Determining Date of Separation in California Dissolution Cases

In California dissolution cases the phrase “Date of Separation” (“DOS”) is what we refer to as a “term of art”–it is a phrase with legal significance separate from its colloquial usage.

In California, this legal term refers to the day that one spouse finally determined that his or her marriage was over, and subsequently did not change his or her mind.  If there is a contest over date of separation, the court looks to external behaviors which support the internal decision to finally end the marriage.  Commonly, the court will look at whether the parties maintain a romantic relationship, whether they hold themselves out in public as man and wife, whether they exchange articles of affection, whether they maintain joint finances, whether they engage in therapy or similar to revive the marriage, whether they communicate with each other or third parties about continuing the marriage, or getting back together, etc. The court is looking for “indicia of finality.”

For example, a spouse may loudly declare a marriage over, but if he or she subsequently discusses with the other spouse the possibility of engaging in marital therapy to save the marriage, a court might conclude that the Date of Separation lies after the spouses’ discussions about engaging in therapy, finding that the discussion demonstrates the spouses had not made a “final” decision.

At Divorce Helpline, our lawyers have the experience you can trust in helping divorcing couples navigate separation, divorce and California Family Law.

Prenuptials: Rendering Agreements Enforceable Against Third Parties

There are some special procedures that you should be aware of for ensuring that your agreement is enforceable against third parties.

  1. Real Property. Under bona fide purchaser rules, a transmutation of real property is not effective regarding third parties without notice of the transmutation unless it is recorded. Thus, a premarital agreement affecting real property rights and any deed executed in accordance with the agreement should be recorded with the County Recorder to provide constructive notice to third parties.
  1. Creditors. A premarital agreement may also protect the property of one spouse from the creditors of the other on debts incurred by the other during marriage. The California Supreme Court has suggested that, as long as creditors are given proper notice, a premarital agreement that provides that each spouse’s earnings and acquisitions during marriage will be his or her separate property may preclude creditors of one spouse from taking the earnings and acquisitions of the other because those earnings and acquisitions would not be community property.

Proper notice probably requires, however, that the creditor be informed about the agreement at or before the time a debt is incurred.

Retention of Documents. In case your premarital agreement is ever contested, it is important for you to keep a copy of all correspondence, especially correspondence directed at your fiance, and anything he or she signs.

Divorce Helpline can assist with any questions regarding how to render prenuptials enforceable against 3rd parties; we have over twenty-years of experience in drafting prenuptial agreements.  For details on prenuptial agreements check out our articles on the impact of prenuptial agreements on nuptials, common provisions, legal requirements, and what should not be included.

Prenuptials: What Should, or May Not Be Included

The following are some provisions which should not, or in some cases, may not be included.

1. Provisions Regulating or Controlling Personal Aspects of Marriage.
Inclusion of provisions in a premarital agreement that attempt to regulate or control personal aspects of the parties’ marriage is very strongly not recommended. Beyond the reluctance of courts to regulate such matters generally, case law has held that contracts purporting to alter the legal incidents of marriage are void and unenforceable as against public policy.

Avoid including in the agreement any provisions that relate to religious practices or instruction, particularly with respect to children, as well as provisions that attempt to regulate or punish personal behavior, or that purport to require or reward personal services between the parties.
These sorts of provisions that have been struck down by courts in the past

a. property forfeiture provision for use of illegal drugs was invalid;
b. contract imposing damages of $50,000 on spouse who is unfaithful is unenforceable as against public policy of no-fault divorce;
c. contract by which husband promised to transfer certain property to wife in exchange for in-home care of him for duration of illness;
d. services as nurse and housekeeper;
e. nursing services and companionship.

2. Duty of Support During Marriage. By statute, each spouse contracts towards the other a duty of support during an ongoing marriage, and it does not appear that this statutory duty may be waived.

3. Agreements That Promote Dissolution or Reward a Spouse Upon Dissolution. Agreements that promote dissolution are prohibited. These are usually provisions that provide a benefit for filing dissolution, e.g., an agreement promotes dissolution if it provides for a transfer of property of substantial value only in the event of dissolution.

4. Child Custody or Child Support. To the extent that they purport to dictate child custody orders, premarital agreements are not binding on the courts.

