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Property Division & Complex Property

Divorce is a stressful and emotionally draining process. One of the most crucial parts of finalizing the divorce process is the division of property. Most people assume that property is divided 50-50 in the State of California. While this is partly true, there are several considerations that a judge or a mediator must take into account before any property associated with any couple is divided.  Some of the factors that will be taken into account include the state of residence, the income used to purchase the said property, and whether there are any written agreements regarding the property.

In this article, we discuss the most important legal aspects relating to property division in California. We will also highlight what actually happens to property during a divorce. Lastly, we highlight the factors used by California judges to divide property be it the family house or any other complex property.

Our experienced San Diego Family Law Attorneys are ready to listen to your case and advice you accordingly in case you need help on this matter. They have successfully handled multiple property division cases and know how to represent your interests before courts of law. Contact our formidable divorce property division lawyers now for the best possible outcome in the California judicial system.

Basic Legal Concepts Relating to Property Division in California

1. Separate Property

Separate property is basically any property that was owned by a spouse prior to marriage. Profits or earnings from such properties are also considered to be part of the separate property. Even after getting married, property inherited by one spouse from elsewhere is also considered separate property. Gifts received separately are also considered separate property. Lastly, the law also considers all properties earned after divorce/ legal separation to be separate property.

In case a spouse had accidentally suffered personal injury and was compensated, such monies and their proceeds are also considered separate properties. The most important thing to remember about separate property is that it will almost always not be considered for division. It will remain the property of the owner.

2. Community Property

Community property includes all properties a couple acquires during marriage. Such property remains community property during divorce regardless of the person who earned it. Examples of community property include houses, cars, and other properties (personal or otherwise). California is a community property state. In other words, the law presumes that every property earned during the period of marriage is community property whether it is personal or not.

The take-away point here is the fact that it is a presumption and that means a competent lawyer can help argue otherwise. An experienced lawyer can use evidence to convince a judge that some property presumed as community property is separate property and should therefore not be divided. One more important is that once a property or an estate is presumed as community property, it cannot be sold or included as part of any other transaction without the permission of the other partner. Restrictions are often imposed after the commencement of divorce proceedings.

3. Co-mingled property

Co-mingled property is those which have been bought or are maintained with a combination of community and separate property. Most of the times, the courts will rule that such properties are community property. Thus, you may have bought a property separately but the fact that you maintained it or serviced it with the co-mingled property will result in the property being declared community property. One of the ways to ensure your separate property, the property that you bought with your own hard work and sweat, remains yours, is to ensure that you buy it and maintain exclusively on your own. Keep it completely separate.

4. Converting separate to community property and vice versa

Spouses often gift each other to mark special occasions. However, most of these gifts perhaps cars are often given verbally with receipts, deeds or logbooks remaining in the giver’s name. Such property will probably be considered separate property if contested. However, the California Family Code does allow the conversion of community property into separate property or separate property into community property if two partners consent.

For example, a house built by both partners (community property) can be converted to separate property by changing the name on the title. Similarly, the separate property of one partner can be transformed into the separate property of the other partner. For instance, if a husband bought a sports car when he was a single man, he can give it to his wife as a gift and it becomes her separate property. It only becomes separate property once all the legal documents are signed.

The act of converting property ownership status is referred to as transmutation. For a property to be considered legally transmuted, it should be in writing. And it should involve the notification of any third party whose rights may be affected by the change. There are obviously a few exceptions to this that will be explained to you by our lawyers during consultation.

5. Division of debts/ liabilities

If a couple had substantial debts before separation, those accumulated during the marriage will be treated in a similar manner to other properties. They will be divided equally. However, this only applies to community debt. Debts acquired by a partner individually/ separately will remain the responsibility of that partner.

Other important legal issues relating to property division in California after marriage dissolution

Who will get the marital home?

This is often a complex issue. Most judges often consider a variety of factors before deciding who gets the marital home. One of the main factors considered is whether you and your partner have a child or children. If that is the case, then the house is often given to the parent who does most child-raising. However, if there are no children in the picture and the house was purchased using separate funds, the owner of the separate property will get the house.

Before the property is divided, no partner has a legal right to lock the other one out or to ask the other one to leave. If locked out, you should call the police and tell them what is happening. They will probably detain your partner if he refuses to follow the law.

