COOPER-GORDON LLP
Summer 2009 Newsletter
Frieda Gordon, Esq.*Avery M. Cooper, Esq.*
(310) 829-7220 (T) (310) 829-9918 (T)
(310) 829-2490 (F) (310) 828-6371 (F)
friedag@cooper-gordon.com averyc@cooper-gordon.com
Katherine Su, Esq. Yana R
Drorit Bick Reiter, Esq. Nolan Hiett, Law Clerk
Christine Donald, Legal Assistant Julie Dicterow, Office Assistant
2530 Wilshire Blvd., Santa Monica, CA 90403, 3rd Flr.
*Certified Family Law Specialists Certified by the California State Bar Board of Legal Specialization
Welcome to the Summer 2009 note, Katherine Su, our
edition of our newsletter. senior associate, just
In this issue we want to let returned from scaling the
people know that our law wall of Half Dome in
clerk Nolan Hiett has taken a Yosemite National Park! We
leave of absence, and he is are all extremely impressed
sorely missed. We are with her prowess,
looking forward to welcoming especially as it is her
him back to work shortly, first time backpacking.
when he will commence again She says she loves
to handle much of the backpacking and can’t wait
document preparation and to go again. Avery and
client interfacing in our Frieda just returned from a
Family Law, Probate and too-brief trip to the
Estates cases. Central Coast for some sea-
side relaxation, swimming,
lounging and eating
Please return to our web site fabulous gourmet food at a
periodically to check out our hilltop bed and breakfast
new blog entries and follow in the middle of a vineyard
Frieda Gordon on Twitter. By and, of course, wine
adding these two new tasting. They made many
features, Cooper-Gordon is new friends and acquainted
able to provide up-to-the- themselves with many new
minute news with regard to wineries and wines.
our law practice in the areas
of probate, trusts, Avery and Frieda
conservatorships and family continue to be
law, as well as personal extremely busy in their
items of interest. practices, despite the
Additionally, up-to-the- downturn in the economy.
minute changes in the law are Cases become more difficult
now routine and can be found to settle and no one is
in our new section entitled happy with the results
“What’s New at Cooper- after a court trial,
Gordon,” which should provide because, regardless of the
much information to the Parties’ financial
interested public. Please let situation, there is no
us know ifyou have any
suggestions for further
improvement. On a personal
extra money to go around.
So, more than ever, it is
important to try to mediate
or collaborate on your Family
T he process of obtaining
a legal separation or
divorce is already a
highly stressful and
Law and Probate matters, or emotionally draining
at least try to negotiate a process for the Parties
settlement that will be involved. In addition to
reasonable under the adjusting to their newly
circumstances, if not single lives, there may
desirable. also be the issues of child
custody, child visitation,
F
child support, spousal
rieda and Avery both support, property division,
continue to be appointed and/or attorney’s fees and
by the Court to costs involved. Theses
represent children in issues (where applicable)
family law and probate must of course be resolved
matters as well as proposed one way or another, whether
conservatees in probate through litigation or
matters. These areas of law asettlement agreement,
are highly specialized and, before a Judgment can be
although often very difficult reached, and before the
cases, they usually provide Parties can truly move on
for a highly rewarding with their lives.
practice. Recently, Frieda had a very
favorable result in an
OPTIONS FOR SETTLEMENT WHEN THE MARITAL extremely difficult divorce
ESTATE IS UPSIDE DOWN case involving every
possible issue of custody,
B
support, domestic violence,
ecause it is of such great tracing and commingling of
universal interest to our separate and community
clients and potential assets and debts, sanctions
clients, this month we want for violating the court
to provide information about policy of encouraging
resolving cases in which the settlements and attorneys’
debt is greater than the fees and costs. Trial took
value of the assets. about 20 days over a 2½
year period.
W hile these issues are
already difficult and
complicated enough to
resolve, in today’s
California Family Code
Section 2550, Parties are
permitted to stipulate to
an unequal division of the
economic climate, many community estate. Without
couples going through the the agreement of the
legal separation or divorce Parties to an unequal
process are finding that the division of community
issue of property division is estate, the courts are
further complicated due to bound by California Family
the fact that the community Code Section 2550 to divide
estate is “upside down”. the community estate of the
This is a situation in which parties equally. In other
the total debts of the words, while the courts
community estate exceed the must award and/or divide
total value of the assets of the community assets and
the community estate. Thus, debts so as to effect an
even if the Parties were to overall equal division of
liquidate all of the the community estate,
community assets, they would Parties may agree to an
not be able to satisfy all of allocation and/or division
the community debts. To of the community assets and
resolve this increasingly debts which are not
common problem in today’s generally equal, thereby
times, Parties and/or the giving the Parties more
attorneys have been forced to freedom to devise creative
find creative solutions to ways of allocating the
resolving the problem of the community’s assets and
upside down community estate. debts to effect the most
fair division of the
T
community estate, that are
here are various options otherwise available to
available to those those Parties going through
Parties who are seeking the litigation process.
