Our good friend Emily Bouchard has a piece in Forbes today on estate planning for couples.  Here’s an excerpt:

“How married couples and domestic partners structure their estate plans can make the difference between whether a family stays connected or gets blown apart after the first spouse or partner passes away. Things can be even more complicated and volatile in blended families – when there are step and half siblings and stepparents in the mix.”

Read the full article here.

The use of emerging technologies to perpetrate stalking and domestic violence is on the rise. Facebook stalking is now a commonly used term. We’ve all read the news about GPS transmitters being placed on cars by stalkers, and email hacking – as reported by our clients – is now a fairly regular occurrence. Our office has even seen parties placing spyware on one another’s computers to track emails and passwords.

Some of these activities are illegal and can be stopped with restraining orders; others reside in that blurry gray area where enforcement can be a real challenge. Either way, it’s important to be aware of how to protect yourself, and if necessary how to collect the evidence you will need if you want a restraining order.

The following are our tips for how to prevent mishandling of your digital identity.

First and foremost, be sure your computer is not corrupted with malware or spyware. Modern spyware can track every single stroke on your keyboard and easily capture passwords, emails, and credit card information. We regularly advise our clients to open up new email accounts, but if you unwittingly have a key-stroke logger on your computer, it doesn’t matter how many accounts you have – they’re all compromised. There are spyware sweepers available online, but your best bet is to hire an IT professional to conduct the sweep for you.

Second, don’t give your stalker any information to feed upon. Don’t post your personal information online – it never goes away. Be absolutely sure your social networking privacy settings (meaning Facebook, etc.) are set to the most strict and preclusive available. If you believe you are at risk of stalking, never allow social networking services to track your location. Remember that many stalkers will pose as your friends and then have access to your friends-only information. You may need to delete your social networking services entirely if you believe you are at risk.

Third, never, ever, interact with your stalker. This only fuels the problem and clouds the question of whether you are the victim. Instead, document and report. Screen-capture anything that happens online. Save your emails. Tell your friends immediately when something happens so that you have a witness. Videotape. Record. Keep text messages and voicemails. And especially if you are in danger, call the police immediately every time you are stalked or harassed.

Once you have a body of evidence that shows a pattern of behavior, contact an experienced attorney and the police to report what has occurred. An effective lawyer can give you this and more advice, and can help you to obtain a restraining order. We handle quite a few of these cases in our office, so feel free to give us a call if you need any help.

There is a rumor that embattled former senator and presidential contender John Edwards is going to marry his one-time mistress, Rielle Hunter.  Edwards is accused of conspiring to violate campaign finance laws by using approximately $1 million from campaign donors to cover up his affair and the child he fathered with Rielle Hunter.  If Edwards does marry Hunter, she would not be required to testify against him at the trial if she did not want to, and some theorists believe this is the only reason he wants to marry Ms. Hunter.  This is due to the testimonial privilege between spouses.  If this matter were a divorce, however, the privilege against spouses testifying against each other would not apply.

The spousal testimonial privilege can be a very powerful bar to testimony.  The privilege has two parts.  There is a privilege not to testify against one’s spouse and a privilege not to be called as a witness against one’s spouse.  A married person has a privilege not to testify against his or her spouse in any proceeding.  Additionally, a married person whose spouse is a party to the case has a privilege not to be called as a witness by an adverse party without the prior express consent of the spouse having the privilege.

The spousal testimonial privilege does not apply in divorce cases.  Spouses are often at odds regarding the way child custody and visitation should be decided or how assets
should be divided.  Anything a spouse says can be used against them in Court when disputing these issues.  One spouse admitting to hiding assets in a Swiss bank account, for example, cannot claim a privilege against having his wife testify against him when she wants to be compensated for losing access to the money.  People are wise not to say anything around their spouses that could later open the door to an unfavorable court action.

There are multiple ways that a spouse can communicate with their other half – in person, on the phone, email, text messages, etc.  During the family law litigation process, all
of these forms of communication and more can be discovered and used as evidence at trial.  Either spouse can get on the stand and state word for word what her spouse told her through any form of communication.  The other spouse is powerless to keep her quiet.

It is incredibly important to have excellent legal counsel to manage not only the formal process of a divorce, but also the communication between the parties.  In the Bay Area, a person is wise to engage the best San Francisco divorce lawyer available to help navigate these dangerous waters.

Social media accounts like Twitter and Facebook are beginning to take their place in the pantheon of highly contested properties for divorcing couples in California. As we all know, couples dissolving their marriages divide a wide range of assets already – everything from cars and homes to stock options, businesses and artwork. The unavoidable fact is that social media accounts are property, and as the value of such property increases, so too will the litigation surrounding them.

In California, absent a prenup, any asset acquired during marriage is considered community property and must be divided evenly between divorcing spouses. Any property acquired before marriage, after the date of separation, or through gift or bequest (meaning inheritance) is considered separate property and immune from division. There are of course exceptions to these rules, but that’s a good overview.

By this definition, social media accounts created during marriage will almost certainly be characterized as community property. Accounts created prior to marriage may also be defined as community property in part, depending on whether the value increased during the marriage, and whether the personal effort of either spouse contributed to that increase (which of course it would have).

The terms of service of the various social media companies also play a role in defining whether an account is considered property and subject to division. Twitter, for example, defines the content which users create as the property of the user. Twitter sees the content as separate from the account services themselves which Twitter provides. Arguably, the right to access the account and manipulate the content is a kind of property as well.

The content within the accounts, and the right to access the accounts both increasingly have economic value, and couples understandably want to add all value to the marital asset division calculus.

