The Power of a Substantial Separate Estate

Family Code Section 4322 provides that “[i]n an original or modification proceeding, where there are no children, and a party has or acquires a separate estate, including income from employment, sufficient for the party’s proper support, no support shall be ordered or continued against the other party.” This law signifies that if one spouse receives a “separate estate” sufficient to maintain the marital standard of living, the Court has the discretion to deny that person spousal support, provided no minor children are subject to the divorce case.

In Marriage of Terry, (2000) 80 Cal. App. 4th 921, Wife’s net worth was substantially greater than Husband’s. However, Husband had superior earnings as Wife fulfilled the domestic role during their thirty-year marriage. The trial Court ordered Husband to pay spousal support. On appeal, the trial Court’s decision was reversed because the appellate Court crunched numbers and determined that the Wife’s separate estate was more than enough to maintain the marital standard of living. And, just like that, Husband had no more support to pay.

A point must be clarified with the concept of a separate estate. The Appellate Court in Marriage of Rabkin, (1986) 179 Cal. App. 3d 1071, pointed out that “it makes nomore sense to reduce Wife’s spousal support because she received her rightful share of thecommunity property than it would to increase Wife’s spousal support because Husband received his rightful share of the community property.” This goes to the very heart of Family Code Section 4322. Courts are prohibited from using one spouse’s portion of the community estate in any determination of support wherein Family Code Section 4322 is applicable. If the Courts were allowed to do this, then whenever the community estate was divided in a divorce, and support terminated, the party in need of support would need to liquidate his or her portion of the community estate to survive. This differs, however, from where one spouse is able to use investment/interest income from that estate to support himself or herself. A small distinction, but very important.

For those persons who have lived frugally and invested their earnings during marriage, they may be able to use the other spouse’s income from that separate estate to eliminate the need for spousal support. However, the path is tricky and very narrow, so one must proceed carefully.