What’s The Difference Between Community Property And Separate Property?

In California, the property considered in a divorce can be categorized as community property or separate property.

Community property consists of any property, assets or debts acquired by either spouse during the marriage. California law calls for an equal division of community property between the spouses.

Separate property is generally any property that one spouse owned prior to the marriage or acquired by gift or inheritance during the marriage. Separate property is not necessarily subject to division between the spouses.

Separate property may also include items that were purchased with or exchanged for separate property, as well as any increase in the value of the separate property. For an item of property to be regarded by the court as separate, the property owner must provide proof, usually in the form of financial documentation or other records.

A couple may also agree before or during the marriage to change the categorization of an asset from separate to community, or from community to separate. This type of arrangement generally needs to be documented in writing to be enforceable, and the agreement must clearly state the parties’ intentions.

Some items of property may be partially community and partially separate. For example, a retirement plan that was funded before and during the marriage may be partially separate property and partially community property. The same could be said of a business founded by one spouse prior to the marriage and continued during the marriage.

My Spouse Handled The Financial Matters During Our Marriage. How Do I Know I’m Getting A Fair Property Settlement?

This is a common situation. One spouse handled the investments and household finances, while the other spouse contributed to the household in other ways. It’s an arrangement that can certainly work during the marriage, but it can also put you at a disadvantage in your divorce if you lack information about the marital finances.

An important thing to understand is this: if you agree to a property settlement without a full understanding of the marital assets and liabilities, the settlement will almost certainly not be fair. You need an experienced property division attorney on your side to ensure full financial disclosure from the other spouse. If the other spouse refuses to disclose the necessary documents, there are formal steps that can be taken to compel full disclosure. Such actions may include:

  • Request for Production of Documents: This is a request that is served to your spouse or your spouse’s attorney. The request includes a list of items to be disclosed, along with a timeframe for producing the documents.
  • Interrogatories: This is a formal list of questions that we can prepare and send to your spouse or your spouse’s attorney. Typically, the questions must be answered and sent back to us within 30 to 45 days. If your spouse misses the deadline or ignores the questions, it may be necessary to ask the court to order your spouse to comply.
  • Depositions: A deposition affords us the opportunity to ask your spouse property-related questions while he or she is under oath. Anyone who has information relevant to the property questions may also be called in for a deposition, which results in a written document that we can refer to during your case.

How Might A Business Or Professional Practice Be Divided In A Divorce?

For obvious reasons, most divorcing spouses do not want to go into business with each other after their divorce. If a business or professional practice is subject to property division when the marriage ends, it’s important to obtain an accurate business valuation, so a fair deal and exchange of assets can be negotiated.

An accurate business valuation may include obvious factors like real estate and profits, but it may also involve factors such as the value of intellectual property and the goodwill and reputation associated with a professional practice.

Rather than selling the business and splitting the proceeds between the spouses, it may be appropriate to keep ownership of the business with one spouse and transfer other assets of value — a retirement plan, for example — to the other spouse.

In any case, you should seek guidance and representation from a proven divorce lawyer if your goal is to protect your rights and achieve a fair property settlement.

If I Stay In The House While My Spouse And I Are Separated, Will I Get The House After The Divorce Is Finalized?

Not necessarily. Every case is different, and often there are many factors to consider when dividing real estate or the value of real estate for the purposes of a divorce.

However, it is important to note that whatever living arrangement exists between the spouses during their separation may be considered by the court when matters of property division are in question. For example, if the spouses have children, and one spouse stays in the home with the kids, the court may decide that the parent who stayed in the home should keep the house in exchange for other assets — because that arrangement would be in the children’s best interests.

Alternatively, the spouses may decide to sell the house and split the proceeds, or some other deal may be struck to achieve a fair division of the property’s value.

Contact Westover Law Group

To discuss your property division concerns in a free, confidential consultation, call us in Murrieta at 951-894-8440 or contact us via email. We advise and represent clients throughout Riverside, San Diego and San Bernardino counties, as well as Camp Pendleton.

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