family law, Legal

California Divorce 101: Legal Reasons #70

You must be a resident of California for six months and a county resident for three months to file for a divorce, called a “dissolution.”

Either spouse can get a divorce simply by stating in the divorce papers that “irreconcilable differences” have caused a breakdown in the marriage. If both spouses are in agreement that there should be a divorce, they can agree in writing (called a “stipulation”) that the marriage can be ended.

The legal divorce process begins when one of the spouses files a “Petition for Dissolution of Marriage” with the Superior Court. The other spouse is then served with the paperwork and given time to respond. If the parties are in agreement about property and debt division, as well as any child custody and support matters, the divorce can be finalized without a trial. If the parties can’t come to an agreement, the court will set a time for a hearing in the future.

After the Petition for Dissolution has been filed, either party can request temporary assistance from the court, for instance, in the form of temporary custody and child support orders, spousal support orders, or orders to determine who pays community debts on a temporary basis.

Dividing Your Property

California is a “community property” state, which means that assets and debts acquired during your marriage will be divided equally when you divorce.

But not all property is considered “community property”.

For example, any assets you had before you married will be considered “separate property” if you kept that property separated from property acquired during the marriage.

The income produced by a separate property investment is also separate property, as long as it hasn’t been “commingled;” meaning, that it wasn’t mixed together with community money.

Property you inherit from your family or otherwise gifted to you during your marriage will generally be considered your own separate property if it was willed exclusively to you and you did not commingle it with community assets during the marriage.

It’s important to collect all the information you can about all your property, including when you purchased it, approximately how much it is worth, and details such as account numbers, serial numbers, and so forth. Collecting this information before you see a divorce lawyer can save you a lot of time and money.


A court can order alimony, which is called “spousal support” in California. A court will generally consider such factors as:

  • The standard of living established during the marriage
  • The duration of the marriage
  • The needs of each party
  • The financial resources and liabilities of each party
  • The impact on the children of having the care-giving spouse working
  • The contribution of each party to domestic duties and the education and career of the other party
  • Any tax consequences
  • All sources of income available to either party

A court can order temporary spousal support while the divorce is pending. Spousal support is usually ordered for a specific length of time. Once ordered, it can be modified only upon a showing of a “change in circumstances.”

Child Custody and Visitation

In California, the court can make custody decisions based on what is in the “best interest” of the child, but will do so only if the parents can’t come to an agreement between themselves. In deciding which parent should have primary custody, the court will consider:

  • Which parent is more likely to allow the child frequent and continuing contact with the non-custodial parent
  • The history of contact between the parents and the child
  • The health, safety, and welfare of the child
  • The mental and physical health of the parents, including any history of continual alcohol or drug usage
  • The preference of the child, if the child is intelligent, understanding, and experienced/mature enough to express a preference
  • Evidence of child abuse

After the custody order is signed by the judge and filed with the court clerk, both parents are bound by it. If a parent is denied court-ordered access to a child, he or she may bring the issue back before the court to enforce visitation. The judge may decide to modify the custody/visitation order, order makeup visitation for the time missed, or order counseling or mediation.

Child Support

In California, child support is based on factors, such as:

  • The incomes of both parents
  • How many children the parent is responsible for supporting
  • How much time the children spend with each parent

If necessary, a court can set aside a portion of joint or separate assets of the parties to be put into a separate trust or fund for the support and education of the parties’ children.

A California child support order can be modified if there has been a “change in circumstances.” Examples of this would include:

  • A big increase or decrease in either parent’s income
  • The child spending a lot more time with the other parent
  • The child being several years older or having special financial needs such as schooling or medical expenses
Business Law, Legal

What Every Good Partnership Agreement Should Contain: Legal Reasons #69

Although not required, I strongly recommend that partnerships have a partnership agreement in place to detail the business ownership and responsibilities of partners. The clearer and more complete the agreement, the less that is up for debate or disagreement when partners don’t quite see eye to eye.

1. Contributions

Make sure you clearly lay out each partner’s stake in the formation and ongoing finances of the business. How much will each partner contribute to start the business and what will each partner’s responsibilities be for future needs? In your agreement, define what each partner will put forth—not only in the amount of money, but also with regard to time, effort, customers, equipment, etc.

2. Distributions

You’re all in the business to make some money and create and sustain a comfortable life, right? Your partnership agreement should detail how the partners will split your business profits? How much will each partner get paid and who will get paid first? Outline not only how profits will be distributed, but also define if each partner will be paid a salary (and of course how much that salary will be).

3. Ownership

What if something changes with regard to ownership of the business? If you sell it, which partners will get what? What is your partnership’s position on taking on new partners? If one partner wants to withdraw from your business, what happens then? What are the options for buying out another partner? Your agreement should carefully describe how ownership interests would be handled in various scenarios like those and others, such as in the event of any partner’s death, a retirement, or bankruptcy. And to protect your business from a partner leaving, setting up a new company, and stealing your customers, you should also consider adding in a non-compete clause. Better safe than sorry!

