If you are thinking about getting a divorce it is important to be prepared for what can be one of the most challenging aspects of the process: property division. When you and your spouse decide to split you must also decide how any property that you own together will also be divvied up. Couples who get divorced in California must generally follow the state’s property division rules. How property is divided will depend on how it is classified and whether the couple has any pre-existing contractual arrangements in place.
California is a community property state. This means that any property or debts acquired during a legal marriage are considered to be equally owned by both spouses. Any profits or earnings from community property are also considered to be community property. Property can include real estate, furniture, vehicles, bank accounts, income, rent and profits, and even retirement benefits. If a California couple gets divorced, each is entitled to 50 percent of the property and responsible for 50 percent of the debts. Dividing community property can be difficult. Large or complex assets and debts can be difficult to divide, both spouses may have strong personal attachments to certain items, and contested divorces can cloud rational decision-making.
Not all property is classified as community property. Anything that is not community property is classified as separate property. Separate property can include:
- Property owned by an individual spouse prior to marriage;
- Property specifically gifted or bequeathed to one spouse during a marriage; or
- Property acquired by an individual spouse after a legal separation (during the divorce process).
Any profits or earnings from separate property are also considered to be separate property. When property is classified as separate property spouses are not required to give up or share their ownership rights. If a California couple gets divorced, separate property continues to be owned solely by the spouse who owned the property before getting married.
Dividing Property in a California Divorce
At the most basic level, California spouses who divorce are each legally entitled to retain ownership of all separate property, receive ownership rights to half of all community property, and become responsible for half of all community debts. When filing for divorce in California, each spouse is required to complete a Schedule of Assets and Debts (FL-142). The Schedule of Assets and Debts is the starting point for determining how assets and debts will be divided. Each spouse must list and value all assets and debts, including community property and separate property. Spouses then exchange and review the other’s form. This helps to determine (a) the property that must be divided in the divorce and (b) whether there are any disagreements about the classification of certain property.
For example, let’s say the spouses acquire a vintage desk while they are married. Spouse A says the desk was a gift to her. Spouse B says the desk was a gift to the marriage. When the spouses get divorced, Spouse A lists the desk as separate property and Spouse B lists the desk as community property. Spouse A must be able to show that the desk was gifted specifically to her, and not to both spouses. If the desk is considered to be separate property, Spouse A owns it free and clear and has no obligation to share it with Spouse B. If, however, it is determined that the desk was a gift to both spouses it will be considered community property and must be included in the division of property and assets.
How do divorcing spouses divide physical property or other complex assets? How would the spouses in the example above equally divide a vintage desk? Generally, once the Schedule of Assets and Debts have been completed, exchanged, and reviewed the spouses propose a plan to divide any community property. Rather than physically cutting everything they own in half, spouses typically either (a) negotiate the full ownership of certain items in exchange for giving up the right to other property, or (b) sell property and split the profit.
So, if the desk was determined to be community property, Spouse A could get ownership of the desk by conceding ownership of another item of similar value to Spouse B. Alternatively, the spouses could sell the desk and split the financial profit. If the desk was determined to be the separate property of Spouse A, she could retain ownership without conceding the right to own other property of equal value.
Using Prenuptial and Postnuptial Agreements to Avoid Community Property Rules
Many California couples take the initiative to create prenuptial agreements as a way to avoid the headache of property division during a divorce. A prenuptial agreement is really just a contract between two people before they get married. A prenup can specifically assign ownership rights to certain pieces or types of property to one spouse or the other. In the event of a divorce, the terms of a prenuptial agreement will generally supersede the California community property rules. Spouses may also execute postnuptial agreements to dictate how property will be divided in the event of a divorce.
Hiring an Experienced California Property Division Attorney
Property division can be complicated and overwhelming. We often form emotional attachments to our belongings and may find it difficult to give up certain marital assets. Contested divorces can make the process even more difficult. The best way to achieve the best possible outcome is to hire an experienced property division attorney to handle your case. For more information, visit Berenji & Associates – https://www.berenjifamilylaw.com.