2024 – How is Property Divided in A Divorce in California?

Dividing property in a divorce is an important part of the dissolution process, as it determines what property, assets, and liabilities each spouse will receive. If you are going through this difficult life transition, it is crucial to understand the laws and guidelines that govern property division in California. You may wonder, “How is property divided in a divorce in California?” Knowing the answer can ensure your rights are protected and alleviate some of the tension that often comes with dividing property.

Property Division in California

There are two categories of marital property – community property and separate property. Community property is acquired during the marriage and before separation, while separate property is acquired before marriage and after separation. California is a community property state.

This means that all assets, tangible and intangible, and debt acquired by either spouse during the marriage are to be evenly distributed between them. The community property rule applies regardless of who incurred the debt or whose name is on a property.

Community Property in Property Division

In a divorce in California, both spouses are entitled to an equal share of the total value of all community property since it is equally owned by both parties. Assets between you and your spouse that may be regarded as community property can include:

• All income earned during the marriage by either spouse, including stock shares, pension plans, and retirement benefits
• Funds in joint bank accounts
• All assets obtained during the marriage
• A business started with community property funds
• Separate funds used for the benefit of the community
• Certain debts and loans acquired during the marriage
• Necessary debts incurred after the date of separation but before a judgment of legal separation or divorce

For both spouses to get an equal share of the community property, it is essential to have assets like real estate, vehicles, and jewelry accurately valued. This may require the assistance of legal or financial professionals for business valuations, appraisals, and the review of any other assets. Following proper asset valuation, community property should be divided equally and fairly.

Separate Property and Commingling

Separate property is not part of the marital estate and is, therefore, not likely to be subject to the property division process. In California, the following are included in separate property:

• Income earned before the marriage or after the separation date
• Assets acquired before marriage or after separation
• Gifts and inheritances received by one spouse during the marriage
• A settlement awarded to one spouse for a personal injury
• Debts and student loans obtained before marriage
• Certain debts and student loans obtained during marriage

It’s important to be aware that sometimes separate property and community property can become mixed through commingling. This occurs when separate property funds are used for community purposes or vice versa. For example, a spouse may put their inheritance in a shared account that is used for marital expenses or use marital funds to improve or pay for a separate property asset.

Commingling is not always intentional, but it can make distinguishing between community and separate property difficult, especially if they are too mixed to trace the asset back to the source. In this case, the asset may be treated as community property. To avoid commingling and further complicating the property division process, you must pay close attention to how assets are used and keep records of each use.

You should also be aware of transmutation in your marriage, which is a complete change to the classification of an asset. Usually, transmutation is agreed upon by both spouses in a written declaration.

Transmutation happens when property changes from separate property to community property, community property to separate property, or one spouse’s separate property becomes the other spouse’s separate property. For example, adding your spouse’s name to the title of a car that is your separate property could transmute it to community property.

FAQs

Q. What Happens if We Cannot Agree on Property Division?

A. If you and your spouse are unable to agree on how property should be divided on your own, you should hire a family law attorney to serve as a neutral third party and mediator to help you come to a fair agreement. If you still can’t settle, you may need to go to court to resolve the matter. In court, you will have less control over the outcome. The final decision will be made by the judge based on community property laws and other related factors, but not necessarily your wishes.

Q. How Long Does the Property Division Process Take in California?

A. There is no exact duration of time for the property division process, as there are many factors that can influence how long it takes. The timeline can vary based on the complexity of the assets involved, how willing both parties are to cooperate, and whether the matter can be resolved with negotiation or necessitates litigation. The process will become more complicated and take longer if the court has to decide.

Q. Does the Wife Always Get Half of the Assets in a Divorce in California?

A. No, the wife does not always get half the assets in a divorce in California. Typically, both spouses are only entitled to half of all community property, not separate property, with the idea being to split marital assets 50/50. However, there are some factors that can affect this, such as a prenuptial or postnuptial agreement, the amount of spousal support awarded to either spouse, and if a judge finds that an equal split would be unfair due to other factors.

Q. Can a Marital Agreement Affect Property Division in California?

A. Yes, a marital agreement, such as a prenuptial or postnuptial agreement, can affect property division in California. It can indicate which assets should be considered separate property and put in place clear guidelines for how assets should be divided in the event of a divorce. It can also change the classification of assets.

Through a marital agreement, you can establish all assets as community property, agree that assets acquired by either spouse will be their separate property, or specify which assets will be community or separate.

Consult With a Family Law Attorney in California

If you need an experienced lawyer to assist with property division in your divorce, don’t hesitate to contact the Najera Law Group, APC. Our legal team can make sure that your interests are protected and that the distribution of all assets and debts is fair.