How Assets Are Divided in a California Divorce

In the United States, we have two methods of dividing a married couple's assets: 1) equitable distribution, and 2) community property. California, along with a handful of other states, follows the community property model. Generally, married couples own, most, if not all of the property acquired during marriage equally.

The theory under community property law is that both spouses contribute to the marriage, whether it's in the form of income, labor, homemaking, or caring for the couple's children. In light of that information, each spouse is said to "share equally" in the income and profits earned during the course of a marriage.

According to the Internal Revenue Service, "each spouse owns an automatic 50% interest in all community property, regardless of which spouse acquired the community property." So, when a couple files for divorce, the first matter of business is to determine which property is classified as "separate" and which property is "community property."

Separate property includes:

  • Property owned before the marriage
  • Gifts to one spouse alone
  • Inheritances to one spouse
  • Personal injury awards to one spouse only

If you live in California, you and your spouse own almost all of the property acquired during your marriage, regardless of which spouse earned the money or whose name is on the title. Even if only one of you worked during the marriage, the other spouse would still be entitled to half of the income earned during the marriage, unless there's a valid prenuptial or postnuptial agreement that states otherwise.

Note: If you and your spouse incurred debt, the debts are also considered community debts, which are equally owed by you and your spouse.

Do We Have to Divide Everything 50/50?

While California couples are entitled to 50 percent of the marital assets, that does not mean that couples have to adhere to that model of distribution. If a couple decides to have a collaborative divorce, they can depart from the 50/50 model, agree to their own terms as long as it's fair, and memorialize their arrangement in a marital settlement agreement, which is incorporated into a court order.

If you have further questions regarding California's community property laws, contact our San Diego divorce firm for a free case evaluation.