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Our cover article, titled "When Divorces Go Grey," recently published in the Valley Lawyer magazine, beginning on page 30, is available here: PDF

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In situations involving custodial arrangements between two separated parents, one parent may create a dilemma by the need to relocate outside their current area.  This will ultimately impact the custody arrangement as the non-relocating parent will likely be unable to regularly visit with the child once they leave the area.  In California, this situation is known as the “move away” case.  This can be a highly volatile and stressful process requiring complex analysis of the current custodial arrangement and the impacts of the pending relocation. 

There are of course several scenarios that may require unique treatment for the court.  In In re Marriage of Burgess (1996) 13 Cal. 4th 25, the court created the presumption that if custody is not shared, then the physical custodian may relocate unless the objecting party shows that the child would suffer a detriment in terms of his or her rights and/or welfare.  In addition, this detriment must be substantial given the circumstances.  For example, where one parent is the custodial parent and the noncustodial parent rarely puts forth any effort to see the child but seeks to object to the relocation, it will be hard to demonstrate that the child will suffer a substantial detriment in the event of relocation.  Therefore, it is important to consult a family law attorney who knows which factual findings are key to a judge’s decision. 

In the alternative, when custody is shared between both parents and each party maintains frequent and continuous contact, the court will apply a different standard and the move-away request will result in a de novo custody review.  Instead of requiring the non-relocating parent to articulate reasons why the move would be detrimental to the child, the court will presume such a move is substantial detriment to the child.  The court will go through a series of procedural safeguards instilled by California court precedent that will aim to provide a specific solution to the dilemma of relocation.  The relevant factors the court will consider are, among others, the health, safety, and welfare of the children, the nature and amount of contact with both parents, and the other parent. 

Ultimately what the court will seek to determine is what is best for the child.  In the above scenarios, you can see that there is not always an easy solution in move-away cases.  This is something California courts have struggled with due to the high amount of variation in each case.  When relocation is an issue between separated parents, it is highly important to consult a family law attorney as early as possible so as to provide an adequate solution to this potentially complex problem.

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The elephant in the room that drives many divorces is money.  It is something each party is reluctant to admit, but nonetheless is highly integral to the divorce process.  During the divorce proceedings, the court may employ a tracing method to determine what property belongs to what party.  The main point of this tracing is to determine what property is community property and what property is separate property. California, as a community property state, affords different treatment to property acquired during marriage than to property acquired before marriage or through various means such as gifts or inheritances. 

In order to equitably divide community property, such property must be properly valued.  However, in situations where the proceeds of sale will be distributed to each party, valuation is not required.  Unlike cash which is easily valued by a simple press of the button at the ATM, many sources of potential community property are tougher to value.  Legal scholars and practitioners have discussed the valuation process for a host of specific assets.  Ranging from closely held businesses to oriental rugs, the proper valuation of a specific asset can be quite unique. Following the proper valuation methodology is therefore critical to ensuring an equitable outcome of the proceedings.

The value the court will set will be the highest price on the date of valuation that the item would be sold for under normal market conditions.  In re Marriage of Cream (1993) 13 CA 4th 81, 89 16 CR 2d 575.  Under Family Code § 2552(a), the goal of the court will be to have the asset valued “as near as practicable” to the trial as it can be.  Since this is a question of fact, both parties will attempt to value the asset using their own findings or by utilizing an appraiser.  However, the court may, in its discretion, employ experts to do fact-finding on its own behalf.  The most commonly accepted valuation methods include the actual sales price, comparable sales under the same or similar circumstances, offers by third parties, agreements made in anticipation of the future sale of such assets, and tax assessments. 

One important tool for the valuation process may be the utilization of a forensic accountant.  The goal of the forensic accountant is to review cash flow, documents, and other materials related to the assets to determine the true value of each asset.  The family law attorney should have working relationships with trusted and experienced forensic accountants who are able to properly determine the true value of assets at issue. Whether it is a 401(k) or a shopping center, having an experienced forensic accountant for complex valuations can ensure that an inequitable distribution is not made by the family law court.

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Los Angeles is considered the home of the entertainment industries.  Unlike the movies, life does not always have a fairy-tale ending.  Divorces involving members of the entertainment community can be highly publicized affairs.  With the rising number of divorces involving members of the Hollywood community, having a reliable family law attorney who is well-versed in the ways of “the biz” is a necessary tool to protect your interests. 

One important consideration in divorces involving members of the entertainment community is the tracing of community and separate property.  California, as a community property state, affords different treatment to property acquired during marriage than property acquired before marriage or through various means such as gifts or inheritances.  Property popular among members of the entertainment community may include pensions from the various entertainment guilds, corporate ownership, intellectual property (copyrights, trademarks, etc.), and other property interests. 

The valuation of entertainment industry assets can be an important process.  These assets are heavily influenced by a constantly evolving market as well as accounting practices that are always at issue.  An option for the right to turn a screenplay into a motion picture will not be worth the same as absolute ownership of those rights.  Furthermore, such assets are usually impacted by third parties who have a stake in the assets themselves. For example, a creditor may hold a security interest in a motion picture’s underlying copyright for having helped finance the production of the work.  Valuing the worth of the property at issue as well as determining any competing ownership is highly integral to the “tracing” process of the community. 

A growing concern in the entertainment industry is the concept of “celebrity goodwill.”  When one’s worth is impacted by their public image, courts and scholars are forced to ask whether this is an intangible asset or just a mere factor in the valuation process.  California has yet to follow in the footsteps of New Jersey and New York to make celebrity goodwill a divisible asset.[1]  Whether it is Tiger Woods, Mel Gibson, or Arnold Schwarzenegger, it is evident that a celebrity’s public persona impacts their ability to earn.  Given that celebrity divorces are likely to be resolved via settlement, it is unlikely celebrity goodwill will receive a large amount of attention by California courts.  However, at the bargaining table, it offers the family law attorney another bargaining chip in negotiating a settlement.

Tracing community and separate property is only one part of the process.  Depending on the popularity of the parties in the proceedings, handling publicity during the proceedings is also a concern.  In addition, the normal issues that one may encounter during a divorce are also likely to come up.  These include spousal and child support, custody arrangements, and confidentiality agreements.  The family law attorney must seek to protect the interests of his or her clients while at the same time ensuring their privacy during this difficult time.

[1]Laurence J. Cutler & Robin C. Bogan, “Celebrity Goodwill – The Nature of the Beast:  From Horses to Hedge Funds, Tips on Valuing Businesses.”  GP Solo – Law Trends & News, Vol 1, No. 2.  (February 2005) available at:  http://www.americanbar.org/newsletter/publications/law_trends_news_practice_area_e_newsletter_home/celebritygoodwill.html