Property division may be a concern that is high on the list of concerns for divorcing spouses. Understanding what that process looks like can help divorcing couples protect their interests and develop a property division settlement agreement that meets their needs going forward after their divorce.
California is referred to as a community property state which means that property and assets owned by the couple when they separate will generally be divided 50-50. Generally, only marital property is subject to the property division process which can be distinguished from separate property which is typically not divided. Separate property includes inheritances, gifts, personal injury awards and property one of the spouses entered the marriage with. A third category of property, quasi-community property, can also be important to understand. Marital property commonly includes property and assets acquired by the couple during marriage.
Property subject to this process can include a house; cars; furniture and household furnishings; clothing; retirement and 401 (k) plans; pension plans; stocks; life insurance that maintains some cash value; a patent; a security deposit on an apartment; or a business. Debts the couple has will also be divided during the property division process. Some assets can be considered complex assets and it may be necessary to conduct a valuation of certain assets during the process.
Familiarity with the property division process allows divorcing couples to prioritize their interests and work out a property settlement agreement that leaves them both on as solid a financial footing as possible going forward. To prepare for the property division process, divorcing couples should be aware of the different categories of property and how their property will be divided during their California divorce.