Tuesday, April 28, 2009

THE POUND OF FLESH REQUIRED FOR BIFURCATION

Certified Family Law Specialist DONALD F. CONVSER 818/880-8990, an aggressive and effective family law and divorce attorney representing clients in Los Angeles County and Ventura County for over 35 years, owner of WARNER CENTER LAW OFFICES in Woodland Hills, California, offering a free confidential consultation regarding your divorce and family law issues, brings you another informative blog addressing THE POUND OF FLESH REQUIRED FOR BIFURCATION, in a series of blogs designed to inform and educate readers about various areas of Family Law and Divorce, and how he deals with challenges presented to him.

Near the end of my last blog, I stated: Whereas Family Code Section 2337 protects the non-bifurcating party, it requires a pound of flesh from the bifurcating party. In my April 26, 2009 blog, I warned readers that before any party decides to seek Bifurcation of Marital Status, he/she should consider the consequences of a Bifurcation, which include the loss of valuable rights associated with marital status as well as conditions which the Court may impose on the party seeking Bifurcation.

The pound of flesh that the bifurcator has to pay for the bifurcation could include an order requiring him to pay for health insurance for his spouse (equivalent to the pre-bifurcation health insurance) for the period following the bifurcation until the reserved issues (the balance of the issues in the divorce case) are fully resolved, and if that health insurance becomes no longer available (COBRA coverage is only available for 3 years post-dissolution of marital status, at a significant price, and there may well be other reasons that health insurance may become no longer available), if the bifurcator cannot replace that coverage with equivalent coverage (such as where the former spouse has a pre-existing condition that may preclude insurability), the bifurcator becomes the health insurer of his former spouse, i.e., he pays all of her medical, hospital, psychiatric, prescription, and other health care bills.

If that isn't penalty enough, if the bifurcator was covered on his former spouse's health insurance available through her employment, guess what? Upon the bifurcated status dissolution that he hungrily sought, he no longer qualifies for such coverage. What's good for the goose is bad for the gander!

Other penalties that the bifurcator may suffer during the period after the Bifurcated Status Dissolution and the resolution of the balance of the issues in the case (the Judgment on Reserved Issues... which the former spouse could delay through discovery issues, continuances, etc., for years, and note - once there is a Bifurcated Status Dissolution, the 5-year Dismissal Statute for delay in prosecution no longer applies by virtue of Code of Civil Procedure Section 583.161, so the case could drag on, and on, and on...) include orders:

1. That the bifurcator must indemnify and hold his former spouse harmless from any taxes, reassessments, interest and penalties payable by his former spouse in connection with the community estate that would not have been payable if the parties were still married at the time the division of property was made;

2. That the bifurcator must maintain all existing health coverage for the other party and minor children or replace it with equivalent coverage or become their health insurer, as above noted;

3. That the bifurcator [and his estate if/when he dies] must indemnify and hold the other party harmless from any adverse consequences to the other party if the bifurcation results in a termination of the other party's right to a probate homestead in which that party resides at the time the severance is granted;

4. That the bifurcator [and his estate if/when he dies] must indemnify and hold the other party harmless from any adverse consequences to the other party if the bifurcation results in the loss of rights to a probate family allowance as the surviving spouse;

5. That the bifurcator must indemnify and hold the other party harmless from any adverse consequences to the other party if the bifurcation results in the loss of retirement, survivor, or deferred compensation benefits or election/option rights under any pension or similar plan to the extent the other party would have been entitled to those benefits or elections or options as the surviving spouse of the bifurcator;

6. That the bifurcator must indemnify and hold the other party harmless from any adverse consequences if the bifurcation results in the loss of rights to social security benefits or elections to the extent the other party would have been entitled to those benefits or elections as the surviving spouse of the bifurcator [10 years of marriage is the magic number, after which a surviving spouse has the option/election to get derivative survivor social security benefits];

7. That the bifurcator maintain a beneficiary designation for his former spouse for nonprobate transfer assets;

8. That 1/2 or even all of the community interest in an IRA be assigned and transferred to the former spouse to preserve her ability to defer the distribution of the IRA on her death;

9. That upon a showing that circumstances exist that would adversely affect a party's community property rights if the other party died before the division and distribution and payment of community property interests, that the Court may order a specific security interest
.....
[such as an order for an "undertaking" (bond); a QDRO from the securing party's share of a retirement plan; an order for the creation of a Trust; an order for other arrangements to be made for security if the bifurcator died before Judgment on Reserved Issues is entered; and/or an interim order requiring the bifurcator to pay and post security for payment of any survivor benefit that would have been payable on the death of the bifurcator had he died married to the former spouse] designed to reduce or eliminate the possibility that a postmortem enforcement proceeding would be ineffective or unduly burdensome to the surviving party. If you can chew through that, you can taste the bitter pill; and ...

10. That the Court may impose any other condition that it determines is just and equitable. If you missed it, the kitchen sink is included!

And consider, for that heavy pound of flesh that the bifurcator may have to pay, he loses the benefits that he had that are preserved under Family Code Section 2337 for the former spouse.

I'll give thought to other losses that the bifurcator may stand to suffer, because I'm sure that the list above doesn't include all the bifurcation penalties (including loss of benefits as a military spouse... there's another penalty) - but: once the bifurcator gets a Bifurcated Status Dissolution, he may "feel divorced", he may "feel better", he may remarry, and he may file his income taxes as a single person.

So the proposed bifurcator should consider what he gets for what he has to pay, and he should carefully decide, with the assistance of a competent Divorce and Family Law Attorney, whether Bifurcation of Marital Status is worth the pound of flesh.

Posted by DONALD F. CONVISER, owner of WARNER CENTER LAW OFFICES in Woodland Hills CA, a Certified Family Law Specialist who has aggressively and effectively represented people in family law and divorce cases in Los Angeles and Ventura Counties for over 35 years, before the Superior Courts in Los Angeles, Van Nuys, San Fernando, Simi Valley, Ventura, Burbank, Glendale, Santa Monica, Torrance, Pasadena and Pomona, in matters including Bifurcation of Marital Status, premarital agreements, prenuptial agreements, divorces, paternity, stepparent adoption, nonmarital dissolution, child support, spousal support, child custody, visitation, and all other areas of family and divorce law practice. If you have any question or concern regarding Bifurcation or any other aspect of family law or divorce law, call DONALD F. CONVISER at 818/880-8990 for a free confidential consultation.

2 comments:

Unknown said...

Is your list of effects from a Bifurcated agreement assuming the bifurcation dissolves the marital status and not the assets? If so, would a bifurcation disolving the assets and keeping the marital status intact protect such things as the health insurance for the spouse?

William Geelan said...

Does it matter if the bifurcator is the respondent and he is now the one want to end the marriage. Who has the greatest % of liability if they proceed with bifurcation.
Quick recap. I am self employed am going to have house as per Quit claim. I am respondent
She carried all of our benifits and cut me of Jan 1 2010. I want to bifurcate and move on. She was petitioner in action but now I want out