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Community Property • General Principles
CPROP#006
Legal Definition
The economic community ends when there is (1) permanent physical separation and (2) intent not to resume the marital relation by at least one party.
Plain English Explanation
When two people get married, their assets and debts become partly combined, making them an economic community of two. That can be really great––it usually saves them money on taxes and means they can invite in their future together. However, once the marriage is over, that economic community ends and they once again become two individuals with individual finances. It’s useful to know exactly when the two become individuals economically. There are two conditions that must be met. (1) They must have started being physically separate, meaning they don’t live together anymore. (2) At least one person in the couple has made it clear that they don’t plan to be together anymore. With the physical separation and intent to be apart, we know their economic deal in marriage is over and the economic community is dissolved.
Hypothetical
Hypo 1: Jill and Amy have been having a hard time in their marriage and, after months of fighting, finally decide to get divorced. By the time they get divorced, they’ve been living apart for 2 months and Jill’s been saying she’s never coming back since then. When did their economic community end? Result: Even thought they’re just now getting divorced, their financial relationship ended 2 months ago, when Jill moved out and said she’s not coming back. That means that the wages and other money earned after that belong to the individual that earned it, because they haven’t been financially tied since Jill moved out.
Hypo 2: Bob and Sam have been on the outs in their marriage for quite some time. They finally get divorced in November. Sam moved out in September and told Bob that he wanted a divorce all the way back in March. When can we consider the end of the economic community occurred? Result: Even though Sam decided he was done with Bob in February, technically they shared finances until Sam moved out and both conditions (physical separation and intent to never get back together) were met. Therefore, their economic community dissolved in September.
Hypo 2: Bob and Sam have been on the outs in their marriage for quite some time. They finally get divorced in November. Sam moved out in September and told Bob that he wanted a divorce all the way back in March. When can we consider the end of the economic community occurred? Result: Even though Sam decided he was done with Bob in February, technically they shared finances until Sam moved out and both conditions (physical separation and intent to never get back together) were met. Therefore, their economic community dissolved in September.
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