Category Archives: Support

CA Appellate Court Caps Bonus Spousal Support Payment Based on Change of Circumstances and Reasonable Expectations of Parties

January 30th, 2019

Usually, a person who has been ordered to pay spousal support does not run to court seeking a reduction in support after she or he has just received a large raise — the risk being the court could order an increase in support because of the increase in the payor’s income. But in the recent case of T.C. V. D.C. a wife who was paying support to her former husband sought a court ordered reduction in spousal support after she landed a new job with much greater earnings.

Wife’s Salary Skyrockets and She Wants the Court to Reduce the Amount of Support She Must Pay?

Why would the high earning wife take this risk? Wife took this risk because she was paying her ex-husband a base support payment every month tied to her base salary, plus she was paying her ex-husband a percentage of all income that exceeded her base income — and, unfortunately for Wife, the parties’ Marital Settlement Agreement had no cap on the amount of bonus support that she paid to Husband. Think about it: Originally, Wife was paying base support to Husband of less than $1,000 plus she was paying him 10% of her excess/bonus income. At the time of the Marital Settlement Agreement, Wife’s projected “excess” annual earnings (i.e. her annual bonuses) totaled $9,900, meaning Husband would receive an additional $990 annually as an additional “bonus support” payment. Wife agreed to pay this bonus amount even though Husband acknowledged in the Marital Settlement Agreement that the BASE amount of support met his needs and his expenses at the time of the divorce were reflective of the parties’ marital standard of living. Therefore, the bonus payment was gravy as it exceeded his needs as well as the marital standard of living.

Fast forwarded a couple of years later, Wife found a great new job and her “excess earnings” were dramatically higher — $250,000 higher than before! Translation: Per the terms of the Marital Settlement Agreement, Wife’s annual bonus support payment went from $990 to $25,000!

When the Wife filed her request to reduce her support payment, Husband argued that per the terms of their Marital Settlement Agreement wife could not escape the 10% bonus payment no matter how high Wife’s excess earnings were. In layperson’s terms, Husband argued “a deal is a deal.” In legal terms, Husband argued, that there was “no change in circumstance” because at the time the parties reached their original support agreement there was an expectation that Wife’s earnings would increase.

At trial, the court found in favor of Wife. The trial court found that there was a change in circumstance and the trial court then capped the bonus payment to $990/year as that was the bonus amount Wife paid at the time of the Marital Settlement Agreement.

Husband appealed, and the appellate court agreed with the trial court that there was a change in circumstance which warranted a modification of Wife’s support obligation. The court reasoned that although at the time the parties entered into their original agreement they had contemplated an increase in Wife’s earnings, they had not contemplated such a dramatic increase in Wife’s earnings. Huge win for Wife, right? Not so fast. The appellate court went on to state that the $990 annual cap was inappropriate because the Marital Settlement Agreement stated that the base amount of support paid met husband’s needs and the parties’ standard of living. Therefore, the parties had agreed to a support payment that exceeded the parties’ marital standard of living by inclusion of the bonus provision.

Why Bonus Provisions in Marital Settlement Agreements Should Always Include Caps from the Payor’s Perspective

Generally, the payor of support wants their Marital Settlement Agreements to include a statement that the support paid meets the supported parties’ needs and the parties’ marital standard of living. Establishing the marital standard of living and husband’s needs is good practice as those agreed upon facts generally limit a supported spouse’s ability to seek a significant increase of support in the future. Fortunately for Wife, the Marital Settlement Agreement in T.C. v. D.C. included such a provision. But in this case, the problem was not the marital standard of living, it was the gravy – Wife’s agreement to pay bonus support meant she was willing to pay husband support that exceeded the parties’ marital standard of living. Therefore, when drafting Marital Settlement Agreements, if there is a bonus support provision, the support payor should insist to a cap on the amount of bonus support paid.

Ultimately, the net result of T.C. V. D.C. is Husband was not capped at the original $990 annual bonus, but the court can establish some reasonable cap, based on the parties’ expectations at the time they entered their marital settlement agreement.

So Long to Spousal Support?

April 7th, 2015

A California resident is attempting to place a ballot initiative on the November 2016 ballot that would significantly alter (eliminate?) spousal support in California.  The proposed ballot initiative can be found here.

Spousal support is governed by Family Code Section 4300 (et. seq.) and case law.  In short, “a person shall support the person’s spouse.”  Fam. Code § 4300.  Section 4320 sets forth the factors the court is to review when determining post-dissolution spousal support.  The proposed revision would have 4300 read:  “No party shall be unfairly burdened because the other party is unwilling to become self-supporting.”    The “new” 4320 would eliminate the spousal support factors as there would be no need for them without any legally authorized spousal support.

The ballot initiative, if passed, would a) immediately eliminate current spousal support orders less than 10 years in length and b) reduce by 20% per year for 5 years orders with a duration for greater than 10 years.   Spousal support is currently modifiable based on a change in circumstances, court order, or agreement by the parties.  The proposal appears to eliminate spousal support completely by 2021.

