California Divorce Laws and Property Division
If the idea of splitting a shared life overwhelms you, you’re not alone. While all divorces come with their fair share of difficulties, longer marriages can be even more challenging. After all, when you’ve shared more of your lives together than you have apart, where in the world do you start when trying to divide that all up? Who gets all nine thousand pencils in the junk drawer? What about the china you bust out only twice a year? How do you split that extra property you bought, and what about debt?
As a community property state, California law dictates that all property accumulated and monies earned during a marriage belong to both spouses equally. But how does that apply to all your questions? Here’s how community property breaks down when getting divorced in California.
Is California A 50-50 State When it Comes to Divorce?
California’s community property laws grant equal ownership of marital property to both spouses, but that doesn’t necessarily mean everything will be divided 50-50 in a divorce. Instead, the focus is on what is fair.
Say you and your spouse own a house and condo, both of relatively equal value. Rather than split both properties in half and divide the proceeds, the courts might decide to simply award one spouse the house and the other, the condo. Similarly, one party might agree to take on debt in exchange for an item both individuals want. In the end, there are no set rules about division. The point is simply to split the assets fairly so that each spouse walks away with half of the total marital property value.
How Long Do You Have to Be Married to Get Half of Everything?
In California, anything accumulated during the marriage—whether that’s five months or fifty years—is considered community property, and subject to an equitable split. The only exceptions to this are inheritances and gifts (even gifts from one spouse to another), which would fall under separate property.
What is Separate Property in California?
Separate property is whatever you bring to the marriage, which will arguably leave with you after a split. This would also include property that was purchased with separate funds—say, if you sold your really nice pre-marriage car, and then used that money to buy a boat. The boat, arguably, would belong to you as separate property. This is why it’s a good idea to keep track of what money was used to purchase items.
In California, any property (including paychecks) that are earned between the date of separation and the finalized divorce, are also considered separate.
Are Separate Bank Accounts Marital Property in California?
To start, the name on the account means nothing. Rather, it’s all about what kind of property it contains. Remember, all funds acquired during the marriage are considered community property. Full stop. Regardless of how the couple has set up names, or if the account is joint or separate.
The only way an account would be considered separate property is if it dates back before the marriage, and was kept independent from community property. If it hasn’t (for example, if community property funds were deposited in with separate funds), then the account might be subject to a community property split.
Who Gets the House in a California Divorce?
So long as the house is community property (and not separate), it would be divided the same way as everything else in California: equitably. For one couple, that might mean selling the house and splitting the proceeds. For another, maybe one keeps the house while the other gets the business. The ultimate goal is simply to divide the home—and all other assets—equitably between the parties.
Does it Matter Whose Name the Property is in?
No. Just as with bank accounts, the name on the property is irrelevant. What matters, is how the property is classified.
If the property was brought into the marriage (and community property was not used it the upkeep or maintenance), then the property would remain separate. If not, the property would be subject to an equitable division under the rules of community property.
Sometimes, the division isn’t always straight forward, though. A property that starts out as separate might end up “commingled” (one that is both separate and community property at the same time), or else “transmuted” (separate property that has become so entangled in community property, that is impossible to determine what is separate and what isn’t). In these instances, the best thing to do, is to document payments, interests, and equity in the property as best you can, and then hire an attorney to ensure the end agreement with your spouse is as equitable as possible.
How is Debt Divided in a California Divorce?
California’s community property laws treat debt the same way as assets. This means anything acquired during a marriage will be divided equitably when it ends. Similarly, debt brought in by a single party will also leave with the one who brought it.
The goal, as always, is to make things fair. As such, debt can sometimes be used a useful negotiating tool, if there’s something both parties want.
How Do I Protect Myself Financially From my Spouse?
As with most things in life, the best defense is a good offense! If you have the foresight to think ahead, a prenuptial agreement (or “prenup”) is a really great way to keep yourself financially secure from a divorce.
However, if you’re getting divorced, and don’t have a prenup in play, here are a few things you can do to protect yourself from further damage:
- Make the separation date official;
- Get a credit report;
- Close joint accounts;
- Change information, so direct deposits go into a separate account;
- Stop investing in retirement accounts;
- Inventory all major assets;
- Track down proof of separate property (such as inheritances or gifts);
- Figure out what is most valuable to you, personally;
- Do not sign anything without consulting an attorney; and, of course,
- Hire an attorney to make sure your half of the property is, indeed, equitable.
Getting divorced is stressful, even in a community property state like California—especially if the property has been comingled or transmuted. If you’re not sure what might be considered separate or community property in your separation or have other questions regarding California divorce laws, call us at (209) 989-4425, or get in touch online to schedule your consultation today. Let us help ensure that your half of the property division is fair.