Dividing Assets in California Divorce

California is a community property state. According to California state law, this means that everything spouses earn or purchase while married and living together is both spouses’ (or community) property. Thus, this law affects what you are entitled to in a California divorce. More specifically, divorcing couples should divide all community property 50/50 between them.

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What Constitutes “Property”?

California law defines property as:

…anything that can be bought or sold like:

  • A house,
  • Cars,
  • Furniture, or
  • Clothing.

[or] anything that has value, like:

  • Bank accounts and cash,
  • Security deposits on apartments,
  • Pension plans,
  • 401(k) plans,
  • Stocks,
  • Life insurance that has cash value,
  • A business, or
  • A patent. [Source: California Courts]

Therefore, when a couple divorces in California, the court takes into consideration the division of all assets listed above. However, the court must first determine which of the couple’s assets are separate and community property.

Separate vs. Community Property in California

As defined above, community property in California includes anything earned or purchased by one party during the time of marriage and cohabitation. Further, community property also includes all debts the parties incurred over the course of the marriage. However, property that one spouse receives as a gift or inheritance does not constitute community property.

On the other hand, separate property is property acquired prior to marriage or after the official date of separation. Additionally, any profits earned or property purchased with separate property remains separate property. For example, if a spouse purchases a car with money earned from renting a home they inherited, that car is separate property.

If you and your spouse are separating, the court will determine which assets are community and separate property. Then, they will identify what you are entitled to in a California divorce.

Dividing Property in a California Divorce

Uncontested Divorce

Upon making the decision to legally separate, a couple can agree between themselves how they would like to divide property. In an “uncontested” divorce, couples can compromise to agree on all issues and draft their decisions into a marital settlement agreement. Within this agreement, spouses can determine a division of separate and community property they deem fair for both parties. Oftentimes, couples utilize mediation to reach an agreement more easily.

Believe it or not, creating a marital settlement agreement can eliminate the need for a judicial hearing altogether! However, keep in mind that the court will still have to sign off on the agreement. That said, if you’re in an uncontested divorce and need help drafting an agreement or modifying an existing order for child or spousal support, contact A People’s Choice. We offer non-attorney, flat-fee, low cost services tailored to fit your needs.

Contested Divorce

While uncontested divorces are definitely favorable for couples looking to separate with as little stress as possible, they’re not always feasible. Thus, divorces in which couples do not agree (or “contested” divorces) typically require a court hearing. However, before the hearing, both parties must file a preliminary financial disclosure utilizing a Declaration of Disclosure, Schedule of Assets and Debts, and Income and Expense Declaration. Based on information provided in these disclosures, the court can determine how much community property will go to each spouse. Note that uncontested divorces also require financial disclosures; however, couples in amicable divorces have more freedom in their division of property.

Know What You Are Entitled To in a California Divorce

When you are navigating a DIY divorce in California without a lawyer, it’s important to know your rights. Therefore, be sure to check out free legal resources such as the California Court System’s online self-help portal. Additionally, use a registered legal document assistant such as A People’s Choice for help completing your divorce paperwork. Whether you are filing an initial petition for divorce or need assistance with a marital settlement agreement, our family law services are available to you.

A People’s Choice has over 40 years’ experience assisting clients with divorce in California. Plus, we have established an excellent reputation in the community. Call us today at 1-800-747-2780 or use our Quick Start My Divorce interview to get started right away.

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