Archive for the ‘Legal’ Category

Working Through Financial Stress in Marriage & Divorce

Money: A Path to Trouble or Peace

One of the common reasons cited by couples for divorce is financial stress.  They indicate things like too much debt, not enough income, someone not carrying their financial weight, overload of expectations not being met, and more.  Each one or any combination build towards financial stress in the relationship.

The fact is that financial matters may not be solved in divorce.  They may be compounded.  Instead of one household, there are now two.  The debts are typically an obligation of both people.  Taxes are also going to follow both if the returns were jointly filed.  Houses, when sold, may be used to satisfy debts, but then where do people go to rent?

Looking at housing, if there are children, it may be desirable for them to remain in their current school.  This requires a rental for at least one person to remain in the area.  In addition, there is the need for the other parent to have a place large enough to provide a suitable environment for the children.  The result is a more expensive living situation.

How to Handle Money

In marriage or divorce, the first step is to work through the details.  This starts with a picture of the couple’s current financial situation.  Awareness is a major key to moving forward.  Both sides need to understand what is available and how they arrived at that point.  If people are not aware of how they got here, the possibility of correcting the situation is diminished.  This is true regardless of their relationship choices.

It is interesting that in divorce, when one side files, there is a restraining order placed on the major financial accounts and assets of the marriage.  Changes in beneficiaries, withdrawals of significant amounts of money, and termination of insurance contracts are barred.  The only way a change occurs is with mutual consent.  The one exception is to cover the obligations of the community.  But even that needs to be disclosed and monitored in proximity to the expense.

This is actually a good pattern for couples to learn, married or divorced – sharing information and making decisions together.

War and the Choice for Financial Ruin

The use of legal counsel is always advisable in divorce.  The issue does not have to do with obtaining legal counsel.  The problems arise with how the attorney is used.

When couples refuse to cooperate, hiring an attorney may be an expression of frustration and a method of taking back perceived power and control.  When the divorce turns to a litigated fight, both sides retain attorneys.  This leads to a typical retainer ranging from $3,000 to $10,000 each.  If the divorce is perceived to be more complex, that retainer will most likely be much larger.

Money roll and judges hammer on wooden tableIn litigated situations, it becomes a legal version of “telephone.”  Attorney A talks with spouse A.  Attorney A will then contact attorney B (if attorney B had not already contacted attorney A).  Attorney B talks with spouse B.  They develop a response.  Attorney B responds to attorney A who then confers with spouse A.

At this level of conflict, couples are encouraged to avoid speaking with each other.  The exceptions are in the required situations like an exchanging of the children.  Direct communication is cut – except through legal counsel.

At $350 to $450 an hour, plus staff fees and out-of-pocket costs, the legal bills add up quickly.  It does not take long before the retainer is drained, and a new retainer is called for.

From our experience, the typical litigated divorce can easily run up $30,000 to $50,000 in legal fees.  If there are contested issues around children and custody, the cost increases exponentially.  The court will require evaluations and possibly a court-appointed attorney for the children.  All those funds are lost from the estate – money that most couples cannot afford spending.

Peaceful Path Forward

The alternative is to plan out a path forward.  In marriage, this is reached by having a budget both agree to follow and a simple “policy” of two signatures required for every expense.  The two-signature policy fosters mutual agreement and ongoing financial awareness.

The practical approach for couples in any situation includes a monthly review of fixed expenses.  These are the largest bills which include the mortgage, car payment (if there is one), credit cards, utilities and any other costs to the family.  This will also include a review of any credit cards, their usage, the outstanding balances, and the payments.

The next part is the periodic monthly expenses.  There are “forgotten” periodic expenses like car insurance and homeowner coverage.  There are “surprise” expenses like medical deductibles, car, and house repairs.  Families also take vacations, have birthdays, anniversaries, and other expenses that “happen,” but may not be planned for.

Putting together a budget for these expenses allows couples to set aside funds each month.  These funds are moved into the “untouchable” savings account for use when needed.

What is odd to couples in divorce, is that all this information needs to be planned out and disclosed in their financial reports.  The very thing that drove the couple apart is the issue where they need to cooperate most.  Then at the end, it requires two signatures to sign off on the financial disclosures – including the income and expense reports.

