Ex spouse privy to new wife's money????

[olanna]

Dear Socrateaser,

My bf and I are talking about getting married. We both live in CA, as does his ex-wife.  He is concerned, as I am, that there may be some way that she could get to my assets and money through him.  

Can you think of any way she might be able to this?  My lawyer assures me that she cannot gain access to my income or my assets, even through a joint checking account.  Is this true?

[socrateaser]

>Dear Socrateaser,
>
>My bf and I are talking about getting married. We both live in
>CA, as does his ex-wife.  He is concerned, as I am, that there
>may be some way that she could get to my assets and money
>through him.  
>
>Can you think of any way she might be able to this?  My lawyer
>assures me that she cannot gain access to my income or my
>assets, even through a joint checking account.  Is this true?

Does your fiance pay child or spousal support to his ex?

If so, then there is a scenario by which your assets might be obtainable in the future.

All property acquired during marriage is rebuttably presumed as community property, which means that each spouse has a one half interest in the other spouse's earnings during marriage, unless those earnings are the product of the rents, issues or profits of assets which were separately owned by either spouse prior to the marriage, or the assets is the product of gift or inheritance.

So, let's suppose that your new spouse earns $5K per month and you earn $5K per month from wages during marriage. Each of you has a one half interest in the other spouse's income.

Now, suppose your spouse has a preexisting child support order to pay $1,500 per month to his ex. Now, suppose that he decides that he wants to start a new business, so he quits his job and his new income at the business is only $1,500 K per month, because it's a start up.

Your spouse goes to court and asks for a modification of child support, and the court says, "Sorry, you have a demonstrated earning capacity of $5K per month, so your support payment stays the same."

Your spouse says, "Screw her, I'm gonna get this business going and then I'll deal with the child support later."

A year goes by and your spouse now owes $18K in back child support plus 10% statutory interest. Your spouse's ex gets annoyed ang asks the State to go after the money. The state takes your ex to court, and his financial statement shows joint accounts at various banks and brokerages into which both of you have been depositing your community property earnings.

The state obtains a judgment of arrears against your spouse and a writ of garnishment against your community property investment account with $25K in it, most of which has been deposited by you, is now levied to pay the $18K debt.

You move for an injunction to prevent the levy on grounds that the money isn't your spouse's. But, the court finds that the money is community property, and under CA law, community property is liable for either spouse's debts incurred before or during marriage. So, the court denies your injunction and your money is taken to satisfy your spouse's arrearrage.

If your spouse dies or you divorce, the community is entitled to reimbursement for the outlay against your spouse's separate property child support debt. But, of course, if there's no money to reimburse, then you're SOL, and until either death or divorce, it will just look like you took an $18K hit -- because you did.

Can you prevent this outcome? Yes. If you place your separate earnings during marriage into separate accounts from which your spouse has no right to withdrawal, you do not invest community property assets in any property to which you acquire title, and you do not take joint title to any property, and you file your tax returns as married filing separately, AND you have a premarital agreement that states that all income that would be community property acquired during marriage is to be considered the separate property of the spouse who actually earns it, THEN you will probably escape the above-described scenario.

Does this sound like it's all worth the effort? Not to me -- but, perhaps it does to you. The bottom line is that if your spouse owes his ex-spouse support, and there is ANY legal theory on which the State or the ex-spouse can possibly recover, then the court will bend over backwards to give that recovery, because of the very strong public policy in favor of spouses and parents paying their support obligations.

Now, your attorney may read this and say, "That's a pretty unlikely corner case that this Socrateaser dude is describing."

My response to your attorney is that this website is built on the graves of people suffering from "corner case" disease, and that if your attorney turns out to be wrong, and I turn out to be right, how much of your debt will your attorney reimburse you for?

Answer: none of it.

The only sure way to avoid the debts of someone who owes support to a former spouse is to not marry that person until his/her debts are completely satisfied.

Proceed with caution.

[olanna]

and I will ponder it for some time to come. I don't mind living with him for the next nine years or longer...

Thanks Soc!