California Family Law: How Is Property Divided in Divorce?

Dividing property is one of the most stressful aspects of divorce that can sometimes lead to prolonged and bitter disputes. If a couple cannot agree upon the key aspects of the division, it may be the court that ultimately decides who ends up with what when the divorce comes into effect. Of course, the decision of the court is based on the guidelines provided by California family law. In this article, we will describe the most pertinent principles governing property and debt division in a California divorce.

Community Property vs. Separate Property

The first factor the divorcing couple must take into consideration is the distinction between community and separate property in marriage. Community property is defined as all assets and debts acquired by either the husband or the wife during their marriage. Separate property is whatever the husband or the wife acquired prior to marriage, after separation, or what was acquired during marriage through a gift or inheritance. While community property must be equally divided in a divorce, separate property doesn’t have to conform to this rule.

Determining Property Value

The next step after establishing marital property and separate property is to determine the value of all assets. This usually starts with making a list of all tangible (house, car, furniture, art) and intangible (bank accounts, security deposits, stocks, life insurance) items the couple owns or owned prior to the separation. A monetary value then must be given to each of these items. This is done through an appraisal, especially if the couple doesn’t have enough knowledge to determine a fair market value of certain items or if they can’t agree on the value. For intangible assets like retirement funds, the help of a financial professional such as an actuary or a CPA can be required.

Each spouse must separately fill out a Schedule of Assets and Debts form in which they list both separate property and community property, as well as the fair market value of all of the items listed. The spouses then exchange the forms for comparison to see if there are any major disagreements in the perception of ownership (separate vs. community) or value of the property.

Splitting Up the Property

Comparing the Schedule of Assets and Debts forms can help the couple make important decisions regarding how to divide the property and the marital debt. The division must result in both sides retaining a roughly equal net share of the property. Items and assets can be assigned to each spouse or sold, in which case the couple must equally divide the earnings from the sale. If an item of particular importance cannot be sold or divided, one spouse can buy out the other’s share.

Dividing Debts

Dividing debt may be a complicated aspect of a divorce. It is important to remember that, for example, even if your spouse agrees to pay off your credit card debt after a divorce, you will continue to be the debtor in the bank’s eyes. This means that if your ex doesn’t follow through on their obligation to pay off your cards, the bank or the credit company will demand the repayment from you and you will be charged will any additional fees for late payment. To avoid such problems, the couple may agree to pay off marital debts from any property sale such as a real estate sale.

Talk to a Divorce Attorney

Dividing property in a divorce is an involved and complex process. That’s why it’s so important to be able to count on professional help and legal advice when going through a divorce. If you have any questions regarding property division or any other aspect of divorce in California, do not hesitate to contact us. Grey Legal Group APC has years of experience and a record of satisfied clients. Call us at 951-587-8970 to talk to a member of our legal team and get the help you need.

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The Grey Legal Group

At The Grey Legal Group, we believe in helping all families with their legal needs so they can be protected on your journey back to a calmer, happier place of stability. Whether it is divorce, child custody, guardianship, domestic violence, or adoption, we have seen it all before and we can help you through it. With the legal knowledge and experience we bring to the table, we will be certain to find the best and most efficient solution to your situation.

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