How is property divided in a California divorce?

California is a community property state, which means assets and debts should be divided equally.

People going through a divorce must understand how property will be divided. As the Judicial Branch of California points out, even when a couple comes to a decision on their own, a judge will still have to sign off on it to make the agreement legally binding.

Whether developing the terms of division outside the courtroom or though litigation, there are a number of factors that can and should be considered. Having a firm grasp on these issues will ensure a fair split.

Community property

As a community property state, California relies on an equal division of assets and debts that were acquired during the marriage. Separate property will be excluded from the division and includes the following:

  • Items one spouse received or had prior to the marriage
  • Gifts or inheritance one spouse received before or during the marriage
  • Items that were acquired through selling separate property
  • Earnings on separate property

Under the law, items that were acquired before the divorce is finalized but after the separation will be considered separate property. Separate property can become community property, however. For example, commingling a separate bank account with a joint bank account will mean the funds are shared. Additionally, a home that is retitled to include both spouses may be considered community property.

Valuing property

An important part of splitting assets is assigning them an accurate value. Some items, such as a home or vehicle, may be easily appraised. Other property, such as a retirement account, may be a little trickier because withdrawal penalties or taxes may need to be taken into account. Additionally, when either or both spouses own a business, an outside party may be necessary to establish the company’s worth. If a couple cannot agree on how to value an item, the courts can intervene to do so.

Dividing assets

As mentioned above, property is to be divided equally in California. Couples are permitted to come up with their own arrangement. To make things simpler, a couple may decide to simply divide items based on value. For example, if a home is worth $100,000 and a couple has $100,000 in a bank account, one spouse may keep the home and the other may keep the money in an account instead of trying to split both assets.

Splitting debt

When determining who will pay which debt, experts warn against trying to share one debt. In such an arrangement, one person’s credit can be at the mercy of the other person making good on their payments. Instead, it is advisable to have one person responsible for paying the entirety of one debt and balancing the responsibility with other assets. Or, a couple could sell property to pay off debts.

Though it may sound simple to divide assets, the truth is that the job can quickly grow complex and even overwhelming. People who have questions about this issue should speak with a family law attorney in California.