"A frequent question in divorce is, how are the assets going to be divided in a California divorce? I'm Marshall Waller, a California certified family law specialist, a fellow of the American Academy of Matrimonial Lawyers, and a fellow of the International Academy of Family Lawyers. In California, assets are divided under community property law. And here's what that actually means in a divorce.
As a starting point, the law presumes that all property acquired during the marriage is community property unless it is subject to a couple of exceptions. That means it belongs equally to both of the parties to the marriage regardless of whose name appears on title. Earnings during the marriage, real estate purchased after the wedding, and retirement contributions made before the date of separation are classic examples of community property.
By contrast, separate property generally includes assets you owned before marriage or property that you received during the marriage, either by gift or by inheritance and earnings or acquisitions after the date of separation. Courts will typically confirm separate property back to the spouse who owns it and they, of course, will divide the community property between the spouses.
The more complex issues arise when co-mingled or mixed assets are involved. For example, a home purchased before marriage, but then it's paid down during the marriage. And perhaps investment accounts where separate property started the account, but then during the marriage, the parties put money into the account and they all grew together. In those situations, courts often require what's called tracing, which may involve the work of a forensic accountant and detailed financial records to determine what portions of the asset are community and what portions are separate.
In higher asset cases, property division may also involve business interests, stock options, restricted stock units, real estate portfolios, and complex compensation structures. These matters frequently require careful valuation analysis and attention to tax consequences. Documentation is critical. Account statements, grant deeds, equity award agreements, closing papers, and business and bank records can significantly affect the outcome. So people are encouraged to hang on to those things.
Because property division in California can involve detailed financial analysis, tax implications, and long-term financial consequences, careful legal guidance is often finalized as the agreements are determined and the case progresses. Feinberg and Waller handles complex property division matters throughout California in our offices in Beverly Hills, Calabasas, and Westlake."
