Assets and Debts in a Divorce: What California Spouses Should Know
In contemporary American society, building wealth is a goal for many people. When couples decide to get married, this typically involves the combination of certain assets, and spouses embark on a wealth-building journey together. While this may work for many couples, for those that end up filing for divorce, the division of property becomes a major consideration.
California law outlines the processes and procedures by which spouses divide their property when going through a divorce. Known as “community property,” this system of property division is used by divorce courts in California and a few other states to attempt a 50/50 split of all marital property, regardless of how this impacts the relative equity of each spouse after the divorce.
To properly divide property in a divorce, spouses must start by properly identifying all assets and debts that fall under that category of “marital property” as opposed to “separate property.” This work is always best accomplished with the counsel of an experienced local divorce attorney. However, there are some general points of knowledge regarding asset and debt assessment that every resident of California should know. The following is some basic information on assets and debts as they relate to California divorce laws.Marital vs. Separate Assets
Marital assets (also called community assets) in the eyes of a California divorce court are those assets that spouses have acquired together after their official marriage date. Common examples of marital assets include houses, cars, and bank accounts that have been acquired by the couple together after their wedding day.
In comparison to marital assets, separate assets are those that were acquired prior to the date of marriage. While most property is considered community property after the official marriage date, there are come exceptions, such as gifts and inheritances. Your divorce attorney will be able to help you and your spouse review all assets and determine to which category they belong.Marital vs. Separate Debts
The classification of debts in a California divorce follows many of the same rules as asset classification. The longer two spouses have been married, the more likely that mortgages, car loans, and credit card debts will be considered community property. These debts will be reviewed in comparison with assets to determine a net value of all marital property.
Spouses should be aware that in situations where a separate asset or debt is acted upon in some way after marriage, this piece of property is likely to be considered marital property in the eyes of the divorce court in California. A common example of this process (known as “commingling”) occurs when a bank account that belonged to one spouse before marriage receives deposits and withdrawals from the other spouse. In the eyes of the courts, this bank account would therefore be considered marital/community property in divorce proceedings.When to Contact an Attorney
It should be clear at this point that determining asset and debt classifications for divorce purposes in California is tricky business. This is why many spouses elect to employ the services of an experienced divorce attorney in their area. For years, the attorneys at SAC Attorneys have been helping spouses in San Jose navigate this process. Contact SAC Attorneys today to get insight into your unique case.