Common misconceptions about property division during California divorces

People divorcing in California should beware of common misconceptions about separate property, community property and the division of both during divorce.

The division of jointly owned property is a source of concern for many people getting divorced in Sacramento, given the long-term financial impacts that this division can have. Unfortunately, many divorcing spouses suffer from misunderstandings about California's property division laws, which may give rise to unrealistic expectations or missteps during their divorces. It's imperative that spouses avoid these issues by understanding the following common misconceptions.

Separate vs. community property

Many spouses believe that property they personally acquired before or during marriage is exclusively theirs. However, in California, property obtained during marriage is presumed to be community property, and it is subject to division between both spouses. There are a few exceptions, including inheritances and gifts. These are considered separate property regardless of when a spouse obtains them.

Equitable division

In many states, family law judges are tasked with dividing marital property between spouses in a manner that is considered "equitable" or fair, given various factors. In California, absent an agreement otherwise, community property must be split equally between spouses. When all community assets and debts have been allocated, the net value of property that each person holds should be equal absent an agreement for an unequal division of the community estate.

Commingled property

In some cases, property that spouses view as separate may be subject to division if it has become commingled with community property. For example, if a spouse has contributed to a retirement fund both before and during the marriage, the fund represents a commingled asset. In these cases, the entire value of the asset may be subject to division between spouses, unless one spouse can document the worth of the commingled separate property.

Personal debt

Many spouses may think that debt is considered separate property if only one spouse incurred it. However, if the debt accrued while the couple was married, it belongs equally to both spouses. This is true even if one spouse didn't contribute to the debt or know about it. As a result, in some cases spouses with significant unexpected debt may need to consider options such as filing bankruptcy in conjunction with divorce.

Many spouses may also believe that they can divide debt in any way that they desire, as long as the overall division of property is roughly equal. While this is technically true, spouses should remember that lenders do not have to recognize the terms of a divorce settlement. Therefore, even if spouses agree to reassign liability for a debt to one person, the lender may continue seeking compensation from the other spouse if the debt remains in that spouse's name.

Property acquired elsewhere

Many states observe distinct laws regarding the classification or marital or separate property, so spouses who have lived elsewhere may think those laws will affect the final division of their property. However, under California law, property obtained elsewhere that would have been considered community property if it had been acquired in California is considered "quasi-community property." This property is treated just like community property during divorce proceedings.

Getting legal guidance

Since California's laws require an equal division of community property, many spouses may think that seeking legal guidance regarding property division isn't necessary. However, an attorney may be able to advise a spouse on uncovering hidden community property, valuating complex assets or avoiding common missteps when deciding how to divide assets. Therefore, spouses may benefit from consulting with an attorney early on in the asset division process.