- Community property vs. private property in California
- California is a community property state
- Types of property that may be divided in a California divorce
- How do you assess the value of your property?
- How to get what you want in a divorce settlement negotiation
- Getting help with property division in California
- References
Getting a divorce is tough, both emotionally and legally. Understanding the rules about how to divide property is challenging, especially given that California is in the minority as a community property state. Let's take a closer look at dividing personal property in a California divorce.
Community property vs. private property in California
California divides property into two categories. Understanding what they are can help you know how to divide assets in a divorce in California.
Community assets are those you own together during your marriage. Items you purchase together (like houses) can be community property, as can gifts given to the household. Items you brought into the marriage (like furniture) that you both use equally and pay to repair and maintain can become community assets when you divorce.
Private assets are those you bring into the marriage and keep separate (like a computer that’s just yours). Gifts designed just for you, even if you got them after your wedding day, could also be private property. Inheritance money and insurance payouts could be private too, as long as you don’t deposit the funds in a shared space (like a checking account).
The line between community and private property often involves your marriage date, but your separation date matters, too. Anything you purchase after this point could be considered a private asset.
California Family Code 70 says the date of separation is the moment when there’s a complete and final break in your marriage. When the separation arrives, two things happen:
- One person tells the other via actions or words that the marriage is over.
- After that declaration, the spouse continued to behave like they wanted to end the relationship.
You may need evidence like witness accounts, copies of rental agreements, or email messages to prove that the day you’re citing as the separation date is accurate.
California is a community property state
When a couple in California gets divorced, they must go through a process known as division of community property. In this process, their assets and liabilities are divided equally between the two of them.
In California and other community property states, each spouse has equal ownership of everything acquired during the marriage. The property must be distributed equally between the divorcing couple.
California is not an equitable distribution state
California is not an equitable distribution state. Rather, it is a community property state. In equitable distribution states, property is divided in a way that is “fair and equitable.” This doesn't necessarily mean that each person gets an even split of the assets.
Types of property that may be divided in a California divorce
Here are some examples of property subject to division in a divorce in California:
- Household furniture and items
- Bank accounts
- Stocks and bonds, stock warrants, and stock options
- Intangible assets like cryptocurrency
- Copyrights, patents, and licenses
- Royalties
- Motor vehicles, aircraft, and boats, along with associated equipment
- Collectibles such as paintings, other artwork, rare books, coins, stamps, antiques, jewelry, and musical instruments
- Safe-deposit box contents
- Club memberships
- Hotel points and frequent flier miles
- Accrued vacation from an employer
- Judgments due to a party or potential civil claims
In a divorce in California, bank accounts would typically be split evenly between the two spouses. This means that if you have a joint account with your spouse, it would be divided in half, with each spouse receiving an equal share. If you have individual bank accounts, they may be kept separate.
Let's consider another example using hotel points. Maybe your spouse spent a lot of time traveling during your marriage and racked up thousands of hotel points. Your spouse might not think you should get any of the points since they were the one traveling and accruing them. However, because California is a community property state, you have a right to half of those hotel points.
How do you assess the value of your property?
A judge must approve your property split when you divorce. If your plan isn’t fair, courts could throw out your agreement and make a new one on the spot. It pays to be very careful. Assessing the value of your items is critical.
Dealing with items like furniture and electronics is relatively easy, as they’re informally appraised using “garage sale value.” What is garage sale value? It’s essentially your estimation of what the items would be worth if you sold them in a garage sale.
Go room by room, and create a spreadsheet of all shared items. Research each one on a site like eBay to determine how much value they hold. If you can, include links in your spreadsheet, so your spouse can see where your estimates came from.
Expensive items like cars, jewelry, and collections require more sophisticated help. Typically, it’s best to hire an appraiser to examine these items and provide you with a formal estimate of value.
If you have retirement accounts, you must work with the account holder (like the retirement brokerage firm) to determine the item's worth, the value it accrued during the marriage, and how to split it. These can be complicated conversations that involve specialized lawyers and paperwork.
Houses can also be difficult to manage without assistance. A realtor can examine your home and help you understand its current market value. A home inspector can help you determine what repairs are required before the house is sold.
How to get what you want in a divorce settlement negotiation
When it comes to dividing property during a divorce, there is often a lot of give and take involved. Both parties want to come away satisfied and not feeling like they got the short straw. Divorce negotiations go smoothly in some cases. In others, they are quite contentious.
Remember that a successful divorce settlement requires compromise. Each side must be willing to make some sacrifices. For example, one spouse may have to agree to pay a bit more in alimony or child support, while the other may have to give up their right to part of the marital home.
Recommended reading: How to Slay Your Divorce Negotiations Like a Seasoned Pro
Getting help with property division in California
Some people have complex estates that are hard to split. A certified divorce financial analyst (CDFA) can help you get a better understanding of what your financial situation will look like after divorce.
A CDFA is a licensed professional who helps people understand how the financial decisions they make now can impact them later on. For example, a CDFA can explain the tax consequences involved with things like selling a home. This professional can also help to analyze and resolve retirement plan issues and questions. A CDFA’s work could ensure a fair settlement for both parties.
Mediation can also be helpful during a complicated divorce. Mediators are trained professionals who help people communicate clearly and develop plans both sides consider fair. A mediator might help you discuss an asset both parties want to keep, or a mediator can help you deal with the emotional reasons one side doesn’t want to sell a house.
While mediation can be helpful for many people, it’s not right for everyone. If your spouse has a history of manipulation or abuse, participating in conversations may not be safe for you. Mediation also involves compromise, and some people aren’t willing to give up an asset that’s really important to them.
Hello Divorce offers affordable CDFA sessions as well as divorce mediation services, both of which can help you divide your assets efficiently as you negotiate the terms of your divorce.
References
Property and Debts in a Divorce. Judicial Branch of California.Example Trial Issue: Date of Separation. Judicial Branch of California.
What is a CDFA (Certified Divorce Financial Analyst)?)Institute for Divorce Financial Analysts.
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