Couples who are going through a divorce need to decide how to divide their property, assets, and debts—or ask a judge to do it for them in court. There are two types of property in a California divorce: community property and separate property.
Community Property vs. Separate Property
Community property is considered any property, assets, and debts spouses acquire during the course of the marriage and belong equally to both of them. Separate property is considered anything one spouse owned alone before the marriage, or acquired by gift or inheritance during the marriage.
Furthermore, separate property also typically includes items bought with or exchanged for separate property, earnings on separate property, and any increase in value of separate property, as long as the property owner can provide proof of the claim backed by financial documentation or other records.
A couple can also agree—either before or during the marriage—to change an asset that was originally separate property into community property, or vice versa. These type of agreements need to be documented in writing and must clearly state the intentions of the parties. In other words, simply changing the title of the property is not enough.
Many kinds of assets can be partially community and partially separate, such as retirement accounts one spouse contributed to both before and after the marriage, or a business one spouse founded before the marriage and continued after the marriage. Dividing these type of assets can be complex, which is why it is important to consult an experienced lawyer for knowledgeable legal advice.