How the Economy May Affect Your Divorce

The country's financial slowdown has hit all areas of the economy, as we are all too well aware. People have lost jobs, have seen their pensions go down in value, as well as the value of their homes. In addition, many employers have cut down on benefits such as health insurance and matching funds in 401ks. One unexpected result of the downturn is that many divorcing couples find they simply cannot afford to live apart. It's tough enough to maintain one household in their current financial situation, how could they possibly afford two homes? Many couples are making the unusual choice to go forward with the divorce, but still both continue to live in the family home. Is this a crazy, uncommon thing? No, it is becoming a new trend, particularly in California where rents and real estate are so high, and selling a property doesn't necessarily happen over night.

Since California is a community property state both spouses are entitled, with a few exceptions, to equal division of community property and debts in a divorce (known as dissolution of marriage in California). This can get tricky if both spouses remain in the shared home. The court sets the date of separation to determine the extent of the community property estate as of that date. This would include the property value on that date, as well as the amounts of other assets and liabilities such as credit card debt. To determine the actual date of separation, the courts have determined that a separation occurs when one party has the intention of separating. Usually, this would involve the spouse leaving the home. In this case, a formal legal separation would be highly advisable to correctly establish the actual date of separation.


Due to the fact that in California the family home is often the marriage's most valuable asset, division of the property can be extremely complicated. If both parties have decided that it is not the right time to sell the home, due to market conditions, then a plan for co-habitation needs to be in place. If children are in the home as well, this type of separation can ease them into the reality of life being different after mom & dad are actually divorced. While an unusual new trend, this can be a favorable plan in an otherwise acrimonious separation and divorce period.

Once the economic situation has improved, both spouses can begin plans to divide assets and begin life anew, each on their own. Working together to mitigate financial losses can be of benefit to the entire family, and set a cooperative tone for the future. Unusual, yes. Worth considering? Definitely.