When does the “marital economic community” end and why does it matter?
In community property States, like California, most property acquired during a marriage is called the “marital economic community”. For the purposes of the marital economic community, the marriage ends at divorce, death, or when you or your spouse moves out with the intent not to get back together. Therefore, if you and your spouse are planning on getting a divorce, but are still living with each other, the marital economic community will still exist. This can come as a surprise to many people who might think that assets and debts are somehow frozen upon filling for divorce. They are not. For example,
Suppose Dick and Jane have filed for divorce but are still living together. Dick gets a new credit card and runs up $3,000 on some new clothes. When the debts and assets are finally divided at the end of the divorce, Jane will be shouldered with half of the debt that Dick ran up on the credit card because the “marital economic community” had not ended.
Instead, suppose that Dick and Jane are still getting a divorce but Dick moved in with his brother during the divorce proceedings. When the debts and assets are finally divided at the end of the divorce, Jane will be shouldered with none of the debt that Dick ran up on the credit card because the “marital economic community” had ended when Dick moved out.
As you can see Jane is a lot better off if Dick moves out before he buys his new clothes. The effects of someone moving out can cut both ways. For example, if Dick instead gets a big promotion after moving in with his brother, then Jane could just as easily be hurt when it comes to calculating alimony. This is why it is important to discuss your situation with your lawyer so that they can advise you as to what is best course of action for your individual situation.
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