5. Waiver of Joint and Survivor Annuity or Survivor Benefits Under Private Retirement Plan Probably Unenforceable. It appears that the rights of a nonparticipant spouse to receive a joint and survivor annuity or survivor benefits under a private retirement plan following the participant spouse’s death, as distinguished from other retirement benefits, cannot be waived in a premarital agreement.

Divorce Helpline can assist with any questions regarding what is enforceable in California prenuptials; we have over twenty-years of experience in drafting prenuptial agreements.  For details on prenuptial agreements check out our articles on the impact of prenuptial agreements on nuptials, common provisions, and legal requirements.

Premarital Agreements: Prenuptial Legal Requirements

California has strict and detailed requirements for an enforceable prenuptial agreement include the following:

  1. Both parties must be independently represented by separate attorneys, unless a spouse is advised to seek legal representation and waives hiring an attorney in a separate written instrument.
  2. Both parties must have at least seven (7) calendar days from the time they are first presented with the agreement to study and consider it before signing.
  3. If one of the parties is not represented by an attorney (and has signed a separate written waiver) he or she must be fully informed in writing, prior to signing, of the terms and basic effect of the agreement as well as the rights and obligations he or she is giving up by signing the agreement.

In the preparation of a premarital agreement each party is required to prepare and disclosure all of their assets and liabilities to the other party.

An expensive aspect of prenuptial can arise if a fiance doesn’t retain counsel to explain the premarital agreement to him or her.  In that event the attorney will have to draft a fairly extensive letter fully informing the fiance of the terms and basis effect of the premarital and the rights and obligations he or she is giving up.  This letter is involved and expensive—it may be less costly to pay an independent attorney to review the agreement and orally explain it to him or her.

Divorce Helpline can assist with any questions regarding prenuptial legal requirements or general questions. For details on prenuptial agreements check out our articles on the impact of prenuptial agreements on nuptialscommon provisions, and what is enforceable.

Prenuptials: Common Provisions

I wanted to briefly overview the common provisions often found in premarital agreements.

A “premarital agreement” is an agreement between prospective spouses made in contemplation of marriage and to be effective upon marriage. A premarital agreement shall be in writing and signed by both parties voluntarily and not under duress, fraud or undue influence.

Common Provisions.  A premarital agreement is designed to protect the rights of each party.  Some common provisions are:

  1. Provisions precluding the creation of community property. A premarital agreement may be used to preclude the creation of community property interests, either entirely or with specified exceptions.

E.g., under a general agreement designed to preclude the creation of community property, each party’s earnings during marriage and before separation, and the value of their efforts during marriage, and any items acquired by the party with those earnings, can be his or her separate property.  It can strengthen such a provision to designate one joint account as the only place where community funds will be kept—i.e. by funding any money into such an account, it becomes community property.

Another common provision is that any debt or asset acquired in one spouse’s name is the separate property of that spouse.

  1. Provisions to maintain the character of separate property. A premarital agreement may be used to ensure that a spouse’s separate property owned before marriage remains separate after marriage, regardless of any developments (e.g., any increase in value attributable to community payments or effort) that might otherwise result in a community interest in the property.

You may wish to have a provision that states that no community interest in a spouse’s separate property, and no right of reimbursement to the community or to a spouse, may be created unless it is created in a writing, and that absent a writing any contribution of time, money or effort to the benefit of a spouse’s separate property is deemed a gift.

  1. Provisions to waive or limit spousal support. Prospective spouses can enter into provisions waiving or modifying spousal support rights subject to the following restrictions.

Any provision in a premarital agreement regarding spousal support, including, but not limited to, a waiver of it, is not enforceable if the party against whom enforcement of the spousal support provision is sought was not represented by independent counsel at the time the agreement containing the provision was signed, or if the provision regarding spousal support is unconscionable at the time of enforcement. An otherwise unenforceable provision in a premarital agreement regarding spousal support may not become enforceable solely because the party against whom enforcement is sought was represented by independent counsel.

  1. Provisions for transmuting the character of existing property. By means of a premarital agreement, parties also may contract to transmute the character of property from

Community property to separate property;  Separate property of one or both parties to community property; or  Separate property of one party to the separate property of the other party.

