## Facts

- Husband and wife were married about 12 years and separated on June 23, 1976.
- During marriage, husband worked at San Joaquin Community Hospital (beginning in 1972) and became an assistant administrator.
- Twenty days after separation, on July 13, 1976, the hospital terminated husband and paid him net severance of $24,208.64 (about one year’s salary).
- Trial evidence showed the payment was not a bonus or reward for past services; it was set to support husband based on anticipated difficulty obtaining comparable employment.
- The hospital administrator considered threats by wife and wife’s father (a hospital chaplain) to make husband’s work situation difficult and to harm him financially and professionally.

## Issues

1. Whether a post-separation severance payment is community property when employment occurred during marriage, or the employee spouse’s separate property when the payment is intended to replace post-separation earnings and employability.

## Decision

- The Court of Appeal reversed.
- The severance payment was husband’s separate property.
- Wife was not entitled to one-half of the severance payment.

## Legal Principles

- Characterization of severance/termination pay turns on the payment’s purpose: whether it compensates for past services (community) or replaces post-separation earnings and earning capacity (separate).
- A forward-looking payment intended to cushion future wage loss or diminished employability after separation is treated as separate property, even if close in time to separation.
- Courts rely on competent evidence of intent and function of the payment, not solely on the fact that it arose from an employment relationship that existed during marriage.

## Conclusion

Because the severance payment was designed to offset expected post-separation employment difficulties and loss of future earnings rather than to compensate for past marital-period services, it was properly characterized as the husband’s separate property and could not be divided as community property.


In re Marriage of Wright, 189 Cal. Rptr. 336 (Ct. App. 1983)