Love and Real Estate: I am in a divorce with my spouse, but I don’t want to sell our house yet because I am worried about the impact selling will have on our kids. What can I do?
By Shawn Weber, CLS-F*
It is possible to get what is called a “deferred sale of home order”. California Family Code section 3800(b) provides for this option as follows:
‘Deferred sale of home order’ means an order that temporarily delays the sale and awards the temporary exclusive use and possession of the family home to a custodial parent of a minor child or child for whom support is authorized under Sections 3900 and 3901 or under Section 3910, whether or not the custodial parent has sole or joint custody, in order to minimize the adverse impact of dissolution of marriage or legal separation of the parties on the welfare of the child.
Section 3800 and related sections basically codify the holding of In re Marriage of Duke (1980) 101 Cal.App.3d 152, 161 Cal.Rptr. 444. The Court in Duke wrote:
Where adverse economic, emotional and social impacts on minor children and the custodial parent, which would result from an immediate loss of a long established family home are not outweighed by economic detriment to the noncustodial party, the court shall, upon request, reserve jurisdiction and defer sale on appropriate conditions.
[Duke at page 155.]
In essence, the intent of the statute is to minimize the impact on the children by awarding temporary use and possession of the family residence to the custodial parent. (A “custodial parent” is the party awarded either sole or joint physical custody of a child. [See Cal. Fam. Code 3801 (a).]) This house is then sold at some future time.
Before the Court will make a deferred sale of home order, the court must first determine “whether it is economically feasible to maintain the payments of any note secured by a deed of trust, property taxes, insurance for the home during the period the sale of the home is deferred, and the condition of the home comparable to that at the time of trial.” [Cal. Fam. Code 3801.]
In making this determination, the Court has to consider each of the following factors:
(1) The resident parent’s income.
(2) The availability of spousal support, child support, or both spousal and child support.
(3) Any other sources of funds available to make those payments.
The Family Code specifically describes the legislature’s intent regarding the economic feasibility test to accomplish all of the following:
(1) Avoid the likelihood of possible defaults on the payments of notes and resulting foreclosures.
(2) Avoid inadequate insurance coverage.
(3) Prevent deterioration of the condition of the family home.
(4) Prevent any other circumstance which would jeopardize both parents’ equity in the home.
If the Court is satisfied that the deferred sale is economically feasible, then it has to ask the following questions:
(1) How long has the child lived in the home?
(2) What is the child’s grade in school?
(3) How close is the residence to the child’s school or daycare?
(4) Was the house modified to accommodate a disabled child or a disabled custodial parent?
(5) What emotional detriment would there be to the child if he/she changed residences?
(6) How close is the house to the custodial parent’s work?
(7) How financially able are the parents to obtain suitable housing?
(8) What tax consequences would be experienced by each party as a result of the deferred sale?
(9) What other “just and equitable” factors are there for the court to consider regarding a potential deferred sale.
Once the Court has considered all of the required factors, then it can make its order. The order has to spell out the duration of the deferral and what each party has to do to maintain the residence. Usually, the “in-spouse” has to pay the costs of living in the residence to include the mortgage, property taxes, HOA, etc.
Now, the parties can always agree to a deferred sale without the Court ordering it if they so choose. They would just want to also carefully consider the factors described above as well. It would not due for a party to insist on a deferred sale of home order that simply was impossible financially.
One important point to consider: In my experience, the children are far less emotionally impacted by a move than the parents realize. It is important when considering a deferred sale of home order, to ask whether the deferred sale is desired because the kids need it or because a parent is having a hard time letting go of the house. Often it is better to just sell the house as soon as possible (you can visit https://www.housebuyersofamerica.com/sell-my-house-home to learn about a possible way of doing this). It is common for people ton entangle their emotions with things. Perhaps we will make seriously flawed financial decisions in order to hold onto a thing like a house. Remember to really think about the decision of a deferred home sale. If it doesn’t make sense financially-then it won’t help the kids either. In fact, an economically imprudent deferred home sale can hurt the kids a lot more than it will help.
