Deferred Compensation--When after-marriage earnings are considered community property
The San Francisco Bar Association recently published an article that may have suprised some. While many people have the understanding that the date of separation is the magic date that clearly separates what is characterized as ones community property (property acquired during marriage that is is divided equally with their ex) and what is ones separate property (property acquired after date of separation that is solely theirs) many do not realize that even after-date-of-separation monies may be considered community property under some circumstances.
If a party's earnings after separation are due to, or arise from, efforts during the marriage, than those monies may be characterized as community property. The law essentially is recongnizing that ones efforts during marriage may have an affect of deferred compensation to which the other party is entitled. Although not all of us are Hollywood rising stars like Pablo Schreiber, in the article below, this caveat in the law may still have an affect on those who earn bonuses or stocks, for example. Below is the article by Ariel Sosna and Sarah Van Voorhis:
Pablo Schreiber, the newly-recognizable former star of “Orange is the New Black” due to his distinctive mustache that earned him the nickname “Pornstache,” has learned that the timing of his new-found success will also benefit his ex-wife, despite the end of their six year marriage. Currently starring in the new HBO series “The Brink,” Schreiber previously was best known for being the brother of Liev Schreiber and a character actor in shows like “The Wire.” His career took off when he landed the role of sadistic Officer Mendez in “Orange is the New Black,” for which he was nominated for an Emmy Award. Pursuant to their divorce decree, his ex-wife Jessica was granted one-half of his earnings and residuals from that hit show as well as the hit shows “Weeds” and “Law and Order: SVU.” Despite the fact that Schreiber will not be receiving all of the earnings and residuals from these shows until after the parties’ date of separation (at which time earnings are presumed separate property pursuant to Family Code §771), earnings from an artistic work are characterized based on the underlying work itself. If the artistic work is a product of the creator’s efforts during the marriage, the earnings from that work are community property. See Marriage of Worth (1987) 195 CA3d 768. In Worth, one-half of Husband’s copyrights related to trivia books that he wrote during marriage were confirmed to Wife in the divorce. When two years later, Husband sued “Trivial Pursuit” for copyright infringement and obtained a judgment, Wife claimed she was entitled to half. The Court of Appeal agreed, holding that the copyrights were obtained during the marriage and therefore the judgment from the copyright infringement was also community property. Similarly in Marriage of Zaentz (1990) 218 CA3d 154, movie producer Saul Zaentz (producer of “One Flew Over the Cuckoo’s Nest,” “Amadeus” and “The English Patient”), argued that because “Amadeus” was not completed when he and his wife separated, it was not community property. The Court of Appeal held “[w]hether or not the movie was completed and receiving income at the time of separation, the time and artistic energies expended occurred in some appreciable degree during the marriage. Husband devoted the better part of two years during the marriage working only on the production of ‘Amadeus’. Thus, the community would be entitled to at least an equitable portion of the income generated as a result thereof.” Id. at p. 164. Schreiber is obviously a talented actor who will likely have continued success. His ex-wife may have had something to do with his jump to stardom (if not his mustache), and for this, she will benefit.
Read More at blog.sfbar.org/2015/09/25/orange-might-be-the-new-green-for-actors-soon-to-be-ex-wife/ © Legal by the Bay
Headlines announcing celebrity divorces cover the gossip magazines. And this has been a popular year for divorce in Hollywood – Ben and Jennifer, Blake and Miranda, Gwen and Gavin, and Halle and Olivier, to name just a few. While such news may only be fit for mindless gossip magazines, celebrity divorces surprisingly offer some insight into divorce legal proceedings, even for those without celebrity status. For example, Barry Bonds divorce in 1994 led to a change in law on governing pre-nuptual agreements.
The divorce of Brian Austin Green, of 90210 fame, from Megan Fox brings to light a not uncommon question we grapple with in our cases. Who gets the proceeds from a personal injury award? Green and Fox were in car accident in 2014, while still married. Green now claims that he suffers from vertigo as a result of the accident and is now unable to work. This, in part, accounts for the couple’s large disparity in income, prompting Green’s request for temporary spousal support. The question arises, if Green is awarded a personal injury award as a result of the accident, who retains the proceeds? Typically, under Family Code section 2603(b), the Party who suffered the injury retains the proceeds. However, in the interest of justice, the Court may award the non-injured Party up to one-half of the award. What merits “in the interest of justice” is decided on a case by case basis. To discuss the details of your case, speak with a qualified family law attorney at the Law offices of Maria E. Crabtree.
For the full article by Ms. Sosna and Ms. Van Voohries, see http://blog.sfbar.org/2015/11/06/divorce-is-the-peach-pits-for-former-beverly-hills-90210-actor/
What is Summary Dissolution?
The Bar Association of San Francisco recently published a very interesting article which nicely sums up summary dissolution, including how to qualify and what the process entails:
Michael Welch is probably best known for his role as the high school student with a crush on lead character, Bella, in the “Twilight” series franchise. Recently, Welch made news for choosing Valentine’s Day as the day to file for divorce. However, the divorce is interesting for another reason. TMZ reported that Welch and his wife, Marissa Lefton, “jointly filed” for divorce. A joint filing means that Welch and Lefton made use of the summary dissolution option in California. This option allows couples without children, married for a short time, with few assets and few debts to simplify the divorce process.
Welch’s filing will probably be the only celebrity summary dissolution this column will ever get to present because few celebrities will qualify to use the process. The requirements for a summary dissolution are laid out right on the Judicial Council forms making the process that much simpler to do without an attorney. In order to qualify for a summary dissolution, the parties must have been married for less than five years with no children of the marriage; neither person may own any real property; neither the community property nor separate property worth cannot exceed $38,000; and the total community debt cannot be more than $6,000. Vehicles are excluded from these calculations. Finally, both parties must be willing to waive their rights to spousal support.
If the parties meet the requirements for a summary dissolution, they must jointly complete and submit the petition and judgment forms all at the same time. The court holds on to the judgment forms for the requisite six month waiting period and then returns the filed, signed forms and the parties are divorced. There is a catch. During the six month waiting period, either party just has to file one form requesting to end the summary dissolution process and the process ends putting the parties back at square one.
Welch and Lefton married in 2008 and claim they separated in 2011, for a total length of marriage of around three years. They have no children. According to TMZ, they marked the box indicating that they have no community property (which is difficult to imagine given a three year marriage and three “Twilight” movies during that time). Since the two have submitted their forms, all they have to do is wait out the six months and hope that neither one changes his or her mind during the interim.
While summary dissolution is rare, it can be a great option for couples who fall within the guidelines laid out on Judicial Council Form FL-800. For those who do not, I recommend divorcing couples contact a divorce attorney to assess how they may be able to assist in making the dissolution process as amicable and quick as possible. There are several options available to those who do not qualify for summary dissolution, including mediating agreements or proceeding by default with written agreement.
For the full article by Ms. Sosna and Ms. Van Voohries, see: http://www.sfbar.org/basf-bulletin/2013/april2013/family-law-corner-apr2013.aspx
Maria E. Crabtree, CFLS