To become an official ballot initiative, certain steps must be followed.  Click here to learn more about that process.  If it obtains the necessary signatures, it still must win a vote at the polls.

 

Child Support

March 2nd, 2015

A child support order is just that – an order.  Once ordered, it is not optional.  However, $14.3 billion in child support remained unpaid in the United States in 2011.

Child support in California is determined by a mathematical formula which is set forth at Family Code Section 4055 (the “guideline” amount”).  In short, the Court looks at both parties’ incomes, the number of children, the amount of time the child(ren) spend with each parent, as well as the tax filing status and relevant and allowable deductible expenses.*

California parents can “run” the child support calculations here.

In addition:

  • The Court shall also order the following additional items:  childcare costs related to employment and reasonable uninsured health care costs for the children.  Fam. Code § 4062(a).
  • The Court may also order costs related to educational/special needs of the children and travel expenses for visitation.  Fam. Code § 4062(b).

*Non-guideline child support awards are governed by Family Code Section 4057 (subject of a later blog post).

If the other parent is not paying the court-ordered support, or if you are a parent who cannot afford to pay the court-ordered support, an experienced family law attorney can answer your questions and help identify potential solutions to your family law needs.

The Petition – Parts 7 (d), (e), (f)/(g), and (h); Part 8

January 20th, 2015

The Petition breakdown wraps up today.  The Judicial Council updated the Petition and Response as of January 1, 2015.  The information contained in the pre- and post-updated forms are (for the most part) the same.   However, in seeking to complete the task at hand (a walk-through of the Petition), the final components are briefly discussed below.

Part 7(d) (Parentage)

If a child is born after marriage, the child is considered of the marriage and the child of the two parents.  Fam. Code § 7541.  If a child is born prior to the marriage (to the parents), the Petitioner (or Respondent) can request that the court find the pre-marriage child a child of both parties.  This is in lieu of a separate parentage action.

Part 7(e) (attorney’s fees)

Payment of attorney’s fees in conjunction with a family law matter is governed by Family Code Sections 2030-2034.  The Court looks at a number of factors including the requesting party’s need and the other party’s ability to pay.  These are not the only factors, and the Court is also required to review the level of difficulty of the case as well as the spousal support factors (discussed below) as they relate to the payment of fees.

Parts 7(f), (g) (spousal support)

Temporary and long-term (or permanent) spousal support will be discussed in a separate blog post.  The Court is required to review a number of factors in determining post-judgment support.

Part 7(h) (property)

Previous blog posts described the difference between community property and separate property.  The Petitioner and Respondent can ask the Court to award community property to him/her and confirm his/her separate property to him/her.

 Part 8 (child support)

Child support will be addressed in a separate blog post.

Continue to check back to this blog for further information on support (child and spousal) as well as other news and updates as they relate to family law in California.

Beware Social Media!

November 3rd, 2014

A recent Doonesbury cartoon should remind all family law parties to watch what they post to their Facebook page.

While the comic focuses on potential adultery (not a specific ground for dissolution in California), Facebook and other social media posts can potentially impact support and custody/visitation decisions.  For example:

  • Support:  If a party claiming the need for support simultaneously posts photos and status updates about their expensive vacation to Europe, you can expect the opposing party to raise this issue as an argument against support.
  • Custody/Visitation:  If a party claims that he is the best (and only) person to care for the parties’ child, and photos surface of the child holding a Solo red cup; the other parent may use this information to let the court know about the parent’s “relaxed” parenting style.

In short, if one does not want information before the Court, don’t post it to social media.  Don’t rely on your privacy and security settings.  Keep your dissolution and opinions about the other party to yourself and share only with your attorney.

More on Adult Child Support

April 22nd, 2014

On March 5, this blog referenced a New Jersery adult child support case and a California parent’s responsibility (or lack thereof) to pay for a child’s college education.

As previously noted, parents are not responsible for their non-minor children unless the child is “incapacitated from earning a living and without sufficient means” (Fam. Code § 3910) or the parents otherwise agree (Fam. Code § 3587).

In a recent case (Drescher v. Gross, (4/11/14) 2 Civ B246494, Div 3), the Court ruled on what happens when parents agree to provide for their non-minor children (i.e. pay for college) but when college comes – one parent cannot (or will not) pay and asks the Court to modify their order.

With minor children, child support is modifiable – and the parties cannot contract out of this provision.  However, according to Drescher, if the parties agree to provide support (including paying for college) for their adult children, the parties MAY contractually agree to limit the court’s ability to modify support.  And the Court cannot then modify that adult child support order.

Thus, if you are considering an adult child support provision in your Marital Settlement Agreement, and you want that provision to be non-modifiable, be sure you speak to an experienced family law attorney to ensure your wishes are memorialized in your MSA.

 

Child Support – above guideline?

March 13th, 2014

In Washington, DC, parents are in court disputing the appropriate amount of child support to be paid for the parties’ two children.  It gets press (here at the Washington Post) because of the money involved (millions) and because the father, Peter Orszag, is a former Clinton and Obama administration official.

