This article has been written by Md Mosiur Rahman pursuing Crack California Bar Examination – Test Prep Course and edited by Shashwat Kaushik.
This article has been published by Sneha Mahawar.
Table of Contents
Introduction
Termination of the marital economic community in California is a crucial legal aspect that happens at the end of a marriage. California is a community property state where assets and debts are equally divided among the spouses wishing to bring an end to their conjugal life. This article delves into an overview of the formation of the marital economic community, essential requirements, exceptions, termination procedures, and division of the marital economic community after termination exploring the legal framework, principles, and implications of this process. This article also probes into the clarification of marital property, spousal support, and other financial considerations that need to be fulfilled during and after the termination process. However, the article aims to focus on an inclusive understanding of how the termination of the marital economic community functions within the legal framework of California.
Formation of marital economic community
The concept of marital economic community is governed by Califonia’s family law system. The marital economic community is a legal concept that pertains to the financial settlement and shared assets of married spouses which begins with marriage when couples decide to live together after the marriage. In the marital economic community, the spouses are considered to hold joint ownership of their assets, liabilities, and obligations during their valid marriage. After forming the marital economic community it creates the rights and obligations upon the couples regarding their property and it will be governed by the community property laws. The marital economic community is also called marital property or community property, it denotes the financial and property rights and responsibilities that spouses share during their marriage. Sections 760 and 761 of the California Family Code define all property, real or personal acquired by a married person as community property. However, the community property may be classified in various forms, these are discussed in the subsequent subparagraphs.
Community property
The perception of community property exists to protect spousal rights. Community property includes all property acquired during marriage and is the default characterization of all marital assets. Community property typically includes salary, wages, and other compensation for work performed during marriage, the benefits resulting from the labour and skills of each spouse, income derived from community property assets, and separate property that has been changed into community property. But if the property is established to be separate property, that will not be counted as community property.
Separate property
Separate property is all other property that each spouse acquired before the creation or after the termination of the community property estate and property acquired by one spouse during marriage through gift, inheritance, or an award for personal injury damage. If the property is acquired solely with separate property funds, it retains its status as a separate property. So, the property acquired before marriage or after permanent separation is characterised as separate property.
Quasi-community property
If the spouses acquired assets during the marriage while residing out of California in a non-community property state, that property would have been treated as quasi-community property. Quasi-community property will be considered community property upon the death or divorce of the spouse. Before that, the property is subject to the laws of the non-community state. After the death or divorce of the spouse, quasi-community property will be divided in a manner similar to community property.
Termination of the marital economic community
The termination of the marital economic community in California is governed by the state’s community property laws and regulations. When this community is terminated, it may occur in several ways, including death, change of domicile, divorce or legal separation, physical separation, and annulment.
Death
A marital economic community that has been created will be terminated on the date that one spouse dies. Upon death, the physical existence is diminished and anything of further consequence is stopped for good. But the rights and obligations are created for the person who is still alive. So, upon the death of any spouses, the community property will terminate.
Change in domicile
A marital economic community that has been created will be terminated when spouses change their domicile from California to a non-community law state. In that case, their property will be controlled by the jurisdiction of the law in which they are domiciled. Due to such a transfer of domicile from California, their property will be divided according to the community property law and community property will be terminated.
Divorce or legal separation
Divorce or legal separation, is the most common way to terminate a marital economic community in California. It involves the legal dissolution of the marriage. If a party is seeking only to terminate their marital status, then personal jurisdiction over both spouses is not mandatory. If at least one spouse is domiciled in California for at least six months and notice of the proceedings is provided to the other party, the proceeding can be initiated and continue to the trial for a final decree.
Physical separation
California law holds that community property will be terminated when spouses physically separate and both spouses intend to permanently end the marriage. This mutual intent must be established through the actions and conduct of the spouses. Physical separation is an alternative to divorce; in this case, spouses live separately but remain legally married. In a physical separation, spouses remain married in the eyes of the law but live separately forever.
Annulment
Annulment is the declaration that a marriage was void or invalid from the beginning, as it never existed. Thus, if a marriage is illegally formed and if it is annulled, then the parties will regain their legal rights and responsibilities as they were before the marriage happened. Grounds for annulments may include insanity, fraud, force, duress, incompetency, being underage, and polygamy. Annulments result like divorces in that courts may decree nearly anything that would be common upon a decree of divorce. Under Section 2210 of the California Family Code, a marriage qualifies for annulments.
