If you are contemplating a divorce in California, you have probably heard that this is a community property state. What, exactly, does that mean? Understanding the basics about property division in California can be crucial to your short-term and long-term financial security.
The difference between “community property” states and “equitable distribution” states is not something that most of our readers usually need to worry about – unless, of course, they are going through a divorce.
In a community property state like California, of which there are a few, the general rule is that a family law court will attempt to split joint assets and debts 50/50 between the divorcing spouses. That isn’t the case in equitable distribution states, where family law courts attempt to find a “fair” distribution of assets and debts – which isn’t always an equal split. Most states take the equitable distribution approach to divorce law.
Your assets on the line
When you are going through a divorce, especially a high net-worth divorce, property and debt division can become the most contentious issue in the case. Your home, vehicles, investments, retirement accounts and even pricey possessions like artwork – among many other assets and debts – may all be a part of the property and debt division issue in a divorce case.
It is easy to see how a division of such assets and debts can impact your financial situation for a long time to come. Finding a fair asset division arrangement may take direct negotiations between the parties, mediation or even courtroom litigation. Understanding the basics of California divorce law and your own factual situation in a divorce case is crucial.