California Family Law Attorney
3 entries found. Viewing page 1 of 1.  
April 07, 2010
  Am I LIABLE for my husband's NURSING HOME DEBT?
Posted By Thurman Arnold

Q. Am I liable for my husband's nursing home bills?

Community and both spouse's separate property is liable for the other spouse's "necessaries of life" while the spouses are living together, and even when they are living separately - unless they are living separately by agreement within the meaning of Family Code section 4302. If this occurs at a time when there is no community property but the other spouse does have separate property, there is a right of reimbursement for a period of time (i.e., if the other spouse dies there is a time limit on seeking reimbursement).

Note that spouses each owe a duty to support the other out of their own separate property if there is no community property. Family Code section 4301.

"Necessaries of life" include food, shelter, clothing, and the expenses of a final illness.

Thurman W. Arnold III
Continue reading "Am I LIABLE for my husband's NURSING HOME DEBT?" »

Permalink  | Comments()
January 18, 2010
  If my Wife and I are separated, do I have to pay the CREDIT CARDS she ran up after leaving?
Posted By Thurman Arnold

Q. My Wife and I are separated. Am I liable for her debts she incurs once we split up?

James, Blythe, CA

Credit Card Debt and Divorce

If you are a co-signor on, for instance, a credit card account you are also liable to the credit card company. The fact of divorce or separation does not itself alter your obligations with third parties (since they are not allowed to participate in the divorce and they would be prejudiced s if you could unilaterally disavow liability because of divorce).

As between you and spouse, you may or may not be obligated for one-half the debt depending on when the other spouse incurred it - if after separation, generally speaking they owe it. If the debt was incurred before separation, sometimes the debt will be assigned to one party without offset depending upon what it was for and whether they have the use of that property that the debt acquired - for instance, the furniture charged on the credit card or those car lease payments. Family Code section 910(b). Keep in mind, however, that if you move back in together (reconcile) you may lose these protections. The surest way to establish that a separation has in fact occurred is through filing a proceeding or Judgment for Dissolution or Legal Separation, although separations are suspect where parties continue to live under the same roof.

If your situation instead deals with credit card debt that existed at the date of separation, then read about Epstein credits/reimbursements.

The Court does have the power under Family Code section 2623 to divide post-separation debts for "necessaries of life of either spouse or the necessaries of life of the children of the marriage" as between the parties "according to the parties' respective needs and abilities to pay at the time the debt was incurred." This is a discretionary call for the judge, and generally debt is assigned to the party who incurs it - particularly if that party is already receiving court ordered or even voluntary child or spousal support. If the post-separation debt is not for a "necessary of life" it will assigned to the spouse who incurred the debt.

Once your divorce is final or a decree of legal separation has been entered, each spouse is solely liable for all debts incurred thereafter, including necessaries. A Judgment or Marital Termination Agreement is going to assign the debt existing as of that date as between the parties.

Author: T.W. Arnold, III, CFLS

Continue reading "If my Wife and I are separated, do I have to pay the CREDIT CARDS she ran up after leaving?" »

Permalink  | Comments()
January 17, 2010
  Why is the date of PHYSICAL SEPARATION legally important?
Posted By Thurman Arnold

Q. Why is the idea of 'physical separation' important in California divorce or domestic partnership dissolutions?

A. The idea of "physical separation" is one of the most important concepts to California matrimonial law. It determines presumptions based upon time of acquisition as to what is, or is not, community property. It is used to determine the length of marriage for purposes of deciding how long someone must pay, or can receive, spousal support. We've written a ton of stuff about this issue, and the laws have changed, changed again, and changed once more! See 2017's Family Code section 70.

Physical separation is the date that the marriage ends, for most practical purposes. The date of physical separation is the date that community property ceases to accumulate. Family Code section 771 states "The earnings and accumulations of a spouse and the minor children living with, or in the custody of, the spouse, while living separate and apart from the other spouse, are the separate property of the spouse."

Once spouses separate, all their earnings and everything that is acquired with those earnings are separate property of each spouse, respectively.

Similarly, upon separation each spouse is no longer liable for the debts of the other spouse. The community estate is liable for a debt incurred by either spouse "during marriage". During marriage "does not include the period during which the spouses are living separate and apart before a judgment of dissolution ... or legal separation...." FC section 910. An exception exists as to "necessaries" except to the extent that the parties are living separate by agreement and whether or not support is stipulated by that agreement. FC section 4302.

Separation is of critical importance to the expanding interpretation and growing field of the law of fiduciary duties. The duty of confidentiality that arises because of the marital relationship by legislative fiat (Family Code section 721) and which gives rise to major exposure for the conduct of spouses with regard to property and money, ceases at separation - meaning spouses no longer have the expectation and right of relying upon one another as trusted partners. Fiduciary duties continue pursuant to FC sections 1100 et seq. and sections 2100 et seq. as to assets that already exist, or can be considered marital opportunities arising after separation, until the time each asset in question is divided by agreement or court adjudication. Fiduciary duties are land mines. A good example of the consequences for breach of fiduciary duty is the Rossi case, where a wife who won the lottery and then filed for divorce the next day claiming she and her husband had already separated. She fails to list the lottery winnings in her paperwork, and refused to disclose it to the husband later claiming, among other things, that she had been a victim of domestic violence. Because the husband had no idea about the lottery winnings, he did not dispute the divorce or wife's asserted date of separation until much later when one day he received a letter intended for the wife by a company offering to buy out the winnings. He called the State Lottery Board, and then filed a motion to set aside the divorce degree and for damages for wife's fraud and breach of fiduciary duty. The court ordered the wife to disgorge all her winnings (100%) and pay them over to the husband.

The separation date is crucial to understanding reimbursement claims relating to payment on joint and separate debts, or in fixing rights to real property. For instance, California law provides that the community has an interest in the appreciation of a residence which is owned, meaning title is held, in one spouse's name alone where principal on a mortgage is being paid down. This is called the Moore-Marsden approach to equitable reimbursement. If the house appreciates after separation, the titled spouse may want to argue that all that appreciation belongs to them. Date of separation becomes important to the date of valuing the real estate and determining the relative principal loan amounts.

It is crucial where businesses are involved, regardless whether they are corporations, mom and pop shops, or sole proprietorships. For instance, what happens when a spouse who controls or who is the business, which was established before or during the marriage, continues to derive income from it after the parties separate? Maybe the business goes up in value. Perhaps it goes down in value through market factors, or maybe even the spouse intentionally drives it into the ground in order to reduce the amount that will be ordered to buy out the other spouse's interest. In all these situations a date of separation determination is crucial.

Another common area where it comes up in with regard to pensions, whether they be defined benefit plans or contributive benefit plans. Whatever accrues to the spouse who holds the pension by way of his post-separation contributions belongs to them.

Date of separation is also critical to determining the length of the marriage for purposes of spousal support or alimony rights. It is a snapshot in time with huge ramifications, including how long a spousal support obligation may continue and when it might be terminated.

It is critical that you hire an attorney who understands how to litigate and present the facts of physical separation. For a January, 2014 update and review of current date of separation appellate decisions, click here!

Author: Thurman W. Arnold III, Certified Family Law Specialist

Continue reading "Why is the date of PHYSICAL SEPARATION legally important?" »

Permalink  | Comments()
3 entries found. Viewing page 1 of 1.