Dividing Assets. What To Do In A Divorce
California is a Community Property State. That means that, absent certain exceptions, all property that is acquired or improved during marriage will be divided equally amongst the parties when the marriage is dissolved. Property that was inherited or acquired before marriage, will continue to be the separate property of the acquiring spouse. However, the community may be entitled to a credit for value enhancing improvements that were made to a to a spouses separate property while the parties were married.
For instance, if, during the marraige, the wages of the earner spouse were used to pay down the mortage of real estate that was acquired before the parties were married, the Community may be entitled to a pro rate ownership share of the property upon divorce, to the extent that the mortage was paid down with the earnings on one spouse, while the parties were married and living together.
The general rule is that while both parties are supposed to get an equal share of the community property estate upon dissolution, that does not mean the division will be equal in kind. In other words, one spouse may be awarded more than 1/2 of one asset, while the other is awarded greater than 1/2 of another asset. As long as the division of community property estate is equal, the division of specific assets can be unequal.
There are, of course, exceptions to the equal division rule. Excessive gambling is one example. If one spouse squanders community property earnings on gambling, then there does not have to be an equal division when the parties divorce. There can be an offset to compensate the spouse who did not squander assets.
Another example of an exception to the equal divison rule is when one party makes a gift of community property without the consent of the other spouse. For instance, if one spouse buys an expensive gift for another person, without consent of his or her spouse. In those instances, courts are also within their discretion to order an uneuqal division of assets upon dissolution. Moreover, in certain situations, transactions made without the consent of both spouses may be set aside.
The rules regarding property division, and the exceptions thereto, can get complicated. Therefore, it is best to retain an attorney who is experienced in property valuation in order to guide you through this process, and to get you the best deal possible under existing law. Division of property can affect your rights in real estate, stock plans, retirement benefits, business ownership interests, and other investments.