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Palm Springs Law Blog

Wednesday, July 24, 2019

Splitting the Difference: How Will I Come Out Financially After My Divorce?

Apart from the emotional turmoil that typically surrounds a divorce, particularly if there are children involved, serious financial concerns will affect both parties. If you are wondering, or worrying, about how your lifestyle will be affected by the change in your marital status, you need a well-informed, highly skilled family law attorney to guide you through. While it is nice to think that you and your soon-to-be ex-spouse/partner will be able to agree on a fair distribution of assets and a reasonable division of debts, in most cases divorces become tug of wars.

What does the fact that California is a community property state mean?

The phrase “community property” means that in the state of California, as in eight other states, all property acquired during the marriage or registered domestic partnership is owned equally between spouses/partners. Therefore, when that couple divorces, their assets will be equally divided. While this may seem like a simple matter, complications often arise in trying to ascertain which property belongs to both parties and which belongs to one of the individuals. An experienced divorce lawyer will be able to clarify all aspects of the definition of community property for you.

Examples of Community Property and Community Property Debts

Generally, all of the following, assuming they were purchased during the marriage/partnership, are considered community property:
  • Land
  • Income
  • Bank and investment accounts
  • Businesses or professional practices
  • Cash value of insurance policies
  • Furnishings, jewelry, art, antiques, gems, cars
  • Houses and rental properties (even if the title is in the name of only one spouse)
  • Retirement or pension plans
  • Stocks and stock options
  • Tax shelter investments
In the same vein, community debts are liabilities or debts incurred -- by either spouse/partner -- during the course of the marriage/partnership. California courts will occasionally make exceptions for secret debts incurred by one spouse/partner through gambling, purchase of illicit drugs, or during the course of an extramarital affair.

What is separate property in California?

State law does recognize, however, that each spouse/partner is an individual who may have brought privately owned assets to the marriage/partnership, have earned interest on separately owned property during the marriage/partnership, or have received a personal gift, inheritance, or personal injury award during the marriage/partnership that belongs to that party alone.

Drawing the Line: the Date of Separation

In California, laws regarding distribution of assets and debts go into effect at the time of separation -- not actual physical separation, but when one party declares that the marriage/partnership is over and conducts her/himself accordingly. Words said in anger are not enough to draw the line, but permanent actions like moving out of the marital/partnership bed or refusing to go to social events as part of a couple are. As you can see, there may be ambiguities and nuances regarding the division of property. This is why having an accomplished divorce attorney to legally represent your best interests is essential. 

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