The Nastiest Divorce in California, Part I

I have a friend whose husband left her after 30 years of marriage. He didn't actually just leave her.  He planned his exit very carefully.Because they had accumulated wealth together during their 30 years of marriage in a community property state, he worked with his lawyer and accountant to set things up financially to circumvent the 50/50 divorce distribution required by law.He took out large loans and used the equity in their house and businesses as collateral. He devalued the stock in his privately held company. He cooked his books everywhere he could do it legally.

California is a community property state. He needed her to sign all the papers. She did, as she had so often done in past years with other loan papers, tax returns, contracts and everything else he did financially. He was the businessman, she thought. He knew what he was doing. She never asked questions; he never volunteered information.

After their separation, he repaid the loans with money he had stashed in a separate account of which she knew nothing. His credit rating remained intact. Her equity had been drained from their house. He was using a legal device called Epstein credits. Her lawyer hadn’t told her about this legal but deadly divorce tactic.

http://www.divorcenet.com/states/california/dividing_the_debts_in_divorce

The divorce lawyer she consulted took her as a client on a contingency basis. He recognized the name and the businesses they owned in the community. He thought that she would be able to pay him once the final settlement was official.

As her case unfolded, the lawyer realized that she wouldn't be able to pay him because her husband had left her with no money and responsibility for half of his debt. Eventually, the lawyer didn't return her calls. She couldn't find another lawyer who would work with her.

Her husband did nothing illegal. Neither did his attorneys or accountant. Her signature was on all the documents. She had no idea what she was signing. After five years of fighting for her legal rights, her case gets its final ruling this week.

Stay tuned.