The California divorce Brown Formula, also known as the “time rule”, refers to the 1976 case of Marriage of Brown. The perception is that this case established a rule whereby community property such as retirement benefits can be apportioned based on the amount of time it was earned during the marriage versus pre-marriage and post-separation.
Forgive us ahead of time if we get a little technical in this post. It’s sometimes difficult to talk about such concepts without sounding like a lawyer…especially because we are lawyers…but I think you know what we mean. Hey, we don’t expect you to read an article and suddenly understand these concepts.
We are providing you with general information about the Brown Formula but real questions and actual advice can only come when you speak to an experienced family law attorney. Do not rely on this article for your specific situation.
Now, back to the lawyer talk thing…
The Marriage of Brown case didn’t actually establish the time rule. This is a common misconception among family law attorneys and even judges. What is correct is that the Brown case tackled the issue of whether vested versus unvested pension benefits made a difference to its community versus separate property characterization. Bear with me for a moment. The Marriage of Brown court held:
In sum, we submit that whatever abstract terminology we impose, the joint effort that composes the community and the respective contributions of the spouses that make up its assets, are the meaningful criteria. The wife’s contribution to the community is not one whit less if we declare the husband’s pension rights not a contingent asset but a mere… “expectancy.” Fortunately we can appropriately reflect the realistic situation by recognizing that the husband’s pension rights, a contingent interest, whether vested or not vested, comprise a property interest of the community and that the wife may properly share in it.
A little confusing? We know. Since the Brown Formula is often associated with the time rule in California divorce cases, we’re going to roll with it for the purposes of this article. Again, a lot of lawyer jargon in that paragraph right? Fortunately, you don’t have to worry about that either because we are not concerned here about vesting. We are going to talk about the time rule. Ready? Let’s do this.
Application of the California divorce Brown Formula and the time rule
Since the California divorce Brown Formula and time rule is most often used with a defined benefit plan such as a pension, we will also use that as an example in its application. Note – it is not limited to that and has been used for stocks and other division of assets.
Under the Brown Formula and time rule, the community property portion of a defined plan is a ratio. It is the time worked between the date the spouses are married and the date they separated in relationship to the entire time the plan holder was employed.
Examples are easier to understand.
Let’s assume that a husband’s retirement benefits resulted from twenty years of total employment. Also assume the husband and wife became married five years into that employment and were separated five years before the husband reached the twenty year mark. That means there is five years of pre-marital apportionment and five years of post-separation apportionment. There is then ten years of community property allocation in proportion to the twenty total years.
If the Brown Formula and time rule is strictly applied, 50% of the benefits are community property and the other 50% are separate property. You then take the community property and divide by half and you get the wife’s portion.
Is that how it always works? No.
California divorce Brown Formula and its application when years of employment are not the determining factor
For apportionment to take place as we have discussed, the retirement benefits must be substantially related the numbers of years the spouse was employed. In other words, the number of employment years must bear a substantial relationship to the accrual of the retirement benefits. It doesn’t always.
One of the cases that has come down in California is called Marriage of Poppy.
In that case, a husband’s pension with the Naval Reserve was not a function of years served but rather “points” earned. The points related to the drills that the husband attended. The California appellate court held application of the time rule may not be appropriate. It told the trial court to look at the number of points earned from the date of the marriage to the date of separation compared to all of the points earned. The appellate court substituted points for time since points were substantially related to the amount of the retirement benefits.
California divorce Brown Formula when the retirement is fully earned during marriage and before separation
Another case is called the Marriage of Henkel.
After 26 years of service in the Air Force, a colonel got married. Six years later, he separated. Since they were married for six years, the wife’s lawyer asked the trial court to apply the time rule and use a numerator of six years and the denominator of 32.
On appeal, the California Court stated that using the time rule in that manner was not the proper method. That was because the Colonel earned the entire retirement after thirty years and the additional two years were irrelevant toward the benefits. Therefore, the correct number to use was four years as the community property portion and not six.
California appellate cases have come down over the years which have applied the Brown Formula and time rule. Others have refused to do so when the substantial relationship did not exist. The key for your purposes is that a closer look should be had and a focus should fall on the substantial relationship between time and the benefits that are being divided.
Does the Brown Formula and time rule determine whether an asset is community property?
Another source of confusion is that the Brown Formula and time rule determines whether or not an asset such as defined benefit plan is or is not community property. The time rule has nothing to do with that. It is simply a formula to divide it, not characterize it.