4 Ways to Protect Your Assets During a Divorce in California

One of the important steps in finalizing a divorce is determining how to divide property between the two spouses. In some cases, the division of property can be simple and straightforward. However, it’s possible for complications to arise. It can be helpful to understand the top five ways to protect your assets during a divorce in California to avoid these situations.

Community Property vs. Separate Property vs. Commingled Property in California

In California, community property refers to any assets or debts that both partners own or owe together. These types of property are eligible to be divided in a divorce. Separate property refers to any assets and debts each individual spouse had before they entered the marriage. It can also refer to any property purchased solely under one spouse’s name and with their finances alone.

Commingled property refers to any assets or debts that can be considered community property and separate property. A common example of a commingled property would be a house that one spouse bought, but both spouses contribute to the mortgage payments.

The down payment for the house is separate property, while the mortgage payments are community property, which makes the equity of the house both community and separate property. Separating commingled property can be complicated, which is why it can be beneficial to work with a California divorce lawyer.

How to Protect Your Assets in a Divorce in California

The average property value in California has been on a steady incline in the past decade or so and was about $827,300 in 2023. The increasing value of real property in California remains an important aspect of a divorce. That’s why it’s important to understand how to protect your assets when it comes to dividing property during a divorce.

California is a community property state, which means it follows a 50/50 divorce law. When you get divorced in California, you can expect any community property between you and your spouse to be divided equally. If you are handling your divorce in court, the judge makes the final decision about the division of property.

The good news is that it’s possible to protect your assets in a divorce if you believe you deserve to retain full ownership of property from a marriage.

Here are four simple ways to keep your assets safe from property division in a divorce:

• Prenuptial/postnuptial agreements. You can specify the division of assets in a binding agreement before or after you are married. This can override community property laws and potentially keep your assets safe.
• Separate business accounts. If you own a business, it’s wise to keep any business finances separate from your personal accounts. This can protect them from being a part of the property division process.
• Separate financial accounts. Having separate bank accounts is an easy way to avoid California property laws in divorces. Any separate property is not eligible for being divided in a divorce.
• Trusts. You can shield assets from the divorce process by putting them in a trust. There are specific domestic asset protection trusts for this purpose.

Benefits of Working With a California Divorce Lawyer

You can go through the divorce process on your own, but it’s likely to be time-consuming and quite challenging. It can be beneficial to work with a divorce lawyer even in uncontested divorces where both parties agree on all terms. It’s always helpful to have someone with a deep understanding of the law to oversee your legally binding decisions.

According to recent data, about 1.75 million women and 1.22 million men in the state are divorced. While California has had a relatively low divorce rate when compared to other states, it’s still important to understand how to move through the divorce process while keeping your assets safe.

By working with a California divorce lawyer, you can have peace of mind knowing you’re going through every step of the process correctly and are protecting your rights, too.

FAQs

Q: What Property Can be Divided Between Spouses in a Divorce in California?

A: Property is typically categorized as either community property, separate property, or commingled property. Community property refers to any assets or debts that belong to both spouses equally, such as a joint bank account. Separate property is anything that an individual owns outside of the marriage. This could be anything from a vehicle they bought before marrying their spouse to student loans taken out before the marriage. Commingled property refers to anything in between these categories.

Q: Is California a 50/50 Divorce State?

A: California is a 50/50 divorce state, which means that you can expect all community property between you and your spouse to be divided equally. This is also known as a community property state. Any separate property can stay with the spouse it belonged to before the marriage. Prenuptial and postnuptial agreements can change the terms of the 50/50 law in some cases. A California divorce attorney can help you better understand how you can protect your property.

Q: Does the Length of My Marriage Impact How Property Is Divided in a Divorce in California?

A: In practice, California divorce laws apply to all marriages, both short-term and long-term. However, long-term marriages can often result in a more equal division of property. This is because joint ownership of assets and debts is typically more established in longer marriages. In California, a marriage lasting 10 years or more is considered a long-term marriage.

Q: Is My Spouse Entitled to Half my 401(k) in a Divorce in California?

A: Since California is a 50/50 state or community property state, your spouse is likely to be entitled to half the 401(k) value that accumulated during your marriage. That said, any contributions made to the 401(k) before the marriage are separate property, which means they are not eligible to be divided in a divorce.

Get in Touch with a California Divorce Lawyer to Learn More About Your Rights in a Divorce

Our team at Bickford Blado & Botros has years of experience handling divorce cases in California, so we’re familiar with navigating the emotional and financial difficulties that often come with divorces. If you’re ready to discuss your case in more detail, contact our office to set up a consultation with our team today.

 

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