If You Want the Court to Treat Your Income As Yours Alone You Must Live Apart
Date of separation can be a very important issue in a divorce. The reason is that in a marital dissolution proceeding, a court determines the division of property between the spouses by first characterizing the parties’ property as community property or separate property. Family Code section 760 provides that all property acquired by the spouses during the marriage is community property ―[e]xcept as otherwise provided by statute. One such statute is Family Code section 771, subdivision (a) of which provides that ―[t]he earnings and accumulations of a spouse . . . , while living separate and apart from the other spouse, are the separate property of the spouse.‖ In a California Supreme Court case, published July 20, 2015, the Court considered whether a couple may be living separate and apart, for purposes of section 771(a), when they live together in the same home. The court concluded the answer was no.
The court stated that “Consistent with the statute‘s history and the developed standard articulated by the case law, we hold that ―living separate and apart refers to a situation in which spouses are living in separate residences and at least one of them has the subjective intent to end the marital relationship, which intent is objectively evidenced by words or conduct reflecting that there is a complete and final break in the marriage relationship.” While the Court found this couple were not living separate and apart it expressly reserved judgment on whether a court could ever find that a couple were living separate and apart but still be under the same roof.
TAKE AWAY FOR PEOPLE CONTEMPLATING DIVORCE OR IN THE MIDST OF DIVORCE: This case makes it clear that if you want your earnings to be considered separate property you should not be living with your spouse. One of you or both of you should leave the marital residence. While the court did say there might be a fact pattern wherein cohabitants would be considered living separate under the law for purposes of characterizing income and earnings as separate property, the court shed no light on what that pattern of facts is.
Here is a link to the actual case if you care to read it. Davis v. Davis