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Ely, Counselor at Law
Category: Family Law
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Experience:  Private practice with focus on family, criminal, PI, consumer protection, and business consultation.
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Married in 1993. Separated since May of 2009. I filed for divorce

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Married in 1993. Separated since May of 2009. I filed for divorce June of 2009. I submitted an asset proposal & child custody proposal to the court. My wife hired an attorney and responded to the custody proposal but not to the dissolution of assets in 2009. My gross income is $78K/year. In late 2009 I agreed to pay her $2001 per month, as requested by her attorney & calculated by the disso-master. She has not worked since our daughter was born in 1998.
Per verbal agreement I have lived in the family home. The primary loan is for $205K. Payment $1580/month. I estimate the home to be worth about $200K to $250K.
In 2008 we had been planning to buy a 2nd rental home so we took out a $50,000 second mortgage on the family home. The 2nd is in my name only. We had $43K in the bank from this second in summer 2009. I took $20K of the money and put it in another account. She took the other half. She has been making the monthly payment on the half she took. I give her a statement each month, which she has requested, which states that the money is owed by her. Our other rental house needed a new septic system in fall 2009. We split the cost which she borrowed from the 2nd and now agrees that she owes approximately $23,500. I think she spent most of this money on a car and attorney's fees.
There is no equity in either of the houses. Between them we are upside down $40-90K. We have about $9K worth of non liquid assets, cars, tools, furniture. I have a defined benefit retirement account with a cash value of about $70K. No other assets.
In June of 2010 our rental house went vacant and we verbally agreed not to make the payment until we found a renter. We missed one payment of $1280. We owe $150K on this house and it is worth about $110K. The rent had been $1095. I found a renter after it had been vacant for 45 days and I payed the bank all of the first month's rent and the security deposit, a total of $1900. I have been sending the bank all of the rent, $995/month. I/we requested a loan modification but were denied. We are in default on this house. They say we owe about $5k. I have asked in writing for an itemized explanation which they have refused to provide. They returned my last check of $995 because they said it was insufficient to clear the default. I plan to continue to send them all of the rent. My wife and I have discussed attempting a short sale.
I payed my half of the line of credit back by early 2010. From February 2010 to January 2011 I have taken on additional work (I am a high school teacher and have been teaching extra classes). My gross income for 2010 will be approximately $110K. I saved about $25K & I drew out the remaining $27K from the line of credit and now have about $52K in cash. I am looking at buying a $60K house with this plus another $8K in unsecured short term loans. I would like to buy this house and rent it but may move into it eventually if I cannot afford to stay in the family home.
We agreed to do our 2009 taxes jointly. For at least 10 years prior to this we had used zero deductions on my W2 statement and had a sizeable tax return. We used this money to pay our living expenses for the two months for which I don't get a paycheck. The return was almost $16K, $4K more than the previous year. She verbally agreed to accept $500 from this and, of course, I would have to pay the normal family support. After signing the return she changed her mind. I received a letter from her attorney demanding $78xx and stating that I need to pay the family support as well. This arrived at a time when I was seeking reconciliation with her so I chose not to fight and sent her a check for $8K in addition to the normal family support.
We have been discussing reconciliation more seriously for the last 4 months. She has made it clear that she is not interested in finalizing the divorce at this time. I estimate our chances of reconciliation at 60%. Finally, my questions:

1. Can I buy the house without her knowledge without getting into specific legal trouble during divorce proceedings. In other words, would it be illegal? Would it be seen as being done in bad faith? (or is it similar to her purchasing her car with "her" portion of the funds?) It would be bought with only $27K of marrital assets of which she has nearly matching funds of $23K. I do understand that there is some risk that I might have to sell the house in order to pay her in an asset settlement. But could I be ordered to sell it or could it be taken from me if its value is not needed to settle assets?

2. Will the house automatically be community property if she does not "sign off"? If I do inform her what will be involved in getting her to sign off?

3. What are the ramifications of giving my father $60K? He buys a house and later gives the house to me?

4. Is there any hope of getting back the $78xx associated with the tax return as part of an asset settlement or otherwise?

Please only answer this question if you are patient.
Submitted: 3 years ago.
Category: Family Law
Expert:  Ely replied 3 years ago.
Hello,



Welcome to JustAnswer and thank you for the opportunity to assist you. Please remember that there might be a delay between your follow up questions and my answers because I may be helping other clients or taking a break.



