Category Archives: Community Property

Retirement Benefits at Dissolution

In In Re Marriage of Green, Husband had served in the military for 4 years preceding his marriage to Wife. During marriage, he worked as a firefighter and was given the opportunity to purchase up to four years of service credit towards his retirement benefits (with CalPers) for his previous military service. Husband and Wife paid approximately $11,000 of community property funds to purchase the benefit via an installment plan before the parties separated.

Because the military service occurred entirely before the marriage, the service credit related to that service was Husband’s separate property, “except to the extent the community contributed to the payments necessary to obtain it.”  Wife’s interest, at dissolution, was therefore limited to one-half of the community contributions plus interest – not the additional increase in value for those years of service that Wife had requested.

The Court reaffirmed previous rulings regarding the apportionment of an employee spouse’s retirement benefit between the between the spouses’ community property interest and any separate property interest the employee spouse may have. The court has discretion to choose the method of apportionment as long as the result is reasonable and fairly represents the relative contributions of the community and separate estates.

In sum, the Court reviewed the general rules regarding pension division at dissolution (notably: “…all property that a spouse acquires during marriage before separation is community property. (Fam. Code, §§ 760, 770.) Community property may include the right to retirement benefits that the employee spouse accrues as deferred compensation for services rendered. The right to retirement benefits is a property interest. To the extent that such a right derives from service during marriage before separation, it is a community asset.”) and applied them to a specific retirement benefit.  (The San Francisco Chronicle reported on the case here.)

If you have questions about your retirement benefits or your spouse’s retirement benefits, be sure to speak to a qualified family law attorney to help you determine the community v. separate property interest in those benefits.

Former spouses co-owning family business after divorce

Ordinarily, marital dissolution involves too much hostility and distrust for couples to co-manage a family business following divorce.  Occasionally, however, divorcing parties believe that it is in their best financial interest to jointly manage and control a family business post divorce.  Read more about this in a recent NYT article:   Read more about this here.