Can I get back my down payment?

If you bought a home in San Jose, it probably came at a hefty price.  The down payment may come from the money you and your spouse saved together, the money one of you or both of you saved before you got married, or the money you or your spouse received as a gift from family. Or, the down payment may be the money you saved together plus your pre-marriage savings or gifts from family. There are a lot of scenarios. This is when a San Jose divorce lawyer deals reimbursement issues. If you dipped into the savings account you had before you got married to buy a home with your spouse, can you get your money back after your home is sold as part of your divorce?
Family Code 2640 addresses reimbursement of a separate property down payment. Family Code section 2640(a) states: “(a) “Contributions to the acquisition of property,” as used in this section, include down payments, payments for improvements, and payments that reduce the principal of a loan used to finance the purchase or improvement of the property but do not include payments of interest on the loan or payments made for maintenance, insurance,or taxation of the property.”

First, tell your San Jose divorce lawyer how much was the total down payment. Second, identify the source from which your separate funds came, whether it is the savings account you had before you got married, investments you had before you got married, sale of property you owned before you got married, or a gift from a family member. Third, give your San Jose divorce lawyer the proof that part of the down payment came from a separate source. Show bank statements from your account that you had before you got married which prove the money was transferred to make a down payment.  Or, show proof of a check or a bank transfer by a family member into your account together with proof that this money was used for a down payment. The person who gave you the money can also sign a declaration under penalty of perjury that he/she gave you a gift. However, showing bank statements is always best to trace the source of the money you used as a down payment.

The money you had in your account before marriage, the money that you got when you sold property you owned before marriage, and money you got as a gift is your separate property. If you can prove that you contributed your separate property funds toward the down payment for a community property home, you can get these funds reimbursed to you when the home is sold.  For example, you bought the home for $400,000.  The home is sold for $600,000.  The mortgage is $300,000.  Your parents gave you $50,000, which you used as a down payment. After the loan is paid off, you have $300,000 left.  You get reimbursed $50,000. The remaining $250,000 is community property that is divided 50/50.  You and your spouse get $125,000.

While reimbursement claims may seem straight forward, they are not.  There are many factors that affect whether you can make a Family Code 2640 claim.  The reimbursement claims are most common when it comes to a house in a San Jose divorce.  Family Code section 2640 can apply to other property too. If you bought a home with your spouse and used your separate property funds for a down payment, I encourage you to consult my office for a full analysis.

Written by Ekaterina Berman, a San Jose divorce and family immigration lawyer.  My goal is to provide experienced and caring representation in family law matters to every client.

Posted in Legal Tagged with:

Date of Separation Revisited

The date of separation is a critical issue in characterizing property and the length of marriage for the purposes of spousal support duration. In a previous post, I talked about In re. Marriage of Davis, a 2015 decision that defined the date of separation. Davis held that spouses are not separated if they live in the same home. Under Davis,living in different homes became a requirement for separation. California legislature passed Family Code § 70, which will be effective on January 1, 2017 to deal with the “date of separation” issue.
Family Code § 70 reads:
(a) “Date of separation” means the date that a complete and final break in the marital relationship has occurred, as evidenced by both of the following:
(1) The spouse has expressed to the other spouse his or her intent to end the marriage.
(2) The conduct of the spouse is consistent with his or her intent to end the marriage.
(b) In determining the date of separation, the court shall take into consideration all relevant evidence.
(c) It is the intent of the Legislature in enacting this section to abrogate the decisions in In re Marriage of Davis (2015) 61 Cal.4th 846 and In re Marriage of Norviel (2002) 102 Cal.App.4th 1152.
Family Code § 70 makes living in separate homes a factor in the “date of separation” analysis. Consult a San Jose divorce lawyer for more information on this topic and how your “date of separation” will play a role in your case.

For more information, take a look at
http://www.sfgate.com/news/article/New-Calif-law-says-couples-can-live-separately-8414670.php

Written by Ekaterina Berman, a San Jose divorce and family immigration lawyer. My goal is to provide caring and experienced representation in family law matters to every client. 

