Divorce Options

When a couple has made the decision to end their marriage, there are more options available to them than simply battling it out in divorce court. While litigation is definitely an option for settling a divorce, there are other options that are far more constructive, less expensive, and less time consuming. If you are considering filing for divorce, we invite you to contact our office to schedule a consultation to discuss your options. Some of the options we can discuss with you include:

• Divorce Mediation: During mediation you and your spouse will meet with a neutral mediator who will assist you in resolving the various issues of your divorce, such as child custody, child support, property division, and alimony. The mediator will not issue a ruling, but rather help foster communication between you and your ex and help you work through any differences so you're able to settle your divorce. Mediation is designed to be much less stressful and emotional draining than a divorce litigated in court, and is much more cost-effective than litigation.

• Arbitration: During arbitration, an arbitrator is given the task of resolving the issues in a divorce instead of judge, however the arbitrator's role is very similar to that of a judge. Arbitration tends to be less formal than litigation, however arbitration is usually binding, which means an arbitrator's decision cannot be appealed. It should be mentioned that the parties can tell the arbitrator what rules they would like him or her to follow; they don't have that option in litigation.

• Contested Divorce/Litigation: when a couple cannot amicably resolve their divorce their case will be sent to divorce court for litigation. Litigation can quickly become highly contentious, and it may take months before even one issue can successfully be resolved. Not only is litigation more emotionally draining and stressful, but it tends to be much more expensive due to the amount of time it takes to resolve the divorce through litigation.

• Uncontested Divorce: uncontested divorce is general term applied to any divorce in which the parties are able to amicably and without conflict resolve or settle their divorce.


Divorce Mediation & Collaborative Negotiation

“The most expensive divorce is the one in which each spouse hires a divorce lawyer who pledges to “get tough” with the other side, and in which the divorce becomes an affair of two lawyers butting heads like big-horn sheep. Our office offers two alternative approaches to the traditional courtroom divorce, both of which can offer clients significant savings—both financially and emotionally--as legal posturing gives way to common sense efforts to forget the past and work together for a more positive future.

Confidential Mediation is a process in which the divorcing couple meets with an attorney specially trained as a mediator. The divorce mediator assists the couple in working together to explore alternative solutions to the issues involved in divorce (child custody, support and property division). In working together with the divorce mediator to reach their own custom-made settlement, couples are not limited to the choices available to a judge called upon to decide their case. Freed from the one-size-fits-all approach, the couple can work creatively to arrive at solutions that will serve them best after the divorce. And if, for any reason, they conclude that divorce mediation isn’t working for them, nothing that either has said during mediation can come into play in any divorce proceedings down the road. That’s why we call it “confidential” mediation.

Collaborative Negotiation (sometimes called “Collaborative Law”) offers the creative problem-solving flexibility of Confidential Mediation with a traditional twist — each party has his or her own attorney. The parties and their attorneys meet in a series of in-office meetings to address the issues involved in the divorce, often with the help of specially retained experts to offer assistance in financial issues or issues concerning the children. The important difference is that the attorneys are trained to assist the parties in working toward agreement rather than doing the big-horn sheep thing, and everyone agrees in writing to avoid the courtroom, where judges who don’t know the couple or their children are required to apply one-size-fits-all rules to the issues in the case.

For more information on Collaborative Negotiation, please visit www.divorceoption.com or discuss it with your attorney. A positive and common-sense approach to divorce begins with the decision that the past does not need to determine the future. When you work together with a compassionate and settlement-oriented attorney to establish an atmosphere of mutual respect and cooperation with the other side, you will begin to discover “win-win” solutions that preserve the couple’s dignity and net worth, so that both can move on to successful lives after divorce. At Dave Grotewohl & Associates, our focus is on the future and ways to make it better for all concerned—Husbands, Wives and Children.


Basic Steps In Dividing Property In A California Divorce

There are three basic steps in dividing property in a divorce action:

Characterization: First it must be determined whether the property is "community property", "separate property", or "quasi-marital property. Valuation: Next the property must be given a value either by agreement or appraisal.

Division: After the property has been characterized and valued, the goal of the court is to confirm separate property to the owner of that property and to evenly divide community property.

