MERENBACH LAW I Santa Barbara Preeminent Lawyer
  • Home
  • About Firm
  • Divorce
  • Estate I Trusts
  • Criminal Defense
  • Other Practice Areas
  • Reviews
  • Contact Us
INTEGRITY - COMPASSION - COMPETENCE - CONFIDENTIALITY EXPERT IN COMPLEX PROPERTY DIVISION
LEADING DIVORCE ATTORNEY - SANTA BARBARA & VENTURA COUNTIES

The law firm's areas of expertise include jurisdictional divorce issues; marital property characterization, valuation, and division; spousal and child support; child custody cases; paternity matters; and prenuptial, postnuptial, and marital settlement agreements.
We are dedicated to protecting your family, your assets and your future.

Lawyer Dennis Merenbach | Top Attorney Divorce
Picture
Lawyer Dennis Merenbach | Lawyer Divorce
Lawyer Dennis Merenbach | Top Attorney Family
Picture
ATTENTION TO DETAIL - FORENSIC ACCOUNTING

The central and most important issue of dissolution is the marital property division, spousal support/alimony. Merenbach's extensive experience in civil litigation gives him the unique ability to analyze and determine the true reality relating to unreported assets and income, manipulated financial information and reoccurring patterns in how business owners understate income, assets, and related value of their closely held businesses. 

We focus on questionable transactions, sham exchanges, self dealing, particularly when dealing with a less than forthright spouse. There are always legal footprints, trails and indicators to the real assets and income. It is unfortunate that divorces and separations can lead to unethical, unprofessional and outright deceptive actions by a spouse. For example, some of the most frequent asset/income deceptions include:
 


•Sham Exchanges
•Self-Dealing
•International/Offshore Holdings
•Closely-held Businesses
•Asset Undervaluation Techniques

•Unreported Assets
•Understated Income
•Overstated Expenses
•Questionable Transactions
•Complex Partnership Structures

THE FOERNSIC ACCOUNTANT'S ROLE

Often, a person will claim to their spouse that the personal or business income is very low (or recently dropped) and that the assets are minimal; the personal financial statement submitted to the bank often shows a different picture. It may reflect income and assets that the other spouse was not aware of. One then has to conduct further analysis to determine the true reality. The most common situation related to under reporting of assets and income occurs when a dishonest spouse controls a closely held business. Ways to manipulate financial information and results are only limited by the spouse's imagination. There are, however, recurring patterns in how business owners understate income, assets, and the related value of their closely held businesses.

When dealing with a dishonest spouse, the attorney and accounting expert need to work together closely from the outset of a case. The types of data needed will often exceed information regularly obtained in mandatory disclosures and the methodologies used by the accounting expert will need to be cost effective and coordinated with the discovery process. Successfully uncovering the omissions of a dishonest spouse requires a high level of experience and tenacity by the accountant/attorney team.


 
PROPERTY APPRAISALS

Each dissolution of marriage proceeding requires (unless agreed to mutually by the parties) that the amount of community property and community obligations be equally divided. Equal division can be accomplished by dividing each particular asset between the parties or by awarding one asset to one party and an asset or assets of equal value to the other. If one party assumes the obligation for a community debt, that debt will usually be deducted from the value of assets awarded to him or her in computing the equal division requirements. A Court Judgment which requires one party to pay a particular bill will not relieve the other party of the obligation, in the event of default if it is a joint obligation.

Those assets acquired by you prior to your marriage are usually confirmed to you as your sole and separate property, free and clear of any interest of your spouse. So also are those assets you acquire after the date of separation.

Those assets accumulated by you during the course of the marriage are generally characterized as community property. Community property assets are normally divided equally between the husband and the wife. There are certain exceptions as follows: gifts, inheritances, personal injury awards.



What Are Unreported Assets?

Providing an equitable distribution of a couple's finances in a divorce is the most complex and often the most time consuming part of any dissolution. It is not unusual for a spouse to hide assets, especially if the one of the spouses earns significantly more or is tied to or owns a closely held business. Unreported assets are typically brought up in divorce proceedings, typically in high net-worth cases. These types of financial issues are highly complicated in dissolution of marriage but are very important, as it is often a very long road to discovering and proving where these assets actually are and what they are concealing. In my practice I have found that more often than not a spouse would have been hiding assets long before a formal decision to divorce has been chosen . Some of the general questions in regards to unreported assets and income are usually:

  • What types of assets could be hidden?

