Property division is one of the most contentious issues couples may face in a California divorce, especially in long-term marriages where a significant amount of assets have been accumulated. An understanding of how property, debts, and assets are divided is essential to understanding your rights and a fair outcome in your divorce.

Community Property

California is a “community property” state. The term “community property” defines the character of assets acquired during the marriage as belonging to each spouse equally, regardless whether the asset or debt is in only one spouse’s name. Spouses accumulate community property during the “community period,” defined as the period from the date of marriage through the “date of separation.” Any assets or debts acquired during the community period are presumed to be community property in character, subject to equal division at divorce (with certain exceptions, like gifts or inheritance).

The date of separation is a term of art defined under Cal. Family Code section 70. The date of separation is legally significant because the date of separation date defines the end of the community period. The date of separation is the date irreconcilable differences in the marriage arose. After the date of separation, there is no longer a presumption that assets or debts acquired are community property. Rather, after the date of separation, the presumption shifts to the presumption that the asset or debt is the separate property of the spouse who acquired it.

Separate property can be accumulated during the community period also under certain circumstances. Gifts or inheritances acquired during the community period are separate property in character, and will remain separate property at divorce as long as these separate assets were not commingled with community property, or converted into community property through a writing.

Community property that is subject to division in divorce can include:

• Real estate, land or vacation timeshares
• Businesses
• Vehicles
• Retirement plans and pensions
• Life insurance policies
• Bank accounts
• Savings accounts
• Jewelry, collectibles, and artwork
• Frequent Flyer Miles
• Furniture
• Digital assets
• Family pets

What Happens to the Family Home in a Divorce?

The family home is often one of the most significant assets a couple owns. Options for handling the division of the marital home at divorce include the following:

• Selling the home and splitting the profit — If it wouldn’t be financially possible for either spouse to keep the home, they may sell it and divide the profit.
• One spouse buys-out the other spouse’s interest in the home — If one of the spouses wishes to remain the owner of the home, they may buy-out the other spouse and pay them their share of the value.
• Deferring the sale of the home — In some situations, it might make sense to delay the sale of the residence for some period of time, usually taking into account the needs of minor children.

If the home is not community property in character, but after marriage community income was used to pay down the principal on the mortgage or to make improvements to the home, the community may be entitled to an apportioned interest in the appreciation of the home, sometimes referred to as a “Moore-Marsden interest,” referring to two seminal cases addressing the issue.

Other reimbursements may also apply, so it is important to talk to an experienced family lawyer before taking any steps to handle the disposition of the home. Attempting to handle the disposition of the home without the help of a lawyer can result in significant mistakes that affect the rest of your divorce case.

Is Litigation Always Required for Property Division Matters?

Most cases settle by a written agreement that is then made into a court order. Working together cooperatively to resolve the issues, either in mediation or with the help of lawyer negotiations, can reduce stress and save you time and money. Once spouses reach an agreement regarding what will happen to their community property, they can submit the settlement to the judge for approval.

Litigation can sometimes be avoided if the spouses entered into a prenuptial agreement before marriage or a postnuptial agreement during the course of their marriage. A prenup or postnup can specify how property should be characterized during divorce and determine which spouse receives which assets. By executing a prenup or postnup, spouses can avoid lengthy and costly divorce litigation.

Contact an Experienced California Property Division Attorney

Property division in divorce can be legally complex. This blog provides only a cursory review of some of the fundamental principles of property division — it is important to have a skilled attorney who understands the law and can help you reach your goals. At Bednarczyk & Valerio, LLP, we provide knowledgeable representation and compassionate advice to clients facing divorce on a wide array of family law issues. To learn more about how we can help with your divorce matter, contact us online or call 925-464-2494.