2 Main Issues That Arise When Dividing Assets In a Divorce Proceeding
In every divorce proceeding, one main issue is the division of assets. There are typically two issues that come into play in such a division.
The first issue is the date of separation. When did the couple separate? Separation occurs when the couple part ways and do not try to get back together. Courts generally look for conduct evidencing a clear and final break in the marital relationship. This is an objective test and one based on the reasonable person standard. Courts will generally examine the couple’s actions and determine whether there is conduct that a reasonable person may believe that the couple are still married.
This concept can become tricky if the couple continues to live in the same household, share household expenses, maintain the same mailing address, attend social events as a couple, and/or vacation together. These are just some factors that Courts have considered when determining the date of separation. Why is the date of separation important? That brings us to the second key issue in division of assets: community property v. separate property.
California is a community property state, meaning that any property acquired and debt incurred between the date of marriage and the date of separation is considered community property. Upon dissolution of marriage, community property is divided equally (50-50) between the couple, unless the couple agrees otherwise.
In contrast, any property acquired by either spouse before the date of marriage or after the date of separation is considered separate property. Additionally, property acquired during marriage by gift, bequest, devise or descent is also generally considered separate property. Upon dissolution of marriage, separate property goes to the spouse who acquired it. So, if one spouse earns additional money or accumulates wealth after the couple is deemed to have separated, that spouse generally keeps those assets as his or her separate property, even though the divorce has not been finalized.
There are situations where one spouse’s separate property is converted to community property. A classic example is when a spouse owns a home before marriage and upon getting married, the spouse sells that home and purchases a new home with his or her new spouse. The new home is considered community property because it is acquired during marriage. However, the home was purchased from proceeds obtained from selling separate property. In these situations, Courts generally trace separate property through the community property, and upon dissolution of marriage, the spouse who converted his or her separate property to community property gets a bigger share of the assets.
If you are faced with a divorce that requires the division of assets, the services of an attorney become invaluable as he or she can guide you through the process. This article strictly talks about California law. Laws in other states may differ. This article is for educational purposes only and is not meant to serve as legal advice. You should always contact an attorney to discuss any legal matter.