Property division is a complicated part of a divorce case. It can become even more complex if you and your spouse are a high-earning or high-asset couple. High-asset divorces can be tense and often involve contested terms. A contested case will go to court for a judge to decide property division based on California’s community property laws.
State law in California holds that both spouses are entitled to equal shares of community property. Property can include bank accounts, cash, stocks and bonds, clothing, cars, properties, furniture, and collectibles. Community property describes everything the couple acquired during the marriage. It can also refer to assets brought into the marriage by each party if the couple commingled these assets. Creating a joint bank account is an example of commingling assets.
When a couple marries or registers a domestic partnership, the two legally become a community. Debts and assets acquired thereafter become community property. In California, the courts will divide all community property 50/50 in a divorce case, regardless of fault for the divorce or the financial situations of either spouse. It will not matter if only one spouse brought the majority of the earnings or debt into the marriage. The court will split everything in half during a divorce trial.
In an equitable distribution state, on the other hand, the courts will analyze the unique factors of the case before allocating a percentage of the property and/or debts to each spouse. Equitable distribution states will assess fault, financial hardship, child custody and other factors before making a property division decision. California’s strict community property law makes it important to be proactive about protecting your assets in a divorce case.