Divorce in California
February 18, 2023 5:19 PM Subscribe
My spouse and I are going to get divorced. It's amicable. We have some specific goals.
I'll be consulting with local attorneys as well, and you are not our lawyer.
The goals:
- Get out of community property status as soon as possible, so we can both acquire assets going forward without having to worry about how they will be split, or becoming responsible for the other's debts. In particular, one of us will retain our current home and the other would like to be able to purchase a separate residence as soon as possible without it being considered a marital asset.
Would it be possible to sign an legally robust agreement about no longer having community property without being fully divorced or separated? (See below about healthcare, which is the only reason we aren't immediately proceeding with a separation / divorce.)
- Maintain healthcare. My spouse relies on my employer for healthcare at the moment. They should be able to provide their own coverage before the end of the year. Could we be separated, or divorced, and somehow require the insurance company to maintain coverage until the next open enrollment period? My googling seems to indicate that being separated ends insurance coverage for the separated spouse.
- Get one of our names removed from our shared mortgage. Difficulty: it's the person who makes the most money. They do have wealthy family members who would be willing to assume responsibility. We have a very good rate and do not want to refinance the house given the current rates.
We're pretty much on the same page with how we want things to end. I don't expect there to be any disagreement or conflict on how to divide assets. We both want things to go smoothly and quickly.
I'll be consulting with local attorneys as well, and you are not our lawyer.
The goals:
- Get out of community property status as soon as possible, so we can both acquire assets going forward without having to worry about how they will be split, or becoming responsible for the other's debts. In particular, one of us will retain our current home and the other would like to be able to purchase a separate residence as soon as possible without it being considered a marital asset.
Would it be possible to sign an legally robust agreement about no longer having community property without being fully divorced or separated? (See below about healthcare, which is the only reason we aren't immediately proceeding with a separation / divorce.)
- Maintain healthcare. My spouse relies on my employer for healthcare at the moment. They should be able to provide their own coverage before the end of the year. Could we be separated, or divorced, and somehow require the insurance company to maintain coverage until the next open enrollment period? My googling seems to indicate that being separated ends insurance coverage for the separated spouse.
- Get one of our names removed from our shared mortgage. Difficulty: it's the person who makes the most money. They do have wealthy family members who would be willing to assume responsibility. We have a very good rate and do not want to refinance the house given the current rates.
We're pretty much on the same page with how we want things to end. I don't expect there to be any disagreement or conflict on how to divide assets. We both want things to go smoothly and quickly.
You need to look at your insurance plan handbook to see when a spouse stops being a qualifying family member.
posted by praemunire at 6:10 PM on February 18, 2023
posted by praemunire at 6:10 PM on February 18, 2023
Yes, you can use a post-nuptial agreement to stop certain purchases from becoming community property. PNAs are expensive to be do right though, so you need to really want this.
No, you cannot take a (living) guarantor or borrower off a mortgage without refinancing at current rates.
Yes and no - divorce and legal separation each terminate a spouse from the separated/former spouse's paid insurance but the spouse has the right to COBRA continuation at his/her own expense. However, California doesn't require legal separation before divorce, and your spouse definitely can stay on your insurance while a divorce is pending but no legal separation order is in effect.
posted by MattD at 6:10 PM on February 18, 2023 [2 favorites]
No, you cannot take a (living) guarantor or borrower off a mortgage without refinancing at current rates.
Yes and no - divorce and legal separation each terminate a spouse from the separated/former spouse's paid insurance but the spouse has the right to COBRA continuation at his/her own expense. However, California doesn't require legal separation before divorce, and your spouse definitely can stay on your insurance while a divorce is pending but no legal separation order is in effect.
posted by MattD at 6:10 PM on February 18, 2023 [2 favorites]
In WA, the process is that you get separated before you get divorced. We reached an amicable separation agreement that severed our financial relationship going forwards; we have not yet formally divorced. I offered to buy out my ex's half of the house in exchange for his name removed from the deed; a precondition for obtaining a new mortgage. This and other assets, including bank and retirement accounts, were split per discussion. Your situation in California will be unique to your state's laws; consult with an attorney who can guide you through the legal details and obligations.
posted by They sucked his brains out! at 7:23 PM on February 18, 2023
posted by They sucked his brains out! at 7:23 PM on February 18, 2023
Could we be separated, or divorced, and somehow require the insurance company to maintain coverage until the next open enrollment period? My googling seems to indicate that being separated ends insurance coverage for the separated spouse.
