Keeping Separate Property in a California Divorce
California upholds a strict community property law for divorce, meaning that all of a married couple’s shared assets and debts must be divided evenly in divorce. However, California is a dual property state, meaning the court recognizes both separate property and marital property or community property. “Separate” property is anything that belongs solely to one of the divorcing spouses, while community property is everything subject to division. While you might think this is a straightforward distinction, many divorcing spouses encounter disputes when it comes to their separate property ownership rights.
If you are preparing to divorce in California, property division is likely to be one of the most contentious aspects of the entire process. You may believe that you can easily identify your separate property and shield it from division. However, many people in this position discover that their separate property is not entirely immune from division in divorce. An experienced California divorce lawyer can help you complete your financial disclosure and establish separate property ownership rights, but it’s wise to know what your property division proceedings are likely to entail before you begin divorce proceedings.
What Counts as Separate Property?
California recognizes various types of separate property, such as:
- Real property owned before marriage. If you bought your house before you were married, the house will likely remain your separate property in divorce except under certain conditions.
- Gifts you received during your marriage, including gifts given by your spouse. To establish separate property ownership rights over gifts, you simply need to prove it was given to you in a donatory capacity.
- If you received an inheritance from a parent, grandparent, or other relative, you have the right to maintain this property even if you received it while married. It’s important to note that if the party who left the property to you designated it as intended for you and your spouse, it will qualify as community property.
- Assets and accounts acquired before marriage. If you had a savings account in your own name before marriage and maintained sole ownership over the account, you would be likely to retain ownership over accounts like this in divorce. However, if your spouse contributed to it in any way, this may not be the case.
- Family heirlooms. If you received heirlooms from your parents or grandparents, you should be able to retain ownership of these items in divorce. However, if you gifted certain heirlooms to your spouse, such as a grandparent’s wedding ring or something similar, this would qualify as a gift to them and would therefore be their separate property since you gave it to them in a donatory capacity.
An experienced attorney is the best resource to consult when it comes to establishing your separate property ownership rights in divorce. The precursor to property division in divorce is the financial disclosure process in which both divorcing spouses must provide a complete record of all their assets and debts. This financial disclosure should include a complete list of all the separate property you intend to claim as well as your records pertaining to your community property.
What Is Transmutation?
California recognizes the law of transmutation in divorce. This law applies whenever separate property technically qualifies as community property. One spouse’s efforts or contributions can cause separate property to “transmute” to community property. For example, consider the situation in which you owned a home before marriage worth $300,000. Your spouse helped pay for renovations and upgrades that increased the property value to $500,000. In this case, the court would likely deem this as a significant enough increase for the house to qualify as community property.
It’s also possible for separate property to transmute to community property in simpler ways. Sometimes all it takes for an asset to qualify as community property is for the original owner to assign their spouse as a joint owner. If you refinanced your home during marriage and listed your spouse as a joint owner, this would likely transmute the house to community property.
Making Property Division in Divorce Easier
Many California residents view the state’s community property law as overly strict, with minimal room for divorcing spouses to equitably negotiate division of their marital property. However, you do not necessarily need to leave your property division determination solely in the hands of a judge. Many couples choose divorce mediation to avoid the stress and expense of litigation, but mediation can provide several other benefits as well. One of the most important benefits mediations can provide is the ability to exercise more control over the outcome of your divorce.
Your mediated property division settlement must still align with California’s community property law. Still, you and your spouse may be able to reach a more personalized outcome than what a judge could provide in litigation. For example, a judge may enforce California’s community property law by compelling the divorcing spouses to liquidate certain assets and divide the proceeds. In mediation, the divorcing spouses may be able to negotiate a “trade” of assets that enables each spouse to maintain control over equal shares of property. Spouses may also agree to “buyouts” of each other’s shares of certain assets.
Consult an Attorney
Divorce can be emotional and messy, and it’s natural for anyone going through a divorce to want to protect their personal financial interests as much as possible. Maintaining an objective view of the situation can be difficult when you are struggling with complex emotional issues and personal tensions in your divorce. An experienced California divorce lawyer can not only help you maintain control over your separate property in divorce but also provide detailed guidance and support throughout every step of the process. The right attorney can increase the likelihood of you securing a favorable outcome to property division in your divorce.
The attorneys at Bickford, Blado & Botros have years of experience representing clients in a wide range of difficult divorce cases. We understand the financial concerns our clients often have regarding their separate property ownership rights and the doubts they often experience when it comes to property division in divorce. If you are preparing to end your marriage in California, contact us today to schedule a consultation with our team. We will review your financial situation and help you safeguard your separate property as much as California state law allows.
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