Property Division in a California Divorce

If you are getting a divorce for the first time, you probably have a lot of questions, especially in reference to finances. If you own a home, what will happen to it? If you have a 401(k) or IRA, how will your retirement funds be divided? What if you're the breadwinner, will your spouse be entitled to the money that you earned?

These are all perfectly valid questions and we're going to explain how property division works in a California divorce. Continue reading for clarity on the subject.

California is a Community Property State

In the United States, there are two methods for dividing marital property: Equitable division and community property. While the majority of states follow the "equitable division" model, California is not one of them.

Instead, California is one of the nine states that adopted the community property system. Some of the other community property states include: Arizona, Idaho, Nevada, Texas, and Washington.

How does community property work? The basic theory of community property is that each spouse contributes labor to the marriage, and thus, each spouse shares equally in the marital estate.

Under California's community property law, each spouse has an automatic 50 percent interest in all assets acquired during the marriage, regardless of whose name is on the title or who earned the money. Like the marital property, spouses also share each other's debts.

Community Property vs. Marital Property

When a couple divorces, one of the first orders of business will be to determine which assets are "community" assets or marital property and which ones are separate property. Separate property is considered to belong to one spouse only and is NOT subject to division in a divorce.

Separate property includes:

  • Property acquired before the marriage
  • Property acquired by gift
  • Property acquired by inheritance
  • Property acquired after the separation

In contrast, community property is all property acquired after the marriage took place. Community property includes but is not limited to: cash in bank accounts, the marital residence, retirement accounts, investments, stocks and bonds, real estate, furnishings, automobiles, collectibles, art, a business, etc.

Do assets have to be split 50/50?

Marital assets do not have to be split down the middle; a divorcing couple has the option of reaching their own agreement on how to divide their property. However, if a couple cannot reach such an agreement, then the judge will have to decide for them and he or she will do so in accordance with California's community property laws.

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