Dividing property in a California divorce isn’t always straightforward, especially when pensions, military service credits, and complex assets like CalPERS are involved. A pivotal case that highlights these complexities is the Marriage of Green, decided by the First Appellate District from an appeal in Contra Costa County.
In this in-depth guide, we’ll unpack the legal principles, explore related family law concepts, and provide practical FAQs to help you understand how military credits can become community property, even if they were earned before marriage.
This was the question in a recent case from the First Appellate District that was on appeal from Contra Costa County.
In the case of Marriage of Green:
One of the main issues in the case was these military service credit years. Husband argued that they were his separate property since they were earned prior to marriage. Wife claimed that because they were purchased during the marriage, they were community property.
What did the trial court hold? It ruled for the Husband and said the years purchased were his separate property. The appeals court overturned the trial court and said, “No,” the service years were community.
So, how does property that was acquired before marriage become community property? Well, the appeals court was not persuaded that the property was acquired before marriage. The appellate court went through an extensive review of when this property was acquired. Were the service years “vested” or were they more of an “expectancy”? Was there an enforceable right to the service years? If so, when was the enforceable right to that property acquired?
The Court found that Husband had only an expectancy to the service years credits once he completed his military service. Thus, a mere expectancy is not an enforceable right and is not property that can be divided at divorce. But what changed everything in this case is that Husband worked for the Alameda Fire Department, and because the Alameda Fire Department participated in CalPERS, Husband was able to purchase those years by being a member of CalPERS.
Thus, the right to those years changed from a mere expectancy to a contractual right once he purchased those years through his employment with the Alameda Fire Department and CalPERS. Since the right to those service years changed from an expectancy to a contractual right during the marriage, the court found them to be community property.
Under California Family Code Section 760, all property acquired by a married person during the marriage while domiciled in California is community property. This includes:
Relevant statutes:
A Qualified Domestic Relations Order (QDRO) is a court order required to divide retirement plans like CalPERS. While CalPERS is technically a government plan exempt from ERISA, it has its own requirements for dividing pensions in divorce.
Before a CalPERS pension can be divided, it must be joined as a party in the divorce case. This is called a joinder and is required under California Family Code S2060.
Understanding the Marriage of Green in context requires looking at other key cases:
The California Public Employees’ Retirement System (CalPERS) is the nation’s largest public pension fund, providing retirement benefits to California public employees.
The USFSPA allows state courts to divide military retirement pay as property in divorce cases. It does not automatically divide military pensions but authorizes state law to do so.
If the right to purchase the credits arises and the purchase is made during the marriage using community funds, the credits are generally considered community property.
If your CalPERS credits were earned or purchased during the marriage, they are likely community property. If earned entirely before the marriage, they may be your separate property.
Factor | Community Property | Separate Property |
---|---|---|
Pension earned during marriage | Community | N/A |
Pension earned before marriage | N/A | Separate |
Military credits purchased during marriage | Community | N/A |
Military credits earned before marriage but not vested | N/A | Expectancy (not property) |
Military credits purchased before marriage | N/A | Separate |
Dividing pensions, military service credits, and complex assets like CalPERS requires precise legal guidance.
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