Property division is often one of the most contentious aspects of any divorce. During the division of assets and liabilities, the court determines how the parties will divide marital assets. In states like California, where many people own valuable property or assets or have significant liabilities, the process of division judgment can determine a person's future financial stability. Today, we’re getting to know the property division process in California a little better.
Understanding Community Property States, Marital Property, and More
California is a "community property" state. In community property states, the court divides marital assets equally (50/50) between spouses. This is different than states like Florida, which distributes assets "equitably."
Here's an example: In California, the court will ask a couple to sell their marital home and divide the profits, even if there are children involved and one parent receives sole custody. If one party wants to retain the marital home, they can buy the other party out. To receive the full value of the house, one party would need to agree to gift the marital home entirely to the other party.
In a similar situation in Florida, the court might award the house entirely to the parent who's getting custody to help them care for the children, determining that an "equitable" judgment.
Frequently, amicable property divisions end with both parties happier than contentious property division cases. If you and your ex can work together to determine how you should divide marital property, your chances of coming to a mutually beneficial arrangement are much higher.
It is worth noting that, even if an asset starts as a "separate asset" (something owned entirely by one individual and, as such, exempt from the property division process), it can turn into a marital asset if both spouses contribute to its value. For example, if you start a business on your own before you get married, and your spouse never contributes to the business, it is your separate property. However, if your spouse does contribute to the business, it becomes marital property, even though it started as a separate asset.
Prenuptial and postnuptial agreements can help individuals preserve their stake in their property. If you have a valuable asset such as a business or investment account, getting a prenup or postnup to protect it is probably wise.
At Singleton Smith Law Offices, we can help you work through the property division process. For a consultation with our team, contact us online or give us a call at (951) 779-1610.