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The McKay Law Group, APC
Family Law Attorneys
402 West Broadway, Suite 400
San Diego, CA 92037
P: (619) 321-6886
F: (619) 321-6889

California is a community property state, which simply put, means all property acquired by the ‘community’, i.e., the husband and wife during marriage, is divided equally at the time of divorce. As simple as this sounds, it is often very confusing to implement for a variety of reasons.

The importance of the date of separation

California is one of the few states in the United States that ‘cuts off’ the marital interest in property at the time the husband and wife separate. Other states divide and value the marital property as of the date the divorce is final.

The date of separation is sometimes difficult to determine. It is determined by the subjective intent of one of the parties, combined with actions that show an intent to separate. For instance, a married couple can have a discussion on January 1 st that they are in agreement the marriage is over. They start closing out their joint bank accounts and credit cards. They may decide on a parenting schedule for their children, with one of them looking for an apartment. Even if the moving spouse cannot get into an apartment until the first of February, the date of separation would be January 1 st, as that was the day the couple determined the marriage to be over and started making plans for separate lives.

Often times the exact date of separation is difficult to determine. The impact on the divorce can be significant, as each spouse’s earnings and accumulations after the date of separation are considered to be separate property and not subject to division.

It is also confusing as some marital or community assets are divided as of the date of trial and some are divided as of the date of separation. For instance, a community residence is usually considered a community asset until the date of trial, even if one spouse has stayed in the house for an extended period and paid the mortgage and property taxes.

Separate assets

Any assets you owned prior to the marriage, or assets obtained by gift or inheritance are considered your separate assets and will usually not be divided with the community assets. However, if you have mixed or commingled your pre-marital or separate assets with your community assets, it may be difficult to ‘untangle’ whether the asset is to be considered community or separate. For instance, if you had a stock account prior to marriage and then continued to use the account to trade after marriage, including the purchase of stock with your earnings or your spouse’s earnings, the separate nature of the account could be lost. In this situation, it is very important that you speak with your attorney to determine what your rights to the asset are.

Personal property

If the parties cannot agree on who gets what item of furniture or personal property, a judge can make temporary orders, pending trial, as to which items a party can have ‘exclusive use and possession’ of. Usually, the determination as to which spouse is allowed the ownership of an item of property is not made until the time of trial.

Real estate

Similarly, the parties can agree, or a court can order that one spouse (and the children) be allowed to stay in the family residence during the pendency of the divorce. However, whether that spouse is allowed to keep the house after the divorce is a ‘trial issue’ and will not be decided until the time of trial, unless the parties agree.

Retirement accounts

Irrespective of which spouse earns the retirement benefit, any benefits obtained during the marriage are considered community and will be split equally. For most retirement benefits, with the exception of IRA’s, a QDRO, or Qualified Domestics Relations Order is prepared, which must be approved by the Plan Administrator.

Business interests

If one or both spouses owns a business, the business is usually awarded to one spouse, with an offset to the other spouse by way of an equalization payment or other asset awarded to that spouse. Unless the parties can agree on the value of the business, a business appraisal is required.

Some general guidelines.

• Vehicles . Each party usually takes the vehicle they drove during the marriage, including the debt on it. The fair market value is determined by using Kelly Blue Book ‘mid range’ value. If the values of the vehicles are different, the difference is offset to allow for equal division.

• Furniture and appliances . Each party prepares a list of the items, with a corresponding ‘fair market resale value’ next to the item. The resale value is the price that item would get at a garage sale. If there is an unequal division, the difference can be offset to equalize. Attorneys and judges will not spend time arguing over personal property. If the parties cannot agree to values, a joint appraiser is appointed, or a special master is retained to assist the parties in dividing their property.

• Family residence . Usually one spouse keeps the house and buys the other spouse out (within 90 days after finalizing the divorce) or the house is sold and the proceeds are split. If you want to stay in the house, do not voluntarily move out.

• Children’s possessions . The children’s possessions can be divided in the same manner as the adults. Usually, one parent will need to purchase additional furniture, toys, etc.