These reports are required by courts.  But when litigating attorneys are involved, this can become an expensive process with each side issuing requests for financial information.  If it is not forthcoming, the request turns into a subpoena – the legal demand for information.  If the material is suspected to be incorrect, this escalates to hiring experts to do forensic evaluations – more costs.

Our observations through the years are that education is one key to successful negotiations.  In marriage or divorce it is important for both spouses to have a full understanding of their mutual financial world.  This helps both sides to know what is on the table and whether an offer is acceptable or not.

The Lessons

In marriage or divorce, cooperation is essential to economize and move forward.  If the marriage is so far gone that a couple will not work on the relationship, then it is best to cut those losses, set up an independent financial program and take care of the business of divorce.  But do not enter this with the illusion that life will go on as it was in the past.  Cutbacks and sacrifice are needed to make divorce or marriage work.

With divorce, most cases create a mutual agreement by the couple to keep the household running, and the children cared for.  That sounds impossible to some.  In situations when the other person does not cooperate, there are ways to move the process forward.  The court may be used to garnish wages and to seek access to assets independent of the other person’s cooperation.

In California, there are laws under the family code that allow access to assets for support and maintenance of the “marital standard of living.”  This does not mean that the same standard a person was accustomed to will be maintained.  But it does provide methods to seek funding for legal counsel and support payments while the matter is sorted out.

In California, this starts with a court filing asking for temporary support.  If the request for temporary support is refused by the other side, then an assignment of wages is an option.  This process is available when cooperation is absent.

While demands can be issued and a level of support obtained through the courts, this course of action is expensive.  The spouse that is compelled to pay will have their employer involved through a legal garnishment of wages.  The cost to both sides for legal counsel to maneuver this maze leads to more wasted assets.  Working it out before resorting to this measure makes better financial sense.

A Core Question

If couples are headed in the direction of litigation, we have a question for them to consider together.  Is a fight worth the financial and emotional cost?  We also explore the hidden costs when children are involved.  If children are aware of the divorce, they will most likely be aware of their change in circumstance.  They may also be aware of mom or dad not paying for their support.  That is a devastating message to a child.

Closing Comments

Our mission is to educate people about their relationship options, including divorce.  As couples approach a crossroad in their relationship, they may believe divorce is their only path.  The fact is that a divorce is one option among many.  It is one point on a continuum.  We encourage couples to take One Last Look™ before deciding.  Here is a place to explore options based on the couple’s own facts and circumstances.  They can see how the process might play out in the real world of separation and divorce.  Investing about four hours to save thousands in legal fees and heartbreak is worth consideration.


Armand D’Alo & Robbin D’Alo

Note:  Links in this article were active as of September 2018.

Is There Still A Way to Preserve the Alimony Deduction?

What Are The Options?

The first reaction to this question is “No!”  But let’s dig a bit deeper into what options are open to the couple.

Do You Have to Be Divorced by December 31, 2018?

Possibly not.  Under code § 71, alimony and separate maintenance payments are prescribed as being deductible if, “such payment is received by (or on behalf of) a spouse under a divorce or separation instrument.”  It further states that “The term “divorce or separation instrument” means—

(A) a decree of divorce or separate maintenance or a written instrument incident to such a decree,

(B) a written separation agreement, or

(C) a decree (not described in subparagraph (A)) requiring a spouse to make payments for the support or maintenance of the other spouse.

Based on this part of the code, while there is no precedence for the matter, it appears that a couple need only have a separation agreement in place on December 31, 2018, for their support payments to be deductible.  The interpretation of the tax reform rules appears to indicate that regardless of the repeal of the deduction for alimony paid and corresponding inclusion in income by the recipient (effective for tax years beginning in 2019), that alimony paid under a separation agreement entered into prior to the effective date is generally grandfathered.

If there are modifications, such as the separation becoming a divorce, it is important that the provision is stated in such a way as to be part of the original agreement, incorporating those provisions of support into the final agreement.  If the modification expressly provides that the amendments made by this provision apply to such modifications, it should stand the scrutiny of IRS review.

What About After December 31, 2018?

The tax code provides some options that are not as valuable but still useful tools.  For each of these, check with a tax specialist to verify if it is an option in your situation.