Posted in Legal Tagged with:

another reason why you must understand the difference between separate property and community property; a few more words about tracing

In re. Marriage of Bonvino was decided in 2015.  This case highlights the importance of tracing in property characterization. I already talked about how understanding separate property and community property can mean the difference between financial ruin and keeping your money.  The Bonvino case shows why property division is not so straight forward as you might think and how a San Jose divorce lawyer can point you in the right direction when dealing with property division.

In Bonvino, husband bought a home in 1986 in Long Beach. Husband paid off the mortgage on his Long Beach home with his separate property funds (the money he earned before he got married).  Husband got married in 1993.  In 1996, husband and wife bought a home in Westlake Village and rented out husband’s Long Beach home. Husband again used his separate property funds (the money he earned before he got married), to make a downpayment for the Westlake Village.  The title to the Westlake Village home was held in husband’s name as “married man, as his sole and separate property.”  Wife did not sign the loan documents.  Wife signed a quitclaim deed to the Westlake Village home. Wife was not added to the title during the marriage, though, according to her, husband promised to add her to the title at some point.  The mortgage payments for the Westlake Village home were made from husband’s salary earned during the marriage, which was community property. Eventually, husband sold his Long Beach home and paid off the Westlake Village home loan with the sale proceeds.

Husband and wife started the divorce in 2005.  Characterization of the Westlake Village home was an issue.  Wife argued that the Westlake Village home was “presumed” to be community property because it was purchased during marriage. Wife also argued that the quitclaim deed she signed should be set aside because husband used undue influence to make her sign it.   Husband argued that the Westlake Village home was his separate property and the community interest should be calculated based on the interest community acquired as the result of lowering the mortgage balance. This is the Moore/Marsden formula which is used to calculate community interest in separate property when community property funds are used to pay the mortgage.  The Moore/Marsden formula will be discussed in detail in a separate post as this topic deserves a post of its own.

The trial court found that the Westlake Village home was community property because it was purchased during the marriage and husband had to be reimbursed for the separate property funds that he contributed towards the purchase (Family Code section 2640).  The trial court also found that the quitclaim deed should be set aside because husband did not show that he dealt with wife in good faith. Husband appealed.  The Court of Appeal affirmed in part and reversed in part the trial court’s decision.

First, the Court of Appeal acknowledged that property acquired during marriage is presumed to be community property unless it is traceable to a separate property source.I have explained that separate property is property acquired before marriage, by gift or inheritance, or earned/accumulated during the time spouses are living separate and apart.  The downpayment for the Westlake Village home was made with husband’s separate property funds but the loan was paid with community property funds.  The Court of Appeal explained that Family Code section 2640 applies when separate property funds are used to purchase community property, not when separate property funds are used to purchase separate property.  The Court of Appeal concluded that the Westlake Village home was husband’s separate property because it was purchased with husband’s separate property funds even though it was purchased during the marriage.  Therefore, Family Code section 2640 reimbursement did not apply.  The Court of Appeal further explained that husband’s payoff of the Westlake Village loan with the money he received after selling his Long Beach home gave husband an additional separate property interest.  The trial court was left to figure out husband’s separate property interest in the Westlake Village home and the community property interest based on the Moore/Marsden formula.

Here are the points to keep in mind: 1. The characterization of funds used to purchase property play an important role in characterizing the property as separate or community; 2. The presumption that property was purchased during marriage is community property can be overcome by tracing the source of the purchase funds to a separate property source; 3. When community funds are used to pay down the loan on a separate property home, the correct way to determine community property interest is the Moore/Marsden formula; and 4. Family Code section 2640 reimbursement is appropriate when separate property funds  were used to purchase community property.  In cases like the Bonvino case, the advice of a San Jose divorce lawyer becomes important to help you protect your interests.

Written by Ekaterina Berman, a San Jose divorce and family immigration lawyer. My goal is to provide caring and experienced representation in family law matters to every client.

