California Divorce – Community Property Division

Laws regarding property division upon divorce vary greatly from state to state. The following information is intended to provide you with a basic understanding of property division in a California divorce case.

California: A Community Property State

California is a community property state. This means that in the state of California, generally speaking, property acquired by either spouse during the course of a marriage is considered to belong to both spouses jointly. Property acquired during marriage is presumed under California law to belong to each spouse equally.

There are some exceptions to this general rule. Property acquired by either spouse by gift, inheritance, or recoveries from personal injuries sustained by the spouse is not community property.

When dividing property and assets in a divorce case, California places the property in to two different categories: community property and separate property.

Community Property

Community property consists of property, other than one spouse’s separate property, acquired during the marriage including:

  • Real property: homes, land, vacation homes, etc.
  • Businesses and business interests
  • Cars, boats, and other vehicles
  • Retirement accounts and investment accounts including IRA’s, pensions, annuities, etc.
  • Bank accounts

Generally speaking, anything acquired during the marriage that has value (other than the exceptions listed) is considered community property.

Separate Property

Separate property consists of all property acquired by a spouse before the date of the marriage. Additionally, property acquired during the marriage by gift, inheritance, or money received for personal injuries sustained by a spouse is also considered that spouse’s separate property.

Simply because one spouse is named on the title, deed, or account alone does not make the property personal property.

A spouse must be able to show through “tracing” that a particular piece of property is separate property. That is, he or she must be able to show that his or her own separate funds were used to acquire the property. This is easily done if the the property was acquired before marriage, but can become much more difficult if acquired during marriag. If the court is not shown enough evidence to prove that the property is one spouse’s separate property, then it will be considered community property.

Once a court determines a specific piece of property to be separate property, then the court cannot take that piece of property away from the separate property owner. However, the court may require the separate property owning spouse “reimburse” the community for any debts paid or improvements made upon that property with community funds or resources. The court will essentially set that individual piece of property aside for the spouse to whom it belongs when determining how to divide the remaining property in a divorce.

Community Property Division in a California Divorce

Once the separate property has been “set aside” for the separate property owners, then the court must divide the community property from the marriage completely equally. However, the courts do not require the fivision of assets to be “in-kind.” Rather, the court must determine that the net value of all property awarded to one spouse is equal to the value of all the property awarded to the other spouse.

As a general rule, if each spouse has the same educational background, makes the same amount of money, has the same amount of personal property, and there are no children of the marriage, then typically the community property will be awarded to each spouse 50/50. However, if considering the above factors, there is a significant difference in the spouses’ financial situation, then the court will divide out the community property accordingly, keeping those factors in mind. The court will divide the estate in a manner it deems just and right, considering those factors and others.

Essentially, the court is given a wide array of discretion in determining the best way to divide community assets and property in a divorce.