Assets
The Big Picture
California works as a community property state for divorce proceedings. That means that all assets earned during marriage are defined as "community assets" and all debts incurred during marriage are defined as "community debts." To illustrate this fact, consider the title of "community" used in these definitions as a basket. Each spouse is entitled to put items into the basket and take items out of the basket. An example of an item going into the basket would be income. Other items may go in based upon how they were treated. For example, inheritance money doesn't normally go into the basket, but any money used to fix up a home is absorbed into the property value that goes into the basket.
During the divorce process, the challenge is determining what belongs in the basket and how to ultimately divide up its contents. Matters get further complicated when items such as pensions and 401ks go into the basket due to IRS penalizations activated upon account cash-outs.
One category that does not go into the basket is separate property, which is defined as property (or the property's value on the day the couple married) owned solely by one spouse. For example, if the wife owned a house prior to marriage, the value of that house up to the date of marriage is considered separate property. Inheritances and gifts are often viewed as separate property.
Like everything involved with the divorce process, there are exceptions to these rules and assets owned prior to marriage or acquired after marriage may fall under a grey area.
Moschetti Family Law can help you through this difficult time. We are committed to helping individuals with the transition and ensuring they have the fair and equitable resolution. If you have any questions, please contact our office for help in understanding how California's laws pertain to your property. Call us at
Articles
The Long Arm of Family Law
A Brief Overview of the Psychology of Money
Unreported Income and Hidden Assets
Why CPA's Ask for Certain Documents in Divorce Cases
Dividing Pensions in Divorce: Errors Made Can Be Costly
The Value of a Divorce Financial Planner
Codes
Family Code §751
Family Code §760
Family Code §770
Family Code §771
Family Code §772
Family Code §852
Family Code §2640
Cases
Loring v. Stuart (1889) 79 Cal. 200
Marvin v. Marvin (1976) 18 Cal.3d 660
In re Marriage of Lucas 27 Cal.3d 808
Milian v. De Leon (1986) 181 Cal.App.3d 1185
In re Marriage of Vanderbeek 177 CA3d 224
