Supreme Court Makes Important Changes in Law on Marital Separation, Community Property and Support
The California Supreme Court has issued a surprising decision overturning decades of precedent on the “date of separation” for purposes of community property, spousal support and child support. The supreme court’s ruling in Marriage of Davis (Case No. S215050, 7/20/15) has immediately resulted in important changes affecting the finances of divorcing spouses.
In the Davis case, the supreme court ruled that, for financial purposes, a marriage continues until the parties have begun “living separate and apart.” Thus, divorcing spouses who continue living under the same roof will generally be considered not to have separated, with their earnings belonging to the community rather than the separate property of each spouse. This means that child support and spousal support will ordinarily not be available to spouses who continue to live in the same household but otherwise view themselves as living separately and independently.
In the Davis case, Keith Davis and Sheryl Davis were married in 1993 and had two children. The wife filed for divorce in 2008. The wife argued that their “date of separation” was in 2006, when they began living separately in the same household for most purposes.
The husband argued that the “date of separation” did not occur until the wife moved out in 2011, more than two years after she filed for divorce. The trial court agreed with the wife’s position, and the husband brought an appeal to the California Supreme Court.
In its ruling, the supreme court considered the statutory language of Family Code section 771(a), which provides that the “earnings and accumulations of a spouse . . . while living separate and apart from the other spouse, are the separate property of the spouse.” The court examined the issue of whether a couple may be “living separate and apart” when they live together in the same home.
The supreme court concluded that the answer is no, and that the spouses must be living in separate residences in order for their earnings and accumulations to be their separate property. The court ruled that each spouse’s income will be community property belonging to both spouses until: (1) the spouses establish separate residences; and (2) at least one spouse demonstrates an intent to end the marital relationship, as objectively evidenced by words or conduct reflecting that there is a complete and final break in the marriage relationship.
The supreme court acknowledged the possibility that a couple could potentially be “living separate and apart” under the same roof in the right circumstances. This would appear to involve a clear and complete division of the household.
In the Davis case, the supreme court recognized that its decision “may work hardship in some specific situations,” but concluded that it was bound by the express language of the statute. The court expressed the view that its ruling would protect the lower-earning spouse by making both spouses’ earnings community property, during a time in the divorce process when a support order will generally be unavailable.
Divorcing spouses will need to carefully consider the profound changes in divorce law resulting from the Davis decision. First, this ruling will increase the length of marriage in many cases, with more higher-earning spouses paying spousal support for longer time periods. Second, a higher-earning spouse who seeks to avoid this result will potentially be subject to temporary support orders at an earlier date.
Third, a higher-earning spouse who wants financial independence will need to move out of the marital residence, but will then become subject to support orders. Fourth, a spouse who still lives in the marital residence but wants to separate his or her finances will need to carefully consider the automatic temporary restraining orders. The ATROs will ordinarily prevent a spouse from transferring funds from a joint bank account to a separate bank account, particularly where the funds involve community property.