Many people fail to understand just what community property is all about. This can lead to a great deal of confusion when it comes to determining how property is divided when you are in the process of separation and /or divorce from your spouse in San Diego County.
So just what is community property? community property can be defined as:
Any income or assets that is earned or acquired by a married person while living together.”
Any income or assets that you have acquired before the marriage, is known as separate property. Law requires that in the event of a divorce the community property be equally divided between you and your spouse if there is no written contract in place that clearly outlines otherwise (see Pre-Nuptial Agreements / Post-Nuptial Agreements).
Community property will normally be divided equally, unless there are extenuating circumstances, at what is known as the “fair market value” of the assets. The obligations that are shared by you and your spouse will be subtracted from the total of the assets. It’s this remaining amount that will be the net value of the community property and both you and your spouse will receive half of this total.
Once the net value of the assets of community property have been determined you, and your spouse, may choose to award the other with the family residence while the other is awarded any business or real estate investments. So long as the net value of the assets is equal the courts will be satisfied.
It won’t be difficult for the court system to decide if an asset is separate property or community property. When you are making a list of all your assets make sure that you make note of all your separate property so that this can be presented fairly in the hearing and not come into dispute at a later date.
Assets that many people forget about when they are in the middle of a divorce include employment benefits and pension plans. Any interest that has accumulated in the following pension and employee plans is considered to be community property:
- Pension plans
- Retirement plans
- Employee Benefit Plans
- Profit Sharing
Law allows that one spouse or the other can be awarded what is known as a “proportionate share” of the benefits when they are paid out.
With so many things to consider when you are in the middle of a divorce, it is vital that you seek professional advice so that you can plan for all contingencies. The better prepared that you are for the process that is involved with the division of community property the better you’ll make out when your divorce is final.