Divorce 101 – What is Separate Or Community Property in a Divorce?
Property and asset division is a major issue in most divorces, and it doesn’t help that the relevant laws are frequently complicated and confusing. Before you start the divorce process, you should understand whether your property is considered “joint” or “separate,” and how both are treated under the law.
First, let’s be clear about what’s being discussed. In general, “property” refers to anything that can be bought or sold, such as residential and commercial real estate, automobiles, furniture, clothing, technology, and so on. Moreover, property can refer to any monetary value, such as bank deposits, investment holdings, patent rights, and even security deposits for rental units.
All of the property you and your spouse own is either community property or separate property when you get a divorce (or in rare cases, a mixture of both). This classification determines how property is divided after the divorce is finalized.
Because California is a community property state, marriage or the registration of a domestic partnership creates a legal “community” between two people. Any property or debt that a person gets while they are married or in a partnership belongs to the community, not the person who got it. Section 760 of the California Family Code defines community property as “any property, real or personal, wherever located, acquired by a married person during marriage while domiciled in this state.” When a couple gets a divorce, the community property is usually split 50/50.
The state’s definition of “community property” is meant to be a broad category that covers a lot of different kinds of property and ownership. The state uses a number of other laws to decide whether or not a piece of real or personal property is community property. This depends on a number of factors and rules that are all tied together.
Property that one person owned before they got married is not “community property.” Instead, it is treated as separate property. Gifts and inheritances specifically given to one party, as well as property acquired or earned after the separation, are examples of separate property. This is why the separation date is so important in so many divorces, and it should be recorded and discussed with your attorney as soon as possible.
Any property acquired with separate property is also considered separate property, even if acquired during the marriage. For example, if you purchase a car after marriage with money earned prior to the marriage, the car may still be considered separate property. Rental income or income from separate property is also considered separate property, which means that money or rental income from businesses or real estate owned prior to the marriage is still considered separate property as long as it is not commingled with community property.
Commingling is the combination of separate and community property.
Property division is rarely as simple as defined above, and much of the work in divorce proceedings is determining where separate and community property have “commingled” during the marriage. It is common, for example, for one party to have owned a home prior to the marriage and sold it to make a down payment on a new home with their spouse. The down payment is considered separate property, but if mortgage payments are made with money earned during the marriage, the equity in the home is now a mix of separate and community property.
Complications can also arise if one spouse had money in a bank or investment account prior to the marriage and then changes the account’s name, deposits joint income, or uses the account to pay joint debts. In such cases, a court accountant is frequently required to track the money and review the history of transactions during the marriage in order to divide the remaining money into separate or joint property.
Protecting what is yours
The first step in protecting your separate property is to understand what each asset is worth. If your separate property is substantial, you can recover some or all of your money and even get some of your assets back. If you can trace your separate property, your divorce will be less stressful than you may think. A Riverside divorce attorney from Fanily Law Matters can provide you with the legal assistance you need to make the right decisions during your divorce.