Other resources regarding deferred home sales:
In re Marriage of Braud (1996) 45 Cal.App.4th 797, 53 Cal.Rptr.2d 179.
In re Marriage of Boseman (1973) 31 Cal.App.3d 372, 107 Cal.Rptr. 232.
In re Marriage of Herrmann (1978) 84 Cal.App.3d 361, 148 Cal.Rptr. 550.
In re Marriage of Stallworth (1987) 192 Cal.App.3d 742, 237 Cal.Rptr. 829.
For more information regarding a deferred home sale, contact attorney Shawn Weber at 858-345-1616 or visit our website at www.bravewebermack.com .
*Certified Specialist – Family Law
The State Bar of California Board of Legal Specialization.
Love and Real Estate: I am in a divorce with my spouse, but I don’t want to sell our house yet because I am worried about the impact selling will have on our kids. What can I do?
By Shawn Weber, CLS-F*
It is possible to get what is called a “deferred sale of home order”. California Family Code section 3800(b) provides for this option as follows:
‘Deferred sale of home order’ means an order that temporarily delays the sale and awards the temporary exclusive use and possession of the family home to a custodial parent of a minor child or child for whom support is authorized under Sections 3900 and 3901 or under Section 3910, whether or not the custodial parent has sole or joint custody, in order to minimize the adverse impact of dissolution of marriage or legal separation of the parties on the welfare of the child.
Section 3800 and related sections basically codify the holding of In re Marriage of Duke (1980) 101 Cal.App.3d 152, 161 Cal.Rptr. 444. The Court in Duke wrote:
Where adverse economic, emotional and social impacts on minor children and the custodial parent, which would result from an immediate loss of a long established family home are not outweighed by economic detriment to the noncustodial party, the court shall, upon request, reserve jurisdiction and defer sale on appropriate conditions.
[Duke at page 155.]
In essence, the intent of the statute is to minimize the impact on the children by awarding temporary use and possession of the family residence to the custodial parent. (A “custodial parent” is the party awarded either sole or joint physical custody of a child. [See Cal. Fam. Code 3801 (a).]) This house is then sold at some future time.
Before the Court will make a deferred sale of home order, the court must first determine “whether it is economically feasible to maintain the payments of any note secured by a deed of trust, property taxes, insurance for the home during the period the sale of the home is deferred, and the condition of the home comparable to that at the time of trial.” [Cal. Fam. Code 3801.]
In making this determination, the Court has to consider each of the following factors:
(1) The resident parent’s income.
(2) The availability of spousal support, child support, or both spousal and child support.
(3) Any other sources of funds available to make those payments.
The Family Code specifically describes the legislature’s intent regarding the economic feasibility test to accomplish all of the following:
(1) Avoid the likelihood of possible defaults on the payments of notes and resulting foreclosures.
(2) Avoid inadequate insurance coverage.
(3) Prevent deterioration of the condition of the family home.
(4) Prevent any other circumstance which would jeopardize both parents’ equity in the home.
If the Court is satisfied that the deferred sale is economically feasible, then it has to ask the following questions:
(1) How long has the child lived in the home?
(2) What is the child’s grade in school?
(3) How close is the residence to the child’s school or daycare?
(4) Was the house modified to accommodate a disabled child or a disabled custodial parent?
(5) What emotional detriment would there be to the child if he/she changed residences?
(6) How close is the house to the custodial parent’s work?
(7) How financially able are the parents to obtain suitable housing?
(8) What tax consequences would be experienced by each party as a result of the deferred sale?
(9) What other “just and equitable” factors are there for the court to consider regarding a potential deferred sale.
Once the Court has considered all of the required factors, then it can make its order. The order has to spell out the duration of the deferral and what each party has to do to maintain the residence. Usually, the “in-spouse” has to pay the costs of living in the residence to include the mortgage, property taxes, HOA, etc.
Now, the parties can always agree to a deferred sale without the Court ordering it if they so choose. They would just want to also carefully consider the factors described above as well. It would not due for a party to insist on a deferred sale of home order that simply was impossible financially.
