Changes in Divorce Laws for 2017 Raise the Stakes in Child and Spousal Support Battles
According to government statistics, Californians pay more than $5 billion in child support, and more than $1 billion in spousal support, each year. It is estimated that more than 500,000 Californians receive child support or spousal support each year. Under the formula followed by most California counties, child support and spousal support can amount to as much as 40% of the paying spouse’s earnings. With stakes this high, the California legislature has not surprisingly been active with legislation designed to weigh the competing interests of paying and receiving spouses. For 2017, this means a new statute directed at determining the “date of separation” for purposes of deciding whether to award child support and spousal support and whether earnings are community property or separate property.
Under the new Family Code section 70, which takes effect on January 1, 2017, the “date of separation” occurs when a spouse has expressed to the other his or her intent to end the marriage, and that spouse’s conduct is consistent with his or her intent to end the marriage. This new statute overrules the Supreme Court’s decision in Marriage of Davis (2015) 61 Cal.4th 835, which ruled that separation required the spouses to be “living separately and apart” in different households. Under the new law, a court must consider all the relevant evidence in deciding when a couple has separated, such that child support and spousal support may be awarded and that each spouse’s earnings will be their separate property, rather than community property.
In another new development for spousal support law in 2017, the Court of Appeal has ruled that a spouse’s separate property must be considered for purposes of awarding spousal support. In Marriage of Brandes (2015) 239 Cal.App.4th 1461, the Court of Appeal ruled that the determination of spousal support must include an analysis of the separate assets available to the supported spouse, so that the amount of any spousal support award is consistent with the financial resources and needs of both parties. In Brandes, the husband was ordered to pay $450,000 per month in spousal support to the wife, based in part on his income of $5.6 million per month and the parties’ respective assets in excess of $400 million (husband) and $100 million (wife).
The Court of Appeal reversed the trial court’s property division award, and directed the trial court to award a share of the husband’s business to the wife, based on a share purchase agreement made during the marriage.
The Court of Appeal also ordered the trial court to reconsider the $450,000 monthly spousal support award to the extent the additional property award enabled the wife to support herself at this marital standard of living. The Court of Appeal observed that the additional property award might substantially increase the value of her assets, which could potentially be available in supporting her at the marital standard of living.
The Court of Appeal cautioned that the husband “is not entitled to a disproportionately higher standard of living than the wife” resulting from his $5.6 million monthly income, and suggested that the wife might need additional time in which to prudently invest her assets in order to generate investment income. The Court of Appeal also rejected the husband’s argument that the wife should not be awarded spousal support in an amount greater than her actual monthly expenses of approximately $100,000. The Court of Appeal disagreed, concluding that a spouse’s “needs” are only one factor in determining a proper amount of spousal support.