Posted in Legal Tagged with:

why understanding the difference between separate property and community property can mean the difference between a favorable outcome and financial ruin

Husband bought his home in San Jose in 1993. He bought it together with his parents. Husband and parents used their money for the down payment. Husband and parents were on title to the home. Husband got married in 2001. His San Jose home significantly grew in value from 1993 to 2001. Husband refinanced the loan a few months after he got married and added wife to the loan and to the title. The title to the home was held by husband, wife, and husband’s parents as of 2001. Husband and wife separated in 2013. Between 2001 and 2013, the house grew in value even more. Husband thought that because wife was now on title, she was entitled to half of the equity that was accumulated from 1993 (date of purchase) until 2013 (date of separation). However, with the sound advice of a San Jose divorce lawyer, husband was able to keep his home and negotiate a fair buy-out.

The following principles are important to understand when dealing with “mixed property”—property that is part “separate” and part “community.” California Family Code section 760 reads: “Except as otherwise provided by statute, all property, real or personal, wherever situated, acquired by a married person during the marriage while domiciled in this state is community property.” California Family Code section 770 reads: “(a) Separate property of a married person includes all of the following: (1) All property owned by the person before marriage; (2) All property acquired by the person after marriage by gift, bequest, devise, or descent; (3) The rents, issues, and profits of the property described in this section. (b) A married person may, without the consent of the person’s spouse, convey the person’s separate property.”

Another family code section that came into play here was Family Code section 2640, which reads: “(a) Contributions to the acquisition of property,” as used in this section, include downpayments, payments for improvements, and payments that reduce the principal of a loan used to finance the purchase or improvement of the property but do not include payments of interest on the loan or payments made for maintenance, insurance, or taxation of the property;(b) In the division of the community estate under this division, unless a party has made a written waiver of the right to reimbursement or has signed a writing that has the effect of a waiver, the party shall be reimbursed for the party’s contributions to the acquisition of property of the community property estate to the extent the party traces the contributions to a separate property source. The amount reimbursed shall be without interest or adjustment for change in monetary values and may not exceed the net value of the property at the time of the division;(c) A party shall be reimbursed for the party’s separate property contributions to the acquisition of property of the other spouse’s separate property estate during the marriage, unless there has been a transmutation in writing pursuant to Chapter 5 (commencing with Section 850) of Part 2 of Division 4, or a written waiver of the right to reimbursement. The amount reimbursed shall be without interest or adjustment for change in monetary values and may not exceed the net value of the property at the time of the division.” Family Code section 2640 is very important when we are dealing with “mixed” property.

Now, let’s apply these principles to this case. Husband purchased the home before he got married. Husband made a down payment with the money he earned before marriage. The down payment was husband’s separate property. Part of the equity husband acquired in the home from 1993 until 2001 was his separate property. To figure out the husband’s separate property interest, we looked up the property values in the loan documents related to the purchase in 1993 and the refinance in 2001. The home was appraised at the time of purchase and at the time of the refinance, and, luckily, the appraisals were not lost. This also speaks to the importance of keeping all loan documents when you buy or refinance. Next, we had to figure out the present value of the home, which we did by ordering an appraisal. Wife’s interest was determined as follows. First, husband’s separate property claim under section 2640 was calculated. Second, the equity of the property was determined by subtracting the mortgage balance from the appraised value. Third, the total equity was divided by half since husband and wife were 50% owners and husband’s parents were 50% owners. From the equity that husband and wife owned, we subtracted husband’s section 2640 claim. The result was the “community” equity. Husband and wife were entitled to half of the community equity. This is how husband was able to negotiate a buy-out and keep his home. When you are dealing with “mixed” property, advice of a San Jose divorce lawyer who is experienced in dealing with these issues is critical. This is how understanding the difference between separate property and community property, with the help of a San Jose divorce lawyer, can mean the difference between a financial ruin and a favorable result.

