What happens to your assets during a California divorce?

What happens to your assets during a California divorce?

If you and your spouse are facing divorce, you may have concerns about how the court might divide your property. That may be especially true if you have complex or high-value assets, like real estate investments or ownership in a business.

The first thing to know is that California law distinguishes between community property and separate property. Generally, separate property remains separate after divorce, while community property may be subject to an even split between the two spouses when they divorce.

Understanding community property vs. separate property

In most cases, assets that either you or your spouse earned or acquired during your marriage became community property. This may be true regardless of who purchased the asset or whose name is on the title or account. Exceptions may include personal gifts or an inheritance.

Assets the court considers community property may include physical property like a house, vehicle, furniture or antiques as well as financial assets like bank accounts, stocks, bonds and business holdings. If either of you has a 401(k) or pension plan, funds contributed or earned during your marriage may also be community property that the court may divide equally after your divorce.

However, if you have assets that you acquired before your marriage and did not intermingle with marital assets, that property may not be subject to division when you separate.

Resolving property issues through negotiation

If you and your spouse share complex and/or high-value assets, you may not want to leave the division of your estate up to the court. Collaborative and mediated divorce are two alternatives to litigation that may help you to negotiate a property settlement that truly works for your family’s specific circumstances.