Divorce Settlement in California: What the Law Actually Decides

A California divorce settlement is a written agreement between spouses, called a marital settlement agreement, that resolves some or all of the issues in their divorce. Under Family Code section 2550, the court divides the community estate equally except upon the written agreement of the parties or on oral stipulation of the parties in open court.

This article walks through each part of a settlement, what the law fixes and what spouses can negotiate.

What a California Divorce Settlement Actually Is

A marital settlement agreement is a written contract in which divorcing spouses resolve some or all of the issues in their case, including property, debts, support and custody. Under Code of Civil Procedure section 664.6(a), when parties to pending litigation stipulate to a settlement in a writing signed by the parties outside the presence of the court, or orally before the court, the court, upon motion, may enter judgment pursuant to the terms of the settlement. The support provisions of such an agreement are separate and severable from the property provisions (Family Code sections 3585 and 3590), and a support order based on the agreement is imposed by law and made under the court's power to order support.

Under Family Code section 2310, dissolution of the marriage may be based on "irreconcilable differences, which have caused the irremediable breakdown of the marriage," or on permanent legal incapacity to make decisions.

Family law cases from Carlsbad are generally heard at the Superior Court of California, County of San Diego, North County Regional Center, 325 South Melrose Drive, Vista, CA 92081.

Timing has its own rule. Under Family Code section 2339, no judgment ending the marriage is final "until six months have expired from the date of service of a copy of summons and petition or the date of appearance of the respondent, whichever occurs first." The clock does not start on the day the petition is filed. The court may also extend the period for good cause. Section 2339(a) is subject to subdivision (b) and to sections 2340 to 2344, which this article does not cover.

Community Property and How California Divides It

California's starting point is Family Code section 760: "all property, real or personal, wherever situated, acquired by a married person during the marriage while domiciled in this state is community property," except as otherwise provided by statute.

Family Code section 770 defines separate property to include property owned before marriage, property received during marriage by gift, bequest, devise or descent (an inheritance, in plain terms), and the rents, issues and profits of that property.

Once property is identified as community, Family Code section 2550 tells the court to "divide the community estate of the parties equally." The same section opens with an important exception: "upon the written agreement of the parties, or on oral stipulation of the parties in open court," or "as otherwise provided in this division." Spouses may agree to an unequal split, for example one keeping the home while the other keeps more of a retirement account. Both have to consent.

Debts are part of the picture too. Under Family Code section 910(a), except as otherwise expressly provided by statute, the community estate is liable for a debt incurred by either spouse before or during marriage, and section 910(b) provides that "during marriage" does not include the period after the date of separation and before a judgment of dissolution of marriage or legal separation. Section 2620 provides that the debts for which the community estate is liable that are unpaid at the time of trial, or for which the community estate becomes liable after trial, "shall be confirmed or divided as provided in this part."

Valuation follows a separate rule. Under Family Code section 2552, the court values assets and liabilities "as near as practicable to the time of trial." On 30 days' notice and for good cause, the court may use a date after separation and before trial instead. The firm's page on property division in Carlsbad covers these rules in more depth.

Separate Property, Reimbursements, and Mixed Assets

Money and property of different characters can get mixed. A down payment on a family home might come from savings one spouse had before the wedding, for example.

Family Code section 2640 addresses one of them: separate money put into community property. A spouse who contributed separate funds toward acquiring community property is generally reimbursed "to the extent the party traces the contributions to a separate property source," unless that spouse signed a written waiver. Under the statute, contributions include down payments, payments for improvements and payments that reduce loan principal. They do not include loan interest, maintenance, insurance or taxes.

The opposite situation, community money paying down a loan on a home that is one spouse's separate property, is known as Moore/Marsden apportionment. Section 2640 and Moore/Marsden answer two different questions, and they are not interchangeable.

Spouses can also change the character of property on purpose. That change is called a transmutation. Under Family Code section 852, a transmutation "is not valid unless made in writing by an express declaration" that the spouse whose interest is harmed makes, joins in, consents to or accepts. A transmutation of real property is not effective against third parties without notice unless it is recorded. There is a narrow exception for personal gifts between spouses, such as clothing or jewelry, that are not substantial in value.

Businesses add another layer. A business's value can include goodwill, and that value is decided on the evidence, often with help from experts. The firm's page on complex financial divorce discusses how that tends to come up.

Spousal Support: How California Courts Decide

Support can begin long before the case ends. Family Code section 3600 allows the court, while a divorce is pending, to order "either spouse to pay any amount that is necessary for the support of the other spouse." This is called pendente lite support, a Latin phrase meaning "while the litigation is pending." In plain terms, it is temporary support.

Long-term support after the judgment rests on Family Code section 4320. The court must consider a list of circumstances. These include whether each spouse's earning capacity can maintain the standard of living established during the marriage, the supported spouse's marketable skills and the job market for them, and whether time away from work for domestic duties during the marriage impaired that spouse's earning capacity. The list also includes the extent to which the supported spouse contributed to the other spouse's education, training, career position or license, the duration of the marriage, and the age and health of the parties (section 4320(b), (f) and (h)). Section 4320(l) states the goal that the supported party be self-supporting within a reasonable period of time. Except in the case of a marriage of long duration as described in section 4336, a "reasonable period of time" generally shall be one-half the length of the marriage, but nothing in the section limits the court's discretion to order support for a greater or lesser length of time based on the other listed factors, section 4336 and the circumstances of the parties.

