California, like other states, divides assets according to community property laws during divorce proceedings. This implies that a large share of the assets and liabilities acquired during the marriage are jointly owned by both spouses.
Knowing how the system works can be critical when dealing with a divorce. While this article provides an overview, consulting with a divorce lawyer in San Jose is an essential aspect of providing legal assistance in your case.
What Do You Mean by the Term Community Property?
California, like most states, follows the community property model. Under this model, assets and debts acquired during the marriage are generally considered community property and will be divided equally between the spouses. This covers income, real estate, vehicles, and other assets acquired during the marriage.
In California, community property is everything two married spouses acquire during the marriage, including assets and debts. This includes:
- Real estate (House, vacation property)
- Bank Accounts (Checking, Savings, Investment Accounts)
- Retirement accounts (401(k), IRAs)
- Vehicles (cars, boats)
- Assets (acquired during the marriage) of the business.
- Incurred debts during marriage (credit cards, loans)
Important Exceptions: Separate Property
In some states, community property rules might not apply. Separate property is a category that encompasses assets and debts that belong only to one of the spouses and are not subject to division during a divorce. This can include:
- Having assets owned by one spouse before the marriage.
- The inheritances received by a spouse during the marriage (if the inheritances remain separate)
- If one spouse was the recipient of the gift during the marriage (leaving it apart),
- One of the most common personal injury settlements awarded to one spouse is compensation for loss of consortium.
The community property category includes most assets, but there are exceptions. Typically, property obtained before the marriage, during the date of separation, or through gifts or inheritance is separate property and is not subject to division.
What Happens to Community Property in California After Divorce?
The California law mandates an equitable division of community property, which does not mean 50-50 but a fair share of the property. Several factors are considered during this division:
- The number of years in the marriage
- Each spouse’s earning capacity
- Each spouse’s role in acquiring and enhancing the assets will be considered (for example, one spouse may have inherited a house but the other spouse significantly contributed to its value through renovations).
- The needs of any students involved
Valuation of Assets
Calculating the value of assets precisely is of great importance in the property division process. This includes arriving at the correct market value of each asset, which may be real estate, business interests, investments, or personal property. Professional appraisals or expert opinions may be sought to make a valuation independent and unaffected.
The Splitting up of Assets
Spouses are free to decide how they want to divide their community property. Here are the common approaches:
- Settlement Agreement: Spouses settle and dispose of their assets and debts in their own way, which is reflected in a formal settlement agreement.
- Mediation: An impartial mediator helps them communicate and reach an acceptable deal regarding the distribution of property.
- Litigation: Without an agreement, the judge will apply California law and the factors stated to divide the property. This may be a time-consuming and expensive journey.
The Point of Spousal Agreements
Spouses may opt to create prenuptial or postnuptial agreements, which specify their property division rules if the marriage ends in a divorce. The agreement can stipulate the division of specific assets or even the waiver of rights to some types of property, thereby giving the person a level of autonomy and control over the process.
Valuation of Assets
Calculating the value of assets precisely is of great importance in the property division process. This includes arriving at the correct market value of each asset, which may be real estate, business interests, investments, or personal property. Professional appraisals or expert opinions may be sought to make a valuation independent and unaffected.
Factors Influencing Division
The purpose of an equal division of community property is to be achieved, however, all the factors are considered by the court in the fair distribution. These factors may range from the duration of the marriage, the financial contributions of both spouses and the general economic situation of each person.
Division of Debts
Besides the assets, debts that were incurred during the marriage are also included in property division. Such may be mortgage loans, credit card debts, and other liabilities. Attribution of liabilities to individual debts is a critical factor of property division.
The Role of a Divorce Lawyer
Conducting the divorce with the help of a competent lawyer is fundamental for overcoming the complications of property distribution. A divorce lawyer in San Jose may provide legal advice, make sure the client follows the laws of California, and represent their interests.
Conclusion
The division of property is one of the most difficult factors in a California divorce. Learning the community property laws and the way the division process works can help you view negotiations or litigation in a more clear way. It is important to consult a knowledgeable Divorce Attorney in San Jose because he/she will help you defend your rights and make sure that you get a fair settlement on the division of marital assets and debts.