It would have been a good idea for husband and wife to sign a prenuptial agreement before husband added wife to the title. But, in this case, it did not happen. Getting a prenuptial agreement is a very personal matter, and the decision to enter into one is driven by personal and cultural values. In this case, husband would have sold his home and paid wife $150,000 had it not been for advice of a San Jose divorce lawyer and a forensic accountant who traced husband’s downpayment to a separate property source and calculated husband’s Family Code section 2640 separate property reimbursement claim. Because husband could prove his section 2640 separate property reimbursement claim, wife received $60,000 as opposed to half of the total equity. This case is an example when hiring an expert was necessary and justified in terms of cost and the outcome achieved.

If you are going through a divorce and you owned real estate before you got married, it is important that you consult with a San Jose divorce lawyer about property division. Understanding separate property reimbursement claims is critical to keeping your property and to your success.

Written by Ekaterina Berman, a San Jose divorce and family immigration lawyer. My goal is to provide caring and experienced representation in family law matters to every client. 

Posted in Legal Tagged with:

we are filing for divorce, but we are still living together. what is our date of separation? 

With the cost of living in San Jose and the Bay Area, many people cannot afford to move out and stay under the same roof while going through divorce. In San Jose in particular, it is the high rent that keeps couples who are going through divorce under the same roof until their assets and debts are divided and each gets enough “capital” to move out and start over. Other factors that keep San Jose divorcing couples under the same roof is anxiety over new and not so comfortable living arrangements as well as stability for the children. Inevitably, the question comes up: when is our date of separation if we are still living in the same home?

California Family Code section 771(a) reads: “The earnings and accumulations of a spouse and the minor children living with, or in the custody of, the spouse while living separate and apart from the other spouse, are the separate property of the spouse.”  In re. Marriage of Davis, a case that was decided in 2015, the California Supreme Court held that Family Code section 771(a) requires spouses to be living in separate homes for their earnings to be considered separate property.  Under Davis,the date as of which the spouse’s earnings and accumulations will be characterized as separate property is the date one spouse establishes a separate home.

​The Davis case established a rule which makes establishment of an individual residence a requirement for “separation” under Family Code section 771(a).  Unfortunately, this ruling leaves many people who going through a divorce in San Jose in a difficult situation.  On one hand, moving out may not be affordable. On the other hand, leaving the home is necessary to cut off the community property characterization of income and savings as well as shortening the length of the marriage.

Written by Ekaterina Berman, a San San Jose divorce and family immigration lawyer. My goal is to provide experienced and caring representation in family law matters to every client.

Posted in Legal Tagged with:

How to prepare a successful fiancé visa petition

If you are a U.S. citizen planning to marry a foreign national, a fiancé visa (K-1 visa) is the way to get your fiancé to the U.S.  It is important to note that a fiancé visa is only available to a fiancé of a U.S. citizen. If you are a permanent resident, you cannot bring your fiancé to the U.S. on a fiancé visa. A fiancé visa is not an immigrant visa. It is a visa that your fiancé gets for the purpose of coming to the U.S. in order to get married. You and your fiancé must marry within 90 days of his/her arrival in the U.S. After you marry, you must file an application to adjust your fiance’s status to the status of a permanent resident and a work permit. Your fiancé may work during the time his/her application to adjust status is pending.

In order to apply for a fiancé visa, you and your fiancé must show that you have a good faith relationship and that you plan to get married. A good faith relationship can be shown by photographs of you together taken over the time you have known each other, your correspondence, evidence of trips you took together, phone calls to each other, money transfers, affidavits of friends and family who know you as a couple, etc. Your intent to marry can be shown by a sworn statement by both of you that you intent to marry each other within 90 days of your fiance’s arrival in the U.S. Wedding plans can also be shown by proof of wedding arrangements, such as venue reservations, catering contracts, wedding invitations, or an appointment at the local government office if you don’t wish to have a wedding celebration.

You and your fiancé must have met each other in person 2 years within filing of the visa petition. Proof of your meeting must be presented to USCIS, such as photos of you together and evidence of the trip(s) you took to meet each other. Sometimes, it is not possible to meet in person because of cultural or health reasons. If that is your case, you must show proof to USCIS as to why you and your fiancé did not fulfill the meeting requirement.

