Ending a marriage is not only a difficult time emotionally but also an uncertain financial time. Until it becomes clear who will receive what assets, divorce can be extremely stressful—especially with an uncompromising spouse. It’s vital that you understand California’s community property distribution method in order to plan for the financial aftermath of your separation.
Most states divide assets “fairly but equally” in a divorce. Fair but equal distribution means that factors such as the capacity to earn are taken into consideration by the judge determining who gets what. California, on the other hand, uses community property distribution, in which assets are split entirely equally.
What qualifies as community property?
Community property is anything that you and your spouse own together. The idea of splitting everything you own half-and-half may seem simple at first, but the method requires further clarification. Community property includes far more than just your paychecks and your house. It also encompasses any assets purchased with wages that you earned during the marriage. You may be the one who swiped the credit card, but if you used shared money for the purchase, the asset is automatically categorized as community as well.
Keep in mind that community property includes all financial responsibilities. Debts are evenly split in California as well, even if one person was solely responsible for incurring the costs. It does not matter if, for example, the credit card only featured one spouse’s name. The debt happened during the marriage and, therefore, belongs to both spouses.
Keep it separate, keep it safe
Separate property is anything you owned before the marriage and kept separate, such as an inheritance or a gift. Separate property is the only property that will not be affected or potentially taken away from you in a divorce.
If you have questions about which assets are community and which are separate, contact an attorney well-versed in California divorce law today.