At Divorce Helpline we are here to make the legal side of your marriage simple and clear and we offer prenuptial services. Check out our blog on the impact of prenuptial agreements, legal requirements, and what is enforceable.

Prenuptial Agreements: Impact On Nuptials

Prenuptial, or premarital agreements, can be very difficult to draft, negotiate and implement.  The most obvious problem is that prenuptial agreements are held to high legal review standards for voluntariness (you weren’t coerced into signing, even emotionally), and knowledge (you understood the legal effect of what you signed).  So there are safeguards that have to be put in place to create an enforceable document.

Unfortunately, this process takes place between two individuals who are probably deeply in love and delighted about their upcoming nuptials.  The bottom line is, the required t’s to cross and i’s to dot in the process of negotiating and drafting a prenuptial can have quite a dampening effect on the process of the marriage.

Further, prenuptials often require provisions that go into branching conditional alternatives–e.g, if this happens, then this rule applies, but if that occurs, then…  There are some similarities to estate planning, in that you have to try to anticipate all of the things that could happen.

The result of this is that a seemingly simple list from a prenuptial client can spawn thirty-pages of prenuptial text, for reasons that may not be immediately apparent to the marrying couple.  This can add further strain.

At Divorce Helpline, we have over twenty-years of experience in drafting prenuptial agreements.  We strive to make the process as pain-free as possible, while at the same time creating a document that will protect your agreements if that ever becomes necessary.   For details on prenuptial agreements check out our articles on common provisionslegal requirements, and what is enforceable.

Divorce Trial Evidence: Authenticity and Hearsay

Authenticity and hearsay.

You have your own list of documents or other physical evidence you need, and one from your expert or experts.

The first step: When it comes from the other side, it is good to go.

Your spouse will have to produce at least one Declaration of Disclosure, and you may issue Discovery requiring your spouse to produce information or physical evidence, usually documents. When it comes from your spouse as part of their Declaration of Disclosure, or as a response to Discovery, you are done: the evidence’s authenticity is established and your spouse is estopped from making a hearsay objection.

This is why it is very important to make sure that your spouse’s Declaration of Disclosure is complete and states a position regarding each assets and debts characterization (whether it is community or separate property) and value. If your spouse’s Declaration of Disclosure is lacking, then you can and should ask for a complete response from them, to create a document that you can use at trial.

Voluntary production.

Your spouse or their attorney might also produce discovery to you voluntarily. If so, it’s important that you have some means of proving that production: e.g., at a trial you still may have to prove that your spouse gave you two-hundred pages of bank documents two years earlier.

The safest route would be to ask them to list the produced items in a dated and signed letter along with a verification—a signed statement under penalty of perjury.

Your documents, documents from third parties, and Declarations of Custodian.

For any item of physical evidence that you or your expert needs that has not been produced by the other side (e.g., documents you subpoena from third parties, or have acquired yourself), in most cases, if these are business records, you can admit the evidence so long as they are accompanied by a “Declaration of Custodian,” a document from the third party institution that verifies that the identified documents are authentic and should be admitted without the live testimony of the person who drafted the documents.

Generally, you can get a Declaration of Custodian for your documents by issuing a discovery demand called a “Deposition Subpoena for Production of Business Records” to the institution. If you use an attorney service to draft this discovery demand, they will also draft a Declaration of Custodian.

Authenticity is easy to understand. Hearsay can be tricky: generally, when a party at a trial tries to enter evidence of a statement, the other side has the right to question the person who made the statement (this is called cross-examination). When the person who made the statement is not at the trial, and ready to be questioned about what they said, this statement may be excluded as hearsay. Certain business records, even though they contain statements, do not require the testimony of the person who made the statement—this is what is called an exception to the hearsay rule. A good Declaration of Custodian can establish that documents are authentic and are exempt from the hearsay rule.

You will need a Declaration of Custodian for all documents you wish to admit as evidence, unless the Expert Rule (see below) applies. If you can’t get one, you will need to subpoena the person who drafted the document.

Warning: Seven years?

Most institutions (e.g., banks) will not hold documents for more than seven years. Keep this in mind if you are getting close to five to seven years from the point that important documents were created!

Warning: Experts and Foundation.

