No couple gets married expecting to divorce eventually. Unfortunately, there are many situations that might arise (e.g., infidelity, incompatibility, irreconcilable differences, etc.) when divorce becomes the best option. Untangling your joint finances is often one of the most complicated issues. So what happens to your assets in a divorce?
You and your spouse must work together to agree on how to split up property. In this case, property includes (1) anything that can be bought or sold like real estate, household goods, jewelry, vehicles, etc., as well as (2) anything that has value like income, investment and retirement accounts, stocks, etc. If you had a prenuptial or postnuptial agreement in place, this process is usually faster and smoother, and the court will most likely follow the agreed-upon terms regarding division of assets.
In the absence of a pre- or postnuptial agreement, and if you and your spouse cannot agree, the court will decide these issues for you. Divorce laws vary from state to state but all states fall into one of two categories:
- An equitable distribution state, where a judge splits all assets “fairly” according to each party’s earning potential, needs, and any personal property.
- A community property state, where the family court divides all community property evenly between the spouses.
Division of Assets in California
California is a community property state, so it’s important to know what the state considers community property versus separate property. In general, community property is everything you own or owe together while married. For instance, if you bought a house together and paid the mortgage while married, both the house and any outstanding debt belong to both of you.
Separate property, on the other hand, is anything you owned or owed before your marriage or after your separation, or any individual inheritance or gifts. Determining the official date of separation varies for different couples. Some consider the date of separation the day they moved out. Others might choose the date you told your spouse you wanted a divorce or filed for divorce, or the date you decided together to move forward with a divorce. Anything you earned, bought, or owe after the date of separation is separate property.
Each spouse is allowed to keep all separate property, but all community property will be split evenly between spouses. You will need a formal court order, but this process is easier if you and your spouse can develop a divorce agreement that outlines how you both want community assets distributed. If your divorce is contentious, or you simply cannot agree, the courts will decide how to divide your assets during a hearing or trial.
We Can Help Protect Your Interests
At Lonich Patton Ehrlich Policastri (LPEP Law), our family law attorneys are experts in property division issues in California. We have years of experience in protecting our clients’ interests in cases of divorce. We work together with other professionals like property evaluators, accountants, forensic accountants, and business evaluators to ensure an accurate representation of all your assets, determine marital vs separate property, and assess the value of property, as well as discover any hidden family assets. Let LPEP make sure you get what you deserve. Call us today at (408) 553-0801 to schedule a free, 30-minute consultation.
Disclaimer: this article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.