One important point to consider: In my experience, the children are far less emotionally impacted by a move than the parents realize. It is important when considering a deferred sale of home order, to ask whether the deferred sale is desired because the kids need it or because a parent is having a hard time letting go of the house. Often it is better to just sell the house as soon as possible (you can visit https://www.housebuyersofamerica.com/sell-my-house-home to learn about a possible way of doing this). It is common for people ton entangle their emotions with things. Perhaps we will make seriously flawed financial decisions in order to hold onto a thing like a house. Remember to really think about the decision of a deferred home sale. If it doesn’t make sense financially-then it won’t help the kids either. In fact, an economically imprudent deferred home sale can hurt the kids a lot more than it will help.
Other resources regarding deferred home sales:
In re Marriage of Braud (1996) 45 Cal.App.4th 797, 53 Cal.Rptr.2d 179.
In re Marriage of Boseman (1973) 31 Cal.App.3d 372, 107 Cal.Rptr. 232.
In re Marriage of Herrmann (1978) 84 Cal.App.3d 361, 148 Cal.Rptr. 550.
In re Marriage of Stallworth (1987) 192 Cal.App.3d 742, 237 Cal.Rptr. 829.
For more information regarding a deferred home sale, contact attorney Shawn Weber at 858-345-1616 or visit our website at www.bravewebermack.com .
*Certified Specialist – Family Law
The State Bar of California Board of Legal Specialization.
Love and Real Estate: If I bought a house a week or two before we were legally divorced does she still get half?
Shawn Weber, Attorney at Law
In California, the question that should be asked is not when the divorce is legally finalized, but when you were separated. California law defines your date of separation as that day on which it was clear to both parties that the marriage was irretrievable. That could be the date a spouse moved to a separate residence or the date a Petition for Dissolution of Marriage was filed at court. If the house was acquired after the date of separation, it will be considered separate property. (Beware: if you use community property funds to purchase the house or to make a down payment, you run the risk of giving your ex-spouse an interest in the property or – at the very least – a right to reimbursement.)
BE CAREFUL! Adding a spouses name to the title for a piece of separate real property (i.e., a deed) will turn the property into a community asset. However, a right to reimbursement of the separate property investment will still stand.
Failure to follow California’s strict disclosure rules can be very expensive in divorce cases.
California Duty of Disclosure
In California, it is essential in every dissolution, divorce, nullity or legal separation case to make a full and complete disclosure.
California Family Code § 721 requires full disclosure in divorce cases.
California Family Code § 721
The duties of disclosure are largely controlled by California Family Code § 721, which describes the fiduciary duties between spouses. It provides, in part:
[A] husband and wife are subject to the general rules governing fiduciary relationships which control the actions of persons occupying confidential relations with each other. This confidential relationship imposes a duty of the highest good faith and fair dealing on each spouse, and neither shall take any unfair advantage of the other.
California Family Code § 721 (b).
The statute goes further to subscribe to marriages the same sort of fiduciary duties that exist between business partners. It indicates that, as with business partners, the confidential relationship between spouses is
(b)…a fiduciary relationship subject to the same rights and duties of nonmarital business partners, as provided in Sections 16403, 16404, and 16503 of the Corporations Code, including, but not limited to, the following:
(1)Providing each spouse access at all times to any books kept regarding a transaction for the purposes of inspection and copying.
(2)Rendering upon request, true and full information of all things affecting any transaction which concerns the community property. Nothing in this section is intended to impose a duty for either spouse to keep detailed books and records of community property transactions.
(3)Accounting to the spouse, and holding as a trustee, any benefit or profit derived from any transaction by one spouse without the consent of the other spouse which concerns the community property.
Id.
Family Code § 2102
With this in mind, the California Family Code has specific disclosure rules. Per Family Code § 2102, parties are subject to the § 721 fiduciary standards. This goes from the time of separation until the distribution of the community assets. Section 2102 requires the following:
(1)The accurate and complete disclosure of all assets and liabilities in which the party has or may have an interest or obligation and all current earnings, accumulations, and expenses, including an immediate, full, and accurate update or augmentation to the extent there have been any material changes.
