Division of Property
Classification of property and its division can become one of the most contentious issues in a divorce, so seek the advice and assistance of a California dissolution of marriage attorney familiar with the particulars of California’s community property law. The lawyers of Cullen & Murphy in Riverside have the experience to help you.
California is what is known as a “community property” state. Community property is defined as all property, both real and personal, which a married person living in the state acquires during the marriage. This includes property that is located outside the state as well as within the state. With the exception of separate property, no matter how property is titled, and, in the case of income, no matter who earned it, if it is acquired by either spouse during the marriage, it is considered part of the marital community estate.
Upon dissolution of the marriage, community property, absent an agreement to the contrary between the parties, is divided equally between them. However, an absolute equal division of each individual asset would not be possible or even reasonable in many cases. For example, to achieve an equal division of every asset would require sale of each asset and division of the proceeds. For many families, forcing the sale of the family residence at the time of the dissolution can cause disruption to the family and result in even more inequity than awarding the residence to one spouse while awarding another asset of equal value to the other spouse. As a result, valuation and division of assets may become one of the major points of dispute between parties.
California law sets out exceptions to what is included in the marital community estate. The exceptions include: property acquired by a spouse prior to the marriage, and property acquired by a spouse during the marriage by gift or inheritance. The rents, proceeds or profits generated by any separate property are also treated as separate property.
While it is usually clear what is and is not considered community property, disputes often arise over the classification of property. The classification of property can change during the course of the marriage. For instance, one spouse may own a home prior to marriage. After marriage, however, the home becomes the family residence, mortgage payments are made from income acquired during the marriage, the home is refinanced and several improvements and updates are made. It is likely the home would no longer be considered separate property and would be treated as an asset of the community estate.
Spouses – or prospective spouses – may make agreements as to the classification of property both prior to the marriage and at the time of dissolution.
In California, agreements made prior to marriage are called “prenuptial agreements” and must conform to certain requirements that protect against coercion to enter into an unfair agreement. For instance, the parties must each be represented by independent counsel, or they must have waived in a separate writing the right to have independent counsel.
The use of prenuptial agreements is becoming more common. This is true not only in situations where the parties may have large estates acquired prior to marriage, but also in the instance of spouses who have children from prior relationships. A couple contemplating marriage, each of whom has children from a prior marriage, may wish to ensure that their own children receive a rightful share of property.
Married couples may also make agreements, called postnuptial agreement, regarding the classification of property subsequent to their marriage. Enforcement of such an agreement, if disputed, will likely hinge on the validity of the agreement; whether it appears that the parties each had full disclosure of assets; whether there is any evidence of duress; and whether the agreement is fair to both parties.
Contact a dissolution of marriage lawyer
In complex situations such as dissolution of marriage, the resolution of a property classification dispute requires the assistance of legal counsel experienced in California community property law. The family law attorneys at Cullen & Murphy in Riverside can assist you in resolving your property division issues.
DISCLAIMER: This site and any information contained herein are intended for informational purposes only and should not be construed as legal advice. Seek competent legal counsel for advice on any legal matter.