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Marriage Money and Property

Getting married comes with huge legal responsibilities, especially when it concerns issues of debt, property, and money.  Becoming legally married in the state of California means that your spouse’s income and debt are yours as well. Whether it is you or your spouse who has incurred a debt, the consequences will affect the both of you. It is therefore important for you to understand how marriage the implication that marriage will have on your debts, assets, money, property, and tax obligations. Furthermore, if you are contemplating divorce, you should understand the laws that govern property division and how they will touch on what you own personally as well as what you own jointly with your partner.

Such matters can be complex and tedious but can be handled with much ease if you seek the legal counsel of a marriage attorney. San Diego Family Law Attorney will guide you through the legal implication of marriage, money, and property and will also come in handy in the event your spouse dies or during your divorce proceedings.

Who Owns What in Marital Property?

California is a community property state and everything acquired during the marriage belongs to both partners. Although each spouse may claim ownership of certain assets or items, the possessions acquired by spouses in the course of their marriage are shared. However, there can be possessions that are acquired during the marriage but cannot be considered to belong to both spouses. For instance, items acquired through inheritance or personal gift may be possessed by the person who directly received the item or asset. Such items are referred to as ‘separate property.’

In the event of a separation or divorce, marital property is subject to division, and this is done right down in the middle. While almost everyone gets married with the belief that they will spend the rest of their lives together with their spouses, it’s unfortunate that almost half of all marriages end in divorce. For this reason, it makes sense for married individuals to take certain precautions when it comes to the issue of money and property.

What is Considered to be Separate Property or Community Property?

Separate property

Below is a list of what is considered separate property:

  • Property attained exclusively by one partner before the marriage
  • Property that one spouse received as a gift during and before the marriage
  • All property acquired by either spouse as inheritance

Community property

Community property includes:

  • Earnings by either partner in the course of the marriage
  • Property or assets attained using the income of either partner in the course of the marriage, and
  • Separate property commingled with community property

For instance, Sandra and Mike have been married for a decade; Sandra buys a car from what her teaching career’s earnings. This car belongs to both of them unless stated otherwise in a prenup. However, if Mike had bought an expensive sports car prior to the marriage, the car will be treated as separate property. However, if Mike offers half the sports car’s interest to Sandra, it becomes community property.

Death or divorce

If one spouse dies, his or her share of the community property will automatically belong to the living spouse. However, this will not be the case with separate property. The transfer of separate property to the living spouse can only be achieved if the dead spouse left a will. If there is no will, it will be upon the court to decide on the distribution of the property in question. If the couple holds a property’s title deed, a court proceeding will not be necessary as the title will automatically pass to the living spouse.

In the case of separation or divorce, the spouses will receive an equal share of the community property. When it comes to assets that are not possible to divide equally, such as homes, cars, or pieces of art, one of the partners could get the property, while the other will receive other assets whose value is equal to what they could have received if the house was to be divided, for instance.

Major Exceptions

There are certain instances that don’t support equal distribution of property. Some of them include:

  • Educational credits of a spouse will carry on as that particular partner’s liability,
  • Embezzlement of community property by one partner during or prior to the divorce,
  • Offense obligation gained by one partner and did not happen as a consequence of actions that could have benefited both spouses
  • Private injury compensation that was done via community property reverts to spouse who had sustained the injury in the event of a divorce, and
  • If the community liabilities and debts surpass the value of the assets that might be used to settle them, that is called negative community. For the court to safeguard the interest of the creditors, it will need to take into account each partner’s ability to settle the debt and this means that one party may eligible if he or she has the ability to pay the debt singlehandedly.

Marriage Money Problems and How to Avoid Them

Most divorces in the United States in general and the state of California, in particular, are brought about by the issue of money. An otherwise excellent relationship full of love could suddenly wilt under the scorching heat of financial stress. Most married couples avoid talking about the issue of money. In as much as it may not be an exciting discussion, talking about it helps you understand your spouse’s view on the subject of money. You get to agree on critical financial issues and this can help you avoid fights and even divorce.

If you are not financially compatible this could be an early warning sign that your marriage could be headed for rough waters. It is therefore important for newlyweds and married couples to discuss financial matters upfront in order to avoid the likelihood of negative financial impacts. This could take place in the form of developing a family budget and setting out clear and actionable goals and expectations. Here are tips on avoiding marriage money problems:

1. Set Expectations

Money is considered to be one of the topmost factors that render havoc in marriages, causing divorce. This is because individuals enter into the union with varied expectations on lifestyle and even how they should spend money. To avoid marriage money issues, it is important to discuss the issue with your spouse and set expectations for your financial future.

