It’s just a short hop from the holidays to what is known as “divorce season.” For the past 2 months, many people have been in holiday “limbo,” not making waves during this time of “goodwill.” I’ve counseled many women, often the lesser earners, who have remained in a separated-but-not-divorced “limbo” state for longer than a holiday season. For some, it becomes a permanent state.
In July 2015, the California Supreme Court resolved a difference in opinion in the state’s Court of Appeals: It held that spouses must “be living in separate residences in order for their earnings and accumulations to be their separate property.”
This ruling gave higher earners sufficient motivation to bear the inconvenience of uprooting themselves and their property in order to draw a line in the sand for future earnings and accumulations to be separate.
By extension, this created another class of those left behind who were financially dependent on the spouse who left: It created a financial system where money was still deposited in their bank account, or bills were still paid, but without a legal agreement.
Remaining separated indefinitely, but not pursuing divorce, is dangerous for many reasons:
1) Unless we know the exact financial standing within the relationship, then we have no idea how marital assets are being spent. The longer couples live separate lives without the knowledge of day-to-day financial events, the harder it will be to trace marital assets.
I have a client whose husband left her 2 years ago for another woman. She has passively watched as he has sold several marital assets, which are part of her community property.
My client doesn’t want to file for divorce because that may rock the boat; she is afraid that her support order will be less than it is now. The longer she waits, the more likely that assets will be hidden or will “disappear.”
2) Some clients condition themselves to live within this smaller “budget” indefinitely, not realizing that it might make it tougher to get a good settlement.
I’ve heard clients say that as long as their spouse makes a house payment, or puts a certain amount in the bank, they’d rather live with it than put themselves through the conflict of a divorce. This can be a dangerous plan because they’ve voluntarily diminished their standard of living.
The lesser earner has unwittingly made the case for her spouse that she has adjusted to the decreased standard of living. The longer it goes on, the harder it is to argue otherwise. Such clients make it tougher to get a good settlement. Little by little, they start decreasing the initial amount they have agreed to, and there is less reason to negotiate upwards.
3) No guarantees.
Lots of things can happen during a prolonged separation. Jobs can change; spouses could move to another state; health issues can arise; sudden retirement could become necessary. What happens if a spouse decides he is not going to continue the informal arrangement? There is no immediate recourse without a formal, legal agreement; he might not be as magnanimous.
By filing for divorce and taking charge of their financial future, “limbo” clients would be assured of a temporary support order guaranteeing funds are available to maintain their lifestyle during the divorce proceedings.
My suggestion to those who feel they are in limbo: Get your head together, get your team together, and start to take control of your life rather than wait for someone else to control it for you.