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Just what is “community property?”

On Behalf of | Oct 6, 2021 | Family Law

If you and your spouse are looking into a divorce right now, one of the things you should know is that you are in a community property state. If you haven’t ever heard this term before, it can be confusing.

Community property states believe that each person in a marriage is equal regardless of what they contributed financially. In a community property state, it is presumed that each party will walk away with 50% of their marital assets.

That doesn’t mean that you’re going to have to divide everything you own equally, though. You have to keep in mind that not all of your property is marital, or shared, property.

What is marital property?

Generally speaking, marital property is any property that you have acquired during your marriage. This property will be presumed to be community property and belong to both parties unless you’re able to show that it should be treated as separate property.

Community property, your marital property, is divided equally in California, though you do have the option to negotiate a different settlement outside of court. Separate property, which may include inheritances, gifts or property acquired before marriage, will go back to the original owner.

How do you divide community property?

When you divide your marital property, you’ll do so by starting with the presumption that you’ll receive 50% of your shared assets. That doesn’t necessarily mean that you’ll divide the actual assets in half, though. For example, if you have a stock portfolio worth $100,000 and your spouse has a retirement worth the same amount, you may each decide to keep your respective investments. Other people might decide to literally divide those and to share half of the stocks or retirement income with the other party.

In California, you and your spouse both have a fiduciary duty to one another, so you will be expected to be fair with one another. Be honest about the assets that you have in your possession so that you cannot be later accused of hiding assets from your spouse.

The division of your property could be complex. Make sure you understand the law and are prepared to determine how your property should be classified.