Complex Property Division

Steve Fernandez and Mark Karney are both Certified Family Law Specialists* with over 50 years of combined experience.

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Los Angeles Complex Property Division Attorneys

The popular belief concerning divorce proceedings in the Golden State may be that a couple’s property is split fifty-fifty, but California family law is not quite so simple. Who gets what during marriage dissolution or legal separation may hinge on a multitude of factors, such as:

  • When the property was acquired,
  • How the title is held,
  • What income was used to purchase it,
  • Whether the spouses moved in and out of state, or
  • Whether some written agreement exist regarding the property.

If you’re considering a divorce, you may have questions regarding your property rights. Speak with a Los Angeles property division attorney at Fernandez & Karney today. Attorneys Steven Fernandez and Mark Karney are both Certified Family Law Specialists with over 50 years of combined experience. We offer a free consultation.

The Community Property Presumption

California law presumes that all property acquired during the marriage by either spouse – while a resident of the state – is community property. This includes real estate and personal property, and, in some cases, trusts. Whether the real estate is located outside of California, or movable property is transported outside the state, has little relevance, as long as the spouses retain a domicile in the state.

Under certain circumstances, any monetary award in a personal injury lawsuit could also be considered community property by California courts. The judge may designate liabilities, like credit card debt, as community property, too. However, even if ownership was acquired jointly during the marriage, a deed or another written document may specify that the property is separate.

The presumption in this context is rebuttable, which means that an attempt can be made in court to refute categorization of a particular valuable, for instance pension funds, as community property. However, an acceptable proof must be offered to convince the judge that an exception might apply: California case law requires at least a preponderance of evidence. But, different requirements (as to level of proof – or as to the conditions of validity of property transfer) may apply to different issues in each case, and the complexity may quickly increase because of the fiduciary nature of the relationship between married couples or domestic partners.

The California community property presumption is important for several reasons: for instance, community property cannot be sold or given away without the knowledge or the blessing of the other partner. Once the divorce proceedings begin, restrictions are automatically imposed to severely limit any property transactions, such as sale, gift, or borrowing against marital property in general.

Division of Property Basics

Court’s decision on what comprises marital community property determines the division of property during divorce, legal separation, or nullity proceedings. As a rule, the judge will divide community property between the spouses equally.

However, the domestic partners or spouses can avoid such property allocation if they either

  1. present a valid written agreement, like a prenup; or
  2. submit (to) a divergent division in open court.

Separate Property

A married person can generally control their separate property independently of their spouse. There are exceptions: for instance, if one spouse files for annulment, divorce, or legal separation, temporary restrictions are placed on the sale of any separately owned real estate.

Separate property includes:

  1. All property the person owned before marriage, including any profit from such property;
  2. Any property the individual inherited, or received as a gift after getting married – again, this encompasses any revenue from such property;
  3. Any earnings and wealth acquired after the legal separation of the spouses (or domestic partners);
  4. Income earned while living apart and separately. This could include income of minor children who live with the spouse.

Transmutation: Turning Separate Property Into Community Property

California Family Code § 850 allows spouses to transform the property from separate property to community property, or from community property to separate property if they both consent – for example by recording a title change: this is called transmutation.

Further, the separate property of one spouse can be transmuted into separate property of the other: if for instance, a wife decides to give her husband a sailboat, which she purchased as a single woman, the separate property of the wife becomes the separate property of the husband. In such instances, when property was acquired by one of the spouses before marriage, but the couple decided to change title after the marriage, to include both spouses as joint owners, the courts will assume such property is community property.

For transmutation to be effective, it must be in writing. Also, if it affects the rights of third parties, like creditors, they must be appropriately notified of such ownership change. But, say, a gift of small inexpensive jewelry between spouses generally doesn’t require a three-page contract to be valid, so exceptions do exist.

Speak with a Los Angeles Complex Property Division Attorney Today

At Fernandez & Karney we pride ourselves in providing complete and detailed information on topics that matter to you. If you need further assistance, please call us or schedule a no-charge consultation.