You’ll need to check the terms of the plan - in your plan booklet or benefits guide/enrollment materials, there is likely a section called “when coverage ends” or something similar. Group health plans are generally free to exclude spouses based on either legal separation or actual divorce but plans rarely choose to cover ex-spouses. In some states (New Hampshire, Massachusetts, there may be others) certain plans (fully-insured plans) are required by insurance law to cover ex-spouses under certain circumstances (if neither spouse remarries and some other conditions). I don’t think that’s the case in California (and it wouldn’t apply if the employer’s plan is “self-insured”).
posted by Pax at 8:26 AM on February 19, 2023
You’ll need to check the terms of the plan - in your plan booklet or benefits guide/enrollment materials, there is likely a section called “when coverage ends” or something similar. Group health plans are generally free to exclude spouses based on either legal separation or actual divorce but plans rarely choose to cover ex-spouses. In some states (New Hampshire, Massachusetts, there may be others) certain plans (fully-insured plans) are required by insurance law to cover ex-spouses under certain circumstances (if neither spouse remarries and some other conditions). I don’t think that’s the case in California (and it wouldn’t apply if the employer’s plan is “self-insured”).
posted by Pax at 8:26 AM on February 19, 2023
Assuming the employer has at least 20 employees, Health coverage will end but COBRA allows the non employee spouse to pay to remain on the insurance, typically for up to 36 months. This may be very expensive depending on the plan and ACA coverage may make more sense.
posted by dpx.mfx at 9:45 AM on February 19, 2023
posted by dpx.mfx at 9:45 AM on February 19, 2023
If you agree on the date of separation, then that is not going to be the sticking point when it comes time to finalize who gets what. If the date of separation is contested, a California family court will determine it based on the evidence of the factors set forth in Family Code Sec. 70 (which explicitly changed previous case-law). This can get complicated, in some situations. (Here's a 2021 article on the nuances, meant for CA family lawyers but fairly readable.)
As it sounds like you both have the same goals, if everything material is truly uncontested then the most efficient (in time and money) thing to do would likely be to each find an attorney in your area who offers limited-scope or fixed-fee "collaborative divorce," which is accomplished largely out of court (basically, except for finalizing the result). One 'collaborative divorce' lawyer can typically help you find another for your spouse. They can then can help you fix the official date of separation in mutual filings; or if necessary, do something more to memorialize it in advance of filings (and advise you on opening separate accounts and etc—including assisting with insurance issues, if you have trouble going through the normal channels).
This is different than divorce mediation using one attorney-mediator; it's sort of a middle ground between that and a litigated divorce (which itself has certain provisions for expedited 'uncontested' dissolutions, but within the court process). Broadly speaking the downside of the out-of-court collaborative process is that if the cooperation fails and it becomes contested you re-start at square one (and you have to find different lawyers).
If you affirmatively only want to be separated, that is an option — but then you probably still want to each engage lawyers to draft a suitable post-nup to protect against later application of Fam. Code Sec. 70 (as if challenged, a court may find a later separation date based on conduct, as that article goes into).
posted by snuffleupagus at 10:33 AM on February 19, 2023
As it sounds like you both have the same goals, if everything material is truly uncontested then the most efficient (in time and money) thing to do would likely be to each find an attorney in your area who offers limited-scope or fixed-fee "collaborative divorce," which is accomplished largely out of court (basically, except for finalizing the result). One 'collaborative divorce' lawyer can typically help you find another for your spouse. They can then can help you fix the official date of separation in mutual filings; or if necessary, do something more to memorialize it in advance of filings (and advise you on opening separate accounts and etc—including assisting with insurance issues, if you have trouble going through the normal channels).
This is different than divorce mediation using one attorney-mediator; it's sort of a middle ground between that and a litigated divorce (which itself has certain provisions for expedited 'uncontested' dissolutions, but within the court process). Broadly speaking the downside of the out-of-court collaborative process is that if the cooperation fails and it becomes contested you re-start at square one (and you have to find different lawyers).
If you affirmatively only want to be separated, that is an option — but then you probably still want to each engage lawyers to draft a suitable post-nup to protect against later application of Fam. Code Sec. 70 (as if challenged, a court may find a later separation date based on conduct, as that article goes into).
posted by snuffleupagus at 10:33 AM on February 19, 2023
When my partner and I split I was able to assume our mortgage. The paperwork was similar to a refi; the bank wanted to know whether I was good for it, of course. There were fees but less than a refi.
The internet says that assumable mortgages are no longer common, but it's worth checking.
posted by magicbus at 3:23 PM on February 19, 2023
The internet says that assumable mortgages are no longer common, but it's worth checking.
posted by magicbus at 3:23 PM on February 19, 2023
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Also, double check the ACA options aren't better than staying together on insurance. If someone loses insurance they are immediately able to enroll in ACA, vs. waiting for the next open enrollment period.
It is uncommon for a mortgage to allow for removal of one party, but is the wealthy family member wealthy enough to do a private mortgage? The other option is to put a timeline for refinancing in the separation/divorce that allows the lower income party to come up with funding once they're back on their feet.
Again, talk to a lawyer, the divorce I'm familiar with was not in California but they had similar wishes and were able to cobble something together taking the legal separation route. In our state a legal separation can be converted to a divorce by either party individually, but also check into impacts for remarrying in CA.
posted by Narrow Harbor at 5:59 PM on February 18, 2023