Bay Area Divorce Lawyer Blog

Once upon a time, back in the 50’s/60’s when divorce was considered somewhat shameful and there were few of the wonderful, wise and supportive divorce professionals that, with some effort, can be found these days, Bill and Helen divorced.

It was a long, drawn out, torturous divorce that ended badly for everyone involved. (except for the floozy) Bill began sleeping with the town floozy and ultimately, fell in love with her. But he did not have the courage to tell Helen that he had fallen in love with someone else, and instead stayed away for long periods of time, was dishonest about what he was doing, and mean and judgmental with Helen, cruelly criticizing her for not being the woman he wanted, rather than being honest about his choices. Bill attempted to beat up one of his children for calling the floozy a slut. And the floozy was even more cruel and heartless than Bill. Helen was naïve and insecure and worried about what others might think, so did not open up with those who could have helped her. Nor was she able to simply confront Bill and suggest that the marital contract be terminated with as much dignity and respect as could be mustered. Or alternatively, simply ignore him, get some therapy and continue with a separate life while married. Instead, there were ugly fights, many tears and much sobbing, sleepless nights, and an emotional breakdown. Neither parent was present for the children in a meaningful way because, as is so often the case with divorces, the parents were too caught up in their own self-interest (Bill) and pain (Helen).

They lived separately for several years, Bill doing whatever Bill wanted and Helen working at a stressful, low wage job and trying to provide a home for the children. Seeing the pain Bill was causing, the children aligned with Helen and ceased their relationship with him, not even attending his funeral some forty odd years later.

Retirement benefits are often among the most significant assets in play when a couple decides to divorce. The question of how to divide those benefits can be a tricky one that implicates both state and federal laws. As California’s Second District Court of Appeals recently explained, state law in California generally dictates that retirement benefits are community property to be split evenly between spouses upon divorce. Federal law, however, mandates that Social Security retirement benefits remain the separate property of the spouse who contributes to the system during the course of the marriage.

Husband and Wife separated in February 2010, following roughly 16 years of marriage. Husband, who worked as an attorney, contributed to Social Security through deductions from his paychecks during the course of the marriage. Wife, who worked for a state government entity as an employee of local district attorney’s office, participated in a defined-benefit retirement plan (“LACERA”), in which her employer contributed the full amount. The total retirement benefits available to Wife under her LACERA plan were based on the number of years she worked, her age, and her compensation. The plan also barred covered employees from contributing to or receiving Social Security for the time they served in the district attorney’s office, according to the Court.

Husband and Wife eventually entered into a marital settlement agreement, in which they resolved a number of issues related to the divorce. Among other things, the couple agreed that Husband’s Social Security benefits – valued at $228,000 – were separate property and that Wife’s LACERA benefits – valued at about $215,000 – were community property. Wife later asked a trial court to divide the couple’s property in a way that accounted for this disparity. She said the court should either require Husband to reimburse the community for the Social Security contributions and then divide them equally, or allocate her all of the LACERA benefits to equalize the retirement assets. The trial judge declined, finding that federal law prevented the court from considering Husband’s Social Security benefits in dividing the couple’s property.

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California divorce courts generally consider any property owned by one spouse before a marriage that spouse’s separate property to be kept by the spouse in the event of a divorce. Community property, on the other hand, includes anything that one or both spouses acquire through their efforts during the marriage, and it is typically divided equally between the spouses upon divorce. A recent case from the state’s Fourth District Court of Appeals shows how spouses can change the nature of separate property by specifically granting the other spouse an interest in it.

Husband and Wife were married for roughly 32 years before separating in 2007. Two years earlier, they signed an agreement in which the couple stated that all of the property they owned now and anything they acquired going forward would be considered community property. The spouses were eventually able to resolve many of the issues related to the divorce, but a nine-day trial was also held to consider lingering matters related to property distribution.

Wife argued that the trial court erred in awarding Husband reimbursement for his separate property under Family Code section 2640 because of the agreement to transmute all separate property to community property.