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. 

What does equal division mean?

If you take your case to court, the Family Code requires an equal division of assets and debts. 

There are two types of equal division that a Court will use to divide community property- both assets and debts.  

In Kind Division - Is when the Parties divide the asset in two (stock, cash).

Asset Distribution - If the property is something that cannot be divided one side will get an asset of equal value or cash. Examples include - houses, stock portfolios, lines of credit.  

Here is a sample equalization chart. Spouse 1 takes on the credit card debt and has to give Spouse 2 a $50,000 payment so that both Spouses are equal at the end of the day.

What is a Lis Pendens?

A Lis Pendens or Notice of Pendency of Action prevents the opposing side in your divorce from encumbering real property in violation of an Automatic Temporary Restraining Order. 
Do you need a Lis Pendens? Only if you have real property that you think may be encumbered during a divorce.

To issue a Lis Pendens, you will need to a the Notice of Pendency of Action with the Court Clerk and then Record that Notice at the County’s Recorder office.  Here are some requirements, a Lis Pendens: (1) must be served on the other party, (2) must be identified in the pleading, (3) must be released at the end of the case. 

  

How do I calculate the length of our marriage?

There are two different dates to pay attention to when you calculate the length of your marriage.   

Are you trying to calculate the length of marriage for social security benefits or spousal military benefits?
For federal benefits, the date of marriage is measured from the date of marriage to the date of termination of status (the date your divorce decree is finalized).

Are you trying to calculate the length of marriage for spousal support and separate property?
California uses the date of separation as the date for the end of marriage to measure spousal support and the date on which all earnings become separate property.

What is Moore Marsden and do I need it?

Experienced San Francisco Bay Area Family Law Attorneys will tell clients about reimbursement rights for property purchased prior to marriage with separate property funds.

For example, if one spouse owns a residence or other real estate as separate property before marriage, and then community funds are used to reduce the principle owed on the mortgage, then the community estate will acquire a pro-tanto interest in the property. This is commonly known as Moore/Marsden based on two cases in the 1980s.

Stated another way, Moore/Marsden Rule provides that when community property funds are used to reduce the principal balance on a loan used to acquire a separate property residence owned prior to marriage by one of the spouses, the community acquires an interest in that property.

A different approach has been used when community property is used to improve separate property. In family law, separate property funds that are contributed to a community property are entitled to reimbursement under Family Code 2640 (without interest or appreciation). Be careful because the statute limits reimbursement to the net value of the property at the time of division.  An additional wrinkle in Moore Marsden calculations can be a refinancing - so contact a family lawyer or Certified Divorce Financial Planner if you have questions about separate property reimbursement.  

Learn more about property division:

MY SPOUSE LIQUIDATED OUR ACCOUNT DURING OUR DIVORCE, CAN HE DO THAT?

WHAT IS COMMUNITY PROPERTY?