Divorces, whether they occur in California or elsewhere, tend to take a number of months and can even go beyond a year if the spouses delay in making filings or in reaching agreements on issues in the divorce. California in fact will not issue a finalized divorce until at least six months after the action for divorce was commenced in court. In the meantime, spouses very well may continue to earn income, and might even bring in relatively large portions of income through annual bonuses paid at the end of the year. The question becomes whether the other spouse is entitled to some of that bonus, which brings us to the larger question of how California courts will split income earned by both spouses during the marriage and throughout the time the divorce is pending.
Community Property and the Date of Separation
One of the most important aspects of California divorce law is the concept of community property. California’s community property laws state that any property earned by either spouse during the time of the marriage belongs to the marital community and should be split 50/50 between the spouses upon divorce. This is the case no matter how much either spouse earned or worked.
The next question becomes then what will be considered the period of the marriage in which the community property laws will apply to earned income. The starting point is easy: the date the spouses were married. The ending point is called the “date of separation” and that is the date that at least one of the spouses decided he or she wanted to end the marriage and performed some conduct consistent with that intention, for example telling the other spouse that he or she wanted a divorce and taking action consistent with that intention. Both spouses do not have to have agreed on the date that they both wanted a divorce, but so long as one spouse resolutely told the other that a divorce was desired, that will be the date of separation.
Applying the Date of Separation to Bonuses
When applying the date of separation to regular weekly or monthly income, the court will simply rule that any income earned up until the date of separation by either spouse will be considered community property subject to 50/50 split, while income earned after that date will be separate property which belongs solely to the person who earned that property (note that a spouse may be required to pay spousal support on income earned after the date of separation, but spousal support is a whole separate inquiry from community property rules).
But with a year-end bonus, the court will want to look at how much of that bonus is attributable to work performed by the earning spouse prior to to the date of separation, and then award half that relative proportion of the bonus as community property. Let’s assume a wife earned a $24,000 year-end bonus and the bonus was awarded for work done throughout the year. If the date of separation was September 1, then the spouses would have been separated for four months of the year, or approximately ⅓ of the year, and would have been a marital community for approximately ⅔ of the year. In that example, the court would then award ⅔ of the $24,000 – or $16,000 – to the community, and the wife’s spouse would then be entitled to receive $8,000 of that bonus.
Things get more challenging when the bonus is not proportionate based on work throughout the year but might be attributable to specific events like a big sale. If that same bonus of $24,000 was all based on a single sale in December, after the date of separation, then the spouse would be entitled to nothing because it would be separate property. Conversely, if it was all attributable to a sale in August, before the date of separation, then the entire $24,000 would be community property. An experienced California family law attorney can help you look at your individual situation to make the appropriate calculations and arguments in your favor.
California Family Law Attorney In Torrance
For any questions on property division or any other aspect of divorce law in California, contact the Law Office of Kelly Finan today to schedule a consultation to discuss your circumstances.