In California, parents usually pay child support based on their incomes, the amount of time each spends with the child, and other relevant factors (including, but not limited to, allowable deductions for property taxes, mortgage interest, and union dues).  The information is run through a calculation which produces the guideline amount.  The formula can be found at Family Code Section 4055.  You can run the numbers (your numbers) here.

The guideline number is presumed to be correct.  However, what happens when the payor parent has an extraordinarily high income?  Family Code Section 4057(b)(3) provides that this is a situation when the Court may deviate from the guideline amount.  The burden is on the high-earner to show that the guideline amount is inappropriate because it exceeds the child’s needs.  The Code fails to define a child’s reasonable needs.

The payor parent may wish to show that the child (children) does not need $30,000 per month to meet his needs (assuming that is the guideline amount).  The payee parent, on the other hand, would contend the guideline amount is reasonable to be sure the child is not transitioning between two vastly disparate home environments (an extreme example: a 1 bedroom apartment to an 8000 square foot single family home).

Before agreeing to any child support order or going to court to establish or modify an order, be sure to speak to an experienced family law attorney who can explain guideline child support and the whens and whys of deviating from the guideline.

(ALL!) NJ Parents Breathe a Sigh of Relief

March 5th, 2014

New Jersey parents can sleep a little easier tonight knowing that one of their own won’t have to pay for their over-18-child-who-would-not-listen-yet sued-them-in-court-for-child-support youngster.  The full story is here.

In California, both parents are responsible for the support of their minor children.  Fam. Code § 3900.  The duty to provide support  “continues as to an unmarried child who has attained the age of 18 years, is a full-time high school student, and who is not self-supporting, until the time the child completes the 12th grade or attains the age of 19 years, whichever occurs first.”  Fam. Code § 3901.  However, if the child is incapacitated, support may extend beyond the child’s minority.  Fam. Code § 3910.

Divorcing parents can include in their Marital Settlement Agreement a provision to provide for their children’s college expenses (i.e. division of costs and a list of what constitutes college expenses).  If the parties cannot agree, the Court cannot order one parent to pay for college expenses pursuant to the code sections listed above.

If you have a question about child support or the payment of college expenses, please talk to an experienced family law attorney.

The Petition – Part 2 – Statistical Facts – Date of Separation

February 14th, 2014

In Section 2 of the Petition, the Petitioner lists the Date of Marriage and the Date of Separation (“DOS”).  These dates are important and can impact spousal support and the division of community property.  Most people can agree on the Date of Marriage.  But what is the DOS?

Before we answer that question, why is it important to know that date?  A longer marriage is a factor to consider in the length of time that a party may have to pay spousal support.

Also, property acquired (i.e. money earned) during marriage is community property (subject to some exceptions that are beyond the scope of this entry) and therefore subject to equal division.  However, money earned after the date of separation is that person’s separate property.  “The earnings and accumulations of a spouse … while living separate and apart from the other spouse, are the separate property of the spouse.”  Fam. Code § 771 (a).  (emphasis added)

But what does it mean to live “separate and apart”?  The Court’s have said that separation requires not only a parting of the ways with no present intention of resuming marital relations, but also, more importantly, conduct evidencing a complete and final break in the marital relationship.  In re Marriage of von der Nuell (1994) 23 Cal.App.4th 730, 736.  A court must look at both a subjective and objective component.  In re Marriage of Norviel (2002) 102 Cal.App.4th 1152, 1158–1159.

The subjective component examines whether either of the parties harbors the subjective intent to end the marriage.

The objective component examines whether there is objective conduct evidencing and in furtherance of that intent.  Id.

The California Supreme Court will address this very issue later this year in In Re Marriage of Davis (2013) A136858.  Click here for an article on this case.

What objective conduct is the Court looking for?  In In Re Marriage of von der Nuell (1994) 23 Cal. App. 4th 730, though the parties physically separated years before, they a) maintained joint checking accounts, b) acquired joint title in a car, c) spent significant time together, d) went on vacation together, e) sent cards to each other, and f) maintained sexual relations.  Thus, though Wife subjectively decided the marriage would not work, the objective conduct was insufficient to find a date of separation matching that subjective intent.  Even returning to the family home to do one’s laundry may extend the date of separation.  In Re Marriage of Bagary (1977) 73 Cal. App. 3d 444.

Before entering your Date of Separation on your Petition (or Response), talk to an experienced family law attorney.

 

 

 

Sperm Donors – Beware!

January 23rd, 2014

A sperm donor in Kansas, who claims he waived his parental rights in a contract with the birth mother, was found to be the presumptive father of the child, and therefore ordered to pay child support.  In the Kansas case, the donor failed to “secure the services of a physician during the artificial insemination process.”  To read more, click here.

In California, the donor is “treated in law as if he were not the natural parent” if the donor utilizes a licensed physician or sperm bank.  See Family Code Section 7613.  But if the donor does not comply with the statute, he may be found to be the father and thus liable for support.  See Jhordan C. v. Mary K. (1986) 179 Cal. App. 3d 386.

If you are considering either assisting a friend increase the size of their family or someone seeking a sperm donation, be sure to speak to an experienced family law attorney who can explain everyone’s rights and help ensure you achieve the result you want.