High Net Worth Divorce Attorney Los Angeles

Key Takeaway: California is a community property state, so everything either spouse earns or acquires during marriage is owned equally and is divided equally at divorce under Family Code section 2550. In a high-net-worth case the fight is almost never about the 50/50 rule. It is about characterization, valuation and disclosure, and those three questions decide the number.

Family Code section 760 makes property acquired during marriage community property. Family Code section 770 keeps property owned before marriage, or received by gift or inheritance, as that spouse's separate property. Family Code section 2550 requires the court to divide the community estate equally absent a written agreement. Those three sentences are the whole framework, and every dispute in a high-asset case is an argument about which bucket an asset falls into and what it is worth on the date it is divided.

The doctrines that move the money

California case law supplies the formulas that apportion an asset between the two buckets. These are the doctrines that decide outcomes in an executive, founder or physician divorce.

Doctrine	What it decides	Typical asset
Moore/Marsden	The community's share of a home bought before marriage, measured by principal paid down during marriage plus a proportionate share of appreciation	Residence owned before the marriage
Family Code section 2640	Reimbursement, without interest or appreciation, of separate property contributed to the acquisition of community property	Down payment from separate funds
Pereira	Applied where the growth of a separate-property business came mainly from the owner's effort, giving the separate estate a fair return and the community the rest	Founder-run company
Van Camp	Applied where the growth came mainly from the capital or the nature of the business, giving the community the reasonable value of the spouse's services	Capital-intensive or passive holding
Hug and Nelson	The time-rule fraction that apportions unvested stock options and restricted stock between community and separate property	RSUs and stock options
Epstein credits	Reimbursement to a spouse who paid a community debt with separate funds after separation	Mortgage paid post-separation
Watts charges	A charge against the spouse who had exclusive use of a community asset after separation, measured by its reasonable rental value	Exclusive use of the family home
Smith/Ostler	A percentage order capturing bonus, commission and equity income above base salary as it is actually received	Variable executive compensation

Whether a business is apportioned under Pereira or Van Camp is frequently worth more than every other issue in the case combined, because the two methods can produce results that differ by an order of magnitude on the same company. The choice is not automatic and the court selects whichever achieves substantial justice on the facts, which is why the valuation record is built long before any number is proposed. Our guide to dividing a closely held business in a California divorce covers how that record is assembled.

Disclosure is the leverage, and the penalty is real

Family Code sections 2100 through 2107 require each spouse to serve a preliminary and a final declaration of disclosure listing every asset and every obligation, whether community or separate. The duty is continuing, it is not satisfied by answering what the other side happened to ask, and it does not end until judgment.

The penalty is what gives the duty teeth. Family Code section 1101(g) awards the aggrieved spouse 50 percent of any undisclosed asset plus attorney fees, and section 1101(h) raises that to 100 percent of the asset where the non-disclosure was fraudulent, oppressive or malicious. A spouse who conceals an interest can therefore lose the entire asset rather than half of it. Family Code section 721 imposes the same fiduciary duty that partners owe one another, which is the highest duty California law recognizes between private parties.

Where the numbers on a disclosure do not reconcile with the lifestyle, the answer is a forensic engagement rather than more interrogatories. Our guide to forensic accounting in a California divorce explains how income is reconstructed and how transfers are traced.

Support when the income is large and variable

Spousal support is set under Family Code section 4320, which lists the factors a court must weigh, including the marital standard of living, each spouse's earning capacity, the supported spouse's contribution to the other's career, and the balance of hardships. There is no guideline formula for permanent spousal support in California, so the section 4320 record is the case.

Family Code section 4336 provides that for a marriage of long duration, presumed at ten years or more, the court retains jurisdiction over spousal support indefinitely unless the parties agree otherwise in writing. That single provision is why the date of separation under Family Code section 70 is litigated so heavily in cases near the ten-year line.

Where compensation arrives as bonus, commission or vesting equity rather than salary, a fixed monthly number either overpays or underpays every month. A percentage order handles it instead, and the design of the tiers and the ceiling is where the money is. Our guide to the Smith/Ostler order covers the structure, and our guide to double dipping covers the trap of counting the same business income twice, once as a divided asset and again as support.

Privacy, venue and the cost of conflict

A California divorce file is a public record unless the court orders otherwise. California Rules of Court rules 2.550 and 2.551 govern sealing, and a request must be specific about the material and the overriding interest that supports it, because a blanket sealing request is routinely denied.

Code of Civil Procedure section 638 allows the parties to stipulate to a privately compensated temporary judge. Private judging costs more per hour and usually costs less overall, because the matter is heard on a schedule the parties set rather than on a congested public calendar, and the proceedings are not conducted in an open courtroom.

Family Code section 271 authorizes a sanction award against a party whose conduct frustrates settlement. It is not need-based, which means a higher earner can recover fees from a lower earner whose litigation conduct drove up the cost. Our guide to Family Code 271 sanctions explains when that applies, and our guide to attorney fees in a California divorce covers need-based awards under section 2030.

Marital agreements

Premarital agreements are governed by the Uniform Premarital Agreement Act at Family Code section 1600 and following. Family Code section 1615 makes an agreement unenforceable unless it was entered voluntarily and was not unconscionable when signed, and it deems an agreement involuntary unless the party against whom enforcement is sought had at least seven calendar days between first receiving the agreement and signing it. That seven-day rule is the single most common ground on which a California prenuptial agreement fails.

Postnuptial agreements are held to a stricter standard, because spouses already owe each other the fiduciary duty of Family Code section 721 and a transaction that advantages one of them triggers a presumption of undue influence. Our prenuptial agreement attorney page covers drafting and enforcement.

Where your case will be heard

Los Angeles County assigns family law matters by district. Cases from the Westside are generally heard at the Santa Monica Courthouse at 1725 Main Street, central cases at the Stanley Mosk Courthouse at 111 North Hill Street, and San Fernando Valley cases at Van Nuys. The Beverly Hills Courthouse no longer hears family law matters, so a Beverly Hills residence does not mean a Beverly Hills courtroom.

Borna Houman Law practices from 2530 Wilshire Blvd in Santa Monica and appears across Los Angeles County. Geographic hubs: Santa Monica divorce attorney and Beverly Hills divorce attorney, serving Brentwood, Pacific Palisades, Bel Air, Westwood, Century City, Calabasas and Malibu. Related practices: child custody, marital settlement agreements, divorce mediation, 730 custody evaluations and Marvin claims.

Borna Houman is the founding attorney of Borna Houman Law, admitted to the California Bar under number 352339. The firm is rated 5.0 across 60 client reviews. To discuss a high-asset California divorce in confidence, call (888) 42-BORNA.

This page is general information about California law and is not legal advice. Every matter presents different facts. Consult an attorney about your specific situation.