Jenkins P.C.

Understanding California's community property laws

It is often difficult for divorcing couples to agree on how to divide their assets. When they cannot agree, the decision is up to California courts. And the courts divide property equally between the spouses. 

In a high-conflict divorce, it is important for both spouses to understand California's community property laws before beginning the property division process. Here are some of the essential pieces of information spouses will need to know.

What is community property?

Community property involves all of the assets that spouses collect during their marriage. Such property could include: 

  • The family home and other properties
  • Retirement accounts and benefits
  • Earnings and financial assets
  • Any vehicles

Technically, both spouses hold ownership of any assets accumulated during the marriage. Regardless of who purchased what, an asset bought during the marriage is community property. 

The basis of this idea revolves around how spouses share their property. It is almost like the common wedding vow of "what is mine is yours." This prospect can be difficult in a divorce with considerable assets.

It is necessary to distinguish community property from separate property

Since both spouses collectively own marital property, courts split assets 50-50 between them. To do this, they take an inventory of all a couple's assets. With the help of the spouses, they establish what is marital property and what is separate property.

Separate property is anything that solely belongs to one spouse. This kind of property includes anything a spouse owned before the marriage, as well as any gifts and inheritances in their name.

Valuing the marital property is key to fair division

Then the courts determine the value of the marital property. Valuing community assets can be a complicated process. California courts often hire officials, such as accountants, to assess the current and future values of all assets. So, instead of splitting physical property half-and-half between the spouses, the courts ensure both spouses receive property shares of equal value. 

The process is not as easy as it sounds. However, it is a fair option for spouses with significant assets who cannot reach a property agreement on their own. 

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