One of the biggest concerns a spouse has when seeking a divorce is how assets and liabilities will be divided. There is much at stake for couples, especially those with significant assets. Real estate, retirement accounts and savings are all types of property that are considered in property division. Most states use the theory of “equitable division of property.” In general, this means there is no set split for how property is divided. However, California is a “community property state.” This means that any property deemed community property will be divided fifty-fifty. The line is set more in community property states.
While every situation is different, it still puts a heavy emphasis on what property is put in the community property “pot” so to speak. In a California divorce, all property and liabilities (so debts are included), will be examined to determine if it is community property. All other property is then deemed “separate property.” The major issue tends to be this very critical step of deciding what is community vs. separate property.
What is community property? This is basically all assets and liabilities acquired by either spouse during the marriage. This includes domestic partnerships as well. For the most part, gifts and inheritances are excluded from the community property pot. So for example, if your spouse gave you a piece of jewelry to you as a gift or you inherited money from a relative, these are not considered community property.
Here is another example: suppose you and your spouse have separate savings accounts. Part of this savings account was built up during your marriage. You used funds from this account to purchase a boat. Your spouse never used the boat. Even though you think you bought the boat “with your own money” it is still arguably community property to be divided as it was acquired during the marriage.
There is also “quasi-community property” and “mixed community and separate property” issues. As you can see, property division in California can be very complex. Add business valuation issues and a divorce can get very complicated. That is why it is so essential to your divorce that you have an experienced property division and divorce attorney in California to help you. For more information about divorce and community property, reach out to our law firm as soon as possible.