California is a community property state. In community property states, any property acquired by spouses during a marriage is considered marital or community property. Absent a written agreement like a prenuptial or postnuptial agreement; all community property is subject to equal division by the court.
To divide community property, the court totals the net worth of the community assets and subtracts the community debts from that amount. The remaining asset value is divided, with each spouse receiving one-half of the net value of the community estate.
The spouses do not actually “split” physical objects. Instead, each spouse is entitled to a 50/50 split of the value of the marital estate. Spouses typically receive different assets that are equivalent in value. Separate property, property that a spouse owned before marriage or received through gift or inheritance, is not community property. It remains with the owner spouse upon divorce.
What is Marital Property?
Marital, or community property, is anything with value a couple buys or otherwise obtains during their marriage. It does not matter which spouse has physical control of the property. Some marital property can be bought or sold like:
- Real estate or land
- The marital home
- Vehicles or recreational vehicles
- Household goods, furniture, or jewelry
Other marital property has value or potential value, including stocks, bonds, certificates of deposit, bank accounts, pensions, and savings accounts.
What Is Separate Property?
Separate property is not community property and is not subject to division in a divorce. Separate property includes:
- Property owned by either spouse prior to marriage
- Earnings, rents, profits, or interest on a spouse’s separate property
- Property inherited or gifted to a spouse
- Any asset a spouse acquires during a marriage using their separate property
- Anything a spouse acquires after the date of separation
- Any portion of a retirement, pension, or profit-sharing plan earned before marriage or after the “date of separation.”
Separate property can commingle with marital property making it difficult to divide or even become inseparable from community property over time. To maintain one’s separate property, it is imperative that property always be traceable to its original, separate source.
What is the Date of Separation?
Spouses who decide to separate need to note their date of separation. This is usually the date one spouse moves out or the date both spouses agreed their marriage was over. From the date of separation forward, there is no more community property.
This also means there are no more community debts and income earned by either spouse is separate income.
Reaching a Community Property Agreement with Your Spouse
If you and your spouse are considering divorce, understand that the two of you may come to your own community property and debt settlement. However, any agreement you reach still goes before the family court for approval. Should the two of you not agree, the court will divide your property and debts on your behalf.
In addition to property, you will need to reach an understanding with your spouse about any spousal support, child custody and visitation, and child support. Otherwise, the court will decide these matters on your behalf.
Contact an Experienced Attorney
It is prudent to speak with an experienced divorce attorney in Los Angeles like those at Fernandez & Karney whether or not you and your spouse agree on your divorce issues. Your attorney will review your agreement to ensure it meets California’s legal requirements and will withstand any court scrutiny.
Should you and your spouse disagree, Fernandez & Karney will aggressively protect your property interests in both community and separate property. Contact us today to schedule your confidential consultation with a legal professional.