Another issue to keep in mind is compliance with the International Broker Regulation Act (IMBRA). This law requires background checks for all marriage visa sponsors and background checks for U.S. citizens who use marriage brokerage services that provide dating services between U.S. citizens/permanent residents and foreign nationals for a fee.  An “international marriage broker” is defined as an entity that charges fees for providing matchmaking services between U.S. citizens/permanent residents and foreign nationals. Many people meet over websites and a website can be considered an “international marriage broker” if it falls within the definition. If you have used the services of an “international marriage broker,” it is important to consult an immigration lawyer in order to understand what documentation you must submit to USCIS.

Upon approval of a fiancé visa petition, the file gets transferred to the appropriate consulate of the country where your fiancé will have his/her visa interview. To prepare for the visa interview, your fiancé will have to undergo a medical exam and submit various documents to the consulate at the time of the interview. One of these documents will be an affidavit of support that you have to sign and send over to your fiancé. The affidavit of support would show the interviewing official that you, as the petitioner, have sufficient financial resources to support your fiancé while he/she is in the U.S. on fiancé visa.

​The most frequently asked question is how long it will take to process a fiancé visa. The process does take several months as all required information to prepare the petition must be gathered, all foreign language documents must be translated, and USCIS processing times must be taken into account as well as the time it takes to schedule a medical exam and a visa interview. Because of backlogs and other factors that are not within our control, we cannot predict how long it will take to process a visa petition from start to finish. The advantage of the fiancé visa is that you do not have to travel to a foreign country to get married, your fiancé comes and stays if you get married, and the fiancé visa process takes less time than consular processing for a marriage-based green card.

Written by Ekaterina Berman, a San Jose divorce and family immigration lawyer.  My goal is to provide experienced and caring representation in family law matters to every client.

Posted in Legal Tagged with:

Common Issues in a San Jose Divorce

The San Jose area has experienced tremendous growth in the last 20 years. Knowing how to deal with complex property division issues means the difference between a successful out come and compromising your rights. Here is what commonly comes up in a San Jose divorce:

  • Property characterization
  • Valuation of a business
  • Division of a pension plan
  • Division of investment accounts
  • Division of stock options
  • Division of property located in a foreign country
  • Determining income available for support
  • Credits and reimbursements
  • Undisclosed assets

I will explain how a San Jose divorce lawyer addresses each of the issues listed in this post. A San Jose divorce lawyer can help you explain how to divide your property and protect your interests.

Written by Ekaterina Berman, a San Jose divorce and family immigration lawyer.  My goal is to provide experienced and caring representation in family law matters to every client. 

Posted in Legal Tagged with:

Keeping your Dignity

What is keeping your dignity? Here are the things I tell clients when we talk about keeping dignity.

  • The course your divorce takes depends on you. If your spouse wants nothing else but to push your buttons, you have to keep your dignity. If you react every time, you will give your spouse exactly what he/she wants. There are also opposing lawyers who push buttons. The main thing to remember is not to respond to the high-conflict people’s behavior the way they want you to respond.​
  • Your divorce lawyer should negotiate for you, but you decide whether to settle or not.  Your willingness to negotiate doesn’t mean that you are letting the other party take advantage of you. Write down things that are important to you and rank them.  Give in on things that you don’t really care about.  When you negotiate and make a compromise, you don’t get everything you want and neither does your spouse.  You can achieve way more by good-faith negotiation than good-faith litigation.
  • I have already talked about the importance of comfort level whew hiring a San Jose divorce lawyer. Each lawyer operates a certain way and each lawyer has a personality. Make sure that you and your lawyer can work together. When it comes to your case, make sure you and your lawyer are on the same page. If you want an amicable cost-effective divorce, hiring a bulldog is not a way to go.
  • Control your emotions. No matter how you feel about your spouse, the opposing counsel, or the process, your emotions should not get in the way. Find a safe place to talk about how you feel. Also, don’t forget that there is life outside of the divorce court. Do things you enjoy. Spend time with friends and family. Tell people who are important to you that you love them.
  • Don’t blame your divorce lawyer if you don’t get what your friends or family got when they divorced. Friends and family love to talk about what divorce was like for them. They may be a good motive behind talking to you about their experiences. Or, they may do this to make themselves feel better that they got a better result than you (or so they think). Yes, your friend may be paying less in child support, but there are many reasons for that. You are probably tired of reading on lawyers’ websites that every case is different. So, since you already know that, don’t compare yourself to others.
  • I also talked about being reasonable. If someone in the room is not reasonable, we want to make sure that it is the other side and the opposing counsel.

