Now that I've had a chance to closely read it, here are my thoughts regarding the financial income and expense declaration (the “Declaration”) which Ioan filed. Standard disclaimer, I am not a family lawyer and these are my opinions based on my review of publicly available court records. I will not have any calculation of support possibilities here; it depends on so many factors, including the prenuptial agreement, the disclosures on both forms (if Alice ever submits hers), and the parties’ behavior, that I really can’t speculate on that with any certainty.
OK, here goes. Doing bullet points for ease of reading.
• This Declaration is not just “Ioan’s word.” The income schedule attached to the Declaration has been prepared by an independent third party accounting firm (see Attachment 1). This means it is independently verified information based on evidence. No accountant or attorney is going to put their license on the line for Ioan and file anything less than the truth.
• Also, let’s clarify what this Declaration is, and is not. This Declaration is NOT a complete list of expenses—it simply shows how much money is available for support purposes. This is an important distinction because you will see that the Declaration form only asks for certain limited categories of expenses.
• These financial records submitted by Ioan are pretty much the most recent we can get. No outdated information here. The financial disclosures have an end date of July 27, 2023, which is very close to the filing deadline of August 3, 2023.
• Ioan’s wages are verified by a W-2 form produced by the Internal Revenue Service (the IRS is not going to lie for Ioan).
• There is an ATRO in place in this divorce, as there is in all California divorces. An ATRO is an Automatic Temporary Restraining Order that is automatically issued at the start of a divorce proceeding and prohibits parties from transferring, concealing, or disposing of any property without the written consent of the other party for the entire term of the divorce. There are exceptions such as paying attorney fees and paying for the “necessities of life.” Changing the beneficiaries of insurance policies is also forbidden.
• Alice’s “childhood money” isn’t listed in the schedule of assets and liabilities, so it either doesn’t exist or is money taken from the community property accounts. If it was taken after the divorce it is in violation of the ATRO.
• A quick note on California prenuptial agreements (“prenups” for short). I have prepared many and am a published author on the subject in statewide legal treatises. A prenup sets out what belongs to whom at the start of a marriage, and dictates how property will be treated during the marriage and upon dissolution. Support can also be addressed in a prenup. There are two kinds of support—spousal support and child support. A prenup can modify the default California laws on spousal support or deny it entirely. However, it is illegal to use a prenup to modify default laws on child support, since that is a court’s decision.
• I bring up the prenup because there were two exhibits to the prenup (his and hers) which showed the parties’ separate property (property acquired before marriage and which is considered separate property during the term of the marriage and afterward). The assets which Ioan is claiming as separate property were listed in his exhibit to the prenup—dated April 16, 2007. As you can see from the schedule of assets and liabilities, some assets (CNB #8962 and Halifax #3101) which Alice claims as her separate property were not listed in her the prenup and thus their characterization as her separate property is suspect. No mention of the “childhood money” in the exhibits either.
• The balance sheet lists assets and liabilities. These are listed without taking into account any adjustments that may be made later, such as Epstein/Watts credits, claims for misappropriating money, or claims for breach of fiduciary duty (in California, spouses have a fiduciary duty toward each other).
• The balance sheet’s assets listed are only those which Ioan knows about. There may be other accounts out there held by Alice, either openly or secretly. She hasn’t filed her income and expense declaration by the deadline so we can’t see what she is claiming as hers.
• The funds from the house sale are interesting. As I mentioned earlier, when one sells a house in the U.S., the money is paid by the buyer into an escrow account. No money can be distributed to anyone from the escrow company until “closing costs” are paid. Closing costs include real estate agent commissions, real estate taxes, various fees, and other agreed-upon distributions. It appears some of the attorney fees were paid out of escrow as closing costs. Again, this is hard evidence that attorney fees were paid by Ioan because they came out as closing costs before Ioan and Alice were credited with their share of the sale.
• Ioan paid the house downpayment of $750,000 out of his separate funds and he still needs to be credited for that, so whatever is in Alice’s column after closing costs are paid must still be debited by $750,000 when things are settled up. As you can see, this results in a negative number for Alice.
• IRA accounts are pretty much untouchable for use on expenses because in the U.S., you are hit with a penalty tax if you withdraw funds before age 59 1/2 (yes, fifty-nine-and-a-half). So don’t consider any IRA funds when you consider what funds the parties have to live on.
• Alice is claiming Ioan has a Fidelity account, which he denies. Interesting but no more details on this are listed in the document.
• Interestingly, the attorney Langlois was hired in May 2023. That makes sense because there’s no way this Declaration could have been put together in a short time.
• Note that it seems that the parties and the minor’s counsel have agreed to a custody evaluation, thank goodness (see the last page of the document).
That’s it for now. Sorry this is so long, these are just my thoughts as I read through the Declaration.