Head of Household:  If there are more that one child in the marriage, it is possible to arrange for joint custody with each parent having primary custody of one child.  You may choose Head of Household filing status if you lived apart from your spouse, meet certain tests, and are considered unmarried on the last day of the year (Code Sec. 2(b); Reg. Sec. 1.2-2(b)).

You can elect Head of Household filing status even if you are not divorced or legally separated.  If you qualify as head of household (rather than as married filing separately), your tax rate may be lower, the earned income credit and certain other credits may be available.

Property Taxes:  When couples divorce, the house is generally the largest asset they hold.  The payment of taxes on that property are still deductible is the combined income, property and sales taxes do not exceed $10,000.  This can be a tax benefit to the higher income taxpayer since the limitation on itemized deductions is no longer a factor.

Interest on Mortgages:  Another deduction may be the interest paid on the property.  It is possible for an interested person, the people on the mortgage, to assume the responsibility for the debt and make the mortgage payments.  This can entitle that paying party to tax the deduction for the mortgage interest.

These are a few options that can help in managing the cash flow burdens for those going through a divorce after December 31, 2018.

For further information, contact us at  We will be happy to assist you in evaluating your financial options.


Armand & Robbin D’Alo

UPDATE – 12-15-2017: Divorce: Alimony Gets a Short Reprieve … Then the Ax

New Information From the Tax Conference Committee

Money roll and judges hammer on wooden tableAccording to the bill coming out of the conference committee, it appears the agreements that predate January 1, 2019 will remain deductible to the paying spouse and treated as income to the recipient spouse.

After December 31, 2018, alimony would no longer be deductible by the payor for new decrees. Payments would be excluded from the recipient’s income.

The consequences:

If divorce is being considered in states like California, people need to push their agreements through.


Armand & Robbin D’Alo

Tax Reform: A Business Boom for Family Law Attorneys

Under the House version of tax reform, there is a provision to repeal § 215 – Alimony payments.  That means that the payor will no longer be able to deduct their support payments.  It also means that the recipient will not be taxed on the income.  That sounds great for the recipient!  But the payor is not going to be happy.

Looking at the background, a lot of settlements revolve around the payor spouse being in a higher tax bracket than the recipient.  The net result is that by getting a deduction for the payment, there is a shift of income from the higher bracket to a lower bracket.  This is attractive to the payor since they get to reduce their overall taxable income.  In fact for those in high-tax states, the combined rate of 49% or more means that the payor spouse is making the support payments at a 49% discount.  This also leads couples to negotiate family support, or unallocated support payments, that only increases the tax effect.  This saves even more through tax dollars.

Now, if that adjustment is taken away, those dollars paid will be hard after-tax dollars costing the paying spouse a lot in taxes.  Since taxes were part of the original equation, it is easy to see a flood of petitions to the family courts asking for adjustments in support based on the new math.  The argument will be that the recipient will have a non-taxable flow of income.  Therefore, the payor spouse should be entitled to a discount based on the recipient’s tax bill, had they paid income tax on those funds.  There will be a spread in taxes between the paying spouse and the recipient, and that will be an area of contention and negotiation.

Sadly, the matter tends to move against public policy.  Family courts had an interest in keeping people off welfare and other public support.  This change challenges that notion making it more difficult for families to separate, especially when they are struggling with hard financial conditions.

A Big Cost That Jeopardizes Support Levels

Here is a simple example for illustration.  If the paying spouse is in a 39.6% bracket and the receiving spouse is in the 25% bracket, the net tax savings in the transfer of income is $$8,760.  That is a tax saving of $23,760 for the payor and a $15,000 bill for the recipient.  When that advantage is taken away, not only is the $60,000 transferred, the tax of $23,760 needs to be paid by the paying spouse.  That is a hard cost and total payment of $83,760 from the paying spouse to the recipient (the alimony plus the tax due).

With this much at stake, it is not hard to imagine that a lot of agreements will be altered and petitions will be filed to reduce the amount of support being paid.

Comment:  We wonder if the people behind the scenes that wrote this bill were IRS representatives.  For years they have worked to chisel away at family support (unallocated support) and other forms of transfer payments.  It seems that this bill is targeting those elements precisely with the intent to eliminate all tax aspects of these transfer payments.  The Senate version leaves § 215 untouched.  We will have to wait and see what they do in their committees.