There is an important rule to consider when analyzing documents your expert will rely upon to formulate their opinion. In California the court has the discretion to admit evidence that an expert has relied upon in forming their opinion, when an expert would normally rely upon that type of evidence in doing so. E.g., if an accountant would normally review bank documents when tracing money and you have bank documents that you couldn’t get a Declaration of Custodian for, then the court may admit those documents and the expert opinion which relies upon them.

The operative word here is discretion: the judge does not have to admit other inadmissible evidence relied upon by your expert. This could result in a successful objection to that portion of your expert’s opinion which relies upon the un-admitted evidence.

At Divorce Helpline, we have 25 years of experience coaching clients in navigating the tricky waters of trial preparation. For more information on divorce trial evidence see our previous blog on Two Types of Physical Evidence.

Divorce Trials – The Two Types of Physical Evidence

Documentary evidence can be divided into two general categories, much like opinion testimony can.  There are “lay opinions,” which are opinions which are based on observation and which anyone can make without special training, and there are “expert opinions,” which are opinions that can only be made by individuals with special training (“experts”).

In much the same way there are documents and other evidence which are presented to prove facts and which do not require interpretation (e.g., a bank statement which is offered to prove how much money was in an account on the Date of Separation), and there are documents which an expert relies upon to support his or her expert opinion.

With either type of physical evidence, in order to prepare your case for trial (or a convincing settlement letter), you have three broad tasks:

  1. Determine what physical evidence you need, and once you know
  1. get the evidence, and
  1. make sure its admissible, i.e., that the court will consider it as evidence.

Figuring out what you need:  general facts.  First compile evidence that goes to prove general facts that you need to establish and for which you don’t need an expert (e.g., a Date of Separation bank statement).

What an expert needs.

If you need to use an expert, then it is vital to establish as early as possible

  1. exactly what the expert is going to testify to; and then
  1. exactly what she needs to support that testimony.

Getting it.

If you can’t procure it yourself, then you will have to rely on “Discovery,” which are a series of legal tools which require your spouse or a third party to produce answers to questions, documents, etc.

Discovery is a subject we will address in other blog posts. For this discussion, all you need to know is you can try to gather documents from

  1. Your spouse’s Declaration of Disclosure – Each spouse is required to serve on the other a document laying out their positions on what is community and separate property, and their positions on values of assets and debts.
  1. Documents your spouse produces voluntarily.
  1. Documents produced by discovery demands you serve on your spouse and on third parties.

Will the court consider it?

Generally, the court will consider evidence if it is relevant (it tends to prove or disprove something), if its authentic, and, regarding written evidence or other statements made out of court, it is the kind of written evidence where the original speaker or writer doesn’t have to show up and testify (i.e., there is an exception to what is known at the “hearsay rule”).

Relevancy won’t be an issue if either:  the evidence proves something on its face or your expert says she needed it to render an opinion.

Check out the continuation of this blog in the following post, Divorce Trial Evidence: Authenticity and Hearsay. At Divorce Helpline, we have 25 years of experience coaching clients in navigating the tricky waters of trial preparation.

Inherited Property: Applying Direct Tracing in Family Law

In our example the spouse who inherited must show whether separate funds deposited continued to be on deposit when a withdrawal was made for purchasing the stock, and whether it was their intention to withdraw separate property funds for that purpose. These are questions of fact for the trial court. (Hicks v. Hicks (1962) 211 Cal.App.2d 144, 157.)

In Hicks, the plaintiff produced evidence that he deposited separate property funds exceeding the withdrawals made for separate property purchases. (Id. at 158.) Evidence establishing the availability of sufficient separate funds for separate purposes supports an inference that the owner thereof used such funds for such purposes. (Estate of Goodhew (1959) 174 Cal.App.2d 75, 80.)

In Marriage of Mix (1975) 14 Cal.3d 604, the Supreme Court held that a wife had satisfactorily shown a direct tracing of the source of funds used to acquire each item of her disputed separate property:

“Esther introduced into evidence a schedule compiled by herself and her accountant from her records which itemized chronologically each source of separate funds, each expenditure for separate property purposes, and the balance of separate property funds remaining after each such expenditure. She received $99,632.02 attributable to her separate property; expended $42,213.79 for separate property purposes, leaving an excess of separate property receipts over separate property expenditures in the amount of $57,418.23 throughout the course of the marriage.”