1 - you can purchase the house without her knowledge, but you'll have to volunteer this information to her in discovery or otherwise. Keeping it a secret WILL be seen as bad faith by the Judge, so I do not recommend it. You can only use money that is your own separate property to purchase the home - using joint community property prior to division but knowing that it will be divided just looks bad.2 - Not if it is purchased with your separate income/money only. If that is the case, it will be seen as yours. Everything traced back to separate property only is automatically yours.3 - If you give it from YOUR separate property, none. If you give it from community property that will be split later, the Judge will likely order you to pay her back $30k.4 - Not really, friend, sorry. UNLESS it is a signed agreement by her, no post-nuptial agreement would be recognized by the Court. California Family Code Part 5, Chapter 1, §1502 requires the agreement to be executed as a contract.I hope you found my answer helpful, and if so please click on the ACCEPT button. This is the only way for me to get credit for my work; I receive no credit for my time with you unless you press ACCEPT.



If you still need to clarify something or seek more information, just use the INFO button and I’d be more than happy to follow up to your satisfaction! There is no fee for follow up questions after an accept should you wish to continue in this thread and I encourage you to do so should you need clarification!



While the legal system tries to be inclusive of every possibility, sometimes, people are ethically wronged but have limited legal avenues seek relief. If so, please understand that this is not the expert’s fault, but the way of circumstance.



If you feel that I went an extra step to help, a bonus is always appreciated!



You can always request me for a future advice through my profile at http://www.justanswer.com/profile.aspx?PF=7286322&FID=7 If you do this, make sure to begin the question with “This Question is for Eli…”














Customer: replied 3 years ago.

You can only use money that is your own separate property to purchase the home - using joint community property prior to division but knowing that it will be divided just looks bad.

 

I find this confusing. You say "can only" and "looks bad". Which is it?

 

I don't see much difference between her buying a car with her "half" of the money vs. me buying a house. Is there a difference? Was her buying the car with funds from the same source done in bad faith? She did not notify me that she was buying the car. She has definitely spent a great deal of that money. At what point am I able to spend any of it?

 

UNLESS it is a signed agreement by her, no post-nuptial agreement would be recognized by the Court

 

I don't see how this relates to the question. There was a precedent set over years in our marriage as to how the tax return was to be spent. I.e., living expenses for two months when I didn't get a paycheck. 67% of the money for the return accumulated while we were separated, 33% while we were together. The money was formally demanded by her attorney (obviously she agreed to that) under threat of being taken to court. I don't see how a post-nuptial agreement is relevant.

Expert:  Ely replied 3 years ago.
My apologies - let me clarify. You technically have the right to use the community property unless it is already divided, but if you do and use the purchase for yourself only, the Court will make you pay back half the value. So you CAN, but it would be somewhat redundant since the Judge will order you to repay said amount AND it would look bad in front of the Judge. This is what I meant.

The same applies to her. So, when dividing community property, you should ask the Judge to order her to pay you half the amount spent on the car, if the car was purchased with community property after you were already separated.

Informal precedents are not recognized by the Court in custody or property disputes during a divorce. The statutory law like I mentioned demands that such agreements be contracted and executed. I WANT to tell you that you would be in the right to seek reimbursement for this, but I would be lying. Also, an attorney's formal demand is nothing more that negotiation/pressure tactics, but it carries no weight legally. I am sorry to say that while you HAVE the right to attempt to enforce an informal agreement, the Judge will be quite hesitant to recognize it unless she admits to it and allows it. I am sorry. I do not mean to sound 'cold,' but I would rather not mislead you by telling you what you wish to hear.
Customer: replied 3 years ago.

OK. Great thank you. I appreciate your patience. I realize there is risk to the following approach. But let's say I buy the house using $27K of marital assets, the rest I earned/accumulated after the separation. She has $23K of marital assets which she has already spent or maybe still has some. If this $50K was our only marital asset wouldn't it be likely that I would just have to pay her $4K and keep the house? I do understand that all assets have to be divided and that I also may have to pay some of her legal fees. I apologize if you feel you have already answered this.

