Recently in Identification of Property Category

March 13, 2014

California Man Who Hid Assets in Divorce Gets 17-Year Sentence

handcuff-449966-m.jpgDivorce has the potential to bring out the worst in people. There are many significant issues to resolve before the parties can go their separate ways, such as child custody and support, division of property and spousal support. When the soon-to-be ex-spouses cannot see eye to eye on these all-important matters, disputes can arise and the negotiations can become more and more contentious. In an effort to minimize the animosity between the spouses and to move the process along efficiently and smoothly, it is important to consult with an experienced family law attorney from the San Diego area.

One of the most important issues to resolve is the division of marital property. In order to do that, parties must be able to find and identify marital property, subject to division. Fortunately, state law provides some guidance in this area. California is a "community property" state, which means that a marriage renders two people -- one legal "community." In effect, property that the couple acquires during marriage is "community property." In some cases, deceptive spouses attempt to conceal or hide joint assets in an effort to avoid division of the assets in divorce. Another tactic is to file a fraudulent bankruptcy petition.

In a recent case reported in the U-T San Diego, a man was sentenced to 17 years for his efforts to conceal millions of dollars in assets in divorce and bankruptcy. According to the news reports, the man told his wife that he would file for bankruptcy so that she would get "nothing, including child support." The couple split up in 1999. Between 1999 and 2005, the man reportedly concealed millions of dollars in assets by placing them in other people's names. In 2005, he filed for bankruptcy protection. In 2008, a California court of appeal ruled on the divorce case and said in the ruling that it was the husband's "unstated but apparent view that if he can conceal his finances long enough he will not have to support his children."

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February 13, 2014

California Court of Appeals Sets Forth General Law Regarding Division of Marital Property

mortgage-and-money-6-966070-m.jpgCalifornia is a community property state. This means that marital property -- items acquired during the marriage -- will typically be divided equally upon divorce. A significant part of most divorce proceedings is identifying (and then valuing) marital property. But there are many complicated factors to take into account, such as whether one spouse or another separately holds the title to any of the property accrued during the marriage. To protect and maximize your rights in a divorce proceeding, it is essential that you contact an experienced family law attorney who is well versed in the local laws and the San Diego court rules and procedures.

In a recent California court case, the wife appealed from a judgment in her marital dissolution action. She argued that the trial court erred by identifying certain property as belonging solely and separately to her husband, including real estate as well as rights and benefits in a pension plan. The couple's first marriage together lasted from 1974 to 1986 when they divorced. They chose to remarry in 1990 but later separated in 2007, and are now going through their second divorce. At various points throughout these proceedings, the parties were represented by counsel, but as of the date of trial, both spouses were representing themselves.

Before, and during their marriage, the parties acquired various real properties in California, Nevada and Mississippi. At some point after the separation, the court approved the parties' stipulation that they each would retain temporary possession of certain personal property that they would not sell or otherwise dispose of until the court issued an order. The trial lasted two days and each spouse presented various items of evidence. The court ultimately handed down several findings, identifying certain real properties as belonging separately and solely to each of the spouses, respectively. The court also awarded each party the furniture and furnishings currently in his or her possession.

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December 19, 2013

Secretion of Community Property Assets Through Pension Plan Not Protected by Federal Law (ERISA)

dollar-in-a-box-1-1086817-s.jpgUnder California law, any property that a couple accumulates during the marriage is considered "community property." Likewise, any debt acquired becomes "community debt." Both assets and debts are typically divided equally upon divorce. Determining the property and debt that belongs to the marital property can be very complicated. Properly identifying, valuing and dividing the assets and debts is a very serious part of the divorce process, one that can have lasting effects on the parties involved. If you are facing divorce, it is critical that you contact an experienced family law attorney who is fully familiar with the process in the San Diego county court system.

A recent case illustrates one of the problems that can arise when the divorcing couple is working toward assessing the community property that will ultimately be divided between them. Here, the couple married in 1993 and the husband filed for divorce in March 2003. The court ordered the husband to pay spousal and child support, but at some point he fell behind in his support payments. Once that happened, the California Department of Child Support Services got involved and issued an order requiring Morgan Stanley to withhold funds from the husband's retirement accounts in order to collect child support arrears.

Throughout the lengthy proceedings that began in 2003, the spouses filed many motions and opposing responses, all in an effort to resolve questions about the division of assets, namely, the husband's defined benefit pension plan. In late July 2010, the trial court issued a temporary restraining order prohibiting the husband from transferring any funds in any Morgan Stanley account in his name, the name of his law firm or its pension plan. Two weeks later, the husband transferred approximately $100,000 from his pension plan into his Merrill Lynch trust account.

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September 19, 2013

Husband Indicted for Hiding Millions in Divorce Proceedings

dollar-army-1-1162216-m.jpgA recent news report underscores the extraordinary measures some people will take to hide assets from their soon to be ex-spouse. After being married for 28 years, Sheila Brandner filed for divorce in Alaska in 2007. According to the indictment by the United States' Attorney's Office, her husband Michael Brandner, a 64-year-old plastic surgeon, reacted to the divorce filing by secretly planning a scheme to defraud his wife by hiding assets from her. In any divorce proceeding, a huge issue is the division of marital assets. The ultimate outcome can significantly impact each spouse's lifestyle and comfort. Seeking the help of a local San Diego family law attorney with a record of success cannot be overstated.