4. Decision Making

I can’t emphasize enough how important this is! Trust me, you and your partner(s) will not agree wholeheartedly about everything. You need to define how day-to-day management and long-term decisions will be made. Who gets the last say? Identify what types of decisions require a unanimous vote by partners, and what decisions can be made by a single partner. By setting up a decision-making structure that everyone understands and has agreed to, you’ll have the foundation for a more friction-free business.

5. Dispute Resolution

Ugh! No one wants to think about this, but you should. If things get ugly between partners, how will disputes be handled? Your partnership agreement should define the resolution process. Should mediation be the initial step? Will you require arbitration to settle differences? Keep in mind that if a dispute goes to court, lawsuits become part of public record. Setting up how you’ll handle disputes will take the guesswork out of navigating dissention.

6. Critical Developments

Sometimes, the unexpected happens. It’s what makes business so exciting—and unnerving at times. Your partnership agreement should address possible scenarios and concerns, such as:

  • A partner getting sick or dying—What happens then?
  • A buyout—How will the business be evaluated (and what is the split) if an offer is laid on the table?
  • Retirement provisions.
  • Circumstances under which you can modify your partnership agreement—and the process for making changes.

These are the most common issues. And there are numerous others you should think about.

7. Dissolution

Your agreement should also include what steps should be taken to legally end your partnership. You might opt to do this if you and your partners can’t agree on the future of your business. Also research what your state requires to dissolve partnerships. State law governs dissolution and your state’s website should define the process and provide the forms you need to complete.

employment law, Legal

Employment Laws All Small Businesses Should Know

Parental Leave for Small Employers

An important new law requires that small employers provide new parents with up to 12 workweeks of unpaid leave.

SB 63, the New Parent Leave Act, requires small businesses with 20 or more employees to provide eligible employees up to 12 weeks of unpaid, job-protected leave to bond with a new child — leave that must be taken within one year of the child’s birth, adoption or foster care placement. SB 63 requires employers to provide parental leave only for baby bonding; it does not require employers to provide leave for other reasons, such as a family member’s medical issue.

Ban-the-Box Law

AB 1008 prohibits employers with five or more employees from asking about criminal history information on job applications and from inquiring about or considering criminal history at any time before a conditional offer of employment has been made. There are limited exemptions for certain positions, such as those where a criminal background check is required by federal, state or local law.

No More Salary History Questions

AB 168 bans employers from asking about a job applicant’s prior salary, compensation or benefits (either directly or through an agent, such as a third-party recruiter).

In addition, employers cannot rely on salary history information as a factor in determining whether to hire the applicant or how much to pay the applicant. However, an employer may consider salary information that is disclosed voluntarily by the applicant without any prompting.

Worksite Immigration Enforcement and Protections

The Immigrant Worker Protection Act (AB 450) provides workers with protection from immigration  enforcement while on the job and imposes varying fines from $2,000 to $10,000 for violating its provisions.

This bill also makes it unlawful for employers to reverify the employment eligibility of current employees in a time or manner not allowed by federal employment eligibility verification laws.




Business Law, employment law, family law, Legal

How Much Will It Cost? Legal Reasons #67

When clients ask, “how much does a lawyer cost,” the answer can vary from $150 to $350 or more per hour. But if you’re facing a legal issue, working with a lawyer is very helpful and can affect the outcome of the case. Before hiring a lawyer, you should talk to him or her about fee schedules, flat-rate vs. hourly billing, retainer vs. contingency fees, and a ballpark estimate of the total cost based on the case.

As you consider how much a lawyer will cost, think about how much you have to spend and what the outcome is worth to you.

For example, if you’re thinking about taking legal action against a local business that did not repair your refrigerator properly, do you have enough money available to hire a lawyer, present evidence, and get the court to rule in your favor? Even if you do have enough money, is the overall cost of replacing the refrigerator or having someone else repair it worth the trade-off?

If you decide to move forward with legal action, or you need assistance with a legal matter, ask all potential lawyers that you meet with about their billing practices and fees. If the lawyer is not willing to discuss the costs with you, it’s a sign of poor client service.

Most lawyers bill under one (or several) of the following arrangements:

  • Hourly rate: this is the most common way for a lawyer to bill. This process requires careful documentation of all time spent working on documents, reviewing case files, presenting information in court, and any other tasks related to the client’s case. The client and lawyer will agree on the hourly rate before getting started with the case.
    • A lawyer’s hourly rate varies drastically based on experience, location, operating expenses, and even education.
  • Retainer fee: many lawyers require a retainer fee up front, which is something like a down payment on the case. As the lawyer works on your case, he or she will deduct the costs from the amount you paid and send you periodic invoices showing the deductions.
    • If you drop a case for which you have already paid a retainer fee, it is most likely non-refundable.
  • Flat fee: a lawyer may offer a flat fee for a specific, simple, and well-defined legal case. Examples of cases eligible for flat fee billing include uncontested divorces.
    • Before agreeing to a flat fee, make sure you understand what is covered in the agreement. It may not include filing fees or other fees associated with the legal process, so you’ll need to plan accordingly.
  • Contingency fee: a lawyer may offer this type of billing in a  personal injury case. With a contingency fee, the client doesn’t pay until the case is resolved. Upon resolution, the contingency fee is a percentage of the settlement or money awarded on behalf of the attorney’s client.
Business Law, Legal

Which Corporate Entity Works Best?Legal Reasons #66

LLC (Most Recommended) (Most Ideal for Non-U.S. Citizens)

Limited Liability Company (LLC) is the most common and best business structure for most small businesses because LLC offers personal liability protection.

