The first step to property division during a divorce is deciding whether the property is “community property” or “separate property.” Here’s a little more information defining what these two terms mean.
Property Division
Typically, California law asserts that assets and debts a couple accumulates during the course of a marriage are considered community property.
Any property the spouse owned prior to the marriage, acquired as a gift, or through inheritance during the marriage is that spouse’s separate property. If that property increased in value, that spouse can claim that increase as separate property as long as they can provide evidence such as financial records or other documents. Any property a spouse acquires in the period between date of separation and divorce is also considered separate property.
Date of Separation
The date of separation is the date that one spouse decides to end the marriage. For this to be considered the legal date of separation, there needs to be some legal form of action taken to denote the spouse has chosen to end the marriage. This date can become a sticking point if undefined, especially if a one spouse earns an unusual amount of money (such as a bonus) during the period between separation and divorce. If this date cannot be decided upon, a court will rule on the decision after considering the evidence.
Changing Asset Titles
A couple is able to decide before or during the marriage if they would like to convert an asset from separate property to community property, or vice versa. This agreement needs to be made in writing, and must clearly state each spouses’ intention. Assets can also be considered partially community and partially separate.
Determining “community property” from “separate property” can become complicated and you may want to consult an attorney for advice. Spouses who are not able to decide between what is “community” versus “property” will often have to let the decision come down to the court.
Source: DivorceNet.com, California Divorce: Dividing Property, 2014