Planning For Lawyer’s Fees And Costs In Orange County Divorce Cases

Understanding and planning for the costs of  an Orange County dissolution, paternity and other family law litigation is as important as knowing your rights and responsibilities with respect to the ultimate issues of custody, visitation, support and the division of community assets and debts.  Farzad Family Law provides case strategy sessions during which we assess potential costs for clients including not only anticipated attorneys fees and court costs, but potentially expert fees, court investigator fees and other costs of litigation.

Some spouses are eligible to file for summary dissolution if married for a very short period of time with  no minor children and a community estate worth less than $5,000 (value of community assets less the amount of community debt).   The summary dissolution process involves simplified court forms that significantly reduce and or obviate the need to retain counsel (the Orange County family court called Lamoreaux Justice Center has a self-help center where litigants can obtain assistance completing summary dissolution forms).

Orange County Courts also permit litigants to apply for a waiver of court fees (the filing fee to file a Petition for Dissolution in Orange County as of January 1, 2012, is $395.00 per spouse), and often times grant those applications for litigants who earn less than full-time, minimum wage income (approximately 1,400.00 per month gross).

For those litigants whose family law case involves important issues of custody, visitation, child support, spousal support and/or large community estates, community ownership of corporate business(es) the issues of attorneys fees and costs is as central and important to effective management and resolution of the Orange County divorce or paternity case.

Courts have a duty to ensure each spouse to have access to legal representation in their divorce case.  In cases where there is a disparity in the incomes of the spouses and the lower-earning spouse can show a need for assistance in paying for his/her attorneys fees  and costs, as well as an ability of the other spouse to pay for his/her own fees as well as the fees of the other spouse, courts can order the higher-earning spouse to pay the other spouse’s attorneys fees and costs.

Spouses who find themselves without counsel have the right to apply to the court for an order for attorneys fees and costs to be able to retain an attorney.  The Orange County Family Court can also order a spouse to pay for the other spouse’s past attorneys fees and costs and for prospective, estimated attorneys fees and costs.  Courts typically will award fees and costs where appropriate for prospective attorneys fees  and costs to enable the parties to pursue their legal rights and prosecute their cases to trial and reserve the issue of past attorneys fees until trial if the case does not resolve prior thereto.

It is important to also recognize that courts have the ability to order attorneys fees and costs to be paid from community sources such as investment accounts, corporate business(es), and can order the sale of community assets to help pay for the spouses’ costs of litigation.

In addition to awarding fees and costs on a “need and ability-to-pay” basis, courts may also order one party and/or their counsel to pay attorneys fees and costs as a form of monetary sanctions in situations where the court finds that the conduct of the party and/or their attorney furthers or frustrates the policy of the law to promote settlement of litigation and, where possible, to reduce the cost of litigation by encouraging cooperation between the parties and attorneys.

Warmest Regards,

Matthew J. Sundly
FARZAD FAMILY LAW, APC
Orange County Divorce & Family Law Attorneys
1851 E. 1st Street, Suite 1150
Santa Ana, CA 92705
Telephone: (714) 937-1193
Facsimile: (714) 937-1192

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Stop Your Spouse’s Financial Abuse With A “Feldman Motion”

As if your Orange County divorce case is not stressful enough, you now have to deal with your spouse who insists on acting like a child. Sound familiar? If it does, then this article is for you and will teach you how Farzad Family Law’s years of knowledge, experience and aggressive representation in Orange County divorce and family law matters have helped its clients stop those out of control spouses in their tracks.

While there are several ways to deal with such spouses (or ex-spouses), the two most powerful tools are Family Code section 271 and something that Orange County divorce lawyers call “Feldman motions”.

The motion is named after a case called In Re Marriage of Feldman. The court in the Feldman case hit the husband with $250,000.00 in monetary sanctions and $150,000.00 on top of that for attorney’s fees because the husband failed to disclose certain assets and transactions he had entered into within his mandatory disclosure documents that every spouse must exchange in a divorce case.