Characterization: Separate Property - General Concepts: Property acquired before marriage is the acquiring spouse's separate property, as is property obtained during marriage that can be traced to a premarital acquisition. [Ca Fam § 770(a)(1) & (3) ("rents, issues and profits" of SP are SP) Like community property, separate property does not lose its character as such by a mere change in form or identity. The court must therefore determine when the property was "acquired".

For property characterization purposes, "acquired" contemplates the "inception of title" . . . generally meaning the time (before marriage, during marriage, or after separation) when the original property right arose, not the time when it subsequently matured into full legal title. Property acquired during marriage by "gift, bequest, devise, or descent" (i.e., inter vivos or testamentary gift or intestate succession) is the acquiring spouse's separate property. [Ca Const. Art. I § 21; Ca Fam § 770(a)(2)] A spouse's "earnings and accumulations" after a judgment of legal separation are his or her separate property (Ca Fam § 772); and so are a spouse's "earnings and accumulations" while living separate and apart from the other spouse (Ca Fam § 771(a)). "Separation" within the meaning of Ca Fam § 771(a) requires more than a rift in the spouses' relationship. The date of "separation" occurs only when the parties have come to a parting of the ways with no present intent to resume their marriage and their conduct evidences a complete and final break in the marital relationship. Community Property -

General Concepts: All property acquired during marriage and before separation, other than by gift or inheritance (Ca Fam § 770(a)(2)), is presumptively community property. [Ca Fam §§ 760, 771(a)] Income derived from a spouse's labor, time or skill during marriage and prior to separation is community property. Such "earnings" includes any compensation for services, regardless of the form in which it is received. For example, to the extent it reflects employment during marriage, community "earnings" can include:

 Stock in lieu of salary.
 Employer contributions to an employee profit-sharing plan.
 Incentive stock options.
 A conveyance of real estate from the employer in the form of a gift, but which is a deferred compensation in lieu of a pension.
 Vacation pay, or the right to receive certain other financial benefits as deferred compensation upon termination of employment.
 Other employment fringe benefits based on a contract right to future benefits after separation (even though unvested and unmatured): To the extent "earned" during marriage, these interests are allocatable to the community. Profits from a spouse's business (sole proprietorship, partnership or closely-held corporation) are "earnings" to the extent attributable to either spouse's participation in the business. Conversely, income and profits not reflective of either spouse's labor or skill are strictly a return on the capital investment, characterized in accordance with the separate or community property status of the original investment.

Transmutation: Both before and during marriage, spouses may agree to change the status of any or all of their property (presently owned or thereafter acquired); i.e., they can convert separate into community property, community into separate property, or separate property of one into separate property of the other. [Ca Fam § 850(a),(b) & (c); see also Ca Fam § 1500--spouse's property rights prescribed by statute may be altered by premarital agreement or marital property agreement] The process is commonly referred to as "transmutation."

"Quasi-Community Property": For purposes of a property division in marital actions or the rules governing marital property debt liability, "quasi-community property" is (i) real and personal property, wherever situated, which would have been community property had the owner spouse been domiciled in California at the time of acquisition, and (ii) any property acquired in exchange for such property. [Ca Fam § 125(a) & (b)] The establishment of a California marital domicile may trigger California "quasi-community property" law, under which the parties' common law separate property will be treated as if it were community property for certain purposes.

Quasi-Marital Property: The characterization of "marital" acquisitions as community property necessarily assumes the parties were validly married. Nonetheless, in a nullity proceeding to terminate a void or voidable marriage, California "quasi-marital property" law recognizes normal community property rights in favor of a party who has "putative spouse" status (good faith belief in validity of marriage). [Ca Fam § 2251(a)(2)]

Valuation: Absent an in-kind division or sale and division of proceeds, valuation of each item in the community estate is an essential prerequisite to the court's responsibility to effect a net equal division. Valuation is ultimately a question of fact, to be resolved in the exercise of the trial court's broad discretion based on the range of evidence presented. The trial court's determination will be upheld on appeal so long as supported by substantial evidence in the record.

