California is a community property state, which means that all those assets and debts that were acquired during the marriage are considered owned—and owed—equally. Acquired during the marriage is the key, because anything that falls outside of the marital years is not included. If a divorcing couple can agree on division of property (assets) and debts, it is included in their marital settlement agreement (MSA), although a judge may still need to approve the agreement. What’s more, the property, both assets and debts, still belongs to both you and your spouse until the judge signs off.
Deciding What is and isn’t Marital Property
The best place to start figuring out what is separate and what is community (marital) property in your divorce is to make a list of all your assets, from the house and bank accounts to the furniture and vehicles. Everything. What items are not community property and will not be included in the settlement? They generally include:
- A gift or inheritance acquired prior to marriage (or after your divorce is finalized)
- Real estate that you owned before your marriage
- Other assets (vehicles, antiques, artwork) that you owned or inherited prior to your marriage
Sometimes, what you think you own can become less clear. For instance, you bought a house before you got married, and then your spouse moved in and helped pay the mortgage and property taxes. In that case, the asset has become comingled and a portion of that asset is now community property.
All assets that were acquired during the marriage are community property and will be treated as such, including items such as:
- Stocks and bonds
- Savings and checking accounts
- Real estate, including first homes, vacation homes and rental properties
- Cars, trucks and boats
- Utensils, household items, lawn and garden equipment
- Electronics, including televisions, stereos and computers
Dividing debt is often even more contentious than dividing property. When completing the California Schedule of Debts and Assets (FL-142), you see that debts, as well as assets, are broken down into several categories. Generally speaking, debts are handled in the same way as assets. The intention is to divide everything to get to an equal “net share.”
There are several types of debts that may or may not be considered part of community property, depending on circumstances, including:
- Student loans that were incurred prior to marriage, unless a spouse benefitted from that education or training
- Debts (liabilities) caused by intentional wrongdoing or illegal acts
- Child support for children from a former marriage or relationship are generally not the responsibility of the parent’s new spouse, although there are circumstances where the court may deem otherwise
Make Sure You are Getting Treated Fairly in Your California Division of Property and Debts
If you have a home in the Monterey, Hollister, or Gilroy areas, financial investments, vehicles and credit card or other debt and have questions, we can help. To learn more, please contact Giuliano Law online or call us at (831) 372-4003 and speak with a Monterey divorce lawyer.