When a couple goes through a divorce, one of the main issues they will face is how to divide their shared property and funds. During this process, you may hear that your marital assets are considered “community property.” Those unfamiliar with this term may be wondering, what is community property? Here is what you need to know about California divorce and community property:
What is Community Property?
California is a community property state, meaning that outside of certain exceptions, everything a couple earns, owes, or acquires during their marriage belongs to them equally. It doesn’t matter if one or both partners worked during the marriage or how much income each spouse contributed to the household. Generally, if funds were earned during the marriage, they belong to each partner 50/50. Additionally, an asset or property acquired during the marriage is community property, even if only one partner’s name is on the title or deed.
Community Property’s Value During Divorce
Before dividing community property in a California divorce, it’s vital that you accurately assess its value. Once your property’s value is determined, you and your ex can divide it by agreement, or the court will order its allocation. Depending on the circumstances, property valuation can be a highly contested issue during a divorce, especially when a couple has complex assets such as a family business or multiple real estate holdings.
Separate Property
Under California law, assets and funds that belong only to one spouse are considered that spouse’s separate property. For instance, if you owned a car and house before you married, those assets would remain your separate property. The same would be true of a gift or inheritance you received during your marriage. Likewise, income earned from a separate property asset generally belongs to its owner. However, it is possible to convert separate property into community property. Whether your property remains separate depends on what you do with it during the marriage. For example, adding your spouse’s name to a separate property vehicle title or real estate deed can give them community ownership rights. Additionally, taking separate property or gifted or inherited funds and co-mingling them with marital funds can make these assets community rather than separate property.
Another issue that can come up is when community property funds are used to improve or maintain separate property. For example, suppose you own a house you bought before you married and use community property funds for its repair and renovation. In that circumstance, your ex could claim that they were entitled to reimbursement for the community contribution used to improve your separately owned asset.
Separate property and community property assets can be complicated, and it’s crucial to have the advice of an experienced California divorce attorney when dividing these assets.
Community Property Agreements
Although California is a community property state, there can be situations when shared marital assets and funds are not divided equally between the parties. One circumstance can be when a couple agrees to divide their community property in a manner that they feel is equitable rather than 50/50.
Most California divorce cases settle outside of the courtroom. However, parties often see the benefit of reaching an agreement on how to divide their community property rather than leaving the matter up to the court. In such a situation, a couple may determine that it works best for one party to be awarded a particular asset while the other keeps something else. For instance, you and your ex may agree that it’s equitable for each of you to retain your respective retirement accounts rather than dividing them or that you should keep your home while your ex gets your community-owned vehicle.
You and your ex are free to develop a marital property settlement agreement that suits your circumstances. However, it’s vital that you work with an experienced California divorce attorney during the process. Your counsel can help protect your interest during negotiations and throughout your California divorce.
Pre-nuptial and Post-nuptial Agreements
Another way in which community property can be kept separate is through pre-nuptial and post-nuptial agreements. A pre-nuptial agreement is a document that each spouse can sign before marriage that stipulates how their separate and marital property will be assigned in the event of divorce. A post-nuptial agreement is a document signed by the parties after they are married and can be used for the same purpose. The parties can also include terms regarding spousal maintenance (alimony) as other specific details in these agreements. If you have a pending divorce and a post-nuptial or pre-nuptial agreement, you should review the document with your California divorce attorney as soon as possible.
Property division during divorce can be complicated and stressful, especially when the parties disagree. If you are going through a divorce in California, it’s vital that you consult with an experienced California divorce attorney to learn more about community property and how it may be divided in your case. Your counsel can help you evaluate your circumstances and determine the best way to proceed with your California divorce.
The attorneys at the Law Offices of Judy L. Burger are experienced California divorce attorneys who can help you during all phases of divorce, legal separation, and annulment. We assist clients along California’s Northern to Southern Coast, including San Francisco, Beverly Hills, Marin, San Jose, Gold River, San Diego, Santa Barbara, Ventura/Oxnard, and surrounding communities. Call us at 415-293-8314 to schedule a private appointment or visit our website.