Obligation To Disclose Value: Each spouse's fiduciary obligations in the management and control of the community estate include the duty (a) to fully disclose to the other spouse "all material facts and information regarding the existence, characterization and valuation of all assets in which the community has or may have an interest and debts for which the community is or may be liable"; and (b) upon request, to "provide equal access to all information, records, and books that pertain to the value and character of those assets and debts." [Ca Fam § 1100(e) (emphasis added)]

The Parties May Agree On Value: The parties are free to enter into an agreement concerning the value of community property and they are encourage to do so by the court.

Fair Market Value: Unless the parties stipulate or agree to accept some other measure of value (e.g., cost or book value), an equal division of the community estate must be predicated on fair market value. [Marriage of Cream (1993) 13 Cal.App.4th 81, 88-89, 16 Cal.Rptr.2d 575, 579] For purposes of effecting an equal property division upon marriage dissolution or legal separation, "fair market value" of a marketable asset is the highest price on the valuation date that would be agreed to by (i) a seller, who is willing to sell but under no obligation "or urgent necessity to do so," and (ii) a buyer, who is ready, willing and able to buy but under "no particular necessity for so doing." [Marriage of Cream, supra, 13 Cal.App.4th at 89, 16 Cal.Rptr.2d at 579]

Date Of Valueation: With few exceptions, community assets and liabilities subject to the court's disposition ordinarily must be valued "as near as practicable to the time of trial." [Ca Fam § 2552(a)] Proof Of Value: Competent valuation evidence may be proffered by any of the following methods: Opinion Testimony: Expert Testimony: A qualified expert can testify as to value (e.g., appraisers, accountants, actuaries or real estate brokers/salespersons). [Ca Evid §§ 801, 813(a)(1), 814]

Owner's Testimony: The property owner or owner's spouse is competent to testify as to the value of his or her own property even though not qualified to testify as an expert. [Ca Evid §§ 813(a)(2) & (c), 814]

Comparable Sales: A witness offering opinion testimony may take into account as the basis of his or her opinion evidence of the price paid for the property if recently purchased; or evidence of market prices or recent sale prices for comparable (similar) property. [Ca Evid §§ 815, 816] However, mere offers to buy or sell certain property are inadmissible to prove the property's value. [Ca Evid § 822(a)(2) & (b)]

Buy-Sell Agreement: The agreed-upon buy-out price or buy-out formula for purchasing a business interest (e.g., shares of stock in a closely-held or professional corporation) as between the business principals is admissable on the question of value in a community property division proceeding between the spouses. However, such a buy-sell agreement is not conclusive. Based upon the evidence presented, the family law court has broad discretion to accept or reject the valuation formula in a business buy-out (or stock purchase) agreement.

Division: Court's Broad Discretion: Generally, where the parties are unable to agree on a disposition of their community estate, trial courts have broad discretion to determine the manner of division in order to accomplish a net equal division. General Approaches: Typically, the court will adopt one or more of the following approaches.

In-Kind Division: The Court divides fungible assets (bank accounts, shares of stock, etc.) in kind, whereby each spouse is awarded one-half.

Asset Distribution Or Cash-Out Division: The Court distributes one or more items to one spouse and items of equal value (which may include an equalizing promissory note) to the other (Ca Fam § 2601).

Sale & Division Of Proceeds: The Court orders an asset sold, with the proceeds divided in proportions necessary to effect a net equal division of the overall community estate.

Deferred Partition By Conversion To Tenancy In Common: The Court awards each spouse an undivided one-half interest in certain items to hold as tenants in common (typically, the family home), deferring partition until feasible to effect a sale and division of the proceeds.

Reservation Of Property Division Jurisdiction: The court may bifurcate the action and grant a "status only" judgment of dissolution or legal separation, expressly reserving jurisdiction to divide the community estate and resolve all other pending issues at a later time. [Ca Fam § 2337] Additionally, where contingencies certain to occur at some finite future time render it impracticable to apportion and fix a value on particular community interests, trial courts may properly act within their discretion by reserving jurisdiction to value and divide specified community assets at a later time. [Marriage of Kilbourne (1991) 232 Cal.App.3d 1518, 1524-1525, 284 Cal.Rptr. 201, 204-205] A reservation of jurisdiction may also be appropriate where there is a potential reimbursement claim but the amount thereof turns on contingencies not yet fixed at the time of the property division trial. [Marriage of Feldner (1995) 40 Cal.App.4th 617, 626, 47 Cal.Rptr.2d 312, 317]