Dividing Property in a Divorce

A big part of getting divorced is dividing up all the property that the couple accumulated. Getting all that stuff divided can be difficult because it includes everything the couple owns-knick-knacks and furniture, houses or other real estate, retirement plans, bank accounts, investments, and businesses.

When people get divorced in California, the property division begins with the rules of community property law. Under those rules, everything falls into one of two categories: property owned by each spouse as an individual, called "separate property," and property owned by the married couple together, called "community property." Separate property goes to each spouse who owns it, but community property must be divided equally between the spouses.

So what is "community property" and what is "separate property"?

In California, we have a set of rules to guide us in figuring out if something is community property or separate property. We start by assuming that everything acquired by a husband or wife during marriage is community property, unless it was a gift or inheritance for just one of them. We also assume that everything the husband or the wife acquired before they got married is their separate property.

Here is a simple example: If a woman marries a man who already owns a house and the mortgage is paid off, then we assume that house is his separate property. Then, if the wife inherits a house from her grandmother during the marriage, we assume it's her separate property. Finally, if the husband or the wife, or both of them together, purchase a house or anything else while they are married, we assume that it is community property.

There are many more rules, and things often get much more complicated than that, but a lot of times people getting a divorce just have a gut feeling about how much they should get. Their sense of fairness sometimes makes them hesitate when the other spouse offers to divide the property a certain way and it just doesn't seem to add up. We see people in that situation all the time. Maybe they don't know the rules for dividing property in a divorce, but they know something isn't right. That is usually a good time to seek help from a divorce attorney, who has the knowledge and tools to investigate and find out what is fair and legal.

A family and divorce attorney knows how the court decides which items are separate or community property and she can use that knowledge to help her clients get a fair share, especially when things get complicated. For instance, sometimes one of the divorcing spouses will try to hide assets, or refuse to provide loan statements or bank records to help figure out how much things are worth and how they ought to be split. An attorney can put pressure on the other person, sometimes with negotiation, and occasionally by seeking court orders.

What is our stuff worth?

Things like real estate, retirement plans, and businesses, almost always need to be valued by professional appraisers. This can add a whole new layer of difficulty, especially with the real estate market going south right now-the value of real estate has been falling for many months and will probably continue to fall. There are several appraisers that we work with when these issues come up. Sometimes, we also need to work with a forensic accountant, who can take appraisals and other financial records to figure out a history of how much somebody's property was worth and when.

A good way to think about the value of personal stuff, like furniture, kitchen appliances, dishes, televisions, etc., is by asking how much you could get for it at a yard sale. Most personal items do not have a high money value. If you have antiques or things you think might be worth a lot of money, you would need to have those professionally appraised.

When is our stuff valued?

The value of everything is usually going up or going down, so it's important to know when the court decides what your stuff is worth. Different things are valued at different times.

• Real estate, like your house, is always valued at the end of the case. Pensions and retirement plans are valued at the date of separation.
• Small businesses run by one or two people are usually valued at the date of separation and larger businesses with many employees are usually valued at the end of the case.
• Bank accounts and investments like stocks are valued at the date of separation, but if they earn interest or increase before the case ends, then there might be community property value in that increase.
• Vehicles, including things like boats and RVs, are valued at the end of the case.

Divorce and family law attorneys don't usually handle those kinds of cases, but at Childs & Childs we have attorney Jerry Childs, who does handle them. If you need help with a property division that is not part of a divorce, then you should check out Mr. Childs' website.