The wife in that case, Elena, learned through the discovery process (depositions and written questions that require answers under oath) of her husband’s nondisclosure and filed her motion. The Court in Feldman held that the fiduciary duty obligations that the spouses owed to each other and the husband’s breach of it justified the sanctions and attorney’s fees award. This include the absolute duty to disclose to the other spouse all the material facts and information regarding the existence, characterization and valuation of assets in which the community has or may have an interest and debts for which the community may be liable. Once the Feldman Court found that nondisclosure had occurred, it didn’t need any further evidence of “injury” to Elena. The time and attorney’s fees that were expended justified the $390,000.00 punishment the Court handed out.

Family Code section 271 is another method by which a spouse who is cooperating through the divorce process can seek sanctions (punishment) against an uncooperating spouse. Family Code 271 is designed to punish a spouse when that spouse or that spouse’s attorney “frustrates the policy of the law to promote settlement of litigation and, where possible, to reduce the cost of litigation by encouraging cooperation between the parties and attorneys.” This kind of misconduct is common in family law but what is uncommon is a cooperative spouse’s lawyer actually filing the motion.

Farzad Family Law are intelligent, hard-working and aggressive Orange County divorce and family law attorneys. Put our experience to work for you and we will put a stop to your spouse’s gamesmanship and lack of cooperation.

We look forward to hearing from you. Call or email us and we will find solutions together.

Warmest Regards,

B. Robert Farzad
FARZAD FAMILY LAW, APC
Orange County Divorce & Family Law Attorneys
1851 E. 1st Street, Suite 1150
Santa Ana, CA 92705
Telephone: (714) 937-1193
Facsimile: (714) 937-1192

“Watts Charges” And “Epstein Credits”: What They Mean To The Divorce Case

Since 2008, few sectors of the economy have been hit harder than the real estate market. In fact, Orange County residents whose homes once enjoyed hundreds of thousands of dollars in equity now find themselves breaking even with the mortgage or, worse yet, significantly upside down. Add to this toxic adjustable mortgages that place California residents in a position unable to afford their homes and you get a long line of homeowners turning over the key to the bank and walking away.

But what happens in a divorce case when that once equity rich home has turned upside down?

First, there are two very important words you will have to learn: (1) Watts Charges and (2) Epstein Credits. Not exactly household words, but in a pending Orange County divorce case, these two words can mean tens of thousands of dollars to the unwitting spouse who doesn’t plan ahead or hasn’t hired experienced OC divorce lawyers like Farzad Family Law.

Watts Charges are simply “rental” charges by one spouse against the other. Let’s say Bob and Jill become separated. Bob goes and rents an apartment while Jill continues to live at the family residence with the children. Let’s further assume the house is community property but the mortgage owed is about the same as the fair market value and, after real estate commissions, it is for all practical purposes upside down. While Jill lives at the residence, she incurs “Watts” charges. That is because Bob, who owns 1/2 of that house, is technically entitled to rent that house out and enjoy one half of that rent. However, since Jill continues to live there to Bob’s exclusion, Bob cannot rent the house out. It doesn’t matter why Bob moved out. Therefore, Jill gets hit with 1/2 of the house’s rental value. Is that fair? Not always. Jill may not have other options. She may not work, have trouble finding a job and therefore cannot afford to move out. Getting an apartment big enough for her and the children may cost as much if not more than her mortgage. So, if the fair rental value of the home on a monthly basis is $3,000.00 per month, then every single month, Bob can charge Jill $1,500.00 per month and try to recover those Watts Charges at the end of his divorce case.

Jill may say, hold on Bob, I am paying the mortgage on the house. If that is true, Jill can try and offset 1/2 of the mortgage payment from the 1/2 of the Watts Charges. That 1/2 of the mortgage is called an “Epstein” Credit. Jill gets a credit for 1/2 of every mortgage payment she makes – or does she? If she is paying the mortgage from community funds (money in a community bank account that has been there during the marriage), then she really isn’t pay for it. The community is. Bye Bye Epstein Credit. Jill has to make sure the payments are from a separate property source (for example, her income earned after her separation from Bob) or she may not get any credit at all.

The typical scenario for Jill that we see a lot now days is when the house is upside down, is headed to a short sale and foreclosure and Jill doesn’t pay the mortgage payments because “I’m going to lose the house anyway, so why pay the bank?” In that circumstance, Jill may get hit with the 1/2 Watts Charges. The worst case scenario is that Bob also pays the mortgage while Jill lives there. That means Bob gets BOTH an Esptein Credit and hits Jill with the Watts Charges. It is not uncommon for a spouse to do this informally and without a court order to lull the other spouse into a false sense of security. It goes something like this: “Honey, I am going to make the mortgage payment so long as you don’t ask the court for support so you can keep living there.” Response: “That sounds fair.” What Jill doesn’t understand is that Bob’s voluntary payment of the mortgage without a court order may not protect her because the court may not deem the payment in lieu (instead of) support.

