California is a community property state. This means that all property acquired after the date of marriage, and before the date of separation, is considered to be community property, unless the property was acquired by gift or inheritance. California recognizes that both spouses make valuable contributions to a marriage, whether those contributions are made through domestic duties or through general employment and financial support, and treats those contributions equally when determining how community property is divided. Property, and other assets are typically characterized by the court as either community property or separate property; this characterization will determine how the court seeks to divide these assets at the time of trial.
All property, real or personal, in or out of the state that either you or your spouse acquired through labor or skill during the marriage is community property. You and your spouse may have more community property than you realize. For example, you may have an interest in pension and profit-sharing benefits, stock options, and other retirement benefits. Each spouse owns one-half of all community property. This is true even if only one spouse worked outside of the home during the marriage and even if this property is in only one spouse's name.
With few exceptions, debts incurred during the marriage are community obligations. This includes credit card bills, even if the card is in your name only. Student loans are an exception and are considered separate property debts. Community property possessions and community property debts are divided equally unless you and your spouse agree to an unequal division. You should be aware that if your spouse agrees to pay a community debt and then fails to pay, you may have to pay the creditor. Division of possessions and debts can be complicated. You may each want a lawyer's advice before entering into an agreement.
If you and your spouse can't agree on the division of debts and possessions, a judge will make the decision. Ownership of each of your belongings might not be split between you and your spouse; instead, a judge might give each of you items of equal value. For example, if your spouse gets the furniture and appliances, you might get the family car or something else of equal value.
Separate property is property acquired before your marriage, including rents or profits received from these items; property received after the date of your separation with your separate earnings; inheritances that were received either before or during marriage; and gifts to you alone, not you and your spouse.
Problems with identifying separate property occur when separate property has been mixed with community property. You may be entitled to receive your separate property back even if it has been mixed. There are complex tracing requirements where property has been mixed, and you may want to seek the advice of a lawyer.
Debts incurred before getting married or incurred after separating from your spouse are your separate property debts. Determining the character of property can be complicated. Your lawyer can help make sure your property is properly listed as "community" or "separate."
Although this concept is relatively simple, certain transactions during the marriage - such as simple refinance - complicate matters. Sometimes it is necessary to hire the services of a forensic accountant to assist in painting a clearer picture.
If you have any questions about the proper division of your assets and debts, please contact us for a consultation.
If you have any further questions or need additional information about our Family Law services, please do not hesitate to call (714) 441-5905.