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Division of property in California

California is a community property state, which means that any assets and debts acquired by the couple during the marriage are considered jointly owned and are divided equally upon divorce. This approach aims to ensure a fair distribution of marital property.

Key Principles

Community Property

• Definition: Includes all earnings by either spouse during the marriage and everything acquired with those earnings. This can include homes, cars, furniture, savings accounts, retirement accounts, and debts.
• Division: Upon divorce, community property is divided equally (50/50) between the spouses, unless agreed otherwise.

Separate Property

• Definition: Includes anything one spouse owned before the marriage, gifts, and inheritances received by one spouse during the marriage, and earnings or acquisitions after the date of separation.
• Division: Separate property is not divided in the divorce and remains the sole property of the spouse who owns it.

Factors Considered in Property Division

• Identification: The first step is to classify property as either community or separate
• Valuation: The next step is to determine the value of the community property to be divided.
• Division: Finally, the property is divided equally, taking into account the valuation and classification.

Special Considerations

Retirement Accounts and Pensions

These are considered community property if contributed to during the marriage and are subject to division. The division is often facilitated through a Qualified Domestic Relations Order (QDRO)

Businesses and Professional Practices

Valuing and dividing a business or professional practice can be complex and often requires expert appraisals.

Debts

Like assets, debts incurred during the marriage are considered community property and are divided equally.

Real Estate

The division of real estate must consider the nature of the property (community or separate) and its value. Options include selling the property and dividing proceeds, one spouse buying out the other, or co-owning the property post-divorce for a period.

Conclusion

The division of property in a California divorce follows the community property principle, aiming for an equal division of marital assets and debts. This process involves identifying, valuing, and dividing property according to legal definitions of community and separate property.

Given the complexities involved, especially with high-value assets or businesses, consulting with legal and financial professionals is often necessary to navigate the division of property effectively.