When spouses decide to separate or divorce, one of the principal concerns is how to divide up the property and debts. The process can feel burdensome at first, but with the understanding of a few basic legal principles and the assistance of an experienced, skilled family law attorney in California, the process becomes more manageable.
What Community Property Means in California
California is a community property state. This means that the law presumes that all property and debts acquired during a marriage belong to both partners. Beginning on the first day of the marriage until the “date of separation,” each partner owns an undivided one-half interest in the combined assets and debts that have been designated as community property. A spouse may only overcome the community property presumption with credible evidence, such as tracing the acquisition of the asset to a separate property source. The division of community property does not require each asset to be split down the middle and couples can be creative with how they allocate debts and assets, as long as the arrangement is equivalent in value.
Community property is a default arrangement. If a couple proactively and consensually creates a prenuptial or postnuptial written agreement or agrees to negotiate around the community property structure once they have a complete and accurate picture of the community and separate assets and debts, they can create a completely different division of assets and debts, including an unequal division.
Similarly, couples are free to “transmute” or formally re-characterize a piece of property, changing it from community property to separate property, separate property to community property, or separate property to separate property. Such transmutations must be made in writing with an express declaration that is made, joined in, consented to, or accepted by the spouse whose interest in the property is adversely affected.
Characteristics of Community Property in California
Not all of the debts and assets of married individuals will qualify as community property. In California, community property typically takes the following forms:
- All earnings that either, or both partners, earned during the marriage.
- All banking accounts holding community monies, regardless of whose name is on the account.
- Assets like homes, cars, and boats acquired during the marriage with community property monies, even if the title only carries one spouse's name.
- All loans, mortgages, and credit cards acquired during the marriage, even if only one spouse incurred the debt.
- The portion of a pension, profit sharing, or retirement earned during the marriage.
- The assets and value of a closely-held business that was developed during the marriage.
Characteristics of Separate Property in California
Separate property is an asset or debt acquired before a marriage or after the “date of separation.” It also includes any inheritances or gifts assigned to just one spouse. If an asset or debt is designated as separate property, it will not become subject to division at the time of divorce or separation and will remain the separate property of the spouse who acquired it. Separate property typically takes the following forms:
- Anything acquired by a spouse before the marriage and kept separate during the marriage.
- Earnings, rents, profits, or interest on separate property.
- Inheritances or property acquired by one spouse during or before the marriage by way of gift or devise.
- Any asset acquired during the marriage but paid for with separate property funds and kept separate from the community.
- Anything acquired by one spouse after the parties separate.
- Parts of a retirement, pension, or profit sharing earned before a marriage or after the “date of separation.”
Commingling Separate and Community Property
Separate property that existed before and throughout the marriage is vulnerable to becoming “commingled” with the community. This means that the property started out as one person's separate property, but over time, the community began to contribute in some way. A common challenge in California divorces is the parsing out of separate and community property in “mixed” assets or debts.
Attorney Jaime L. Kissinger has experience supporting spouses as they designate and divide up commingled property.
Skilled California Property Division Attorney
Dividing up property in a separation or divorce can get sticky and contentious pretty quickly. You can trust attorney Jaime L. Kissinger to thoroughly review your case, assist you in property allocation and division, and skillfully advocate for you in Contra Costa, Sacramento, Solano, or Yolo County family courts. For an initial consultation and case analysis, call her office today.