Tax Relief During and After Divorce

One area of negotiations focuses on how to file a tax return during the divorce.  The discussion also focuses on how to handle refunds or tax liabilities on those filed returns.

Refunds are potentially simple.  This is done by allocating the refund to separate bank accounts.  The allocation is based on many factors negotiated by the couple.  The actual allocation is accomplished by filing form 8888, Allocation of Refund, with the tax return.  This directs dollars to the separate accounts, as indicated in the form.

When taxes are due, there may be other issues.  If there is significant lack of trust on the part of one spouse, there may be fear that taxes due will be imposed on an innocent spouse.  Further, if the return is filed as a joint return, both people become responsible for the tax that is due.  A family court order or agreement in a settlement cannot change or assign the responsibility for the taxes that are owed.  Here are some options to consider.

Innocent or Injured Spouse

These are two concepts that focus on very similar issues but carry different results.

Injured Spouse:  The tax liability for your spouse remains, but the injured person receives the tax refund to which he/she was entitled based on his/her income and tax payments.  The injured person is not held liable for the other person’s misconduct.

Innocent spouse:  The IRS releases the innocent person in whole or in part from any responsibility to pay the assessed tax along with fines and penalties levied on the other spouse for filing a fraudulent return.

Innocent Spouse Relief is found in IRC Sec. 6015(b) (form 8875).  We note that it is hard to prove a person was truly innocent.  The burden of proof is on the person making the request.  To win on this, the innocent spouse must show:

  • The understatement was caused by erroneous information provided by the other spouse.
  • The innocent person had no knowledge of the errors and probably could not have known.
  • The innocent person did not derive benefit from the errors (he/she did not live in a luxury house, had house workers, owned a boat, took vacations, etc.).
  • Finally, it is found that it would be unfair to hold the person responsible based on the evidence.

A questionnaire (IRS form 12508) is used to help determine the facts in each case.  This form is provided to the other spouse, and there will most likely be contact between the two parties during this process.  That aspect can become a problem when accusations are being made about either side.

For details on how the IRS looks at this, you can check out the Internal Revenue Manual for 25.15.18 Innocent Spouse Relief Processing Procedures.

Injured Spouse Relief is found in the Internal Revenue Manual at 25.18.5.  As noted, this is a request that a non-liable spouse be entitled to receive his/her own refund even on jointly filed return.  The injured spouse claim is made with form 8379 Injured Spouse Claim and Allocation.  There are some catches to these provisions for community property states.  Since income and taxes are part of the community, the allocation may not be as favorable as the petitioning spouse may desire.  The IRS, under the Revenue Rules, will look to state tax and family law for guidance in these matters.  Given that different states handle the matter differently, there are separate rulings for various community states.

Injured Spouse Relief Community Property Rules:

  • Rul. 2004-71 for Arizona and Wisconsin
  • Rul. 2004-72 for California, Idaho, and Louisiana
  • Rul. 2004-73 for Nevada, New Mexico, and Washington
  • Rul. 2004-74 for Texas

Separation of Liability

The next option is a request for Separation of Liability under the Internal Revenue Code (IRC Sec. 6015(c)).  Under this process, the tax liability is acknowledged, but it is divided into two accounts.  This is the ultimate way to divide a valid tax liability and make sure the IRS will not come after one spouse for the entire amount due.  This course of action only applies to amounts that are currently unpaid.  According to this statute, the IRS cannot give refunds of amounts already paid in.

This action applies to under-statement of liability on joint returns where one spouse is deceased, or there is a legal separation, a divorce, or the couple has lived apart for the entire 12 months prior to filing Form 8857.

Equitable Relief

Along with the innocent spouse relief request and separation of liability, there is also an option for equitable relief.  This option is available when it is found that the imposition of the tax on an innocent person would be unconscionable.  This includes relief from a tax liability that flows from community income.

Section 4.03(2) of Rev. Proc. 2013-34 provides seven factors the IRS uses to guide a determination based on facts and circumstances.  This is not an exclusive list, and the IRS will look at other factors, positive and negative, to make a final ruling.