 

Also, back to the tax return. I figured at the time that I was being bullied by the attorney. Let's assume that a judge might later decide that I should not have had to pay all of that $8K. Is it completely water under the bridge? I wouldn't be asking a judge to enforce an informal agreement but rather appealing to what is a fair dispersal of the 2009 tax return based on the length of time we were together when the funds accumulated.

Expert:  Ely replied 3 years ago.
It's my pleasure to help you, so no problem at all.

In this scenario, YES - logic and equity dictates that the Court would order just that, and I feel that you have reached this conclusion after applying the law I gave you, so kudos of quickly analyzing the information.

As for the tax return - it is up to the Judge. Equity (fairness) is also a doctrine that runs throughout the divorce. So the Judge MAY seek to rectify this and incorporate a payment to you or otherwise future benefit in taxes for you. But this is strictly up to the Judge. I can tell you that it is POSSIBLE that the Judge will side with you on the tax issue, but not likely because caselaw shows that California Judges usually do not do this (In re Marriage of Fonstein, 552 P. 2d 1169 - Cal: Supreme Court 1976).I hope you found my answer helpful, and if so please click on the ACCEPT button. This is the only way for me to get credit for my work; I receive no credit for my time with you unless you press ACCEPT.



If you still need to clarify something or seek more information, just use the INFO button and I’d be more than happy to follow up to your satisfaction! There is no fee for follow up questions after an accept should you wish to continue in this thread and I encourage you to do so should you need clarification!



While the legal system tries to be inclusive of every possibility, sometimes, people are ethically wronged but have limited legal avenues seek relief. If so, please understand that this is not the expert’s fault, but the way of circumstance.



If you feel that I went an extra step to help, a bonus is always appreciated!



You can always request me for a future advice through my profile at http://www.justanswer.com/profile.aspx?PF=7286322&FID=7 If you do this, make sure to begin the question with “This Question is for Eli…”










Customer: replied 3 years ago.
You have done a very thorough job answering my questions and clarifying where needed. Just one more question and I realize that I do have to click accept for you to get paid. Does the 2010 tax refund belong entirely to me since we were separated for all of 2010 and I paid her the full amount of agreed family support? Can you tell me briefly what happened in (In re Marriage of Fonstein, 552 P. 2d 1169 - Cal: Supreme Court 1976)?
Expert:  Ely replied 3 years ago.
No worries. Plus my signature stamp is what I always include at the end of my answers as part of my time on JustAnswer, so please do not think I am being abrasive or demanding (I'll leave it off from now on).



The tax return and child support do not influence each other - they are considered separate. Therefore, the tax refund would be deemed divided if you filed together based on your individual incomes. If you filed separately, then the tax refund is separate.

As for the IN RE MARRIAGE OF FONSTEIN, I cited it because the Court says, "The trial court need not speculate on such possibilities, however, or consider tax consequences that may or may not arise after the division of the community property." Understand that caselaw acts as 'filler' for questions in law that are not directly addressed in statutory code or fall through the cracks. Here, you have a complex situation as for taxes that is not very clear when CA black letter law is applied. Therefore, caselaw is helpful in predicting or arguing a stance in Court. Going off the quote, it would seem that the Court does not base too much influence on tax consequences in its decisions in division of property law, so hence, it is unlikely that the Judge will make the tax division a big issue. Furthermore, this is accented by the actual black letter law which states that contracts for said division have to be executed in writing (California Family Code Part 5, Chapter 1, §1502).
Ely, Counselor at Law
Category: Family Law
Satisfied Customers: 86561
Experience: Private practice with focus on family, criminal, PI, consumer protection, and business consultation.
Ely and 8 other Family Law Specialists are ready to help you
Customer: replied 3 years ago.

OK. I think I understand now what you meant by the contract earlier. If she had agreed in writing to the $500 then I would have a leg to stand on. If I had filed my taxes separately she would have had little or no basis for seeking half of my refund. If I file my taxes separately for 2010 she has no claim to any refund and I am not obligated to file jointly. Please correct me if I'm wrong. Also, if you have any control over it, would you please avoid sending email notifications? I have allowed my wife to have access to my email account to help prove to her that I don't have a girlfriend. Sorry if that's too much information.Smile

Expert:  Ely replied 3 years ago.
You have the general gist of it, correct.

No problem - I will let customer service know to end emails to you, but I believe that our correspondence may have resulted in some emails to you that might be telling, so if you have not already deleted them, do so.I wish you best of luck.

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