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Attorney Briefcase Seminar: 2008

This was a seminar on October 27, 2008 presented by Garrett Dailey of Attorney Briefcase at the Holiday Inn in San Diego, California. Below are the attorney notes in outline format.

A. Agenda for Attorney for Family Residence Issues
  1. Exclusive use and occupancy
  2. Characterization
  3. Separate property interest in community property residence
  4. Community property interest in separate property residence
  5. Separate property interest in separate property residence
  6. Transmutation
  7. Fiduciary duty
  8. Valuation
  9. Watts
  10. Epstein
  11. Equalizing the division
  12. Taxability of gain
  13. Effect of current economic situation
B. Initial Interview Considerations
  1. Prenuptials
  2. Postnuptials
  3. Quit Claim deeds
  4. Date of acquisition of property
  5. Name property acquired in
  6. Purchase price
  7. Source of down payment
  8. Was spouse added or deleted from title
  9. Refinances
  10. Improvements
  11. Family trusts
  12. Current title
  13. Opinion of value
  14. Currency of payments
  15. Home equity line of credit
  16. Default
C. Title Report
  1. Order title report for each property with title history
  2. Subpoena copy of loan application for refinances if income is an issue in the case
  3. Consider filing request for special notice under Code of Civil Procedure 2924B
  4. Consider filing lis pendens
D. Petition or Response
  1. List description of real property in declaration
  2. Can file lis pendens if need to secure interest if listed
E. Exclusive Use
  1. Ex parte will need police report or other objective documentation
  2. Order shortening time for order to show cause most likely if assault of threat of assault and must be physical or emotional harm
  3. Order to show cause must allege physical or emotional harm
  4. Need to declare where “out” spouse will live if granted
F. Characterization of Residence
  1. Pre 1984: title controls but oral agreement and testimony can be considered
  2. Post 1984: Family law code 2581: joint title presumed community property and can only be overcome by a writing or title, no mistake/oral/implied agreements permitted
G. Resulting Trusts
  1. One party pays the down payment and monthly payments
  2. Title is taken in name of another [normally relative]
  3. Presumption in resulting trust in favor of party making down payment and payments
  4. Ruelas case
H. Separate Property Interest in community property residence
  1. Pre 1984: no reimbursement without agreement to the contrary
  2. Post 1984: Family law code 2640: reimbursement unless written waiver which specifically states that the intent is a gift and acknowledges the right and waives
  3. What is reimbursable: down payment [yes]; construction payments [yes]; building permit fees [yes]; payment of CP debt to qualify for loan [yes]; improvements [yes]; separate property gifts [yes]; portion of debt that is forgiven after separate property payments made [no]; fair market value of residence on date it goes into joint names [yes]; appreciation [no]; rental value [no]
I. Community Property contributions to separate property residence
  1. Pre title appreciation is separate property
  2. Moore: allocation of appreciation between community property and separate property when community property makes payment on separate property residence
  3. Marsden: pre marital appreciation is assigned 100% to separate property
  4. Formula: how much of purchase price did community property pay; what percentage of purchase price did community property pay; how much appreciation during marriage; multiply community property percentage times marital appreciation; add how much of purchase price community property paid and number from the multiplication of the community property percentage time the marital appreciation.
  5. Three programs currently in use to determine this: Support Tax Equitable Divider; CPDGold and Propertizer.
  6. Issues which arise in a Moore/Marsden application: starting date; date of purchase; date of purchase; date of valuation; date of trial; rental value; home equity loan paydown; premarital refinance; postmarital refinance; what was character of new loan; what is effect of any quitclaim deed and others.
  7. Refinances during marriage: 99% will be considered a community property loan
J. Separate Property contributions to separate property residence
  1. Family law code section 2640 treats this the same as separate property contributions to a community property residence
K. Transmutations
  1. Family law code section 721 is a presumption with is always followed
  2. Haines: when an interspousal transaction advantages one spouse, the law presumes such transactions to have been induced by undue influence
  3. Lange: a fiduciary obtains an advantage if his position is improved, he obtains a favorable advantage or otherwise gains, benefits or profits
  4. Delaney: wife had the burden of proof to prove that the transmutation of husband’s separate property to community property was not undue influence
  5. Breach of fiduciary factors: who benefitted; did both benefit; were the terms clear; evidence of duress; free and voluntary; adequate disclosure; full knowledge of the facts; was effect of transaction understood; did they agree no unfair advantage; representation by counsel
  6. Wills: no transmutation per Family law code section 853(a)
  7. Trusts: may or may not be transmutation and conflicting cases: do not use word “transmutation” and no conditional transmutations; “community property agreement” or “marital property agreement” so that no transmutation
L. Residence Appraisers
  1. Fee appraisers: make sure have initials “MAI” or “SRA” after name
M. Watts & Epstein
  1. Watts: charge of use of the community property pendente lite
  2. Elements of Watts: one party excluded from using; fair rental value of asset; costs associated with maintaining the property and difference is credit
  3. Courts do not favor Watts credit and place other party on notice if requesting
  4. Epstein: reimbursement for separate property [post separation income 95%+] payment for a community property debt post date of separation
  5. The repayment is presumed and Court’s must grant if meet burden of proof
  6. Many exceptions to Epstein and most common one is one for payments “in the nature of support
N. Dividing the Family Residence
  1. One half of all net proceeds to each party
  2. Duke order: deferred sale [Family Law Code section 3800-3810]
  3. Refinance in name alone
  4. Loan from family
  5. Promissory Note
O. Income Tax Issues
  1. May exclude up to $500,000 gain on joint return
  2. May exclude up to $250,000 gain on separate return
  3. Must have been principal place of residence for either or both for 2 of last 5 years
  4. Spouse excluded from living there is considered for exclusion of tax gain
  5. If house is near foreclosure, try the following steps: call lender and try to renegotiate loan; agree to list house for sale ASAP; seek a court order on shortened time; consider a short sale
Client Reviews
Dear Roy, I would like to thank you and all team members as well as office staff for helping me defend in this case. It has been a difficult time for me during the last couple of weeks, and now because of this success result, I am able to move forward with my new chapter of life, even a little late at this age!!! Again with much appreciation, I wish you all to continue to do the same with a big heart as it was with me, in helping those who are in need of your professional services. W.
Thank you for your time and energy on this case, you took so much of the worry away from me! I appreciate all of your help. I will use and recommend you to other in the future. T.S.
I want to take this time to thank you and your staff for an outstanding job with my case to terminate spousal, you are an excellent attorney Roy, and your staff is very professional and considerate to my questions and concerns of my case. Thank you very much again. T.Y.
I wanted to say how much I appreciate your help and advice in regards to my name change. Your assistance during this time has been invaluable. Thank you again. M.J.