Your divorce will impact your life in many ways. One of the biggest concerns for many spouses involves how property will be divided once the divorce has been finalized. Property division is complex, but it doesn’t have to be.
Understanding how property is divided during divorce can help you prepare for negotiations and plan for the future. Property is considered community or separate property under California law. What is the difference between the two and how will it impact which property remains yours after divorce?
Community property is property that you and your spouse obtained during your marriage. Community property can include interest in a pension plan or retirement benefits as well as a business, even if only one spouse owns the business. Property titled in only one spouse’s name is also considered community property.
Debts incurred during the marriage are also community property and means that both spouses must share the debt. Debts include credit cards and loans taken out during the marriage.
Each spouse has rights to all community property, expect for a few exceptions. Student loans are considered separate property and only the spouse named on the student loan is responsible for the paying back the debt.
Separate property is property that was acquired before the marriage. This includes inheritances and gifts one spouse received during the marriage. It also includes any property that was acquired after you separated from your spouse.
Divorcing spouses can try to reach an agreement on their own without going to court. However, if an agreement cannot be made, a judge will decide how specific property, assets and debts will be divided according to current state laws.
The property division process is different for every couple. Property, financial accounts, businesses and debts all need to be considered. Due to the complex nature of property division and the impact it will have on your finances, it is best to consult with your attorney before making an agreements.