Readers of this blog know that we discuss various aspects of divorce. This often includes property division. In a recent blog post, we discussed California community property.
In this post, we will focus on how our state decides between community and separate property in a California divorce.
What property is included?
Anything that can be owned will qualify, including tangible and intangible property. Anything that can be bought, sold or appraised qualifies. This includes tangible property, like your vehicles, real estate, furniture, antiques, etc. And, it includes your intangible property, like stocks, bonds, NFTs, cryptocurrencies, etc.
Retirement accounts
The most contentious and complicated items to split are often retirement instruments, like 401(k)s, pensions, etc. because you don’t want to determine their present value, but rather their value at your retirement.
For example, if you were married for a decade, the present value of a decade-old pension is little. It cannot be cashed out until you retire. However, the pension will be valuable when you reach retirement age.
This is where a financial professional can help determine value of these complicated instruments.
Deciding who owns what
One option to make property division less complicated is through a pre-nuptial or post-nuptial agreement that outlines which property qualifies as community and separate property.
To be legally enforceable, the pre-nup or post-nup should be drafted by an attorney, and each party should have their own attorney.
Alternatively, many California couples want to decide how to divide their property themselves. This can be done through a negotiated or mediated agreement outside of any court process.
However, a judge will still need to approve this agreement, and your pre-nup or post-nup.
Determining property type
Without an agreement in place, then the court will need to determine which property qualifies as community and separate. This comes down to the date of separation and marriage.
The date you married is when the marital estate begins. The separation date is the day that you or your spouse let the other spouse know the marriage is over or they wanted to end the marriage. This can be done through words or action, and all words or actions thereafter must be consistent as well.