  • How are these assets hidden?

  • How does one go about finding them?

  • What techniques and strategies are used?

    I know from extensive experience that there are all kinds of different assets that can be hidden and various ways of concealing them. Some of the usual assets are cash, mutual funds, insurance policies, stocks, bonds, conversion of cash into personal property, concealing money through a corporate entity etc. therefore making some assets and income very difficult to find.

    If the spouse who is not running a business or handling the couple's/ family's finances has not put into place a detailed list of assets and debts with documents that show the whereabouts, discovering and finding these assets can prove to be very difficult. This is why you need a specialist - and I am. If you are filling for divorce you need an expert, I practice in every county and city in the state of California.


     
    What is Understated Income?

    Understated and unreported income on tax returns and financial statements can reduce the perceived value of a spouse's or business to the detriment of the other party in the divorce proceedings. Unreported and understated income on a spouse's tax return can mean less money for the spousal or child support. There can be quite a lot of evidence to gather, often times with my help and a forensic accountant who works closely with me. Often in high net-worth divorces, one of he spouse's may own a business and may use the corporate entity to hide their true amount of income earned. Some examples I have encountered in my years of experience include:

  • International Investments

  • Questionable transactions

  • Shame exchanges

  • Retirement accounts

  • Paying salary to non existent employees

  • Voiding checks after the divorce is final

  • Loaning money to friends and family and getting the money back after the divorce has been finalized

Your higher earning spouse has a very strong financial motive to understate income in order to decrease spousal and child support payments, the amount of money split in the divorce (in California property is split in half) The spouse that has been earning the higher income may try to transfer, hide or defer income on anticipation of a formal decision to divorce, leading to complex concealments. If the higher earning spouse owns their own company or is tied to a closely held business, the incentive to conceal grows exponentially higher and the ways of hiding the income tends to get more and more difficult to prove. This can come in the form of unreported cash taken from the business etc. Detecting these ways of hiding or deferring income requires some strategic techniques, that include looking at the couple or family's lifestyle, their net-worth at two different points in their marriage to show consistency or inconsistency, bank deposits of all kinds, any form of tax returns, and sometimes an asset locator is used to find any off-shore funds etc. I leave no stone unturned to locate assets and income. I employ the very best forensic accountants, business appraisers and expert witnesses to make sure no stone is left unturned.

 
                                                                 General Information on California Family Law

No Fault Divorce
California is a "no fault" divorce state. That means that if one spouse wants to terminate the marriage, the other spouse cannot prevent him or her from doing so. It also means that when a judge decides the underlying issues, his or her determination will not be based on who s/he believes to have caused the break-up, or, put differently, whose conduct the judge believes to have been more culpable. In other words, a California judge will not consider issues such as infidelity or undesirable behavior in the final judgment. This also means that absent certain exceptions, the marital estate, or the property that has been purchased, accumulated or improved during the marriage, will be divided equally, irrespective of fault.

Grounds for Divorce - Irreconcilable Differences, Incurable Insanity
There are two grounds for divorce in California. These are irreconcilable differences and incurable insanity. Incurable insanity is a medical condition that must be substantiated by a doctor, because this condition is difficult to prove. Hence, very few California divorces are based on incurable insanity. Accordingly, the most common ground for dissolution of marriage in California is irreconcilable differences. Therefore, since California divorces are not based on fault, a court will not inquire into the reasons why one party wants a divorce.

Residency Requirements - Six months in the state of California; Three months in a California County
In order to file for dissolution of marriage in California, a party must have resided in the State for a minimum of six (6) months, and in the same California county for a minimum of three (3) months. People who don't met this requirement, are not eligible to file for divorce in California.

Legal Separation- an alternative when residency requirements are not met
Depending upon the circumstances, a party may opt to file for legal separation until s/he meets the California residency requirement. When parties are legally separated, their property is divided and support issues are determined. Also, property acquired by either party, after they've been legally separated, will not be classified as community property. It will be the separate property of the acquiring spouse. However, the parties will continue to remain legally married until the marriage is dissolved. In other words, the marital status will not be changed. Since the marital status is not terminated, most parties prefer to wait until they meet the California residency requirements, so that they can file for dissolution of marriage. However, if a party elects to file for legal separation, the action may be converted into a dissolution action once the residency requirements are met. Legal separation is a viable option for clients who anticipate that they will have to leave the state, or the country, for an extended period of time.