  1. Marital Status: Is the requesting spouse no longer married to the non-requesting spouse;
  2. Economic Hardship: What, if any, economic hardship will the requesting spouse suffer if relief is not granted [4.03(2)(b)];
  3. Knowledge or Reason to Know: Under section 6015(f), did the requesting spouse not know or have any reason to know that there was an understatement or deficiency on the joint income tax return.  There are several elements under this provision that are worth exploring in more depth and are beyond the scope of this article.  But the core question is if the non-requesting spouse maintained or restricted access to information in such a way as to disadvantage the requesting spouse and to keep that person uninformed as to the understatement or deficiency in an understatement case.  This also looks at the knowledge or reasons that the requesting spouse would not or could not pay the tax liability within a reasonable period of time after filing the return in an underpayment case;
  4. Legal Obligations: Was there a settlement that either spouse has a legal obligation to pay the liability, such as under a divorce decree or other legally binding agreement;
  5. Enrichment: Was there a situation in which the requesting spouse received a significant benefit from the unpaid tax liability or understatement;
  6. Good-Faith Effort: Did the requesting spouse make a good-faith effort to comply with the income tax laws in the years following the tax year or years to which the request for relief relates; and
  7. Health Issues: What is the requesting spouse’s mental or physical health.

There is no clear test that the IRS will use to evaluate relief claims.  There is not a single factor or mixture of factors that will necessarily determine the scope of relief, if any.  These will vary in each instance.

The final request, one that we hope will not apply to our readers, is relief based on abuse.  When a person is under duress and intimidation, they cannot be viewed as capable of entering into a contract.  The result is that they should be freed from the obligation and consequences they were forced to undertake.

This is a brief summary of options which are offered as information.  It is important to have a qualified tax professional review the facts and circumstances of a situation to see how this might apply and which options have the best likelihood of success.

Armand D’Alo and Robbin D’Alo

Family Court Does Not Supercede Federal Law

The basis for support in California state law is found in Family Code Section 9 which is Support. As of this writing, it encompasses Code sections 3500-5700.905 and it changes whenever the state legislature deems it necessary.

California Code Section 4320 covers the elements a court can take into consideration when ordering support. In our view, every couple, family mediator and collaborative group team should put these on the table for consideration. Even though it may be a non-litigated settlement. Each couple should be working under an informed concept of support.

Money roll and judges hammer on wooden table

Section 4336 of the family code notes that “Except on written agreement of the parties to the contrary or a court order terminating spousal support, the court retains jurisdiction indefinitely in a proceeding for dissolution of marriage or for legal separation of the parties where the marriage is of long duration.” This simply is intended to allow the court to carry jurisdiction, influence or authority over support, including petitions for changes to support whether it is spousal or child support.

This sets the “table” for support on the state level. However, the IRS has their own set of rules about support and the deductibility of such payments from one person to a former spouse. This is located in the U.S. Tax Code under Section 71 – Alimony and separate maintenance payments.

The rules look complex, but are relatively straight forward. We have put in bold the sections that make up the core of these rules:

  • (a) General rule: Gross income includes amounts received as alimony or separate maintenance payments.
  • (b) Alimony or separate maintenance payments defined: For purposes of this section—
    • (1) In general: The term “alimony or separate maintenance payment” means any payment in cash if—
      • (A) such payment is received by (or on behalf of) a spouse under a divorce or separation instrument,
      • (B) the divorce or separation instrument does not designate such payment as a payment which is not includible in gross income under this section and not allowable as a deduction under section 215,
      • (C) in the case of an individual legally separated from his spouse under a decree of divorce or of separate maintenance, the payee spouse and the payor spouse are not members of the same household at the time such payment is made, and
      • (D) there is no liability to make any such payment for any period after the death of the payee spouse and there is no liability to make any payment (in cash or property) as a substitute for such payments after the death of the payee spouse.
    • (2) Divorce or separation instrument: The term “divorce or separation instrument” means—
      • (A) a decree of divorce or separate maintenance or a written instrument incident to such a decree,
      • (B) a written separation agreement, or
      • (C) a decree (not described in subparagraph (A)) requiring a spouse to make payments for the support or maintenance of the other spouse.

