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Personal Injury Damages in a California Divorce

In a prior post, I went over the definition of “separate property” in New York. Under that definition (Section 236(B)(1)(d) of New York’s Domestic Relations Law, if you need to look it up), one of the things that is separate property in divorce in New York is damages received by a spouse for their personal injuries. In this post, I’m going to go over that same question — namely, is money received for personal injuries separate or not — for California. California and New York are similar politically, but remember that when it comes to divorces, California is a community property state and New York is not. Does that affect the answer? In short, yes. Money received for personal injuries sustained during the marriage is community property in California, but it is not automatically subject to division in the way community property typically is in a divorce. There are three California statutes that apply here, all of which are in the California Family Code. The first is section 780 of the California Family Code which provides the following. This entire statute is important, but I’ve put the super important parts in bold. “Except as provided in Section 781 and subject to the rules of allocation set forth in Section 2603, money and other property received or to be received by a married person in satisfaction of a judgment for damages for personal injuries, or pursuant to an agreement for the settlement or compromise of a claim for such damages, is community property if the cause of action for the damages arose during the marriage.” From this, the general rule...

Comparing and Contrasting New York and California Property Division Methods

As mentioned previously on this blog, California is in the small group of US states that use the community property method of property division when it comes to dividing items during a divorce. If you are involved in or around a California divorce case, you know that the terms “community property” and “separate property” are used frequently. As also mentioned previously, the former is divided equally during a California divorce while the latter is not. If you’re interested, community property in California is defined in section 760 of the California Family Code while separate property is defined in section 770(a) of the California Family Code. New York, on the other hand, is not a community property state, but rather uses a property division method called Equitable Distribution. New York is similar to most states in the US in that only about 10 states (mostly in the western US and southwestern US) use the community property method. Unfortunately, this distinction can become confusing to talk about because New York also uses the term “separate property” like California does. However, in place of “community property,” New York uses the term “marital property.” Terminology aside, what also makes it confusing is that the definitions for separate and marital/community property look very similar. For example, in New York, “separate property” is defined in New York Domestic Relations Law section 236(B)(1)(d) as: property acquired before marriage or property acquired by bequest, devise, descent, or gift from someone other than the person’s spouse; compensation for personal injuries; property acquired in exchange for or the increase in value of separate property, except to the extent this...

Transforming California Separate and Community Property (CA Family Code section 852)

When it comes to marriage and divorces in California, one concept that you must absolutely understand is the idea of community versus separate property. The idea is fundamentally very simple. In a nutshell, when you are married, the items you acquire during the marriage are — with a few exceptions — “community property” (see California Family Code section 760). Think of community property as belonging to both spouses equally. In the event of divorce, community property needs to be divided equally. Property that you acquire before or after the married couple separates is “separate property” (see California Family Code section 770) and is not divided during a divorce because it is owned just one of the spouses. Applying this idea in the real world, however, can be complicated for a few reasons. When something was acquired (e.g. during the marriage, before the marriage, etc) is really important. The parties can disagree about that and there is, unfortunately, not always a clear cut way to prove when something was acquired. Sometimes, the date of acquisition is not always a single date. This often happens when, for instance, one spouse buys something (e.g. a house or car) when they are single and pays for it over time that is partly when they are single and partly when they are married. Third, most normal people do not think of assets in terms of when it was acquired, what money was used to pay for it, etc. As a result, mixing or commingling of assets is very common, especially for inherently fungible items like money. Because of these problems and those like them,...

California Automatic Temporary Restraining Orders in Divorces (CA Family Code section 2040)

Everyone’s divorce is different. I haven’t checked every state, of course, but I would venture a guess that that applies to divorces all over. It is not specific specific to any one state in the US. One scenario that sometimes occurs is the following. Spouse A and B are married, but there is a disparity in earnings between the two. For example, only A works a job while B stays home to raise the children. Suppose that A and B then divorce. What, unfortunately, sometimes occurs is that A then attempts to exercise financial leverage to coerce B during the course of the divorce. I’ve seen this happen both in situations where A has filed for divorce and B has filed for divorce. In the former, A may feel entitled to, for instance, hide significant community property because A feels that property belongs to them since it came from their earnings. In the latter, A may feel entitled to cut B off financially by, for example, hiding assets as a way of retaliating for B filing a divorce in the first place. What is the spouse in B’s position to do to protect themselves? In California, B is protected by something called an Automatic Temporary Restraining Order — commonly called an “ATROS” — as defined in California Family Code section 2040 and that is the subject of this post. Most people have heard of the term “restraining order” which is generally a court order prohibiting (i.e. “restraining”) one party from doing something. A restraining order might be issued by a family court in a domestic violence situation, for example....
California Divorce and Powers of Attorney

California Divorce and Powers of Attorney

I had a post before about what happens in California to your will after you get divorced. Many people have their spouses named in their will in some way (e.g. to be executor). In nearly all cases, I would imagine you don’t want your ex-spouse to have control over your estate when you’ve died. Today, though, I’m going to go over a similar question: what happens in California to your Power of Attorney or Durable Power of Attorney document after you’ve gotten divorced? As with wills, many people name their spouses as their power of attorney agent or durable power of attorney agent and, as with divorces, most people likely don’t want their ex-spouses having control over them once the divorce is finally over. The relevant law here is going to be Section 4154 of the California Probate Code, section (a) of which states: “If after executing a power of attorney the principal’s marriage to the attorney-in-fact is dissolved or annulled, the principal’s designation of the former spouse as attorney-in-fact is revoked.” Section 4154(b) then goes on to say that if divorce or annulment of the marriage was the only reason why the power of attorney was revoked, then remarriage of the principal and attorney-in-fact will reinstate the power of attorney and the attorney-in-fact’s authority under it. If, however, the power of attorney was revoked for other reasons too and the principal and attorney-in-fact just happened to get divorced at the same time, then them remarrying does not reinstate the power of attorney and the attorney-in-fact’s authority. If you compare what happens to a will under section 6122 of...
California Divorce: Undisclosed Assets

California Divorce: Undisclosed Assets

This post is going to be about what happens to assets that were not previously disclosed during a California divorce case. This failure to disclose could be intentional, such as your soon-to-be ex-spouse purposely trying to hide bank accounts and other property from you. For instance, suppose you were a stay-at-home mom and your husband was the one who worked outside the home. Even though all the property the two of you acquired during the marriage is likely going to be community property to which you would be entitled to half, he might view it as all rightfully belonging to him because he was the one who went out to work for it. He might, for example, try to hide it by putting it all under his brother’s name, his elderly mother’s name, etc. The failure to disclose could also be accidental. People can be forgetful, even when they intend to be honest. Depending on your level of wealth, the length of the marriage, etc, it is possible that your soon-to-be ex-husband, for example, might forget that he had a 401K from a job he worked 20 years ago that he has never touched. Theoretically, all assets and debts should be disclosed during a divorce and each party should — in theory — have total access to all information regarding the couple’s finances. The reality, of course, is never that perfect. The fact that financial disclosure during a California divorce is voluntary and on the honor system doesn’t help either. Bottom line: if you’re involved in a California divorce and you believe your soon-to-be ex-spouse is trying to hide...