Division of Assets

California is a Community Property State. That means that, absent certain exceptions, all property that is acquired or improved during marriage will be divided equally amongst the parties when the marriage is dissolved. Property that was inherited or acquired before marriage, will continue to be the separate property of the acquiring spouse. However, the community may be entitled to a credit for value enhancing improvements that were made to a to a spouses separate property while the parties were married. The rules regarding property division, and the exceptions thereto, can get complicated. Therefore, it is best to retain an attorney who is experienced in property valuation in order to guide you through this process, and to get you the best deal possible under existing law. Division of property can affect your rights in real estate, stock plans, retirement benefits, business ownership interests, and other investments. 

Settlement vs. Litigation

Divorce can be an emotionally draining time for all concerned. It is often said that people going through a divorce are good people who are at their worst. This can also be a financially draining time for the parties. Thus, it is always in everyone's best interest to try and negotiate an agreement with regards to major issues such as custody, support, and division of property. If the parties can settle most of the major issues, they can save a great deal of money and emotional energy. They also maintain control over the matter, which is usually better than leaving the final decision to an outsider, such as a judge.

In some instances, I have been able to settle all of the issues without proceeding to trial. In fact, if the parties are able to reach an agreement, the divorced can be finalized simply by filing the required paperwork. The parties may never even need to go to court. In situations where the parties are unable to reach a settlement, I use my litigation skills and experience to vigorously represent my clients at trial.


Domestic Violence
A party who has been found to have engaged in domestic violence is presumed to be an unfit parent. A party who is a victim of domestic violence should seek intervention from the police and the courts. The police department has the authority to arrest and remove the abuser, and to issue an emergency protective order. A court has the authority to issue a temporary restraining order, and to order the offending party out of the home, pending a hearing on a permanent injunction.

On the other hand, a party who believes that s/he has been wrongfully accused of domestic violence should seek the advice of an experienced litigator who can protect his or her custody rights. It is not uncommon for one parent to make false allegations of domestic violence in order to gain leverage in a family law proceeding.


Spousal Support
In addition to Child Support, a California court may order that one spouse pay support to the other, both during the dissolution proceeding in order to maintain the status quo, and after the final judgment of dissolution has been entered. The duration of court ordered spousal support will depend upon the length of the marriage. Generally, if the parties have been married for less than ten years, support will be ordered for one-half the length of the marriage. If the parties have been married for more than ten years, the court has jurisdiction to order support until the payee spouse either re-marries or dies.

Spousal support is governed by Family Code section 4320. Thus, when ordering permanent support, a judge will look at the factors set forth in that section. These include, the standard of living during marriage, the income of both parties, the length of the marriage, the age of the parties, their health, their earning capacity, education, job skills, their assets and liabilities, and the ability of the non-earner spouse to obtain the skills necessary to become self-sufficient.

As in situations involving child support, the calculation of the amount of spousal support is determined by the dissomaster, which is a computer program used by attorneys to calculate support payments based on California guidelines. However, unlike child support, the parties may agree amongst themselves to waive spousal support. The internal revenue code provides that spousal support payments are taxable as ordinary income of the payee spouse, and are deductible by the payor spouse. Payments made in the absence of court orders are deemed to be gifts. Thus, in order to take advantage of the tax benefits set forth in the code, it is important for the parties to have enforceable court orders in place.



                                                                                                                                            | Merenbach Law | 805.963.4484  |  sb@dgmlawoffice.com |


Serving Santa Barbara, Goleta, Montecito, Carpinteria, Ventura, Santa Ynez, Buellton, Lompoc, Santa Maria, San Luis Obispo, Ojai, and all of California.


This is attorney advertising. This website is designed for general information only. The information presented herein should not be construed as legal advice or as the formation of an attorney/client relationship. The only way to create an attorney/client relationship with me is by a written agreement which confirms that such a relationship has been established, and which sets forth the terms of that relationship.




Powered by Create your own unique website with customizable templates.
  • Home
  • About Firm
  • Divorce
  • Estate I Trusts
  • Criminal Defense
  • Other Practice Areas
  • Reviews
  • Contact Us