Divorce is one of the most difficult experiences someone can go through. There is the emotional side to it as well as the financial side. How to divide things? What if one person has been supported by the other? Who will the kids live with?
California is a community property state. We’ve all heard this terminology, but what does it actually mean?
From the date you get married to the date you separate (more on this later) a community is created. This means that anything earned or purchased during this period is community property and subject to equal division. Of course, there are some exceptions to this.
Earnings:
One common misconception people have is that their income is their own. It’s not. Even if you’ve put it into a bank account under your name alone, those earnings are community property. Same with retirement accounts and vehicles. The presumption is going to be that it’s community property subject to division. If you have an exception to this, it will be for you to prove.
This also means any debt accumulated is going to be community debt, with again, some exceptions.
What are some of the exceptions to the community property rule?
- Separate property – Anything that you had before you got married will remain your separate property in a divorce. But, this separate property can be transmuted during the marriage making it now community property. How does this happen? If you had a savings account when you got married and added some of your earnings to that same account during the marriage, then the funds are co-mingled and have now been converted into community property. Same with any real estate that is owned going into the marriage. If the mortgage payments are made with income during the marriage, the community now has an interest in your separate property real estate.
- Another exception is inheritance. Any inheritance is separate property as long as it is never commingled with community property.
Whether something is considered separate property or community is going to depend on your exact situation. Contact our office for a consultation to discuss these issues.