How Does Community Property Work in a Divorce in California?

Community property affects nearly every issue that arises during a divorce case. People often ask, “How does community property work in a divorce in California?” Property division can be extremely tricky. However, understanding California divorce laws and how they relate to property division can help you prepare for your legal process. Paula D. Kleinman can help.

About Paula D. Kleinman

Paula D. Kleinman, located in Vista, represents individuals throughout San Diego County. We take pride in paying attention to the details of your case and communicating clearly with you. We keep our clients informed of everything throughout their case. Our law firm believes it’s important to be upfront with our clients about the potential outcomes they can expect.

With over 25 years of experience, we know how to guide our clients through the process of divorce and help them understand their options under California law. Many of our cases are litigated at the North County Regional Center. For this reason, it’s important that a lawyer serving this area be familiar with the local laws and judicial practices. A Carlsbad family law attorney from Paula D. Kleinman, A Professional Law Corporation, can provide this familiarity.

Community Property in California

In California, community property generally refers to any assets or debts that either spouse acquires during the marriage. California Family Code Section 760 states that property that either spouse acquires during the marriage is presumed to be community property, regardless of how a title is held. Essentially, any income or property acquired by either spouse during the marriage belongs equally to both spouses.

Separate property generally includes any property acquired before marriage, after separation, or gifts/inheritance passed specifically to one spouse.

Salary earned by either spouse, real property purchased during the marriage, retirement accounts, and businesses established during the marriage, for example, are all generally considered community property. California community property laws view marriage as an economic partnership where both spouses contribute either by earning income or by taking on roles such as a caretaker or homemaker.

The median family income for households with one earner is $76,190. When one spouse is the earner, and the other spouse contributes at home by doing household tasks that don’t earn an actual wage, their efforts are considered in property division in a California divorce case. In many of these cases, such contributions might affect the way property is split. It may also initiate spousal support for the non-earner.

Forty-five states reported 672,502 divorces nationwide. This equates to a divorce rate of 2.4 per 1,000 people. Because some states, including California, do not report divorces, this number is somewhat off for the country as a whole. Consequently, some analysts estimate the California divorce rate is slightly higher than this.

Determining and Valuing Property

In divorce proceedings, both spouses are expected to disclose and identify all community property/assets and debts, and determine the value of all these assets. Oftentimes, if there is disagreement, this can frame the tone for the rest of the divorce. Being realistic about asset values can prove to be beneficial to you in the long run. Some common examples of community property that you and your spouse may have to divide are listed below:

• The marital home
• Bank accounts
• Retirement plans (401(k), pensions, etc.)
• Vehicles
• Credit card balances
• Loans

For some things, such as bank accounts, valuation can be simple, but it can be more complicated for other assets. For example, formal appraisals may be required for real estate, whereas financial professionals may be consulted for other difficult-to-value assets.

How Debts Factor into Property Division

In California, debts that spouses incur during marriage are community debts. This means each spouse is responsible for repaying the debt, even if only one spouse accrued the debt. Examples of community debt include:

• Credit cards
• Personal loans
• Medical expenses
• Business loans

Some debt may be divisible as separate debt if your spouse incurred it without your knowledge. Just because you weren’t aware of a debt doesn’t automatically mean it’s not your responsibility, though.

Understanding Equal Division of Property

California uses an equal division rule when distributing community property. California Family Code Section 2550 mandates courts divide community property assets and debts equally.

However, this does not always mean splitting everything down the middle. Community property can be divided unequally as long as the overall distribution is equal in value. For example, Spouse A may keep the family home, while Spouse B keeps more of the retirement assets to compensate. Dividing assets sometimes requires negotiation when community property isn’t easily valued or clearly identified, such as with private businesses or stock options.

Hire a Divorce Lawyer With Over 25 Years of Experience in Property Division

While legal principles seem straightforward, the specifics of a divorce can be surprisingly complicated. Dealing with property often requires financial paperwork, legal jargon, and making hard choices. For many people, this means deciding to hire a divorce lawyer, especially when property division is an area of major contention. Paula D. Kleinman is committed to serving families in Carlsbad with an informed and communicative approach to customer service.

FAQs

Q: How Are Pets Treated in Property Division in California?

A: California divorce laws inform state courts of how to take care of and treat pets in divorce, so that they are not treated like property. Judges can assign pet ownership based on who takes better care of the pet and who was the primary caregiver. These are different from the usual laws that dictate how property is divided.

Q: What Happens if One Spouse Hides Assets in a Divorce?

A: Consequences for hiding assets include potentially losing your right to keep the asset. Because each spouse is required to disclose information about their finances in California, the court may award all or a majority of that asset to the spouse who did not hide assets. You could also face sanctions and pay attorney’s fees if you violate California’s policy on full disclosure.

Q: Are Personal Injury Settlements Divided as Community Property?

A: When and why a personal injury settlement was awarded dictates whether they are included and divided in community property. While portions that are compensation for pain and suffering are often categorized as separate property, any amount that makes up for lost wages or medical expenses paid during the marriage may be considered community property and divisible.

Q: Can a Prenuptial Agreement Override Community Property Laws?

A: Yes. A valid prenuptial agreement can alter the method by which property is characterized and distributed. A prenuptial agreement can specify what property is to be treated as separate property and how property is to be characterized and distributed upon divorce. The courts uphold marital agreements if they were entered into voluntarily and meet certain legal requirements.

Connect With Experienced Carlsbad Divorce Attorney, Paula D. Kleinman

If you are going through a divorce in California, it’s important to know how property division applies to your situation. Paula D. Kleinman has the experience and resources to provide the appropriate legal provisions for your property division case. Contact us for more insight into your specific divorce case.