Legal framework
The primary source of law in California related to the termination of marital economic community and issues relating to family law matters is the California Family Code. The California Family Code, which became operative in 1994, applies to all family law matters in California, including divorce, property division, support, and other related issues. Other primary sources of law are the published case law from the California appellate courts and the California Supreme Court.
Procedure for termination
There is no other separate family court in California. Jurisdiction over all proceedings lies with the Superior Court and under the provisions of Section 200 of the California Family Code, all family law proceedings must be commenced in the Superior Court. Except in a few very limited circumstances, all proceedings are public proceedings, which means the trial is conducted in an open court. When a party is seeking to terminate their marital status, personal jurisdiction over both spouses is not required. If at least one spouse is domiciled in California for at least six months, they can initiate the proceedings, providing notice of the proceeding to the other party. So, the termination proceeding is initiated by the filing of a petition by one party, and after that, the respondent generally has 30 days to file their response to the facts. After that time, the case can be set for a court hearing, and upon the merits of the case, a decree will be awarded by the court.
Division of property upon termination
The termination of the marital economic community involves the division of community property. According to the provisions of Section 2550 of the California Family Code, the court must divide all community property assets equally. Joint titles’ property and acquired property during the marriage is treated as community property. The court has the discretion to award a property entirely to one party for the purpose of an overall equal division of the community property. According to the provisions of Section 2550 of the California Family Code, the court also has the power to make an unequal division of assets to one party if it seems that properties were misappropriated by the other party. However, the court may award the entirety of one property to one party to affect a substantially equal division of the community property in an exception when economic circumstances arise for such a division.
Spousal support
According to Section 4300 of the California Family Code, each party has to support the other party. After the termination of a marital economic community, spousal support is apportioned into two divisions, such as temporary support orders and permanent orders. The court has the authority to order a party to pay temporary spousal support in any amount necessary to support the other spouse during the proceeding. The amount for temporary support may be considered by the court as outlined in Section 4320 of the California Family Code, but the most important factor will be the relative income of the parties concerned. Temporary spousal support is given to maintain the party’s marital standard of living.
Grounds on which the award will be given
The court will order a party to pay spousal support for a reasonable period based on the listed factors. If the term of marriage is less than ten years, short-term or medium-term maintenance is awarded. On the other hand, if the marriage term is more than ten years or closer to ten years, the court must order support on an open-ended basis if both parties have not agreed otherwise.
Set formula or court discretion
There is both a set formula and discretion in setting the amount of spousal maintenance. California courts follow statewide uniform support guidelines. In considering the amount of permanent support, the court is bound by the statutory guidelines of Section 4320 of the California Family Code. So, in determining the relevant spousal support, there are set formulas, and based on these guidelines, the court exercises its discretionary authority.
States with community property law
In the United States of America, there are currently nine states that have community property laws. These nine states are:
- California
- Arizona
- Idaho
- Louisiana
- Nevada
- New Mexico
- Texas
- Washington
- Wisconsin
However, each state has its own set of rules and laws, and the definition of how community property should be divided varies from state to state.
Conclusion
The termination of the marital economic community in California is a significant and complex legal process that influences the financial well-being of the spouses. In this article, it is barely evident that the termination is not the end. Furthermore, the rights, responsibilities, and obligations to each other are much more considerable issues even upon the closing of a marital bond. Understanding the crucial legal aspects is essential for individuals in deciding the separation. However, it should be noted that if there are any difficulties or complexities regarding the termination of the marital economic community, the California courts have exclusive jurisdiction and authority to dissolve the conflicts in an amicable and discretionary manner.
References
- https://leginfo.legislature.ca.gov/faces/codesTOCSelected.xhtml?tocCode=FAM&tocTitle=+Family+Code+-+FAM
- https://www.irs.gov/irm/part25/irm_25-018-001
- https://www.findlaw.com/state/california-law.html
- https://uk.practicallaw.thomsonreuters.com/9-614-4465?transitionType=Default&contextData=(sc.Default)&firstPage=true
- https://www.nathanlawoffices.com/blog/when-does-the-marital-economic-community-end-and-why-does-it-matter-.cfm
- https://walzermelcher.com/what-is-community-property-in-a-california-divorce/
- https://www.wkfamilylaw.com/getting-an-annulment-in-california/
- https://sf.courts.ca.gov/self-help/divorce-separation-annulment
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