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New Court Decision on Separate Property Issues
The Court of Appeal made several rulings in a recent case that clarified the law on the tracing of separate property to a community asset and on reimbursement and credits for a spouse’s exclusive use of the marital residence while the divorce case was pending.
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.
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.
Bifurcated Trial in Divorce Cases
Disputed issues in divorce cases must be resolved either through trial or settlement. Ordinarily, a case that has not settled must be decided in a single trial of all issues. However, Rule 5.175 of the Rules of Court allows the court to bifurcate (or separate) one or more issues for a separate, bifurcated trial before the remaining issues in the case.
What Is the Date of Separation?
In Marriage of Davis, the Court affirmed the importance of the date of separation in divorce. Segregating finances signaled intent, not physical separation.
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