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I Was Gifted A House. Do I Have To Split This With My Partner If We Divorce?

I Was Gifted A House. Do I Have To Split This With My Partner If We Divorce?

No one gets married, thinking that they will be getting a divorce, yet statistics show that up to 50 percent of marriages end in divorce. A divorce can be complicated, hurtful, and traumatizing. Many have likened it to having a death in the family. As difficult as it may be, you must know what you will face in a divorce.

Deciding to end your marriage is just the first step of a divorce. Afterward, many factors will need to be discussed and determined. If minor children are involved, for example, it is usually the central area of contention. Deciding on the children’s future and custody is the most significant decision parents and the courts will make in divorce proceedings.

The next major hurdle in a divorce usually regards the community property the couple has between them. Property is anything that has value and can be purchased or sold. Community property in California can include homes, vehicles, furniture, businesses, bank accounts, retirement plans, and even debt.

Divorce And Your Assets

If there is property involved, there has to be an agreement on what to do with said property. Regardless of the type of divorce, the issue of property in a divorce must be settled by the parties. If not done amicably, it will be done so by the court.

If you are thinking of divorce or in the process, you should understand what the law says about community property and how the court will divide it.

How Does The Law Separate Property In A Divorce?

As with many proceedings, you and your spouse may elect to come up with a settlement on your own. If the two of you agree on how to divide your assets, you should still hire legal representation to help guide you through the process. Keep in mind that the court will have to approve and sign off on that settlement.

If you and your spouse cannot agree on your own, the court will step in. How the judge will separate your property during a divorce depends primarily on where you live. Most states are common law states regarding property between partners. That means that whatever is in your name alone belongs to you alone. A handful of states like Texas and California, however, are community property states.

What Is Community Property?

Community property is property that was acquired during a marriage. This property includes anything acquired by either spouse except those obtained as a gift or inheritance. On the other hand, separate property is property that a party received outside or before the marriage. Separate property also includes property given to one of the parties as a gift or as part of an inheritance.

In community property states, community property will be divided equally between the parties. Because it is impossible to divide some items such as homes and cars in half, the law will determine the value of all community property and assure the parties involved get their equal share. Dividing these assets, however, can get complicated under certain circumstances and scenarios.

Where It Gets Tricky

Separating some types of property can get quite tricky. In states such as California, retirement plans and accounts are considered marital property. Accounts that were present previous to the marriage may or may not separate property. Not understanding the law and your rights can lead to very costly mistakes.

In that same regard, a home that was separate property at one time can turn into marital property. A perfect example of this is if the married couple subsequently took out a loan on the house during their marriage and fully paid or was in the process of paying the loan back with marital income.

The value and equity of the house that was separate property are now blended. Depending on the value of the loan and the value of the home, the property may now be a partial or whole marital asset. These situations are tricky and require that parties seek legal advice before proceeding with a divorce case.

The Bottom Line Regarding California Community Property Laws

Unfortunately, not all marriages have a happy ending. Divorce can be complicated and confusing. There are many factors to keep in mind before and during a divorce proceeding. Not understanding the law and how it may affect the outcome of your case can be financially devastating.

If you are in the process of getting a divorce or need more information before moving forward, it is crucial to contact a knowledgeable divorce attorney. California-based family law attorney Bruce A. Mandel has almost 30 years of experience in divorce cases, including complex property division matters. Contact Bruce A. Mandel today for a FREE consultation or follow him on Facebook.