What is the time rule?

Experienced family law attorneys will tell clients about the time rule. The Time Rule is the formula the Family Court uses to come up with a Community Property value for assets earned over time such as pensions, stock options, bonuses, and disability benefits. Most of these assets (retirement benefits and deferred compensation) are earned over time during a marriage.

When an asset is acquired before marriage and will be earned during marriage, California Family Law requires that you must apportion the values of community property and separate property.  The Court uses the time rule.  Under the time rule, for Benefits, the community interest is the percentage representing the fraction whose numerator is the length of service during marriage before separation, and the denominator is the employee spouse’s length of service in total. 

Here is a sample calculation:

Spouse 1 worked for Xerox for 30 years.  Spouse 1 was married to Spouse 2 for 20 of those years. The time rule gives the following percentage of the pension: 20/30 = 66%.  The total value of the Pension is $100,000. Then 66% or $66,000 is the amount of community property. Thus at equal division, each spouse takes $33,000.