Having an LLC establishes your business as a separate legal entity — meaning members are not personally responsible for business debts and liabilities. In other words, if someone sues your business or if your business is liable to debtors, then your personal possessions, such as car or home, can’t be touched by creditors.

Also, unlike Corporations, LLCs enjoy pass-through taxation — meaning all the profits and losses are “passed through” the business to each members of the LLC. Members report their share of the LLC’s profits and losses on their individual tax returns, and any tax due is paid at the individual level.

The first thing most businesses do is form a LLC and as a business lawyer, I highly recommend having a registered LLC before you start your business.



Corporation is also an independent legal entity, separate from the people who own, control, and manage it. Corporations can enter into contracts, incur debts, and pay taxes apart from its owners.

In other words, the Corporation itself, not the shareholders who own it, is held legally liability for the actions and debts the business incurs.

However, Corporations are more complex than other business structures because they tend to have costly administrative fees and complex tax and legal requirements. Because of these issues, Corporations are generally suggested for more serious companies.

C-Corporation is typically not suggested for most businesses to avoid double taxation. Ask me if you have any questions about this.


S-Corporation (Recommended for U.S. Citizens, Most Tax-Friendly)

S-Corporation is a special type of corporation created through an IRS tax election.

An eligible domestic corporation can avoid double taxation (once to the corporation and again to the shareholders) by electing to be treated as an S-Corporation.

What makes the S-Corporation different from a traditional corporation (C-Corporation) is that profits and losses can pass through to your personal tax return. Consequently, the business is not taxed itself. Only the shareholders are taxed.

S-Corporation offers the best of both worlds: personal limited liability protection along with the tax benefits of an LLC.

S-Corporation is recommended for most businesses as well.

Can’t decide on which business structure is right for you?

business lawyer can help you choose the right business structure and relieve the administrative burden of registering, organizing, and forming your proper business structure with state and federal authorities.



Business Law, employment law, Legal

So You Want To Start a Business?Legal Reasons #66

Before starting a business in California, you should consider the multitude of legal issues that surround such a task, including choosing the right business structure (sole proprietorship, corporation, limited liability company, or partnership), selecting the right company and/or product name, and how the business (including legal and accounting fees) will be financed, what potential liabilities you face with your proposed business, and what licenses and permits you will need.

Choosing the Right Business Entity For a California Business Start-Up.

Once you have determined that you are prepared to start your own business, you should begin the process of making your business legal. The first step should be to decide which legal structure is right for you. There are four main types: sole proprietorship, partnership, corporation and limited liability company. Which one is right for you? A sole proprietorship may be sufficient if: (1) you have no assets; (2) your proposed business is unlikely to be a source of liability; and (3) you don’t anticipate earning more than $50,000 a year. If you do have assets that you want to protect, or if you believe your new business will generate at least $50,000 in income, then you should consider either a corporation or a limited liability company. See, S-Corporation or LLC and then discuss your impressions with a local attorney, hopefully Melissa C. Marsh. Seeing an attorney for just an hour to learn more valuable information could save you thousands down the road.

Sole Proprietor.
If you are not ready to form a corporation, or a limited liability company, you can simply remain a sole proprietor. To start a business as a sole proprietor, all you need to do is get: (1) a taxpayer identification number ( EIN ), (2) a fictitious business name, (3) a local city business license, (4) a seller’s permit if you will be selling taxable goods, and (5) other city or state permits required for your particular business. Prior to selecting a fictitious business name, it is important to make sure the name is available.

If you are planning to go into business with one or more other individuals, get a commitment — an agreement that sets forth your planned relationship, expectations, and financial commitment. If you are forming a corporation, make sure there is a shareholder buy-sell agreement in place. If you are forming a limited liability company, make sure the Operating Agreement contains buy-sell provisions. If you plan to operate as a general partnership, ask yourselves if the additional co-owners are merely going to contribute products and/or services as opposed to money. If so, consider forming a single owner business (sole proprietorship, corporation, or single member LLC) with contractual agreements with those who are to provide products and/or services. If a party later fails to perform, then you can typically find a replacement. If you are going to operate as a partnership, then make sure you execute a written partnership agreement that contains provisions addressing how each partner can leave the business.

It is always best to start a business on your own, rather than with partners. If co-ownership is essential, then make sure you have a well written partnership agreement that: (1) calls for the formation of a corporation or limited liability company if a certain goal is met, and (2) contains buy-sell provisions that provide for the buyout of any co-owner at a set price in the event the co-owner fails to perform, becomes disabled, dies, files for bankruptcy, or becomes involved in a divorce. Most owners of a business never intend, or expect, to become partners with their co-owner’s spouse, but that is exactly what can happen if you don’t have a well prepared buy-sell agreement executed by all of the co-owners.

Corporation. To determine if a corporation will best suit your needs, I will cover in the next blog post.