2. Plan for a Future

It is obviously difficult to tell what the future holds, but even with that, it is important to sit down with your partner and plan out how it should be. While planning, it is significant to set goals to save for different projects and how much time you think is needed to save for the same, in order for you to evade marriage money issues later. However, since expectations and situations may differ from time to time, you should always ensure that this topic is revisited, in order to address any changes that may bring about conflicts.

3. Make a Budget

It’s time to play with numbers and here, you will be required to sit down with your basic predictions of how much you earn (after taxes) and the cost of all things you intend to spend on. Below are the basic things to include in your budget:

  • Income- business income, salary, investment income, and property income
  • Assets- property, investments, bank accounts
  • Expenses- food, rent/mortgage, utilities, transportation, clothing, investment contribution, insurance, entertainment, travel etc.
  • Debts- credit card debts, loans, and mortgages

4. Find any Possible Way to Make It Work

This can be an overwhelming exercise, especially to young couples. To get through successfully, be patient, honest, and ready for negotiation. Achieving this will help you protect your marriage from divorce.  You should always revisit your financial plan to evade marriage money issues that may arise in future. Make sure that you update your plan frequently since most initial assumptions and expectations may greatly differ with the actual resources available. This is a factor that can compromise your plan.

Guidance from a family lawyer will come in handy to diffuse tensions and the feeling of being coaxed by your partner. San Diego Family Law Attorney can help you go through that uncomfortable discussion that might touch on divorce.

Inheritance in Marriage

If you inherited property before entering into a marriage, the property is protected twice. The reasons being that you inherited the gift before you got married to your spouse. Secondly, the law considers any property inherited as a separate property. If you inherit any property while in a marriage, it is important to make sure that the language used in the will protects your rights. The will should clearly indicate that the gift is given exclusively to you and not your family nor kin, to avoid creating a gray area. This is significant since California law permits your partner to make a claim for the property in case of a divorce. This places the burden of proof on your shoulders and you’ll have to demonstrate that the decedent envisioned the property solely for you and not your family.


In California, it is very easy for you to invalidate your separate property if you are not careful. Inheritance that is clearly yours should be treated as such. For instance, if you deposit your cash obtained through inheritance into an account that you jointly hold with your partner, the money becomes community property and its immunity is lost. The legal process that you have undertaken unknowingly is that you have commingled your inheritance with marital funds and relinquished your rights in the sole ownership given by the decedent.

Similarly, if you and your spouse use a house you inherited as your marital home, he or she may be able to make a claim on account that it changed into community property. Furthermore, if you rent out the house and use the income to fund a joint asset, the asset is now community property. The process of segregating what is separate property and community property can be very daunting unless you seek help from an expert.

Prenuptial Agreements and Postnuptial Agreements

People with valuable assets or businesses acquired before marriage, remarrying after a past failed marriage or the death of a spouse and those who want to safeguard their estate for their children would be wise to consider entering into a prenuptial agreement. The contract clearly spells out how assets will be distributed in the event of death or divorce. The agreement should be written and executed fairly while following the right procedure. The content of the contract could also include spousal support and other terms of the marriage such as forfeiture of assets as a consequence of adultery.

A postnuptial agreement is a legal document that plays the same role as a prenuptial agreement, with the major difference being that it’s designed for couples who are already married or in a civil union.  It’s performed to help resolve issues of property, assets, and spousal support in case of separation, divorce or death. When creating a postnuptial agreement, both parties are required to disclose all the money and property they currently own, including community property and separate property. This is followed by both parties coming up with rights and responsibilities for each party during the marriage.

Contact Us for Assistance

Matters concerning marriage, money, and property are often complicated and couples may find the emotional intensity that comes with this personal area of life to be overwhelming. If you are facing financial conflicts in your marriage, consider retaining the services of a compassionate and knowledgeable San Diego Family Law Attorney. Also, if you are in the process of divorce but cannot come to an agreement over the property owned by you and your spouse, we can act as your mediator. We will handle the matter with discretion and dedication to your interests. With our legal experience in this field, we can find experts in the finance field who can help you solve your financial issues in addition to helping you plan and prepare for your future. Contact us today at 619-610-7425 or fill out our online contact form. We’ll be there when you need us.

Contact us today by calling 619-610-7425

We will give you a free, no-obligation consultation and can give immediate attention to your family law legal needs.

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