Under California Family Code Section 2337, a party may obtain what is called a “Status Only Judgment,” which is a judgment that terminates the marriage only, leaving all other issues (division of property, support, custody) to be decided at a later time. The most common reason that a party seeks a status only judgment is because that party wants to remarry. In other cases, the reason is psychological: a party feels that obtaining the divorce will help them move on from the relationship. Whatever the reason may be, it is important to understand the serious consequences that stem from a status only judgment.

1.Loss of Health Care Coverage: Once you are divorced, you are no longer eligible for health care benefits as a “spouse” under your spouse’s employer-sponsored health care plan. The cost of COBRA or an individual heath care plan can be astronomical. If you have any pre-existing conditions or current illness, it may be wise to wait for all issues in the case to be resolved to lengthen the time for which you are eligible under your spouse’s plan. If your spouse demands the status only, he or she will have to agree to continue coverage at his or her own cost until the divorce is final.
2.Loss of Surviving Spouse Retirement Benefits: Similarly, once you are divorced, you are no longer considered a “surviving spouse” for purposes of surviving spouse retirement plan benefits. Accordingly, it is critical that you obtain a Qualified Domestic Relations Order preserving your rights in the retirement plan before agreeing to the status only.
3.Application of Probate Rules: Should your spouse die at any point after the status only but before the final judgment that divides the community estate, the probate code, not the family code, will apply. This could mean the loss of your rights in property that is held in the deceased party’s name alone even if it would otherwise be a community property asset by virtue of the date of purchase or other agreement between the spouses.

These are just a few of the possible consequences of a status only judgment. In recognizing these and other significant consequences, the legislature recently modified the statute governing status only judgments to provide more protection for the spouse whose rights are adversely affected. Typically, the party seeking the status only will be required to “indemnify and hold harmless” the other party; this means that should there be any adverse consequences as a result of the status only, the requesting party will be required to pay for any such losses incurred by the other party.

Suspecting her husband of 32 years was having an affair, Cynthia Shackelford of North Carolina hired a private investigator who confirmed her fear: her husband was involved in a longstanding liaison with a woman whom he’d met at a local college. Shackelford took legal action, suing her husband’s mistress for “alienation of affection.” She won, and was awarded $ 9 million in damages. Shackelford says the lawsuit wasn’t about the money; it was about sending a message.

The little-known law, which doesn’t exist in California or 42 other states, allows for aggrieved spouses to bring a claim in civil court – separate from family law proceedings – against third parties who knowingly have an affair with a married person. Generally, the plaintiff in such actions must show: 1) the marriage entailed love between the spouses in some degree; 2) the spousal love was alienated and destroyed; and 3) the defendant’s malicious conduct contributed to or caused the loss of affection.

Critics of “alienation of affection” and similar laws consider them to be archaic relics of a bygone era. Jacob Appel of Huffington Post describes them as “vestiges of legal codes that also prohibited divorce and criminalized premarital sex, … a consummate example of the sort of private controversies in which the government has no business meddling.” Likewise, some attorneys feel that such laws unnecessarily escalate family law proceedings and are inconsistent with the policies behind “no fault” divorce, which seek to minimize inquiry into the he-said-she-said interpersonal drama that is often behind the breakdown of marriage. Nevertheless, a handful of states still have “alienation of affection” laws on the books, something to make would-be-marriage-meddlers think twice.

Sources: People Magazine, Huffington Post

As Opening Day approaches, much of the buzz about the LA Dodgers focuses on the owners’ high profile divorce case. There are numerous legal issues in the case, as well as millions of dollars at stake.

While Frank and Jamie McCourt are currently litigating the issue of temporary spousal support (with Jamie requesting nearly $1,000,000 per month), the bigger issue in the case is whether the Dodgers are community property. The team was purchased during marriage, raising the presumption that it is a community property asset. However, Frank McCourt asserts that a post-marital agreement signed in 2004 transferred title of the parties’ residential properties to Jamie and made him the sole owner of the team. Jamie is seeking to invalidate the post-marital agreement. It will be interesting to see how it unfolds.

http://sports.espn.go.com/los-angeles/mlb/news/story?id=5037133&campaign=rss&source=MLBHeadlines

Recently, a Chicago father has been in the news for violating a custody order by taking his daughter to a Catholic mass. Specifically, Father converted to Judaism after marrying Mother, and allegedly agreed to raise their daughter Jewish. However, they soon separated, and Father began practicing Catholicism again and even had their daughter baptized Catholic. Thereafter, in the midst of a bitter custody battle, the court issued an order that Father could not expose his daughter to any religion other than Judaism. Father allegedly violated that order by taking his daughter to a Catholic mass and Mother filed a contempt motion; the issue is still pending.

In California, when adjudicating custody, courts cannot base a custody or visitation decision on one parent’s religious practices without a clear showing that the religious practices are detrimental to the child. Generally speaking, each parent is entitled to religious freedom with regard to his or her child and may decide what he or she believes is in the child’s best interests. In fact, addressing religious issues during a custody/visitation dispute raises serious First Amendment concerns regarding the freedom of religion, so most courts attempt to steer clear of these issues. Courts will only intervene when the parent seeking to limit the other from exposing or practicing another religion demonstrates that the belief or practice actually presents a substantial threat of harm to the child.

Wife and Husband filed for dissolution of their marriage a couple years back.  Prior to their final judgment of divorce, the couple reached an agreement for a lump sum spousal support payment.  Marital Settlement Agreement called for a payment of approximately $150,000 and the final judgment incorporating the Marital Settlement Agreement was issued by the court.

The final Judgment was entered several months later and indicated that Husband had paid the lump sum spousal support by certified check.  The final Judgment stipulated a much larger number as the total lump sum spousal support payment with the following adjustments:

• Reduction for a distribution to the wife of Husband’s half of the proceeds from the sale of their home
• An addition for personal property distribution to the wife
• An addition for the wife’s payment of a personal debt of the husband
• A reduction for Husband’s payment of joint debt
• A reduction for Husband’s assumption of one of Wife’s debts
• A reduction for a transfer of Husband’s investment account.

The couple filed a joint return for the prior year reflecting deductions for the year in which the lump sum, with adjustments, spousal support payment was made.  The IRS initially disallowed the entire amount claimed and ultimately agreed to the lump sum spousal support payment as the only one that was properly deductible; the balance of the payments redistributing the couple’s debt and assets were disallowed by the IRS.

Frequently in dissolution settlement a lump sum spousal support buyout includes a number of features that are nothing more than settlement of personal property (to include cash assets such as industrial accounts and the like) and real property and as such would not be deductible as spousal support.  It is also typical that a spousal support buyout be treated as a non taxable event such that the payor does not get the typical spousal support deduction for the amount paid and the receiving spouse does not have to pay tax as it is described as a property division or settlement.  In that case the agreement itself dictates that the payment would not be a deductible for the payor nor would it be income for the payee.