Wooden Letterpress Type Block

In summary, the alimony requirements are that:

  • The spouses don’t file a joint return with each other;
  • The payment is in cash (including checks or money orders) and not an exchange or property or services;
  • The payment is to or for a spouse or a former spouse made under a divorce or separation instrument;
  • While oddly worded, the divorce or separation instrument does not designate the payment as not being alimony;
  • The spouses aren’t members of the same household when the payment is made (This requirement applies only if the spouses are legally separated under a decree of divorce or of separate maintenance.);
  • There’s no liability to make the payment (in cash or property) after the death of the recipient spouse; and
  • The payment isn’t treated as child support or a property settlement.

The wording of the divorce agreement needs to be clear on these matters of the payments may not be deductible to the person making the payment.


Armand and Robbin D’Alo

Divorce Mediation 101: Impact of Laws on Divorce

The way the rules are set tend to drive the way people behave. That is very apparent within divorce. The simplest way to state how this works is with the struggle over money and resources. Like in any war, there is an objective that one side of the relationship sees as worthy of the battle.

When looking at divorce and resources, we note that the rate of divorce in the United States is on a decline, and has been for some time. Part of this has to do with a decrease in the number of marriages happening in the first place. People are waiting until later in life to marry, and thus having children later. Further, people are bringing more property to the marriage, which creates more stability and security, leading to a better climate for the relationship.

Wealth (resources) is a significant factor in divorce. Those who suffer from financial problems often seek divorce as a way to get away from the economic suffering. It is odd, given that divorce can accelerate the path into poverty for women and children of divorce, that financial trouble is a factor cited by so many for breaking up. The fight that can follow, as well as the efforts to enforce court orders, only increases the cost, aggravation, and pain of separation.

Looking across the Atlantic to Scandinavian countries, we see a different picture. The divorce rate within these societies is very high. Sweden, for example, saw over 25,100 divorces in 2013 alone. That was their highest figure since 1975. Similar to the changes in laws in America to the no-fault divorce concept, in 1974 the law in Sweden changed to allow divorces to be sped up. Since that change was enacted, the divorce rate rose each year for over 40 years. The divorce process had become so easy that, as one author notes, “more than 100 couples who tied the knot in 2013 were divorced by the end of the same year.”

A review of factors the led to the higher rates found that morality, or any form of a degraded society, was not the reason behind the changes. The factor that weighed in as the most important—that led to about 47% of all marriages in Sweden ending in divorce—was economic security. Based on information by researcher Glenn Sandström, “The expansion of opportunities to make do without a spouse, the fairer distribution of wealth among social classes, and the development of a welfare state have all contributed to higher divorce rates.” Sandström further notes that, “Individualistic and secular values have flourished and gained legitimacy… periods, where divorce rates rose have coincided almost entirely with times of major progress in the welfare state.”

The result is that an economy that supports the people in a welfare state leads to a lack of need for people to stay in relationships. Therefore, other than the emotional aspect, divorce becomes easy and a non-stressful event.

That does not exist in the United States, and therefore, couples find that they need to “pay” for the divorce between themselves. In so many cases, the path of that fight leads to court. The judge is confronted with the facts and existing laws. The judge then needs to craft a solution based on that law and/or existing cases with similar facts in question. One recent case focusing on the date of separation illustrates this process in California.

In 2015, the case of the Marriage of Davis (2015) , the California Supreme Court ruled that for a couple to be declared as separate and living apart, they must have physically separated and must be in two different locations. This ruling defied the standard practice of family law professionals for couples to simply agree on a date of separation. The ruling from the Supreme Court of California removed any judicial discretion in cases where couples may be negotiating on setting a date of separation that meets their requirements for their unique situation.

Following this ruling, the California Legislature was called into action and Senate Bill SB 1255 was enacted and signed into law by Governor Jerry Brown. This law overrode the Supreme Court and offered clarification to the law in that it allows the couple to consider many reasons for living under the same roof while going through a divorce. These include economic and family reasons, among others.

Why is the date of separation so important? It sets the date at which earnings and asset acquisition are assigned to the individual as separate from the marital assets. The impact is that financial assets acquired or earned from that point forward are no longer part of the marital property.

