Deferred Compensation--When after-marriage earnings are considered community property
The San Francisco Bar Association recently published an article that may have suprised some. While many people have the understanding that the date of separation is the magic date that clearly separates what is characterized as ones community property (property acquired during marriage that is is divided equally with their ex) and what is ones separate property (property acquired after date of separation that is solely theirs) many do not realize that even after-date-of-separation monies may be considered community property under some circumstances.
If a party's earnings after separation are due to, or arise from, efforts during the marriage, than those monies may be characterized as community property. The law essentially is recongnizing that ones efforts during marriage may have an affect of deferred compensation to which the other party is entitled. Although not all of us are Hollywood rising stars like Pablo Schreiber, in the article below, this caveat in the law may still have an affect on those who earn bonuses or stocks, for example. Below is the article by Ariel Sosna and Sarah Van Voorhis:
Pablo Schreiber, the newly-recognizable former star of “Orange is the New Black” due to his distinctive mustache that earned him the nickname “Pornstache,” has learned that the timing of his new-found success will also benefit his ex-wife, despite the end of their six year marriage. Currently starring in the new HBO series “The Brink,” Schreiber previously was best known for being the brother of Liev Schreiber and a character actor in shows like “The Wire.” His career took off when he landed the role of sadistic Officer Mendez in “Orange is the New Black,” for which he was nominated for an Emmy Award. Pursuant to their divorce decree, his ex-wife Jessica was granted one-half of his earnings and residuals from that hit show as well as the hit shows “Weeds” and “Law and Order: SVU.” Despite the fact that Schreiber will not be receiving all of the earnings and residuals from these shows until after the parties’ date of separation (at which time earnings are presumed separate property pursuant to Family Code §771), earnings from an artistic work are characterized based on the underlying work itself. If the artistic work is a product of the creator’s efforts during the marriage, the earnings from that work are community property. See Marriage of Worth (1987) 195 CA3d 768. In Worth, one-half of Husband’s copyrights related to trivia books that he wrote during marriage were confirmed to Wife in the divorce. When two years later, Husband sued “Trivial Pursuit” for copyright infringement and obtained a judgment, Wife claimed she was entitled to half. The Court of Appeal agreed, holding that the copyrights were obtained during the marriage and therefore the judgment from the copyright infringement was also community property. Similarly in Marriage of Zaentz (1990) 218 CA3d 154, movie producer Saul Zaentz (producer of “One Flew Over the Cuckoo’s Nest,” “Amadeus” and “The English Patient”), argued that because “Amadeus” was not completed when he and his wife separated, it was not community property. The Court of Appeal held “[w]hether or not the movie was completed and receiving income at the time of separation, the time and artistic energies expended occurred in some appreciable degree during the marriage. Husband devoted the better part of two years during the marriage working only on the production of ‘Amadeus’. Thus, the community would be entitled to at least an equitable portion of the income generated as a result thereof.” Id. at p. 164. Schreiber is obviously a talented actor who will likely have continued success. His ex-wife may have had something to do with his jump to stardom (if not his mustache), and for this, she will benefit.
Read More at blog.sfbar.org/2015/09/25/orange-might-be-the-new-green-for-actors-soon-to-be-ex-wife/ © Legal by the Bay
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Maria E. Crabtree, CFLS