Understanding Debt and Property Division in a California Divorce

By Gerald A. Maggio, Esq.

Orange-County-divorce-mediators; California Divorce MediatorsProperty and debts have to be divided during a divorce. Many times, the divorcing couple does it itself or enlist the help of a mediator (a neutral third party). But if the couple fails to reach an understanding, it takes the dispute to a court and the judge gives a ruling based on state laws.

The court categorizes property and debts under equitable distribution or community property and then divides them among the couple.

Community property – Any marital property jointly owned by the married couple is known as community property. In certain states such as California, community property gets divided equally among the spouses. Apart from this, each spouse retains their share of the separate property (individual ownership).

Equitable distribution – The rest of the states divide all marital property, assets and income equitably or in a fair manner but not equally. The separate property may be awarded to one spouse to balance out the division.

Division of property does not necessarily mean a physical division. A spouse may be awarded a certain share of the total value of all the property. Apart from this, they will have their share of personal property, assets and debts.

Determining community and separate property

Community property – All earnings and acquisitions made, debts incurred during the period of marriage fall under community property.

Separate property of one spouse – Gifts and inheritances received by one spouse becomes their separate property. Any property purchased using their funds become their separate property. If the spouse owned any business before the marriage it will remain their personal separate property. But if the value of the business increased during the marriage, the increased value will be considered community property.

Separate and community funds used to purchase property – Any such property will become part community and part separate property. But you need to show that separate funds were used. But if separate property and community property is mixed, it usually becomes community property.

Determining who gets the marital home

If there are any children, the parent who is the primary care taker of the children retains the marital home. But if there are no children and both the spouses jointly own the property, it can become quite tricky.

To learn more about the divorce process in California and how mediation can help, please visit our page, What is Divorce Mediation