One of the most important aspects of the divorce process is the division of assets. This may include property and cash, but what about more abstract sources of income, such as pensions and other retirement benefits? That can be a much more complicated matter, though here in California, the Brown Formula, or “time rule,” is in place to handle such a question.
Right off the bat, we want to let you know that this is a complex matter that can even be confusing for judges and attorneys. While this article is meant to give a general overview of the Brown Formula, it’s always best to consult with an experienced professional who understands its intricacies.
The Brown Formula
Before we start to break down the formula, let’s start by seeing what it says exactly.
“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 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 vest or not vested, comprise a property interest of the community and that the wife may properly share in it.”
There’s a lot to unpack here, but what does it basically mean? Let’s think of an example. Let’s say that a man works become eligible for a pension with his company after working there for twenty years. Five years into working there, he gets married and remains married for ten years. After that time, they get divorced, and he continues to work the rest of the five years until he is able to receive the pension. Since he was married for 50% of the time he worked there, 50% of his pension would be part of the community property and the two would divide it. Therefore, his wife would be eligible to receive 25% of his pension.
How the Formula Is Used in Practice
Believe it or not, the last section was the easy part. Life is rarely as simple as in the example above. People tend to fight for their rights when it comes to divorce cases and there have been multiple ways the courts have interpreted the Brown Formula.
For instance, imagine the before mentioned example. What if the man got married after 18 years working for the company before marrying for ten years and then divorcing? If he continued to work for the company during the marriage, would 36% percent of the pension be part of community property? Depending on the rest of the circumstances, probably not, since the man only needed two of the ten years to become eligible for his pension. Therefore, in that situation, only 20% of the total pension may be community property, giving the ex-wife access to 10%.
The Takeaway
Arriving at an exact number can be a challenge because not always a clear definition of the formula. If someone is working on a divorce settlement and the Brown Formula comes up, this would be the time to get a professional involved if there wasn’t one already working on it. This is one of the most complicated aspects of divorce law in the state, and only someone who trained and experienced in this type of procedure should handle it. Doing this on your own may result in legal repercussions down the line or giving away a larger portion of your retirement than you needed to.
