Let’s say that Mr. X and his spouse are splitting up and this is what transpires:
- Mrs. X sends her spouse packing, suitcase in hand out the door.
- Mr. X receives a large annual bonus from his employer of $50,000.
- A couple of months later Mr. and Mrs. X have drinks and decide to have sex.
- Mr. X returns to being a total idiot shortly thereafter, reaffirming the fact that they need to get divorced. Mrs. X calls him up and says he can expect divorce papers soon.
A client at a local firm recently found that such a one night stand cost him $25,000. How could sleeping with your own wife cost you more than one of Eliot Spitzer’s call girls? Community property can be a bitch (depending on what side you’re on).
California, Louisiana, Arizona, Nevada, Texas, Washington, Idaho, and New Mexico are all community property states. Anything either spouse earns during the marriage is presumed to be jointly owned (50/50). In community property states, the “date of separation” is the date after which new income and property cease to be community property. So, after the “date of separation,” what’s his is his and what’s hers is hers.
Generally living apart from the other spouse establishes the “date of separation.” California Family Code Section 771 provides: “The earnings and accumulations of a spouse, . . .while living separate and apart from the other spouse, are the separate property of the spouse.” But what if you have sex with one another.
Although “living separate and apart” from the other spouse is good guideline, the California courts have looked to two factors which are prerequisites to separation: (1) one spouse has the subjective intent to end the marriage; and (2) there is objective evidence of conduct furthering that intent. In re Marriage of Hardin (1995) 38 Cal.App.4th 448.
Poor Mr. X
Going back to Mr. X and applying the above factors, having sex with his spouse clouded whether or not either spouse still had the subjective intent to end the marriage. Their conduct also muddied the waters. The court found that when they had sexual relations (Roman numeral III above), this “reset the clock” of their date of separation and they were not separated until Mrs. X reaffirmed her intent to end the marriage (Roman numeral IV above). The court found that since the date of separation was after Mr. X’s receipt of a $50,000 bonus check (Roman numeral II above), this bonus check was community property and half of the money belonged to Mrs. X. Ouch.
How Not To Be Mr. X
Mr. X could have saved himself $25,000 and additional legal fees if he had simply made a clean break and not had sex with his soon-to-be ex-wife. Recent movies like Friends With Benefits and No Strings Attached have given some people the idea that individuals can have a sex life separate from their emotional ties. In addition, middle age couples struggling with separation may fear the dating scene, have sexual needs, and feel the need to fulfill those needs with their soon-to-be ex-spouse in spite of their reasons for separation. As Mr. X can tell you, such a move can be quite expensive. Even if you aren’t thinking of “muddying the waters” with sex, during the recession many couples are living together in spite of their intent to split to save money. If any of your actions are going to make your intent to divorce unclear get an attorney and file for legal separation to protect yourself. If you file for legal separation, you don’t have to worry about the “date of separation”–the date you file for legal separation ends joint ownership of income and property acquired after that date. Don’t worry, if you file for legal separation and later decide to stay married, you can vacate (reverse) it. Just don’t be Mr. X.