(2)The accurate and complete written disclosure of any investment opportunity, business opportunity, or other income-producing opportunity that presents itself after the date of separation, but that results from any investment, significant business activity outside the ordinary course of business, or other income-producing opportunity of either spouse from the date of marriage to the date of separation, inclusive. The written disclosure shall be made in sufficient time for the other spouse to make an informed decision as to whether he or she desires to participate in the investment opportunity, business, or other potential income-producing opportunity, and for the court to resolve any dispute regarding the right of the other spouse to participate in the opportunity. In the event of nondisclosure of an investment opportunity, the division of any gain resulting from that opportunity is governed by the standard provided in Section 2556.
(3)The operation or management of a business or an interest in a business in which the community may have an interest.
Family Code § 2102(a).
Duty to Update and Augment Disclosures
It is important to note that the code not only requires a complete disclosure, but it also requires “immediate, full, and accurate update or augmentation to that extent that there have been material changes.” Id [emphasis added]. This means that after you provide your first disclosure, you must update the other party when there are changes.
Preliminary and Final Declarations of Disclosure
Before the court will grant a judgment for divorce, the parties must exchange preliminary and final declarations of disclosure. Parties can waive the final declaration of disclosure by written stipulation of the parties. But, they can’t waive the preliminary disclosures. See Family Code §§ 2104 and 2105. The statute requires that the parties use specified forms for the disclosures. They are:
Declaration of Disclosure (Judicial Counsel Form FL-140)
Complete this form and sign under penalty of perjury to indicate that you have made a complete and accurate disclosure. Don’t file this form. Rather, just serve it on the other party.
Income and Expense Declaration (Judicial Counsel Form FL-150)
On form Fl-150 you provide all of your income and expense data. You show everything you earn and everything you spend. It’s kind of a “budgety” type form. This aids the court and the spouses in determining the best choices for child support and alimony. You only need to file the form FL-150 if support is at issue at a court hearing. Otherwise, just serve it with your Declaration of Disclosure form.
Schedule of Assets and Debts (Judicial Counsel Form FL-142)
On form FL-142 you list all of your assets and debts. In essence, it shows everything you own and everything you owe. Be sure to list EVERYTHING. There can be consequences if you leave something off. So, when in doubt, disclose. You don’t file form FL-142 at court. Instead, just serve it on the other party with your Declaration of Disclosure.
Declaration Regarding Service of Declaration of Disclosure (Judicial Counsel Form FL-141)
This form indicates to the court that you completed your declaration of disclosure and served it on the other spouse. File this one at court.
Importantly, you only need to file the Declaration Regarding Service of Declaration of Disclosure form at court. Rather than filing, you simply serve the other documents on the other party. However, despite not filing them at court, it is essential to take these forms seriously and to be complete and truthful. The court can be very harsh with people who are inaccurate or incomplete in their disclosures. So, get this one right too.
Sanctions for Failure to Comply with Disclosure Requirements
Family Code § 2107(c) requires monetary sanctions and reasonable attorney fees if a party fails to comply with the spouse’s California Family Code § 721 fiduciary duty of disclosure during dissolution proceedings. Family Code §271(a) provides authority to order attorney fees and costs in the nature of a sanction if conduct “frustrates the policy of the law to promote settlement of litigation.”
In summary, the disclosure required by California Family Code § 721 is not a topic to mess around with. The court must impose Draconian penalties and sanctions on parties who do not comply with the disclosure statutes. Hence, the best advice is to err on the side of caution. Disclose everything and anything to the other side even if you think it is unimportant. Do it early and thoroughly. What’s more, Augment and update routinely. I have seen even the smallest technicality lead a court to set aside a judgment or order stiff sanctions. So, it is simply best to play it safe and disclose it all. Withholding information, whether it is inadvertent or an attempt to be sneaky or cute, can lead to devastating results. If you are not sure if you have disclosed everything necessary, then talk to an attorney and get it right.
For more information, read:
https://weberdisputeresolution.com/california-child-support/
https://weberdisputeresolution.com/early-intervention-mediation-settlement-conference-divorce-case/
https://weberdisputeresolution.com/pre-mediation-information-packet-2/