California Marital Settlements: January 2000 Summary

Legal Developments

Modification of Spousal Support upon Termination of Child Support

In In re Marriage of Lautsbaugh (1999) 72 Cal.App.4th 1131, 85 Cal.Rptr.2d 688, the Second District Court of Appeal reversed a trial court for increasing spousal support after child support terminated, finding that as termination of child support upon graduation from high school was expected in the original order, it could not reasonably constitute a change of circumstances justifying increased spousal support. This opinion, which has been criticized by commentators, raises significant questions regarding how to structure the settlement to provide for the future needs of a supported spouse. Due to the importance of this issue, if your document provides for modifiable spousal or family support, you will automatically be prompted to review the Support Sufficient for Needs question upon loading an existing answer file.

Self-Support Admonition No Longer Mandatory in Judgments

Family Code sections 4320 and 4330 have been amended (1) to provide that the trial court is no longer required to admonish a supported spouse about the duty to become self-supporting, and (2) to clarify that the “half the length of the marriage” standard for a reasonable time to become self-supporting does not apply in marriages of 10 or more years duration.

Income for Child Support Includes Imputed Income from Non-Producing Assets

In County of Kern v. Castle (1999) 75 Cal.App.4th 1442, 89 Cal.Rptr.2d 874, a trial court's child support order was reversed because it did not take into account the father’s reduction in living expenses as a result of his having paid off his mortgage with an inheritance. In In re Marriage of Dacumos (1999) 76 Cal.App.4th 150, 90 Cal.Rptr.2d 159, the court imputed rental income to the ex-husband for child support purposes from his rental property, far in excess of the actual net rental income, based on fair market rental value and net equity. These cases affect not only the amount of child support awarded, but also the scope of the financial information relevant to present and future support.

Bankruptcy Dischargeability of College Payment Obligation

The Ninth Circuit held in In re Seixas (9th Cir. BAP, 1999) 239 B.R. 398, that a father’s obligation to pay half his children’s college education expenses was in the nature of support, and thus nondischargeable under 11 U.S.C. §523(a)(5). The question on Additional Education Support Options has been updated to allow you to include a provision in the document stating the parties’ intent that their obligation to pay for their children’s college education be dischargeable. You will automatically be prompted to review this question upon loading an existing answer file. If you also choose to make the obligation nonmodifiable, bankruptcy discharge will be noted as an exception to the nonmodifiability clause.

Income Tax Liability of “Innocent Spouses”

The California Revenue & Taxation Code was amended in 1999 to conform more closely to the recently liberalized federal standards for innocent spouse tax relief. References to IRS and California FTB Internet sites providing helpful information on federal and California tax law regarding innocent spouses have been added to the program.