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Dividing property during divorce

On Behalf of | Dec 1, 2021 | Divorce

During a divorce, residents of California will need to divide their property. Understanding how the division of property works in the state is important to ensure that it is split correctly during the divorce settlement.

Types of property

During divorce negotiations, spouses will consider three types of property. These include:

  • Separate property, which is any property or earning acquired before marriage, inheritance or individual gifts.
  • Community property, which is any property or earnings acquired during the marriage.
  • Commingled property, which is any property that involves both separate and community property, such as an asset bought with money from an inheritance but improved with money earned during the marriage.

Dividing property

California is a community property state, which means that the state considers any property acquired during the marriage, even if only one spouse’s name is on the title, as well as any income earned during the marriage belonging to both spouses. During the division of property, community assets are usually divided equally between the spouses while each spouse maintains a separate property.

Dividing commingled property is more complicated as it involves establishing which part of the value is separate and which part is community property. For commingled assets, only the part of the value considered community property will be divided between the spouses. This often involves retirement and pension plans, which may have been started before marriage but continued during the relationship.

Additionally, for these assets, particular rules also apply, and to have part of the value assigned to the other spouse usually requires a qualified domestic relations order, or QDRO, for each account. This may also include a home bought before the marriage or with inheritance money but with mortgage payments made from income earned during the marriage.

Making an error during the division of assets can have long-lasting consequences. Understanding where each asset falls and how it can legally be divided is important in preventing costly mistakes.