The big hurdle, of course, is valuing the accounts. Valuation has always been more of an art than a science. This is even more the case when it comes to untested intellectual property assets like social media accounts. Some parties are looking to the actual business flowing from the accounts as a benchmark for determining value. Others are more inclined to take a multiple of earnings – the challenge being that earnings are just beginning to manifest for these assets.

This area of property division is new, but it’s heating up. Asset division provides many challenges to divorcing couples. Careful attention needs to be paid to properly value and divide IP, particularly this distinctly tricky type of IP. A person seeking to divide a social media account, just like any asset, is well advised to seek the counsel of an experienced California family law attorney.

Our office practices family law in San Francisco and the Bay Area. As a result, we work on the forefront of many of these issues. If you have questions, feel free to give us a call.

Jessica Simpson and Kobe Bryant have been in the news recently, both because of their respective prenups. I thought I would take a moment to reflect on the nature of celebrity marriage contracts, and what this can tell us about the marriages of mere mortals.

To recap in case you’ve missed the news, Kobe Bryant’s wife has just filed for divorce, and there’s no prenup. Kobe’s wealth is estimated to be around $150 Million. Assuming the entire fortune was earned during marriage, it’s all community property, meaning Vanessa is entitled to half of it. Moreover, because Kobe continues to earn an income, and because Vanessa will likely gain custody of the children, Bryant could end up paying spousal and child support on top of losing half his net worth. Not to mention the attorney’s fees he’s going to pay.

Jessica Simpson appears to be on the first chapter of a similar story. Her fiancé has apparently backed away from signing a prenup, citing his belief in true love. Like any celebrity, Jessica’s income streams are fairly complex. She is apparently worth approximately $20 Million, and in addition to earning fees for appearances, she continues to earn royalties from her licensing contract with the Camuto Group who bought her clothing brand in 2005. Absent a prenup, Jessica’s income from all of these sources could very well become community property during a marriage. The same, of course, would hold true for her fiancé’s income, assuming he has any.

When celebrities marry, the process is very much like a corporate merger. All of the various income streams need to be charted. The books need to be balanced. The liabilities disclosed. The expectations for future growth must be set, and an exit strategy mapped. Without this process, a split becomes a financial disaster. This is true of course for all marriages, it’s simply more evident with celebrities.

The procedures necessary to create a valid prenup are time consuming, confronting, and tedious. There’s no way around that fact. Nonetheless, celebrities with complex financial structures would be insane to attempt marriage without a prenup, just as a corporation would breach it’s duties to shareholders by merging without a contract.

More important than those obvious considerations, however, is the opportunity that a prenup presents to lay the groundwork for a strong marriage. This is the point that we miss in the gossip columns, and that most people forget when proposing a prenup to a partner.

Premarital agreements require couples to take a very serious look at their expectations for finances and relationship. These expectations say a lot about the marriage, they say a lot about love, and they say a lot about how the couple works through adversity. Celebrities need prenups – that goes without saying. What isn’t said often enough is that they could also use the process to avoid rather than to foreshadow divorce. And the same goes for the rest of us.

It goes without saying that a divorce can be one of the most difficult experiences in your life. So why make it any harder?

I see divorce clients every day. The first thing they often tell me is “I just want this to be over with.”   So here are some simple tips to make that happen:

First, get organized! A divorce requires delivery of nearly all your financial records to your spouse. Even if you and your spouse have been sharing all the accounts, you will still need to put together copies of statements from every financial account, including bank statements, credit card statements, retirement accounts, pay stubs, etc. Start collecting PDF copies of all these statements now. If you stay organized, you can streamline and speed up.

Second, get your paperwork done! The divorce process requires a great deal of paperwork. The faster you work with your attorney to complete the paperwork, the faster you can finalize. The single (so to speak) most time-consuming task in a divorce is dividing community property. This is a difficult task, and can require lengthy negotiations. The negotiation process can’t even begin, however, until your attorney knows what assets you have. That means you need to complete your asset disclosure paperwork! The longer you wait to deliver those documents, the longer your divorce will take.

Third, reach a settlement! The number one most efficient way to wrap up your divorce is to reach a settlement.  While this is not always possible, if you are willing to negotiate and  reach a fair settlement, you will save yourself a great deal of time and money.  A good divorce attorney will help you understand what a fair settlement looks like.

Competent divorce attorneys will do everything in their power to speed the divorce process along, but remember, you are the ultimate decision maker. Don’t drag your heels!

What do I mean that you already have a prenuptial agreement (sometimes called a “prenup“)? If you live anywhere in the United States, then you live in a state that has rules about marriage. Those rules dictate how marital property is treated during marriage, and they dictate what happens to that property if the marriage ends. That, my friends, is a prenup: a bundle of rules and agreements about the assets of married couples. So the question is whether you want the rule-bundle California has set up for you, or some other rule-bundle.  A prenup, or premarital agreement, is how you create your own rule-bundle.

How do prenups strengthen marriages? As you have probably heard, most marriages end over disagreements about money or infidelity. We can’t do anything about the infidelity with a prenup because California is a no-fault divorce state, but we can definitely help with the money issues. Most money problems arise from a lack of communication. Couples don’t like to talk about money – it’s uncomfortable. What if he thinks I’m a gold digger? What if she thinks I’m already planning a divorce? Those are normal concerns, but I’m here to tell you – as someone who sees divorce every day – that your chances of staying married are hugely improved if you talk about money and financial expectations before marriage. A prenup is an absolutely vital part of that discussion because a prenup is a document designed to anticipate the most common money problems that couples encounter. It may turn out that you don’t need a prenup, but you owe it to your marriage to at least know what the rules are.

A prenup is not for everyone. Some couples are perfectly happy with the default rules set up by the state. If that’s the case, then great! But you owe it to yourself and your spouse to know what those rules are, and to talk about your expectations before you get married. That’s the kind of communication a good relationship is founded on.