California is a “community property” state, which means that property acquired jointly by spouses during the marriage is presumed to be part of the community property split. During a divorce proceeding, the court will determine if a piece of property is considered separate or community property. One of the rules that helps provide a clear definition of separate or community property is the rule that property acquired while spouses are “living separate and apart” is considered separate (California Family Code Sec. 771(a).
To determine when a couple starts living apart, the courts request a “date of separation” which determines if property or income obtained during that period is marital or separate property. It is imperative that couples establish this date to determine which assets and earnings belong to which spouse. The date of separation can also have a dramatic impact on retirement accounts, social security benefits and even business ownership.
Unfortunately, the date of separation is not always a clear cut date for couples. In the Marriage of Davis, the date of separation became confusing, but that case definitely created a more clear-cut definition of “separate and apart” for future divorce cases.
The Marriage of Davis
In the Marriage of Davis, the couple had stopped living as a married couple, but remained in the same household for nine years before filing for divorce. They were still living separately, despite sharing the same household. They held separate bank accounts, drove separate cars to children’s activities, did not share bedrooms and did not share household chores. They did, however, share a joint account to contribute toward household expenses, which later was the reason for the couple’s official divorce.
Even though the couple had clearly split ways and there was no intention of resuming the marital relationship, the court decided that living separate and apart requires the couple to actually live in separate households. Because the court decided that they were not considered “separate and apart”, any income and assets acquired during those nine years was still subject to community property – including the husband’s recent increase in wages and new business venture.
In the past, the courts had not looked for one key defining factor when determining if couples were in fact separate. Instead, they looked at the totality of the couple’s actions to see whether or not they were working to maintain a marital relationship.
What This Means for the Future
Not all couples can financially afford to move out into their own living space upon legal separation. With the current economic conditions, spouses may have to share a residence despite the fact that their marital relationship is over – similar to the Marriage of Davis. Some couples in the past have also chosen to share a roof and put off divorce for the stability of their children’s lives, but with the new ruling, couples that choose to live in the same household will still be subjected to community property splits – regardless of how long they have been apart.
Speak with a California Divorce Attorney Regarding Your Community Property Concerns
The Marriage of Davis has changed the landscape and will create more careful consideration when attorneys advise their clients regarding separation issues and asset division. Until the courts further clarify the matter, whether a spouse moves out of the family home or not may become a deciding factor for determining if newly acquired income or assets are subject to distribution. If you have a complicated separation, contact Sarieh Law Offices today. We can help you define your Date of Separation and understand the recent changes. Call us at 714-542-6200 or contact us online to schedule a consultation.
