You hear about it more and more: the idea that a married couple might decide to separate, but remain under the same roof, often so they can easily co-parent and so as not to uproot the children. Sometimes it is to share residential expenses until a divorce is final or because each wants to be the one to stay, thinking they might increase the chance of staying in the residence with the kids after divorce.
They usually establish their own homes after the divorce is final.
Thrusting this idea before the public, married celebrities have lived together after their romantic relationships have ended – think Ben Affleck and Jennifer Garner, Gwyneth Paltrow and Chris Martin, Debra Messing and Daniel Zelman, Carlton and David Gebbia. But the practice is not just for the famous. It is not all that uncommon nowadays and is sometimes referred to as “the limbo phase.”
The legal date of separation under current law
Significantly, this living arrangement can have a major impact on property and debt division in divorce in California, a community property state. The important legal question that must be answered in the eventual divorce is: What was the date of separation?
In California, all property acquired by either spouse during marriage is community property, normally subject to 50-50 division in divorce. Accordingly, income of either spouse during marriage becomes part of the community estate subject to equal division.
Each party keeps his or her own separate property, meaning that which was inherited or received as a gift to the individual, was owned by a spouse before the marriage or acquired by a spouse after separation.
On the other side of the coin, debts incurred by either spouse during the marriage become community debt, subject to fair and equitable division in divorce.
The community estate, meaning the totality of all community property in a marriage, as well as the community debt, stop accumulating on the parties “date of separation.” After that date, income and property acquired by either spouse individually normally remains their separate property and a debt incurred is usually assigned to the spouse who took it out, with narrow exception.
The California Supreme Court has held that the date of separation means the day the spouses move to separate residences. The significance of this holding for a couple that lives together after they have effectively ended their romantic relationship, usually in anticipation of divorce, is that the community estate and community debt continue to accumulate.
Usually in this arrangement, however, people consider themselves to be economically separated. For example, they may keep their own income and take on debt as individuals with the intention of paying it off as individuals. But under current law, these intentions cannot defeat the legal continuation of the community estate because they do not have separate residences.
New legislation will change how the date of separation is determined
In direct, explicit response to the Supreme Court’s ruling and to recognize the reality of couples living together after separation, the California legislature almost unanimously voted to change how the date of separation is determined.
Under the new law, the date of separation will be when a complete and final break in the marital relationship occurred, which is shown by two things:
- One spouse has expressed to the other an intention to end the marriage
- The spouse’s conduct is consistent with an intention to end the marriage
The judge is to look at all relevant evidence to determine the date of separation.
The new law was signed by the governor in July 2016 and will take effect on January 1, 2017. Until then, the date of separation will still require separate residences.
Seek legal advice
Every situation is unique and anyone anticipating divorce should seek legal advice. For example, the date of separation may not be as important if a prenuptial agreement changes how property is characterized or divided, or if the parties negotiate a marital settlement agreement instead of having the judge divide their property and debt.