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At Land Legal Group, our Los Angeles family law attorneys understand that asset division during a California divorce can be stressful. It involves untangling years of financial and emotional investments under the state’s strict community property laws, which require an equal split of marital assets and debts.
It can become contentious if disputes over what constitutes community versus separate property or if assets have been commingled. The emotional toll of dividing shared belongings, coupled with the financial uncertainty that comes with potential changes in lifestyle or living arrangements, adds to the strain, making it a challenging and often overwhelming aspect of divorce.
Here’s an in-depth look at how community property works in California and the division of assets during a divorce.
Understanding the Definition of Community Property in California
In California, community property includes all assets and debts acquired by either spouse during the marriage. This means that income earned by either spouse and property purchased or investments made with that income are considered community property, regardless of whose name is on the title.
Assets and debts that one spouse acquired before and after separation or by gift or inheritance during the marriage are considered separate property. Separate property remains with the individual spouse and is not subject to division in a divorce.
Understanding the Presumption of Community Property in California
The law presumes that any property acquired during the marriage is community property unless proven otherwise. This presumption can be challenged by demonstrating that an asset is a separate property requiring clear documentation or evidence.
It can become commingled if separate property is mixed with community property, such as using separate funds to pay for a marital home. In such cases, determining what portion of the asset is community property versus separate property can become complicated, often requiring detailed tracing of funds.
Understanding the Division of Community Property in California
California law requires that the spouses divide community property equally during a divorce. This doesn’t necessarily mean that each asset will be split in half. Instead, the overall value of the community property will be divided equally. For example, one spouse might keep the family home while the other receives assets of equivalent value.
The court must determine the value of all community property, including real estate, bank accounts, investments, retirement accounts, businesses, and debts. Valuation can be straightforward for liquid assets like cash but more complex for items like businesses or pensions.
Understanding Special Considerations in Asset Division in California
California law considers the portion of the retirement account or pension earned during the marriage as community property, which must be divided accordingly. A Qualified Domestic Relations Order (QDRO) may be necessary to divide retirement benefits.
Just as assets are divided, so are debts. Any debts incurred during the marriage are typically considered community debts and are shared equally by both spouses. This includes mortgages, credit card debt, and loans.
Understanding Other Factors Affecting Asset Division in California
Spouses can agree on dividing their property, often through negotiation or mediation. If both parties consent, these agreements can deviate from the equal division requirement.
If one spouse is found to have hidden assets or engaged in financial misconduct, the court may award the other spouse a more significant share of the community property. Transparency is crucial in the division process.
Prenuptial and postnuptial agreements can dictate how property will be divided in a divorce, potentially overriding the default community property rules. However, they must be valid and enforceable under California law.
Contact Our Skilled Los Angeles Divorce Attorneys for Help
California’s community property laws are designed to ensure an equitable division of marital assets during a divorce, but the process can be complex. Understanding what constitutes community property versus separate property, the nuances of commingling, and the various factors influencing asset division are critical for anyone going through a divorce.
Working closely with legal professionals to navigate these complexities and reach a fair settlement is paramount to your future financial stability.
Call (310) 746-5857 today to connect with the Land Legal Group’s team of adept family law attorneys in Los Angeles, and learn how our decades of combined experience can help ensure your future is secure.
