Property Issues in the California Divorce

One of the major issues in any divorce is dividing the property, commonly known as, "splitting the sheets." Before you start your divorce there are a few concepts that you should be familiar with.

Community property : California is one of a handful of states that have community property laws. These laws are based on the idea that when two people marry they become as one. Instead of two separate individuals, you now have one unit and what's mine is yours and vice versa.

Generally speaking, money and property acquired during the marriage is owned 50/50 by the partners in the marriage. If you marry, buy a house, and pay on it for ten years, then your spouse owns 50 of the equity in that house, whether or not he / she has worked at all during the marriage. Likewise, your spouse owns half of your car, your furniture and your clothes, and, theoretically, there should be an equal split of the value at the time the divorce is granted.

I say, "theoretically," because there's rarely a 50/50 split. In most divorces, the two people bargain with each other about who gets what. Many times, for instance, the man wants the boy toys, such as the motorcycle and the stereo system and the woman is more interested in the art and furniture. One person may agree to take the expensive sports car in exchange for the equity he / she owns in the family residence. As long as it's agreed to by the parties, the judge could care less how the property is divided. If the spouses get into a fight, of course, the judge will be aiming for as close to an equal split as possible.


One other thing that we should note briefly is that even retirement benefits are considered community property, despite the fact that you may not receive them for years. If you earn the benefits during the marriage, your spouse owns one half of whatever you've earned. However, unless you've had a marriage of fairly long duration, it's usually not worth fighting over. And, with military retirement benefits, you do NOT have any rights to them unless you've been married over ten years (an example of federal law over-riding state law.)

Separate property : Not everything that's owned by a married couple is considered community property. Some property is referred to as separate property, meaning that there's no community interest in it. Pretty much anything that you owned free and clear before you got married is your separate property. If your house, for instance, was totally paid off before you got married, there is no community interest in the equity.

Money you had in the bank before you got married is usually your separate property and whatever you buy with that money is also your separate property. Of course, most of us do not go into a marriage with the idea that we'll probably get divorced, so we tend to co-mingle our money in one bank account. Unless you can clearly retrace the separate property interest, you may have a hard time providing that it was just your money that bought that little red sports car.

Here are a few other examples of separate property. If you inherit something that was left specifically to you, rather than to both of you, that's your separate property. In other words, when Uncle Bob left you his wagon wheel living room furniture, the will specifically named you, rather than you and your spouse. Gifts specifically to one party, rather than both, are separate property. You can even agree that what would normally be community property should become the separate property of one spouse. For instance, if you always wanted to start a bagel shop and your spouse was sitting on just enough cash for your start up costs, you might draw up an agreement giving her / him the house as separate property in exchange for the cash.

Finally, anything you acquired after the date of separation from your spouse is considered your separate property. That is why California places such a great emphasis on the date of separation. People tend to buy a lot when they're going to get a divorce. New cars, new clothes, new computers; Basically they're trying to reestablish their sense of a separate identity by getting new stuff. And, if you're still living with your spouse when you do that, it can be hard to prove that you had intended to get a divorce and considered yourself separated.

One other concept we should mention briefly before closing is quasi-community or quasi-separate property . That's property that one party or the other owns in another state which would have considered community or separate property if it was in the State of California. So, why does that matter? It gives the judge a little more latitude in dividing the property. Remember, the judge only has jurisdiction over property that's in the state. If you own a strip mall in Kentucky, the judge can not award that to your spouse, because he / she does not have any jurisdiction over property in Kentucky. BUT. . . With the concept of quasi-community property, the lawyers can drag that property in to the case and say, "Hey, your honor, this guy owns a mall, so my client should probably get the house." Even though state law mandates a 50/50 split of the property, the judge can still say, "Well, that would not an equitable division, since one party has so much more wealth than the other.

We have much more in-depth discussions of California property laws in the California Divorce Course [http://divorcecalifornia.biz/index.html], our on-line guide to doing your own divorce in the State of California. The most important thing to remember in any divorce, though, is that the more you and your spouse work with each other, the more property you each get. When you get in to a huge fight the only people who are going to get more property out of it are the lawyers.

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Daniel Adair


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