August 2018 Update
The current update includes changes that reflect recent developments in case law, legislation, and court rules. Summarized below are some of the more important developments included in this update.
Obtaining a dismissal from a California court of an action on the ground that the agreement at issue contained a forum selection clause specifying the court of another jurisdiction does not render that party a “prevailing party” for purposes of entitlement to attorney fees under CC §1717. DisputeSuite.com, LLC v Scoreinc.com (2017) 2 C5th 968. See §9.116.
Dependency exemption. The Tax Cuts and Jobs Act implemented many significant changes for families. Among them is the suspension of personal exemptions, including the dependency exemption, effective for taxable years 2018 through 2025. See IRC §151(d)(5), as amended by the Tax Cuts and Jobs Act (Pub L 115–97, §11041, 131 Stat 2054). See §§3.41, 3.41A.
Child tax credit. Parents who are separating or divorcing should consider how to allocate or share the child tax credit, which was increased from $1000 to $2000 per qualifying child for taxable years 2018 through 2025. See IRC §24(h), as amended by the Tax Cuts and Jobs Act (Pub L 115–97, §11022, 131 Stat 2054). See §3.41.
Family support. Because of federal legislative changes regarding the deductibility of spousal support, family support will not be an option available to parties who execute an agreement after December 31, 2018. The Tax Cuts and Jobs Act repealed IRC §§71 and 215, eliminating the tax deduction for the spousal support payor. See Tax Cuts and Jobs Act (Pub L 115–97, §11051, 131 Stat 2054). See §3.46.
UIFSA burden of proof. The burden of proof falls on the party objecting to enforcement of an international support order to prove that a country is not subject to UIFSA jurisdiction. Cima-Sorci v Sorci (2017) 17 CA5th 875. See §§11.6, 11.35.
UIFSA modification. A California court may not modify a final money judgment of arrearages from another state to add interest under a California statute when the issue of interest was not litigated in that state and the laws in each state differ. Marriage of Connolly (2018) 20 CA5th 395, 405 (adding interest to judgment of arrearages violated full faith and credit clause). See §11.13.
Determination of amount. A trial court properly construed a stipulated judgment provision that a husband would pay his former wife a percentage of his annual bonus in determining what components of the husband’s later compensation packages were annual bonuses, but the wife failed to produce evidence to support a request to modify monthly spousal support to continue payments past an agreed-on expiration date. Marriage of Minkin (2017) 11 CA5th 939. See §7.19.
Factors; income and assets. A trial court reasonably inferred that a husband’s transfer of income-producing business to current wife was a bad faith attempt to eliminate his business income on paper, while still enjoying its benefits through his wife’s ownership. Marriage of Berman (2017) 15 CA5th 914. See §§7.21, 8.19, 8.23.
Immigrant spouse. A Form I-864 (Affidavit of Support) constitutes a legally binding and enforceable contract between a sponsor and a sponsored immigrant, requiring the sponsor to provide “support to maintain the sponsored alien at an annual income that is not less than 125 percent of the Federal poverty line during the period in which the affidavit is enforceable.” 8 USC §1183a(1)(A). Although such support is not considered spousal support, the immigrant spouse may enforce the agreement in a family law proceeding in state court. Marriage of Kumar (2017) 13 CA5th 1072. See §5.12A.
Obligation to support spouse. When a debt is incurred preseparation, a “station in life” test looking to the marital standard of living will apply. Thus, a debt incurred by a wife during marriage for computers for her law office was considered for “necessaries of life” under Fam C §914(a)(1) because her law practice generated community property income and the computers were necessary to operate the law practice. Direct Capital Corp. v Brooks (2017) 14 CA5th 1168. See §5.3.
Taxation. The Tax Cuts and Jobs Act repealed IRC §§71 and 215, eliminating the federal tax deduction for spousal support payers. This change in tax treatment applies to any divorce or separation instrument executed after December 31, 2018. Existing spousal support orders and agreements are not affected by this change, although a couple may expressly modify an existing agreement in order to adopt the tax treatment of the Act. See Tax Cuts and Jobs Act (Pub L 115–97, §11051, 131 Stat 2054). See chap 7.
Temporary support. A permanent spousal support order could not be made retroactive because no noticed motion or order to show cause was pending. Marriage of Mendoza & Cuellar (2017) 14 CA5th 939. See §§6.7, 6.37A, 7.1.
A trial court erroneously used a supported spouse’s income and expense declaration to determine needs of supported spouse who did not appear at hearing, over objection of payer spouse and in violation of payer spouse’s right under Fam C §217 to live testimony and an opportunity for cross-examination. Marriage of Swain (2018) 21 CA5th 830. See §§2.57, 8.37.