The fight over money led to a court action which, in turn, led to a legislature enacting a law. That is the basic method under which the family code evolved. Since we do not live in a welfare society, a large part of the law is about money. When couples are not financially minded and only think of the “legal rights,” they often make mistakes—not realizing the consequences of those choices on a financial level.


Armand and Robbin D’Alo

Do I Need An Attorney?

This question is almost universal with those going through a divorce. They are overwhelmed with the situation, the change in life and the fact that this is the ultimate in negotiations that anyone might face. The couple wants to get this right. So what is the answer to this important aspect? The true answer is that it depends…and here is why.

Most people can relate to the process of renovating a house. You have seen it on cable or the web and have probably been entertained by what people have to go through. Those headed into the renovation have a couple options:

Do it yourself. You act as your own contractor and do the work yourself. You do the architectural plans, get the necessary approvals, pull the needed permits, perform the demolition, do the work, have the inspections completed, do the clean-up and approve the final results. That is all done yourself. Any errors or delays along the way are yours alone and you are responsible.

Get some help. You could once again act as the general contractor and sub out what you cannot do to specialists. You then complete your part of the tasks that you are capable of doing. In this situation you most likely will also need to be aware of the permit issues. You will need to know if the subcontractors are doing the work up to standards and you will need to coordinate that work with anyone else that you might hire (as well as your own work) to make sure that you meet deadlines. In this case any inspection you need will most likely have to be called for at the completion of each stage which will add time and, if there are loans in place, costs to the project.

Get a general contractor. Under this method you hire a person that is capable of coordinating the entire process, assumes responsibility for completion to code and to your standards. S/he will also most likely be an educator in that they will help you understand the steps in the process with the intent of helping you to get exactly what you want. S/he will also point out flaws or problems with any aspect of the construction that might present particular problems and / or may have alternative solutions. The expertise of the general contractor might end up saving money overall or at least reducing the level of frustration and time you might expend in the process. They will act as your guide through the morass of the construction world.

Divorce, from our experience and view, is a similar process….

Do it yourself. You will need to understand the forms, the requirements of which form to file and why it is used. You might be able to use the free services offered by the court. But they do not take on any responsibility for the outcome. The forms, if not completed correctly may either be returned or, if correct for the court but incorrect per your desired result, leave you with an unintended consequence.

Get some help. You can use a service to file your paperwork. Once again, while they can do the mechanical movement and completion of paper, you need to know if it is what you need to arrive at your intended result. They cannot provide any legal advice. They can say what a form is but they cannot explain how it will specifically work in your situation. This is particularly true of the marital settlement agreement. The service cannot change an outcome if something is filed based on your instructions and it is not an outcome that you desired.

Hire an attorney (Your Divorce General Contractor). Here you get someone that knows the language of the courts, s/he will be able to advise you about results and can assure you that you are getting exactly what you are seeking. One attorney cannot represent both parties as clients. But one attorney can advise a couple about the process and draft the legal marital settlement agreement based on the instructions of the couple. The attorney cannot advise you about the issues as your personal legal counsel (that is a conflict of interest) but they can act as that “general contractor” that can get you through the process as efficiently as possible.

Many couples will use a mediator in addition to the attorney to prepare the couple for the actual work with filing of documents and preparation of the Marriage Settlement Understanding (MSU) that is used to generate the final Marital Settlement Agreement (MSA). Mediators tend to be less expensive than an attorney while the couple hashes through the main details for the MSA. While they cannot provide legal advice, even if they are an attorney, mediators are knowledgeable as to the process and can assist to economize limited resources.

Back to the original question…. Do I need an attorney? That depends on how much you know about the process, the courts and the law as it pertains to you. It also depends on whether you can look at a form or document and be able to discern if it is correct or not.

Our recommendation is that you consider using counsel to assist you in this important matter of the compliance filing. It does cost more, but given the potential consequences down the road, it is worth your consideration.

Trying To Punish Someone During Your Divorce Process Only Hurts You Financially

Divorce hurts enough no matter what the reason. Perhaps there is a violation of intimate trust, abuse or straight abandonment. In any case, that hurt should not be turned towards your legal proceedings.

In California – and most states – courts do not look at fault in divorce. There is no punishment and the court will not find someone “guilty.” Too often, when discussions turn bad, the accusations start flying in both directions which only increases the desire for retribution.

