Many Del Mar spouses have litigated or settled civil disputes. How these civil judgments can impact community and separate property is important throughout the dissolution process. Upon divorce, each community property asset is divided equally between both spouses. Community property is generally all property acquired during the marriage. All property acquired before marriage and after the date of separation is separate property. Additionally, all property acquired by gift, devise, or bequest is separate property. This system leaves many couples wondering whether community property or separate property is liable for the tort judgment.
Surprisingly, all of the community property is subject to the civil liability of either spouse. As a general rule, a spouse's separate property and all of the community property is liable for a debt incurred before or during marriage. As a debt owed by one spouse, the same rules apply to debts owed to plaintiffs in civil cases. The innocent spouse's separate property is not liable for any debts that he or she did not incur. However, whether the plaintiff can collect from the separate or the community property first depends on how the liability was incurred. The following example will best illustrate this principle: Husband was driving to pick up Daughter from daycare when Pedestrian stepped of the curb. Husband struck Pedestrian and Pedestrian incurred $100,000 in medical bills which Husband was ordered to pay. In this scenario, Husband has incurred liability for a tort judgment. Wife may be curious about whether Pedestrian can collect the $100,000 from community assets such as the family home.
For the Benefit of the Community: If the court determines that Husband incurred this liability while performing an act "for the benefit of the community," then Pedestrian can collect his judgment from the family home first and then, if any debt is left unsatisfied, from Husband's separate property. Pedestrian will argue in the above scenario that because Husband was picking up Daughter from daycare when the accident occurred, he was performing an act for the benefit of the community.
Not for the Benefit of the Community: In the alternative, if the court determines that Husband incurred this liability not for the benefit of the community but for some other purposes, then Pedestrian can collect his judgment from Husband's separate property first and then, if any debt is left unsatisfied, from the family home. However, if Husband has no separate property of his own then, for all intents and purposes, the family home will be the only source from which Pedestrian can and will collect.
Please contact us if you are considering a divorce from your spouse, a legal separation, or have questions regarding child custody and visitation. Nancy J. Bickford is the only attorney in San Diego County representing clients in divorces, who is a Certified Family Law Specialist (CFLS) and who is actively licensed as a Certified Public Accountant (CPA). Don't settle for less when determining your rights. Call 858-793-8884 in Del Mar, Carmel Valley, North County or San Diego.