Marital Property

Community Property

After child custody disputes, property division often cause the most tension and dispute between couples in the midst of a divorce. Ronda A. Middleton understands the animosity that can arise when deciding how to best divide your hard-earned property. Ronda has the knowledge that comes with many years of experience dealing with California’s community property laws, and can explain how these laws will impact the division of your marital property.

Determining what is Community Property

Unless there is a valid prenuptial agreement, California laws dictate how to divide assets and debts during dissolution of marriage or domestic partnership, separation, or divorce. Generally, all debts incurred during marriage and unpaid on the date of separation, are subtracted from the community assets to create the net amount of the estate. Each party in a divorce is then entitled to 50% of the net estate.

Questions arise as to what constitutes the community property of the parties, what the individual values of the assets are, and how to divide the assets and the debt. California law provides that all property and assets acquired during marriage are presumed to be community property, except:

• Gifts to one spouse
• Inheritance by one spouse
• Assets accumulated prior to the marriage and kept separate
• Any pension, earnings, or assets acquired after the date of legal separation
• Any earnings, accumulations, appreciation, or profits arising from a separate asset

Community property generally includes earnings during the marriage from work and other efforts, and the property acquired with those funds. Many couples in dissolution have a home, cars, bank accounts, and perhaps some retirement benefits which were acquired during the marriage. These assets must be valued upon dissolution.

Sometimes there is a “mixed asset,” an asset that was owned by a spouse before marriage such as a residence or business. However, during the marriage the spouse continued to operate the business or used earnings after marriage to invest in the asset, such as paying down the mortgage on the residence. Anytime a spouse invests community funds earned during marriage, into a separately owned asset, commingling – or mixing – can occur. In a divorce, it may be necessary to figure out how much of the value of the asset is separate property and how much is community property subject to division.

Often when spouses purchase a family residence, one of the spouses has savings or inherited funds, which they may have used for the down payment. Under California law, the residence acquired during marriage is community property but the spouse who contributed his or her separate property is entitled to reimbursement for the separate funds they invested in the home.

If a spouse claims funds or an asset belonged to him or her before marriage, or was acquired with separate funds, the spouse must “trace” the funds back to the separate property source to prove the funds were separate. Usually a forensic accountant has to be hired by the spouse who is trying to show that he or she has separate funds, which can be traced back. Ronda A. Middleton is skilled in examining asset trails to prove an asset was in fact kept separate or commingled.