How do you protect yourself whether you are Bob or Jim? Plan ahead. Have an experienced divorce lawyer in Orange County like Farzad Family Law actually prepare a stipulated (agreed upon) court order that both of you and the Judge sign so each of you is clear who is paying what and why. Don’t assume your spouse has your best interests at heart. Whether you are Bob or Jill, without good planning, you may find yourself on the wrong end of the law.

Got questions? We are here for you day or night. Call or email us. We are ready to help.

Warmest Regards,

B. Robert Farzad
FARZAD FAMILY LAW, APC
Orange County Divorce & Family Law Attorneys
1851 E. 1st Street, Suite 1150
Santa Ana, CA 92705
Telephone: (714) 937-1193
Facsimile: (714) 937-1192

Keeping Your Family Law Lawyer’s Fees Manageable

I will bet that close to 50% of all attorney-client relationships end because the lawyer claims the client didn’t pay the fees and the client claims the lawyer overcharged him or her. Sometimes, it is unavoidable. Most of the time, it is.

The way you can manage your lawyer’s fees is ensuring 1) you and your lawyer communicate about the tasks he or she intends to perform 2) you can afford the time that will go into those tasks and 3) you understand the risks vs. benefits of the potential outcome of the tasks. How do you do that? Communication.

At Farzad Family Law, in every one of our divorce and family law cases, we ensure you are not “surprised” by your bill and you know what we are doing, why we are doing it and the potential outcomes ahead of us.

1. We evaluate your case to determine what issues in your divorce or paternity case should resolve quickly and which ones will need more work.

2. We evaluate between you and your spouse, which one of you is in a better position to pay for the lawyer’s fees. If your spouse earns more income than you do, then we may need to file a request for the court to have your spouse pay a contribution toward your lawyer’s fees from the very beginning of your Orange County divorce case. If you are the higher income earner, you and us need to do a cost vs. benefit analysis of whether putting up a fight over certain issues is wise if you have an exposure to an attorney fee request from your spouse.

3. We plan out a strategy on your case based on our evaluation and the time you and we take to discuss every issue and identify those that should settle and those that may need to go to court.

4. On the simple or straightforward issues, we make settlement offers to your spouse or spouse’s lawyer early. That way, if your spouse is unreasonable and forces those issues to family court, we can ask the court to order your spouse  to pay lawyer’s fees as a “sanction” (punishment) for being unreasonable.

5. On the complex issues or those you and your spouse have a disagreement, we create a budget for you of how much you can reasonably expect to spend. The budget isn’t a floor or a ceiling on the fees because it is hard to predict fees on any divorce or family law case, but it will give you a range of reasonable expectations. If your spouse is out of control and deliberately tries to increase the lawyer’s fees you spend, it’s time to go to court and ask the court for sanctions against him or her and put a stop to that nonsense early. Few things are worse in a divorce or paternity case than having a spouse that is on a rampage. At Farzad Family Law, we have seen and dealt with our share of them and we know how to handle them.

6. If the strategy on your case changes or needs adjustments, we talk and we plan it out. Constantly communication about your case is not only essential to being informed, it’s also important for ensuring the time and money spent is done so wisely.

7. Finally, every month, you receive a specific and itemized bill from us that shows you the time we spent on your family law case and breaks down the time by the time spent, the task performed and who performed it. I am often surprised by how many divorce and paternity clients who are represented by other lawyers don’t get a bill each month until a huge bill lands on their lap for several months of work.

To keep lawyer’s fees in your case manageable is not difficult. It just requires diligence between you and your lawyer. At Farzad Family Law, we ensure you get that diligence from day one and until the end of your case.

Call us.

We will help you through it.

B. Robert Farzad
FARZAD FAMILY LAW, APC
Orange County Divorce & Family Law Attorneys
1851 E. 1st Street, Suite 1150
Santa Ana, CA 92705
Telephone: (714) 937-1193
Facsimile: (714) 937-1192