After child custody and child support matters, dividing property between divorcing spouses is often the next most challenging hurdle to overcome. If you are going through a divorce in California, understanding the state’s community property law is critical to protecting your financial rights and stability.
California is one of a handful of community property states, and decisions regarding debt and asset division will significantly impact your finances and future financial well-being. These laws can be complicated, especially in contentious and emotional divorces. A California divorce attorney can help by advocating for your rights and interests in community property and other divorce matters.
Community Property State
When property is divided in a divorce, the first step is to classify couples’ assets and debts as separate or community property. In general, but with some exceptions, property acquired between the date the couple was married, and the date of separation is considered community property.
Titled ownership, such as the name on a 401k or car title, does not impact whether it is designated as separate or community property. Once the property is determined to be community property, it is then divided equally between the spouses. See below for more detailed information about the equal division of community property in California divorces.
Debts and assets that are determined to be separate property stays with the individual parties and are not considered when dividing community property. Divorcing spouses often disagree as to whether or not assets are separate when negotiating property division matters.
In California, separate property includes the following:
- Property acquired by individuals before marriage
- Property given to individuals by gift or inheritance before, during, or after the marriage
- The rents, issues, and profits derived from separate property
Assets sometimes start as separate property but eventually become part of the couple’s community property. Arguments over one spouse’s assets that are commingled with community property can be very contentious.
For example, if one party receives an inheritance, it is considered separate property. However, suppose the inheritance is placed into a joint bank account that the spouses use to pay for family expenses, such as mortgage payments on their home. In that case, the mixed-use might result in a court designating the bank account as community property.
Marital Agreements And Community Property
Marital agreements can designate debts and assets as separate or community and establish how the community property will be divided. Couples sometimes enter into prenuptial or postnuptial agreements to protect their rights in certain property and direct how debts and assets are distributed upon divorce. Only marital contracts that are valid and enforceable will impact property division decisions.
Equal Division Of Community Property
After each party fills out a schedule of assets and debts form, the designated community property will be divided equally between parties. Equally dividing the property does not mean that each party takes half of every asset and every debt.
It means that each party’s property value in the divided community property is roughly equal. For example, if marital credit card debt is in your name and you keep that debt, you may be entitled to more cash from a joint bank account to offset the debt making the property distribution equal.
Property Division Agreement
Divorces are simplified when spouses can agree to property division terms. Couples, especially those in short-term marriages with similar income and minimal assets, can often work out property division matters without court intervention. Once a property division agreement is reduced to writing and signed by both parties, it can be filed with the court for approval.
When couples are at odds about how property should be divided, they can go through mediation and other alternative dispute resolution vehicles to help settle contentious property issues. Divorcing spouses often want to have a say in property division terms, which is why they seek outside help to reach an agreement instead of asking the court to intervene.
Court Ordered Division
In some cases, divorcing spouses are unable to agree on property division matters. When it is clear that both sides are at an impasse, a court must decide how the property is designated and divided. Leaving it up to the court to decide is generally not favorable, but a divorce attorney can help by arguing your case and presenting evidence to the judge.
Community Property Divorce Attorney
If you are thinking about or are going through a divorce in California and have questions about community property division, attorney Bruce A. Mandel can help. Contact our office here or call our office at 424-250-9130 to schedule a no-obligation consultation. Follow our Facebook page to learn more about our law practice and the cases we handle.