Family Code section 4336 addresses marriages of long duration. For a marriage "of long duration," the court "retains jurisdiction indefinitely" unless the spouses agree otherwise in writing or a court order ends support. A marriage of ten years or more, measured from the date of marriage to the date of separation, is presumed to be long. The court may still find a shorter marriage to be long, and may consider periods of separation during the marriage.

Spouses can agree on spousal support in a settlement. Under Family Code section 3591(a), the provisions of an agreement for the support of either party are subject to later modification or termination by court order, except as provided in subdivisions (b) and (c). Under section 3591(c), an agreement for spousal support may not be modified or revoked to the extent that a written agreement, or an oral agreement entered into in open court between the parties, specifically provides that the spousal support is not subject to modification or termination.

The firm's page on spousal support in California goes further into temporary versus long-term orders.

Child Custody and Visitation in a California Settlement

Family Code section 3020 states that a child's "health, safety, and welfare" is the court's primary concern in determining the best interests of children when making orders about custody or visitation. The same section sets a public policy favoring "frequent and continuing contact with both parents" after separation. Family Code sections 3003 to 3007 define the terms used in custody orders. Joint legal custody means both parents share the right and the responsibility to make the decisions relating to the health, education, and welfare of a child, and sole legal custody means one parent has that right and responsibility. Joint physical custody means each parent has significant periods of physical custody, and sole physical custody means the child resides with and is under the supervision of one parent, subject to the power of the court to order visitation.

When custody or visitation is contested, the court must set the contested issues for mediation. Under Family Code section 3170, if a pleading shows custody or visitation is contested, "the court shall set the contested issues for mediation." In San Diego County, that mediation is child custody recommending counseling with the court's Family Court Services, under Family Code sections 3170 and 3183.

Under Family Code section 3183(a), the mediator, called a child custody recommending counselor, may, consistent with local court rules, submit a recommendation on custody or visitation to the court. The counselor must first give it in writing to the parties and their attorneys before the hearing. Family Court Services, which calls this person the Family Court Counselor, explains that if no agreement is reached, the counselor makes a recommendation to the court and the hearing proceeds. The judge makes the decision.

Cases involving domestic violence follow a different path. Section 3170(b) provides that they "shall be handled by Family Court Services in accordance with a separate written protocol approved by the Judicial Council." The firm's page on child custody covers custody in more depth.

Child Support: The Guideline Formula and What Parties Can Agree To

Child support in California follows a formula. Family Code section 4055 sets the statewide uniform guideline: CS = K[HN − (H%)(TN)]. In plain words, the formula weighs the higher earner's net monthly disposable income, both parents' combined net income, and the approximate percentage of time the higher earner has primary physical responsibility for the children.

The formula carries real force. Family Code section 4052 says the court "shall adhere to the statewide uniform guideline and may depart from the guideline only in the special circumstances set forth in this article."

Parents can still agree on an amount. Under Family Code section 4065, they may stipulate to child support subject to court approval. The court will not approve an amount below guideline unless the parents declare several things, including that they are fully informed of their rights, that the agreement is made without coercion or duress, that it is in the children's best interests, and that the children's needs will be adequately met.

Child support orders are not permanent. Under Family Code section 3651, a support order generally "may be modified or terminated at any time as the court determines to be necessary." More detail is on the firm's child support page.

Financial Disclosure: What Each Spouse Must Provide

Each party serves declarations of disclosure on the other. Under Family Code section 2104, the preliminary declaration must identify all assets in which the declarant has or may have an interest and all liabilities for which the declarant is or may be liable, regardless of whether they are characterized as community, quasi-community, or separate, and it must include all tax returns filed by the declarant within the two years before it was served. Along with it, each party provides a completed income and expense declaration unless one has already been provided and is current and valid.

The preliminary declaration of disclosure has a fixed deadline. Under Family Code section 2104(f), the petitioner serves it "either concurrently with the petition for dissolution or legal separation, or within 60 days of filing the petition." The respondent serves it with the response or within 60 days of filing the response. The parties can extend these time periods by written agreement, or the court can extend them by order.

A second round follows. Family Code section 2105 requires a final declaration of disclosure and a current income and expense declaration, executed under penalty of perjury. Except by court order for good cause, it is due before or at the time the parties enter into an agreement resolving property or support issues other than pendente lite support or, if the case goes to trial, no later than 45 days before the first assigned trial date. The parties may mutually waive the final declaration.

The disclosure rules carry consequences. Under Family Code section 2107(c), if a party fails to comply with any provision of the disclosure chapter, the court "shall, in addition to any other remedy provided by law, impose money sanctions against the noncomplying party," unless the court finds that the noncomplying party acted with substantial justification or that other circumstances make the sanction unjust. Under section 2107(d), except as otherwise provided in that subdivision, if a court enters a judgment when the parties have failed to comply with all disclosure requirements, "the court shall set aside the judgment." Section 2122(f) separately lists failure to comply with the disclosure requirements as a ground for a motion to set aside a judgment, to be brought within one year after the date on which the complaining party discovered, or should have discovered, the failure to comply.

Summary Dissolution and Court Resources

Summary dissolution is a separate procedure with its own conditions, set out in Family Code section 2400. Its dollar limits are set by statute and, under section 2400(b), adjusted every odd-numbered year. General self-help information is available from the California Courts and the San Diego Superior Court.

Talking With the Firm About a Settlement

Carlsbad Family Law Advocates practices California family law only, for people in Carlsbad and nearby communities such as Oceanside, Vista, San Marcos, Encinitas, Solana Beach, Del Mar and Rancho Santa Fe.

To talk with the firm about divorce settlements, call Carlsbad Family Law Advocates at (760) 840-5102 for a confidential consultation.