settlement of the issue
of property division which
are not otherwise available
to thoseParties who are
allowing the courts to decide
the issue. This is due to
F or example, Husband and
Wife’s only community
assets and debts are a
house which is worth
the fact that pursuant to $400,000, encumbered by a
$500,000 purchase money willing to forgive all or a
mortgage, and a bank account portion of the loan, the
with a balance of $200,000. benefit received to Wife
Husband agrees to give the from this “equal” division
house to Wife, subject to the of the community estate
mortgage secured by the would actually be greater
residence. Pursuant to than one-half. On the
California Family Code other hand, if the Parties
Section 2550, if the house were settling the issue of
and mortgage are assigned to property division, they
Wife, the Court would could agree to give the
theoretically be required to house to Wife, subject to
award $150,000 of the the mortgage, but to assign
$200,000 in the bank account a “zero” value to the home,
to Wife as well. This is and then they could simply
because, despite the fact divide the bank account
that Wife is receiving the equally. This division,
home,she is also being while technically not
assigned the mortgage on the mathematically equal, would
home which exceeds the value be an otherwise fair
of the home by $100,000. In division of the community
effect, this means that assets and debts, as it was
Wife’s net in this assigned Wife’s choice to take the
is -$100,000, while Husband’s home with the encumbrance.
net, receiving neither If she goes into default,
property or debt through this she could simply execute a
assignment, is zero. To deed in lieu of foreclosure
ensure an equal overall whereby she would transfer
division of the community all interest in the home to
property, the Court would be the lender and avoid
required to award $150,000 to foreclosure. Since the
Wife of the bank account mortgage is a purchase
funds and only $50,000 to money mortgage, the debt is
Husband, so that Wife’s net a no-recourse loan, and
would be $50,000 (despite therefore, the loan would
receiving the house as well) be satisfied, and Wifewould
while Husband’s net was also be no worse off by her
$50,000. But of course, if assumption of the debt if
Wife then short sold the home it became due (e.g., she
or the lender was otherwise defaulted.)
community estate in
T he Parties entering into exchange for waiving other
a settlement agreement rights. For example, the
could also agree to Parties could agree for one
include a provision in spouse to assume a larger
their settlement agreement portion of the community
that reserves the Court’s debt in exchange for the
jurisdiction to divide and other spouse’s waiver of
award a particular asset for the right to spousal
a certain period of time. support.
Thus, the Parties could
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divide the remainder of the he Parties could also
community estate, while agree for one or both
continuing to hold some of the Parties to pay
assets and/or debts the premiums for an
outstanding to wait for annuity, and agree to use
conditions to improve prior the proceeds of the annuity
to division. For example, to pay certain community
again using the scenario debts. If the Parties
discussed above, the Parties agree to a certain
could agree to divide the allocation of debts to each
bank account equally, Party, the Parties could
reserving jurisdiction over agree to indemnify the
the division and/or other Party for any
allocation of the house and liability arising out of
the mortgage. The Parties the responsible Party’s
could then wait for the failure to pay the
house’s value to increase community, including the
sufficiently to either “break requirement that the
even” on a sale of the home responsible Party obtain a
or even profit from it. bond for the debt amount or
that he or she maintain a
W hen the Parties are life insurance policy on
entering into a himself or herself naming
settlement agreement the other Party the
with regard to an upside beneficiary, so that in the
down community estate, the event of the responsible
Parties could also agree to Party’s death, the
an unequal division of the surviving Party would
receive funds sufficient to
satisfy the debt. answer your questions and
O ur firm has handled and provide you with a plan for
continues to handle countless achieving your desired
cases involving negative result in this regard.
asset estates as well as
complicated tracing and Next newsletter, we will
commingling issues in divorce discuss developing
situations. We would be technology (email,
happy to consult with you as facebook, twitter, blogs,
the prospective client etc.) and how it can help
regarding these types of or hurt the family law
issues and look forward to litigant.
having the opportunity to
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