Under Family Code, Section 760, generally, property that is acquired during marriage is considered community property. This is a pretty straight-forward definition. However, many cases have been litigated and appealed because determining when property is acquired, in reality, is sometimes not so easy to determine. For example, In re Marriage of Green, husband was in the military prior to marriage.
During the marriage, he was employed as a firefighter. Because of his employment with the city as a firefighter, husband was allowed to purchase four years of additional retirement credit because of his pre-marital military service. So then at dissolution, the question became: Was the four years of additional retirement credit community or separate? Under the community property definition, wife argued that because the military credit was acquired during the marriage when he was a firefighter, the credit should be community. Well, not so much. The court held that the key factor to determine when a property item was acquired is the marital status when services on which benefits are based were rendered. Thus, the court looked at what husband’s status was when he rendered the services to obtain the four years of retirement credit. Under this question, since husband rendered his military service (the benefits are based upon this military service) before marriage, the four years of retirement credit is separate. The mere fact that he was finally able to purchase the retirement credit during the marriage did not make them community.
Another recent case, In re Marriage of Finby, looked at whether or not a “book of business” or “client list” is a community or separate property item. Here, wife was a financial advisor with a client list that she developed during the marriage that approximated $192 million under her management. Wife signed a contract agreeing to work for another bank as a financial advisor. The issue was whether or not the client list was a community asset.
To read more about this case, please visit us at DivorceDigest.com/articles/property, where you can also view over 200 articles relating to Family Law issues.
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