California Divorce Process and Property Division

There are two major schools of thought guiding division of property after marriage dissolution in the United States – Common Law and Community Property. If the married couple resides in a common law state, the property a partner acquires on his own remains his or her property. Most states have laws that follow this guiding principle. However, California and other states such as New Mexico, Texas, and Louisiana are community property states. This means all assets acquired by a couple prior to marriage dissolution are owned by both spouses fifty-fifty, regardless of the amount of money or hard work actually spent by each partner to acquire the property.

Community property includes separate property co-mingled with community property, purchases made by either partner during the marriage, and money earned by either partner from the commencement of the case for legal separation.  

The process

  1. Upon marriage dissolution, all community property will be divided equally between the two partners. The community property will include all community debts/ liabilities. This is why we said the assumption of 50-50 division of property is partly true. It is only partly true because of point number two below.
  2. The process of property division is often in percentages. What this means is that the total economic value of each property will be calculated and then if the judge divides the property 50-50, it will mean that each partner walks away with 50% of the total value of the property. This is often because most properties can’t actually be divided in half. Thus, a court may award one partner a house, and award other assets of equal value to the other partner.
  3. Separate property owned by each partner is distributed/ given back to the partner who owned it. Thus, if you acquired a house before marriage, it remains yours.
  4. Prenuptial agreements entered before marriage are also of importance in the division of property. For example, once done in writing and signed by both partners, such agreements will almost solely determine who gets what in case of a divorce.

 

Circumstances in which community property may not be divided equally

These are basically the exceptions. The cases in which a court may decide not to divide community property equally. One of the circumstances is when a partner misuses community property either during or before the dissolution of marriage. Also, in case of a personal injury award, such an award may be considered community property when a couple is still married but will be distributed wholly to the injured partner upon legal separation. In case community debts exceed community assets (a situation referred to as negative community in legal-speak), courts will most likely use a spouse’s ability to pay and not the equal division rule so as to protect the rights of creditors.

What factors are considered in property division?

There are dozens of factors judges have to take into consideration before commencing the process of property division. Obviously, some of the factors are given more weight than others but all factors are important in making the final decision. There are three major factors courts will consider:

  • Whether the couple divorced on grounds such as domestic violence or adultery
  • The parent declared by a divorce court as a legal caretaker of the couple’s children
  • How much either spouse can earn

In addition to the above-stated factors, the following factors may also determine how a judge will divide community assets:

  • The partner who gets child custody: Courts usually award the custodian a higher percentage of community property than the non-custodian parent.
  • Inheritances: In case one of the spouses is expecting a substantial inheritance courts often award the less wealthy spouse more of the community property.
  • Size of the estate: The smaller the estate, the less a family court is likely to divide it equally.
  • Wellbeing and earning potential: Healthier spouses with a potential to earn more money than their ex-partners will often get less of the community property.
  • Age is also a factor in the division of property

From the factors listed above, it is clear that the process of dividing property upon legal separation is not as straightforward as most would expect. However, even as mindboggling as these factors are, experienced lawyers have been trained to take into account each and every factor so as to get you the best outcome.

How to estimate how the courts may divide your property

Before contacting a Family Law Attorney you can easily estimate how a court will divide your marital property by first making a list of everything you and your partner own. After making the list, eliminate those which your partner owned before the marriage as they won’t likely be considered in for the division of property. Lastly, assign current market value of the items remaining on the list then subtract the total community debts owed by the two of you to creditors. The final sum is what will probably be considered by a judge for property division. This is obviously a very simplistic way of looking at things but it can give you a rough pointer of what to expect.

Get a San Diego Family Law Attorney You Can Count On

In conclusion, there are many legal angles to look at and to consider before a court decides how you and your partner’s properties will be distributed. First, the nature of ownership of properties will be determined. In California, it is presumed that all marital property is community property. Then most properties will not be divided equally because of the multiple factors that have to be considered by courts. If worried that you may not get what is yours after marriage dissolution, simply give us a call and we will give you all the assistance you need.

San Diego Family Law Attorney has skilled, experienced and successful lawyers who are ready to get facts from you and handle your case with the professionalism it deserves. Our lawyers are formidable and have specialized in family law for dozens of years cumulatively. We know family law and we exist for the sole purpose of helping families and individuals with legal issues.

Contact our competent and experienced San Diego Family Law Attorneys today at 619-610-7425 and allow us to provide you with the best legal representation from now onwards! Let us give you the peace of mind you are looking for!

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