(Id. at 613.) The Supreme Court found that the “schedule demonstrated that Esther’s expenditures for separate property purposes closely paralleled in time and amount separate property receipts and thus established her intention to use only her separate property funds for separate property expenditures.” (Id.)

However, Esther was unable to correlate the expenditures of separate property funds with any bank account due to the unavailability of bank records. By itself, the Court held that the schedule was “wholly inadequate”

to meet the direct tracing test. (Id. at 613-614.) However, it noted that the trial court was entitled to accept Esther’s testimony “that the schedule was a true and accurate record, that it accurately reflected the receipts and expenditures as accomplished through various bank accounts, although she could not in all instances correlate the items of the schedule with a particular bank account, and that it accurately corroborated her intention throughout her marriage to make these expenditures for separate property purposes, notwithstanding her use of the balance of her separate property receipts for family expenses.” (Id. at 614.)

“The testimony of a witness, even the party himself, may be sufficient.”

(Id. at 614, citing 6 Witkin, Cal. Procedure (2d ed.) § 248, p. 4240.)

In our example, how can the inheriting spouse connect separate property purchases using inheritance funds to the joint account in which all of the inheritance funds were deposited and from which all purchases of stock were debited through cashier’s checks?

Bank account statements and checks will show deposits of inheritance funds into the account. Bank statements and checks can show the expenditures of separate property for the stock.

Similar to the Mix case, if the balance of her inheritance funds in the account exceed her expenditures on separate property stock purchases, she then merely needs to establish her intention to use her separate property to purchase the stock for herself.

She can testify that she intended to make separate property purchases with her inheritance funds. Unless there is evidence (such as statements in emails, witnesses, etc.) that show an intention to purchase the stock on behalf of the community, her testimony will likely be sufficient. (compare Marriage of Ficke (2013) 217 Cal.App.4th 10, 26 (noting testimony of single witness may constitute substantial evidence of tracing)—no need to produce specific records where H testified mortgage payments on his SP rental were made from rental proceeds account that was never commingled with CP earnings.)

At Divorce Helpline, we regularly work with court-experienced accounting professionals to help our clients navigate through difficult financial analyses, such as Tracing, at a fraction of the cost they would incur in litigation with our services.

Direct Tracing Separate Property in Family Law Actions

Using a Direct Tracing test, you can establish that what you purchased from a community account is a separate property asset when you can show

  1. Your separate funds (e.g., from an inheritance) were deposited with community funds (e.g., into a joint account), and 2. they continued to be on deposit when you withdraw the money for the purchase, and 3. you intend to withdraw your separate funds specifically. (See In re Marriage of Frick (1986) 181 Cal.App.3d 997, 1010-1011.)

Under Direct Tracing, the disputed property is traced to the withdrawal of separate property funds from the commingled account.

For this example let’s imagine you have inherited $100,000, deposited it into a community account, then later pulled it out to purchase $100,000 worth of stock.

To show Direct Tracing, you would first prove that you deposited the inherited money (intended only to go to you).  Let’s say you have the will or other testamentary document and have documents  showing the money flowing from the deceased’s estate and ultimately into the joint account.

Then the stock was purchased:  you would need to prove how much money remained after each stock purchase and in turn prove that there were sufficient separate property funds remaining in that joint account at that time to cover the payment at the time it was made. (See Marriage of Stoll (1998) 63 Cal.App.4th 837, 841; Marriage of Braud (1996) 45 Cal.App.4th 797, 823).

Under the direct tracing method, separate property funds do not lose their character as such as long as the amount of separate funds is ascertainable. (Hicks v. Hicks (1962) 211 Cal.App.2d 144; In Re Marriage of Stoll (1998) 63 Cal.App.4th 837.)

In order to prevail on a direct tracing case in a potentially commingled account, the proponent must present credible evidence as to his intentions coupled with a chronology of the source of separate funds. (In Re Marriage of Mix (1975) 14 Cal.3d 604.)

At Divorce Helpline, we work to help our clients get started in the divorce process, we work as divorce mediators and we are to help navigate through difficult financial analyses, such as Tracing. Be sure to check out our next blog to review how this applies to our example with inherited property.