California is considered a community property state, which means the law presumes that all property acquired during the marriage is owned equally by both spouses/domestic partners. Upon legal separation or divorce, a couple’s assets are divided to ensure that each spouse receives approximately one-half of the community estate. When a couple gets married in California, they are creating a “community” together defined by California law.
Although there are a few exceptions to the rule, under California’s community property laws assets and debts spouses acquired during the marriage belong equally to both partners, and they must divide them equally in the case of a divorce. There are three crucial steps to property division:
- Characterize the property as either community or separate
- Determine the value of the marital property, and
- Decide how to divide the community property
Why Asset Division Can Be Complex Issue in California Divorce
In theory, it sounds simple to add up the total value of a couple’s estate and then split the number in half. In actuality, however, there are several legal issues involved in dividing assets and debts properly that can complicate the process:
It is not unusual for a spouse to make payments on a separate property asset that was acquired before the marriage with community property income.
In such an instance, the community may have an interest in the said asset, even if the asset is characterized as “separate property” per California family code and case law.
Community Property Lawyer in Bakersfield
Community property is all property spouses/domestic partners acquired throughout the marriage, excluding any property acquired by gift or by inheritance (some exceptions apply). In California, spouses own an equal interest in the community property. Community property includes, but is not limited to:
- Real Estate property
- Furnishings, art, antiques, cars
- Income earned during the marriage
- Bank and investment accounts
- Cash value of insurance policies
- Stocks and stock options
- Retirement or pension plans
- Businesses or professional practices
Along with sharing community property, with a few exceptions, California couples share equal responsibility for debts that occurred during the marriage. Community debts are all debts and liabilities incurred during the marriage by either spouse. This includes, but is not limited to, credit card bills, even if the card is in the name of only one spouse. Student loans are an exception and are considered separate property debts.
Separate Property Rules in California
California recognizes that married individuals have a right to own separate property, which is generally not subject to division in a divorce proceeding. Such separate property may include:
- Property acquired before marriage or after the official date of separation
- Property acquired through inheritance
- Any rents, profits, or interest earned on a separate property asset (acquired before the marriage or inherited)
- Debts incurred before getting married or incurred after separation are also separate property debts.
Also, in the event, marriage is determined to be void, and the court does not make a finding that a spouse is rendering the property acquired during the void marriage quasi-community property, then the parties must likely proceed with any property disputes in a Kern County civil court and such rules as the title presumption will likely take control.
In divorce proceedings, problems with identifying and characterizing separate property can occur when separate property has been mixed with that of community property. This can create issues with complex tracing requirements where the property has been mixed, and spouses may want to seek the advice of a skilled family lawyer to make sure their interests are protected.
The Date of Separation in California
California law provides that property and debt acquired after a separation, but before the court enters the final divorce decree, is the separate property of the acquiring spouse. This makes pinpointing the date of separation is one of the most important steps of a divorce proceeding.
California law no longer requires that the spouses physically live apart to determine the date of separation. The date of separation now takes effect on the date one party communicates his/her intent to end the marriage, and then takes some action or series of actions to further that intent.
This means that there has been some sort of proven evidence that at least one spouse outwardly manifested their intent to follow through with the separation, perhaps by no longer sleeping in the same bed or attending social events with the opposing spouse.
Methods of Asset Division in a Bakersfield California Divorce
Before assets and debts can be divided in a divorce proceeding, every item must be characterized as either community or separate property.
There are several options for dividing assets and debts including, but not limited to: an asset or debt that can be assigned to one spouse in exchange for assets or debts, one spouse can “buy out” the other spouse’s share in an asset, or the couple can sell assets and split the profits equally. A typical divorce involves a combination of these and other methods.