How Is Property Divided in a California Divorce?
In California, property and debts are generally divided based on whether they are community property or separate property. In general, each spouse keeps their separate property, while community property and debts are divided equally unless the spouses reach a different agreement that the court approves.
What Is Community Property in California?
Community property generally includes money earned, property purchased, and debts taken on by either spouse during the marriage and before the date of separation.
Community property can include:
- A home or other real estate
- Bank accounts and investments
- Vehicles and other valuable assets
- Retirement and pension benefits earned during the marriage
- Credit card balances, loans, and other debts
The fact that an asset or debt is only in one spouse's name does not necessarily make it separate property.
What Is Separate Property?
Separate property generally includes property or debt that belonged to one spouse before the marriage or was acquired after the date of separation. Gifts and inheritances received by one spouse are also generally considered separate property.
However, separate and community property can become mixed together. For example, a home purchased before marriage may gain community property interest if marital income was later used to make mortgage payments.
Why Does the Date of Separation Matter?
The date of separation can be important when determining whether property or debt is community or separate. Generally, property acquired or debt incurred during the marriage before the date of separation is community, while property acquired or debt incurred afterward is generally separate.
California considers both a spouse's intent to end the marriage and their actions after that decision when determining the date of separation.
What Happens to the Family Home?
A family home may require additional analysis, particularly if one spouse owned the property before marriage, if marital funds were used to pay the mortgage, or if the spouses disagree about its value or equity.
The spouses may agree on a solution, such as selling the home, refinancing, or having one spouse receive the home while the other receives other assets. If they cannot agree, the court can decide how the property should be divided.
What Happens to Retirement Accounts and Debts?
Retirement accounts can contain both separate and community interests depending on when the benefits were earned. Debts may also be community debts even when they are held in only one spouse's name.
Because property and debt issues can become complicated, complete financial disclosure is an important part of the divorce process.
Get Help With Property Division in a California Divorce
Property division can involve homes, businesses, retirement accounts, investments, and significant debts. Dosh Law represents clients in property division and other family law matters in Placerville and throughout El Dorado County.
If you are going through a divorce and have questions about property or debt division, contact Dosh Law to discuss your situation and legal options.