A good professional will not let you do this. But some attorneys may allow you to vent through court pleadings. This runs up a bill, irritates the judge and only leads to a far more expensive process.

Are there times when accusations are warranted? Yes. But these are rare and typically extraordinary in nature. Hiding assets is one of the most sensitive and can carry the most punitive of punishments.

One famous case is the marriage of Denise and Thomas Rossi. Married for 25 years, Denise started their divorce proceedings to the surprise of Thomas. She was in a hurry.

Her haste appeared to be based on her having won $1.3 million in the California Lottery, which was kept secret from Thomas. That act violated state asset disclosure laws. As a result the judge awarded 100% of those lottery winnings to Thomas. Superior Court Judge Richard Denner determined that her actions were based on intent to commit fraud. She had admitted in a deposition that she wanted to keep the winnings away from her husband. As further punishment “…the family court could have imposed attorney’s fees on Denise as an additional penalty under Family Code section 1101, subdivision (h). It chose not to do so. It was within its discretion in making this order.”

Most cases do not involve such activities and most cases will be settled based on an attempt to be equitable in the outcome. Nothing is done to “punish” someone for being a “bad” person.

As noted, efforts to “punish” or to get every penny gives legal counsel the position of having to charge far more for time and effort in preparing and filing motions with the court. Then there is the attorney’s appearance at court and the response to any action at court. The result is a high-cost divorce and less money for living expenses.

The better option is to look at divorce as the dissolution of partnership – a venture that may have gone wrong. That is probably not the emotional reality of the interaction. But from a dollars-and-cents point of view, that is the better option for a more economical outcome.

Remember, for every advantage that one person may try to gain in the divorce, there is $350+ per hour cost of legal fees, not including office overhead and court costs, that both must pay.

If you want to read about this case, you can go to the following link:


By: Armand & Robbin D’Alo

Is There A Best Option for Divorce?

This question is posed by most people that we talk to. The answer is simply no. Each process has its own qualities that are useful in some context. We will try to explain a bit about each.

Do-It-Yourself: Divorce sounds simple, and for those in short marriages and no children, it may just be as easy as saying goodbye. There are services like LegalZoom and help desks at the county courthouse that can assist in completing the paperwork.

The problem here is that if no one seeks legal advice it may be possible for one or the other to later come back and argue that they did not understand what they were doing. What if there were was a house owned by one person before marriage? Then marital funds were used to maintain or to add to it. How do you sort this out? How much goes to which person? The other question is if that amount used for the property is even large enough to argue over. By the time you hire attorneys and go through the motions, a couple thousand dollars can be easily spent. In the mediation and collaborative processes things like this are identified and you become empowered to make an informed choice.

Mediation: Here you have a neutral person knowledgeable of the issues and process. The couple comes in and is responsible for having an open conversation about what they want. The mediator is there to offer information and maintain a balance of power in the room – not letting one person dominate the other.

In mediation it is a good idea to have a consulting attorney that is friendly to the mediation process. That person can offer additional perspective that can help you reach an agreement that is informed and can help protect everyone’s rights in the process.

It is also helpful to have a good therapist that helps you remain resourceful. While the mediator can help with the process in the room, a therapist will help with the process of life beyond that room.

Collaborative: Similar to mediation, this process involves a team of 3 to 6 or 7 professionals. Each spouse has an attorney. There is a neutral financial person in the room and there may be a mental health coach for each spouse and one for the children. There may be others used for specific evaluations in the process, as needed.

In collaboration the entire team agrees that they will never go to court. The attorneys are trained to help the clients actively negotiate an agreement. The financial neutral is responsible to be a repository for all information and to prepare materials to illustrate options. In this process, the professional team supports the couple and family with active participation while allowing the couple to control the process. It is like have a set of skilled mechanics in the room while you orchestrate their work (but they offer guidance along the way).

Litigation: Here is the adversarial process. When people refuse to talk or even refuse to acknowledge that anything is going on, a divorce attorney can file the appropriate petitions with the court to move the process along. When agreement cannot be reached, the judge hearing the matter will make a ruling and that will be the result the couple needs to live by.

There is no correct method. We tend to favor mediation and collaborative work because couples retain the most control over their process while being supported by professionals.


By Armand & Robbin D’Alo