The husband in this case is accused of setting up fake companies, loans and accounts in California, Colorado and Central America, to prevent his wife and the court handling the couple's divorce from learning the extent of his wealth. The indictment alleges that Brandner sought to hide property and money for his "personal control and use," and he allegedly did so through two corporate entities he created. The government seized more than $4.6 million from a bank in California that was deemed to be part of the scheme. According to prosecutors, the money was seized as Michael Brandner was trying to hide it via a fraudulent investment that ultimately would have been written off as a loss, when in fact he would still have the funds.

Fortunately in this case, the authorities were able to identify and locate the marital funds that the husband was trying to conceal. Identification of marital property is a critical component to every divorce case. California is a community property state. This means that the law treats married couples as one "legal community." Therefore, any property acquired during marriage is deemed to be "community property." Likewise, any debts that the couple acquires during the marriage also belong to the "community debt." All items must be divided equally.

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July 4, 2013

California Supreme Court Rules Pre-Marital Military Service Credit Not Community Property

1193021_dark_dollar_2.jpgCalifornia is a community property state. This mean that in places like San Diego, and in cities throughout the state, all assets (as well as debts) that have been accumulated during the course of a marriage should be divided equally in divorce. Identifying marital property and properly assigning value to such items is not always a simple task. There are times when the courts have to get involved to determine the extent of community versus separate property, and how it should be divided. Laws pertaining to the division of property upon divorce can vary from state to state. It is important to contact an experienced, local family law attorney who can protect and maximize your rights to a fair and just settlement.

In California, it is established law that retirement benefits attributable to service rendered during a marriage are considered community property, divisible equally in divorce. But as we can see in the recently decided Supreme Court decision discussed below, the matter concerning the extent or limitation of community property is not necessarily clear.

In this case, a husband rendered his military service before the marriage from 1982 to 1986. He began working as a firefighter in 1989. The Fire Authority participated in the California Public Employees‟ Retirement System (CalPERS), which afforded husband the option to purchase up to four years of service credit towards his retirement benefits for his military service. The couple married in May, 1992. During the marriage, husband exercised his right to four years' worth of retirement credit for his premarital military services. Husband paid for the additional credit at least partially with community property funds.

At issue before the court was how much, if any, of the value of the four additional years of credit is community property. In determining whether retirement benefits are separate or community property, the court looked at the husband's marital status when the services on which the benefits are based were rendered. The court agreed with the trial court's conclusion that because the husband's military service was rendered before the marriage, the four years of additional credit are the husband‟s separate property. The trial court ruling compensated the wife for her share of the community's interest in the property. The Supreme Court affirmed the decision, holding that the court acted within its discretion in awarding the wife one-half of the amount (plus interest) that the community spent to obtain the credit.

Identification, valuation and division of marital versus separate property can be complicated, and often is the cause of many unexpected disputes between divorcing spouses. Here are some items to consider: 1) will retirement accounts be part of community property; 2) are there business accounts; 3) has one spouse tried to hide assets in anticipation of divorce; 4) will a house be valued at purchase price or current fair-market value; and 5) are there joint loans that you will continue to be liable for after the settlement is reached?

Identifying all marital and personal property as part of a San Diego divorce case is critical to winning what rightfully belongs to you and securing the quality-of-life and financial well-being for you and your family.

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June 13, 2013

Finding Hidden Assets Can Be a Big Part of Divorce Proceedings

1149867_army_of_dollars_1.jpgIt would be terrific if all divorcing couples in San Diego and throughout California were open and honest about their marital finances, namely, the assets to be allocated between the spouses. Because California is a "community property" state, all marital property, debts and assets alike, should be divided equally. But estranged spouses have been known to conceal or otherwise channel marital funds into unknown repositories, in order to avoid sharing the accrued marriage wealth. If you are contemplating divorce, it is imperative that you contact a local attorney with a great deal of experience assisting clients in securing the optimal divorce settlement.

A recent Bloomberg article recounts the many ways that business owners seek to hide money, in an effort to save on paying taxes. If and when this business owner -- and his or her spouse -- decide to divorce, the owner often continues this fraud to try to "shortchange" the estranged spouse when it comes time to divide the assets. In effect, the hidden money reduces the value of the business, which is, in all likelihood, part of the marital property to be split evenly.

Spouses who are not involved in business matters are, nonetheless, typically in a unique position to know the true value of a business. After all, even though a certain number is reported as the business owner's official salary, their lifestyle and other expenses may reveal that much more money is earned than is reported. One reporter indicated that many professionals find ways to "hide" income by either understating revenue or inflating their business expenses. In divorce proceedings, many businesses coincidentally see their profits drop drastically right around the time that the married couple decides to separate. It is suggested that judges have seen this occur time and time again.

There are many other ways that a spouse may attempt to hide property during a divorce: 1) delaying raises, stock options or bonuses until after a divorce is finalized; 2) waiting until after a divorce is finalized to sign lucrative financial, business or other contracts; 3) paying a friend, relative or business partner for services not rendered; 4) skimming cash from a business or personal account; 5) hiding valuable assets, such as artwork, antiques, or hobby collections; and 6) hiding investments or cash.

Despite a spouse/business owner's attempts to hide assets from an estranged spouse, there will usually be warning signs, such as a rich lifestyle, including expensive dinners and costly social engagements.

Identification of property is critical in a divorce case. Determining what is considered a marital asset, and identifying all assets to be considered, can have a dramatic impact on your case. It is also important to be aware that one spouse may attempt to empty a joint bank account or run up huge cash advances or credit card debt in preparation for a divorce.

Unfortunately, divorce has the potential to bring out the worst in people. The best course of action is to have an experienced attorney on your side to help vigorously protect your share of the marital assets, in an effort to achieve a fair settlement.

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