​Written by Ekaterina Berman, a San Jose divorce and family immigration lawyer. My goal is to provide experienced and caring representation in family law matters to every client. 

Posted in Legal Tagged with:

Divorce and Bankruptcy

Many people going through divorce use credit cards to finance their living expenses.  This is how questions about what to do with the mounting debt come up.  People have different feelings about bankruptcy.  However, depending on your situation, filing for bankruptcy may be the solution you need.  The idea behind bankruptcy is giving someone a second chance.  Bankruptcy may even improve your credit rating.
Consumers can file for Chapter 7 or Chapter 13 bankruptcy.  Chapter 7 bankruptcy is “debt elimination.”  If you qualify for Chapter 7 bankruptcy, your non-exempt assets, if you have any, are sold to pay your unsecured creditors and your debts are discharged.  Chapter 13 bankruptcy is “debt restructuring.”  You propose a repayment plan that the court approves.  Your debts are discharged after you complete your plan.  Spousal support and child support cannot be discharged in bankruptcy.  Whether Chapter 7 or Chapter 13 bankruptcy is right for you depends on many factors.

There are good reasons to file for bankruptcy before divorce.  If you and your spouse can file together, it eliminates the need to file twice and to pay for 2 petitions.  Elimination of debt before you divorce means you have one less issue to negotiate.  Also, if you and your spouse eliminate your debts together, you will not be responsible for your spouse’s debts.  Even though your marital settlement agreement states that your spouse is responsible for his/her own debts, this provision will not protect you from creditors.  Your marital settlement agreement does not bind your creditors.  If you are struggling with the bills because you and your spouse separated or the bills piled up during the divorce, talk to a San Jose divorce lawyer who can point you in the right direction.

Written by Ekaterina Berman, a San Jose divorce and family immigration lawyer. My goal is to provide experienced and caring representation in family law matters to every client.

Posted in Legal Tagged with:

Things you should know about Asset Division

It seems straight forward that you would divide everything you have in half when you divorce.  But, sometimes, things may not be that simple.  Common issues in a San Jose divorce are figuring out how to divide a house, a businesses, a pension plan, stock options, and a property located in a foreign country.  You already know that California is a community property state. But, California also recognizes separate property interests.   Understanding the difference between community property and separate property can mean the difference between making smart decisions and a financial ruin.
Here are some examples of when community property and separate property interests come into play.  You and your spouse buy a house together.  Your parents give you money and you use it for the down payment.  Can you get this money reimbursed to you?  You bought your house before you got married.  Your spouse moved in and you paid the mortgage from your earnings.  The house also grew in value. Does your spouse get anything, and if so, how much?  You bought your house before you got married and, a few years later, you put your spouse on title.  Will your house now be divided 50/50?  You and your spouse bought a house (or acquired an asset) together with other family members.  How will this asset be divided?  You had an account before you got married and you started putting money into that account during the marriage. How will the money in your account be divided?

Because each family’s assets are different, a San Jose asset division lawyer can tell you how the California law applies to your case.  A San Jose asset division lawyer can ensure that your interests are protected.  If you have questions about asset division and wish to set up a meeting, call my office at (408) 483-3012 or get in touch by telling me about your issue through the online contact form.

Written by Ekaterina Berman, a San Jose divorce and family immigration lawyer. My goal is to provide experienced and caring representation in family law matters to every client.

Posted in Legal Tagged with: