Is there a requirement for an annual income review for a divorce in California?

[butchdority]

What is the name of your state (only U.S. law)? California

I have filed for divorce in Santa Clara and my wife and I are working out the MSA. She has included a paragraph in the spousal support section that says "On or before May 1 each year, the parties shall exchange any and all documentation evidencing their income from all sources for the prior tax year, including income not reported for tax purposes. Husband shall, at that time provide a then current proof of life insurance showing Wife as an irrevocable beneficiary of the policy".

There are no minor children and we have agreed a monthly support payment amount. Is this annual review common, or even a requirement?

Thanks for any helpful responses!

 

[adjusterjack]

It's a requirement if you agree to it.

If you don't like it, cross it out and tell her you don't want it in there.

 

[not2cleverRed]

"What is the name of your state (only U.S. law)? California

As part of our MSA, my wife has added language stating that, in addition to the agreed monthly support amount, I will pay her some percentage of any additional future earnings, to include pay increases, bonuses, sale of stock options (granted after the agreed separation date), and more. There are no minor children to be considered, so it seems unusual to me.

The section added includes this language.

"Husband shall pay to Wife _____% of the gross amount of all additional income he earns, whether reported on his taxes or not, including but not limited to, increases in base salary, commissions, consulting and/or other 1099 income, bonus or bonus-type income, stock options, restricted stock units (RSU), and other equity-based compensation."

Thanks for any helpful responses!"

Again, if you agree to it, it is binding. You could also choose to disagree.

Some factors to consider:
1) length of marriage/age of parties. For example, the expectations of spousal support would be different for 70 year olds divorcing after 40 years of marriage than 20 somethings after 4 years of marriage.

2) Did your spouse support you while you were gaining skills that increased your earning ability? For example, was the spouse a primary wage earner while you earned a (professional) degree?

Your STBX could just be a greedy, grasping person, or could have a reasonable basis to ask for such support. Your lawyer can better advise you.

 

[HRZ]

You best review that with counsel...seems to me you are asking for endless room to debate income and endless room to debate non cash income as well as losses and deductions from income --a lifetime of problems ...

And the improved tax code has a major new difference--in short alimony is not deductible .---You may be zapped on bracket differences as to income and there may be more tax efficient ways to carve you up that leave you better off. .

And as posted the language about life insurance makes no economic sense and borders on meaningless...if EX wants to insure you .she does it !

BTW are there his , hers and our children involved?

 

[not2cleverRed]

You best review that with counsel...seems to me you are asking for endless room to debate income and endless room to debate non cash income as well as losses and deductions from income --a lifetime of problems ...

And the improved tax code has a major new difference--in short alimony is not deductible .---You may be zapped on bracket differences as to income and there may be more tax efficient ways to carve you up that leave you better off. .

And as posted the language about life insurance makes no economic sense and borders on meaningless...if EX wants to insure you .she does it !

BTW are there his , hers and our children involved?

You are incorrect.

OP is being asked to take out a life insurance policy with the ex as a beneficiary so that if he predeceases her, she still gets money. Since he's not paying alimony from the grave. I've seen and heard of court orders that require this.

OP has already said that there are no minor children involved.

 

[HRZ]

[
EXactly as posted the OP is NOT describing an irrevocable life insurance trust ..and for a big policy he may be looking at hefty federal and state inheritance tax issues and some gift tax issues if he is not careful, then again a TV policy for $500 might fit the bill.

I think if support includes an automatic slice of improved earnings then OP should seek an automatic reduction of support if his income falls ..

I didn't ask about minor children...if he has adult children ..and she picks his bones clean he will have zip to leave his children.

IT might be far more tax efficient to offer STBX xxx shares of yyy with a current market value of GGG and hold that offer open for a very short window ..many people go for instant packages ...and besides there is value to cutting the cords.

 

[LdiJ]

[
EXactly as posted the OP is NOT describing an irrevocable life insurance trust ..and for a big policy he may be looking at hefty federal and state inheritance tax issues and some gift tax issues if he is not careful, then again a TV policy for $500 might fit the bill.

No, he would not be looking at any federal or state inheritance tax issues nor gift tax issues by having a life insurance policy with his ex wife as the beneficiary.

I think if support includes an automatic slice of improved earnings then OP should seek an automatic reduction of support if his income falls ..

There is some logic in that.

I didn't ask about minor children...if he has adult children ..and she picks his bones clean he will have zip to leave his children.
]
IT might be far more tax efficient to offer STBX xxx shares of yyy with a current market value of GGG and hold that offer open for a very short window ..many people go for instant packages ...and besides there is value to cutting the cords.

None of that ramble made any sense at all.

 

[HRZ]

If op retains any incidents of control over his own life insurance policy it could well be taxed to his estate while ex gets full payout ..and merely converting existing policy to insurance trust invites a 3 year look back to add it to estate inside of 3 years. if op gets run over by proverbial beer truck

if Op is looking at paying Ex a stream of $ xx for Yy years it's not hard math to do a discount back to present value under various rate of return assumptions and perhaps some rudimentary risk calculations ...I'm not the best of investors....but I'll bet my 10 year moving average on ROI is at least 10% so if you offer me 5000 shares of SSS worth $ Xxx,xxx or whatever as a walkaway number ..I can make up my mind pretty fast ..and might just prefer big bird in hand now and move on.

 

[latigo]

What is the name of your state (only U.S. law)? California

I have filed for divorce in Santa Clara and my wife and I are working out the MSA. She has included a paragraph in the spousal support section that says "On or before May 1 each year, the parties shall exchange any and all documentation evidencing their income from all sources for the prior tax year, including income not reported for tax purposes. Husband shall, at that time provide a then current proof of life insurance showing Wife as an irrevocable beneficiary of the policy".

There are no minor children and we have agreed a monthly support payment amount. Is this annual review common, or even a requirement?

Thanks for any helpful responses!

NO, there isn't any such requirement. Not even in case of minor children and the application of the support guidelines is there any such "annual review" requirement.

But if you even think about signing her "pound of flesh", "castrate and hobble him to the grave", avaricious proposition you are a DAMN FOOL! . My guess is that she has some lady lawyer friend equally disdainful of the male species helping her feed you to the wolves.

Its time for you to show a little back bone and be talking to your attorney. Not her and not strangers on the Internet.

Good luck!

 

[Zigner]

My guess is that she has some lady lawyer friend equally disdainful of the male species helping her feed you to the wolves.

I would expect ANY attorney, male or female, to push for as much as s/he can get for his/her client...it's one of the requirements of the job.

 

[HRZ]

Hopefully we might agree..he is unwise to feed himself to the wolves.

 

[LdiJ]

If op retains any incidents of control over his own life insurance policy it could well be taxed to his estate while ex gets full payout ..and merely converting existing policy to insurance trust invites a 3 year look back to add it to estate inside of 3 years. if op gets run over by proverbial beer truck

All of that is total BS. Seriously...complete and total BS.

if Op is looking at paying Ex a stream of $ xx for Yy years it's not hard math to do a discount back to present value under various rate of return assumptions and perhaps some rudimentary risk calculations ...I'm not the best of investors....but I'll bet my 10 year moving average on ROI is at least 10% so if you offer me 5000 shares of SSS worth $ Xxx,xxx or whatever as a walkaway number ..I can make up my mind pretty fast ..and might just prefer big bird in hand now and move on.

And this is even more BS.

What in the world is going on with you? You keep posting massive amounts of nonsense.

 

[HRZ]

You might want to revisit issues of taxation of life insurance , starting with IRC 2042

And the analysis of an income stream in terms of net present value is pretty basic economics and decision making

 

[not2cleverRed]

You might want to revisit issues of taxation of life insurance , starting with IRC 2042

And the analysis of an income stream in terms of net present value is pretty basic economics and decision making

Ldij is a tax professional. You, by your own admission, at best dabble.

a) OP wife is proposing an irrevocable trust.

b) The life insurance is only paid out after OP dies, so while OP is alive, the "taxation of life insurance" is not a concern.

Yes, good estate planning takes taxes into consideration. However, your concerns for the hypothetic adult children seem a bit overblown.

The simple answer to OP's question is: no, you don't have to agree to everything your stbx asks for. Whether a judge would order these things depends largely on a particular cases circumstances. In many cases it would be unlikely, as the modern thinking is that a woman should be expected to stand on her own two feet.

However, there are exceptions. If OP has not already retained an atty, an initial consultation would be worthwhile.

 

[HRZ]

Those are not the words posted by OP....and OP best make sure he is not feeding himself to the wolves on tax matters.

it may be obvious to you, me and LDiJ about how an irrevocable life insurance trust works...but OP best find out
IF he goes any such route.

And he best be using counsel !

And I suspect you both know that if he owns the policy with incidents of ownership that the value at his death can be in his estate .