How Will the “Bright Line” Ruling on California’s Date of Separation Affect You?
One of the most commonly litigated issues in divorce proceedings is California’s “date of separation.” This occurs because the date of Separation is so impactful to the most critical financial aspects of divorce, such as asset division and support issues.
In the past, to establish the date of separation, couples could lead separate lives under the same roof, as long as there was a clearly stated intent to divorce, accompanied by actions that represented that concept.
The court was not shy about asking invasive questions to determine when efforts to continue the marriage ceased, such as:
- “Do you live in separate rooms?
- “Do you still appear at events together portrayed as a couple?
- “Do you still do your spouse’s laundry?” (This was the lynchpin of a well- known case)
On July 20, 2015, a seminal new ruling went into effect that could have a dramatic impact on couples currently going through the divorce process that have not reached a settlement. This new ruling, intended to clarify a prior nebulous ruling, clearly states that spouses need to have separate residences to be considered separated.
This ruling resulted from a long-running case involving Sheryl Davis and her ex-husband. Ms. Davis started working full time and substantially increased her earnings while still living in the same house with her ex-husband. Initially, their date of separation was listed as 2006, but they continued to live separate lives, under the same roof, until 2011.
After 9 years, this case finally made its way into appeals in the California Supreme Court. In a “bright line“ ruling, the court upheld that even though the Davises acted like roommates, they will need to maintain separate residences before being considered as living separately. With this decision, Ms. Davis must share her earnings, as well as her pension plans and other assets, with her ex-husband (far exceeding the duration of the prior ruling).
This brings up a lot of questions for those contemplating or in the process of divorce:
- Will a higher wage earner be putting herself at risk if she delays moving out from the matrimonial home?
- Will she be liable for debts incurred by the spouse for a longer period of time?
- Will more of her assets be subject to community property laws?
- Would this leave the lower earner scrambling for temporary support (including child care)?
- What if there isn’t enough money to support two households?
In a previous blog, I talked about how the date of separation can affect every asset a couple has, as well as support issues. With this new ruling, all of those factors remain same, with the exception of when the date of separation actually occurs.
As you’re considering the financial ramifications of divorce, a Certified Divorce Financial Analyst (CDFA™) is your best source for financial information. Call me at 310-514-0240 or by email: Vickie@PlanVickie.com.
One more reason couples should stay out of court. I’ll explain.
IMHO, this is bad law.
First, let me explain what I mean by ‘bad law’: Law that serves the judicial or state interests in ease of implementation or enforcement by placing an inordinate burden upon or just plain ignores how citizens actually live their lives. This opinion does that.
Research tells us that, as adjusted for the cost of living wherever you live, separating your residences results in a 30% percent increase in the families’ basic living expenses. In the real world of post great recession middle class America, families cannot afford this additional burden without either a pay raise, digging into savings/retirement/college funds or robbing a bank somewhere. SO couples – like the Davis’s – stay together, living separate lives, in one house even to the point of filing for divorce and pursuing the case all the way to trial.
Who, in their right mind can rationally find that a marital relationship is still intact throughout such an adversarial ordeal? Welcome to ‘Ivory Tower” Law.
The good news is that only trial courts are required to enforce this rule. Couples who choose to stay out of court and enlist the help of a good mediator or collaborative divorce team can negotiate their own “date of financial separation” and create the legal documents to protect them from any attempts to apply the draconian results of this new law to their family.
Divorce is expensive enough. It just got more expensive. We just added one more reason for families to stay out of court.
After all, in all my years, I have yet to have a client come in and say, “I get a raise if we separate!”