The Date That Decides Everything

Before the lawyers, before the disclosures, before anything else: fix the date of separation. It is the most valuable single fact in a divorce and the one clients discover too late, because everything either spouse earns after it is separate property ( Cal. Fam. Code §771). Every bonus, every vesting tranche, every dollar of a company’s growth on one side of that line belongs to the community and on the other side belongs to one person.

California defines it precisely, and the definition is behavioral rather than administrative. Under Cal. Fam. Code §70 — enacted by SB 1255 in 2016 to override In re Marriage of Davis, 61 Cal. 4th 846 (2015), which had held that living under one roof made separation impossible — the date of separation is when a complete and final break occurred, evidenced by both (1) one spouse expressing to the other the intent to end the marriage and (2) conduct consistent with that intent. Living apart is now evidence, not a requirement. The court weighs the whole record.

Which means the record is the case. Not moving out, not filing, but the accumulated evidence of intent: dated written communications, separate accounts opened, the end of joint tax filing, whether you still attended each other’s family events, what you told friends, what you posted. A spouse whose equity vests monthly and who is arguing for an earlier separation date is arguing about millions of dollars using text messages as exhibits.

Two practical consequences follow, and they point in opposite directions depending on which side of the balance sheet you sit:

• If you are the higher earner or hold vesting equity, an earlier defensible date of separation moves post-separation compensation out of the community. Say it clearly and in writing, once, and behave consistently afterward. Ambiguity is expensive and it is your ambiguity.
• If you are the lower earner, a later date keeps more of the other spouse’s earnings and vesting in the pot — and if the marriage is near the ten-year Social Security threshold, the date of dissolution matters separately and enormously (section “Social Security and the Ten-Year Rule”).

Note that the separation date and the valuation date are different, which is the second thing people get wrong. California values assets as near as practicable to the time of trial, not to separation ( Cal. Fam. Code §2552), with a good-cause exception for assets whose value is driven by one spouse’s post-separation effort. So a business that triples during a three-year divorce triples inside the marital estate unless the operating spouse successfully argues for an alternate valuation date. The spouse running the company therefore wants speed; the other wants delay. Recognize that this, and not the furniture, is what the schedule is actually about.