nancy J. Foster, J.D. is a mediator, Collaborative divorce attorney, trainer and Executive Director of the Northern California Mediation Center in San Rafael, CA. See more at www.ncmc-mediate.org.
photo credit: Ann Buscho, Ph.D.
Everyone knows that kids should be protected from their parents’ conflicts. It’s tough to do this when emotions run high, and you are hurting and angry. When you are in so much pain, you may turn to your children for comfort or support, or you may want to tell them the “truth” about the other parent. So why is this such a bad idea?
Kids who are caught in the middle of their parents’ conflict and divorce have worse outcomes than those whose parents prioritize a “child-centered divorce.” A search on Google brings up many references to the term, a “child-centered divorce.” There are helpful websites and blogs that advocate for a peaceful (out of court) resolution of the divorce, and a parenting plan that prioritizes the needs of the children.
This means that kids whose parents stay angry and hostile have more emotional and behavior problems that last into adulthood. The good news is that kids whose parents are able to move beyond the conflict have a good chance at success in life, in school, their relationships, future positive mental health.
Many parents going through divorce have told me that their children are “fine”; that they are “resilient,” but my experience as a child therapist has taught me something different. In the privacy of the therapy office, children talk about their parents’ arguments, their worries about money, the accusations of betrayal or their fears about the future. Because kids worry about their parents, they often cope by trying to look better than they really feel. Inside they may be deeply pained but unable to talk to their parents when they see how much their parents are suffering. They intuitively sense that their parents have enough to worry about, or that their parents need to see the children as fine.
So why keep your kids out of the middle? For their own mental health, they need to love both of you, and if they feel caught in the middle, they may feel they have to choose between you. This is damaging to children. Your children know that they have a part of each of you in them, and if they turn against a parent, it is as if they are turning against a part of themselves.
What happens when kids are caught in the middle? They feel like they are caught in a terrible tug-of-war. They may feel they need to determine who is at fault, or what is “fair.” They may feel burdened by their parents’ emotions and not able to express their own. They may begin to regress, shut down, or act out. Teens and young adult children of divorcing parents may try to get involved in the divorce process itself, in unhealthy ways, by trying to mediate, or judge, or advocate for particular outcomes. And this distracts them from focusing on their own lives in healthy ways.
Here are some ways to protect your kids:
Here some things you can do to help your kids stay out of the middle of the conflict:
Remember that the divorce is a problem to be solved by you and your spouse, the adults, and your kids will benefit from knowing that their parents will continue to parent them together, even if they are living under two roofs. Take the time to work with a professional, if necessary, to resolve your grievances with your spouse so that your children don’t carry the burden of bitterness and grief into their future. Thousands of kids go through divorce with their families, but you can help them to overcome the challenges, become more stress-resistant, resilient, and flexible, by keeping them out of the middle of the divorce. One to two years after a “child-centered” divorce, most kids are on track and healthy.
--Ann Buscho, Ph.D. is a Collaborative Divorce Coach and psychologist in Marin County.
photo credit: Ann Buscho, Ph.D.
Questions abound about Social Security benefits when there is a divorce. Social Security benefits are Federal benefits and are not subject to division in state courts. That being said, under current Federal law unmarried lower earning spouses who had been married for 10 or more years before divorcing and are at least 62 years of age are entitled to ½ of the higher earning spouse's benefits under what is known as a derivative benefit or 100% of their own benefits - whichever is higher even if the higher earning spouse has remarried. In order to receive the full ½ derivative benefit, the lower earning spouse must be at his or her full retirement age and the higher earning spouse must be of minimum retirement age or age 62. If the higher earning spouse begins collecting Social Security benefits before full retirement age, the amount of the lower earning spouse's derivative benefit will be reduced by a percentage based on the number of months before the higher earning spouse reaches full retirement age. One earns a maximum of four credits per year. In 2013, one could earn one credit for every quarter one earned at least $1,160.
These derivative benefits for lower earning spouses have no affect on the benefits of higher earning spouses, their current spouses, or other family members.
If you are the lower earning spouse and are curious about whether your ex-spouse's benefits are more than 50% higher than your benefits, contact the Social Security Administration who will provide you with the benefit amounts to which you may be entitled after first verifying your relationship to your ex-spouse. Privacy laws prohibit the Social Security Administration from providing the ex-spouse's actual Social Security Statement.
Should the higher earning spouse pass before the lower earning spouse and be fully insured (meaning having 40 credits), the lower earning spouse may be eligible to receive 100% of the higher earning spouse's benefits. These benefits are called survivor benefits. The survivor spouse must be at least age 60 or at least age 50, if disabled. The survivor spouse must have been married to the ex-spouse for at least 10 years and be unmarried unless married after age 60 or after age 50 and at the time of remarriage were entitled to Social Security disability benefits.
If at the time of divorce one legally changes his or her name, it will be important to notify the Social Security Administration. For most people this would mean obtaining a certified copy of the divorce decree showing request for name change from the county Superior Court; providing either an original US issued driver's license, state ID card, or US passport; completing an application for a Social Security card; and delivering all items to the local Social Security office or Social Security Card Center. The Social Security Administration notes that if mailing, original documents and certified copies will be returned with receipt.
For more information on Social Security benefits visit http://www.ssa.gov. Or contact the Social Security Administration directly for answers to your specific situation.
Judith F. Sterling is a CPA, Certified Divorce Financial Analyst, and Collaborative Financial Specialist practicing in Sonoma and Marin Counties.
photo credit: Ann Buscho, Ph.D.