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Separate and Apart, Yet Together: When financially strapped couples opt not to file for divorce right away

As the economy plunged into a deep abyss in 2011, married couples came under financial strain. Intuitively, it would seem that divorce rates would increase due to the added stress. However, just the opposite was true. According to the CDC, divorce rates declined from 2008 to 2011. Many couples decided that they simply could not afford to get divorced. Some even continued to live together, but with the understanding that they were not committed to each other anymore. Now that the economy has somewhat recovered, and people are beginning to feel optimistic about their financial futures, some of these couples are finally filing for divorce.

This presents a problem: What is the date of separation? The date that one spouse finally left the house? Or several months/years earlier when the marriage relationship fell apart, even though both spouses remained living in the same house?  

California Family Code section 771 deals with post-separation earnings and accumulation of property. Anything that is earned by either spouse while "living separate and apart" from the other is deemed the separate property of that spouse. Can a couple be "living separate and apart," yet live together in the same house?

This is an issue that the California Supreme Court is currently considering, in In re Marriage of Davis (2013) 220 Cal.App.4th 1109 [163 Cal.Rptr.3d 695], review granted, (2014) 317 P.3d 1183 [167 Ca.Rptr.3d 656]. In that case, Wife informed Husband in 2006 of her intention to end the marriage, and took steps to act separately. She separated her finances from his, they took separate vacations, and she refused to ride in his vehicle or attend events with him. However, she remained in the family home for another five years. The trial court set the date of separation at 2006, and Husband appealed, arguing that it should be the date that she physically left the residence, 2011.

The First Circuit Court of Appeal affirmed the trial court's ruling, stating that parties can be deemed separate while living in the same household if substantial evidence shows that in every meaningful way, one of the parties has abandoned the relationship. To make that showing requires both a subjective and objective analysis: that is, a careful review of the party's beliefs (subjective) and actions (objective). Subjectively, a party's intent can be shown where there is a parting of ways with no present intent of resuming marital relations. Objective intent is shown by conduct evidencing a complete and final break in the marital relationship.

The California Supreme Court has accepted this matter for review, and according to the court's docket online, it has been fully briefed. No projected date for a decision has been issued. The outcome will potentially affect a large number of future divorce actions, where the parties have been living as roommates and co-parents, but not as married partners. These couples may have accumulated significant property since they deemed their marriage "over," and want to keep their hard-earned assets for themselves. If the Supreme Court reverses the First Circuit's decision, couples will find themselves having to share those assets equally with their estranged spouse, as community property. This would also affect debt that was entered into by the parties after their break-up, but while sharing a residence. It could become joint liability. What a bitter pill to swallow, when economic conditions forced them to stay in the same house so long after the marriage was emotionally over.

If you have questions about the date of separation, or divorce in general, please contact our office for a personal consultation with an attorney.

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