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How Are Assets Divided During a Divorce in California?

On Behalf of | Aug 2, 2021 | Child Support, Divorce

San Diego divorce laws divide assets depending on the type of property it is. When you finalize your decision to end your marriage or domestic partnership, you need to protect the assets you earned during your union. So, you must understand what kind of assets are on the table to determine what you legally own. Here is a more comprehensive discussion on the types of property under California law.

Dividing Community Property

In California, each spouse legally owns half of their community property, community property being everything that you earned and bought while you were married. Property includes anything that has value, whether physical, intellectual, or financial. Houses, cars, furniture, clothing, and bank accounts that you opened while married are community property. You can tell what assets are community property by looking at the money you used to purchase the item. For instance, you earned $500 while married, and you spent that money on a stove. The money you bought the stove with and the stove itself are both community property. The debts that you acquired while you were married also count as community property. You and your spouse are equally responsible for the debt that you incurred while married, regardless of whose debt it is. So, even if your spouse incurred the debt while you were married, you still owe half the amount. To complicate things a bit, you may also have quasi-community property. This type of property refers to anything that you or your spouse earned or bought while you were outside the state of California. For example, you lived in Texas with your spouse for a time during your marriage. You got a job, earned a living, and made enough to buy a car while in Texas. The money you earned and the vehicle you purchased are community property under California divorce law. They would still be community property had you made money and bought the car in California. Usually, couples can decide how to split their community property. Otherwise, you may need a divorce lawyer’s assistance with dividing your community property equally. Consider your legal options if your circumstances do not allow you to come to a good agreement with your spouse.

Dividing Separate Property

You can claim any assets you owned before your marriage or domestic partnership as separate property. The money that you earn directly from separate property counts as separate property, as well. For instance, you rent out a house in California that you had owned even before you got married. Your rent profits are separate property because they came from the place you owned before marriage.

Gifts and inheritance that you received during your marriage are also separate property because they are assets meant for an individual. For example, you received inheritance money while you were married. If you use that money to buy a car, then the vehicle is your separate property.

Separate property belongs only to you, and you have every right to claim ownership when dividing assets during divorce. Look at the money you used to spend on an asset to determine whether it is your separate property.

Assets that you receive and money that you earn after your date of separation are also separate property. In California, the date of separation is when you or your spouse expressed intentions of ending your marital relationship.

Sometimes, you may not agree with your spouse on the date of your separation. In such cases, consider seeking a divorce attorney’s help to gather relevant evidence. The divorce court will need you to present evidence to determine your separate property.

Dividing Commingled Property

You will need a lawyer’s help to divide your commingled property. Commingled property is separate property that becomes community property after marriage. This type of property has complicated and technical rules surrounding the division process during divorce, making legal assistance necessary and worthwhile.

Pensions or retirement benefits from a job you held before marriage and kept throughout your union are typical examples of commingled property. Your pension contributions before marriage are separate property. During the marriage, your contributions become community property. Once you separate, your contributions are separate property again.

Sometimes, you and your spouse each have a pension that you each can keep after divorce. However, understanding your pension value and dividing it between you and your spouse is a complicated process requiring an expert to settle the matter.

The divorce court will issue a qualified domestic relations order (QDRO) regarding the pension division. Any mistake in the QDRO preparation will result in further complications and expensive consequences, making legal services a wise decision.

Aside from pensions, home equity can become commingled property in certain situations. A common example is when you sell a house you owned before getting married to place the proceeds as a down payment on another house after marriage. The house you owned before marriage and the money you got from selling it is separate property. The mortgage payments you make for the new place you bought after marriage with your salary are community property. Thus, your house’s equity is commingled property.

You may still need legal assistance when dividing the value of this commingled house. The above situation is common among divorce lawyers, so only a seasoned San Diego divorce attorney would know how to navigate such situations when couples enter divorce in California.

So How Are Assets Divided During a Divorce?

California laws divide assets during a divorce based on the type of property the assets in question are in the first place. Your assets can be community property, separate property, or a mixture of both that we call commingled property.

Community property belongs to you and your spouse equally, meaning you own and are responsible for half of your assets and debts. Separate property is the assets you owned before entering marriage or domestic partnership and the assets you receive during the marriage that is meant only for you. You can usually divide these assets with your spouse if you understand the source of these assets.

Meanwhile, the commingled property is a mixture of community and separate property like pensions that you contributed with money from a job you held before and during the marriage. Dividing pension value with your spouse can be a complicated process that should always have an expert’s input.

Consider calling a family divorce lawyer to help with your asset division. At Smith Family Law, our seasoned San Diego divorce attorneys know how to navigate California law to ensure you and your hard-earned assets get protection during your divorce.

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