Governor Brown signed SB 1255 on July 25, 2016 which becomes effective on January 1, 2017. The law overturns a controversial decision by the California Supreme Court in 2015 which re-set the date of separation in family law.

Traditionally, when a marriage dissolved, the parties moved out of the shared residence and into their own places. Over time, this began to change, particularly with the advent of the recession. People realized that if they could co-exist in the home, they could live more cheaply and more easily co-parent their children, even while considering the marriage to be dissolved. Spouses learned how to “live apart while living together.” In family law, the date of separation became the date that the parties considered themselves to be separated, even if they lived in the same household. In the case of In Re Marriage of Davis (2013) 220 Cal.App.4th 1109, the Court of Appeal held that “a spouse who continues to live in the family home but who, in every meaningful way, has abandoned the marital relationship” could still be separated.

That changed on July 20, 2015. The California Supreme Court held that the date of legal separation is the date that the parties lived in separate residences. In Re Marriage of Davis (2015) 61 Cal.4th 846. This was a game changer for many families.

The date of separation is important because that is the date when the assets are divided, including income, retirement plans, and debt. The date of separation is when a spouse’s half interest in the other spouse’s income, investments, and retirement plans ends. Debt incurred by a spouse after the date of separation is the responsibility of that spouse.

Because the “date of separation” when the parties still live together is “mushy,” this led to disagreements in court as to what the true date was. The California Supreme Court must have been frustrated and drew a strict line in the sand – the date of separation is when the parties live apart.

The Davis decision made it easier for the trial courts but did not make it easier for spouses who were making the best of a difficult situation by living together. The parties had to go back to doing a cost analysis of setting up a new home in order to establish a clear “date of separation” to protect their income and retirement monies. Davis did not care that a shared living arrangement could be the result of dire financial straits for one or both of the spouses.

The California Legislature wrote a new law that torpedoed Davis. Family Code Section 70 now defines the “date of separation” to mean “the date that a complete and final break in the marital relationship has occurred, as evidenced by the spouse’s expression of his or her intent to end the marriage and conduct that is consistent with that intent. The bill would direct a court to take into account all relevant evidence in determining the date of separation.” The new law will allow the spouses to declare themselves to be separated, but give them the flexibility to live in the same household in order to save money and raise their children in a cooperative arrangement.

Why is this article in a Municipal Law blog? Because, while an employer does not participate in family law proceedings, it should be aware of new laws that will have a real effect on its employees. It may change their living situation, how their income and retirement plans are divided, and how their contracts are negotiated and written.