California is one of nine community property states. Community property plays a significant role in property distribution in actions for legal separation or marital dissolution, and the law governing community property is both intricate and complex. At the Schoenberg Family Law Group, P.C., we will ensure that your marital estate is properly classified, that your community property is divided in accordance with the law, and that your separate property interests are protected.Community property generally includes all of the assets and debts acquired by spouses during the marriage without consideration of the income or contributions of individual spouses. Separate property is property that belongs only to one spouse, including property brought into the marriage by that spouse, such as real estate, businesses, or pension and other retirement funds. Separate property also includes assets or debts acquired by one spouse individually during the marriage, such as inheritance, student loans, or property purchased during the marriage with funds from that spouse’s separate property.
Balancing Debt and Assets
California law provides that the community property is to be equally divided upon marital dissolution. However, exactly which assets and debts properly belong to the community, and which are separate property, is not always easily ascertainable and the process of properly classifying and dividing property can be very difficult. Over the course of a marriage, assets can become mixed. A separate asset may be used to acquire a portion of a community asset. Identifying and valuing community property can be hotly contested and may pose significant challenges in the division of assets and debts in marital dissolution or legal separation actions.
Dividing property and debt is one of the biggest issues in every divorce. This can either be done coming to an agreement with your spouse or by going to a mediator. As you do this, one way to make things fair and equal is to focus on balancing out the debt that you have with the assets that you own. In many ways, the debt is just as important as the wealth.
Types of Community Property
Our expertise in dividing marital estates provides our clients with the diligence and foresight necessary to aggressively and thoroughly discover your community estate while protecting separate property interests. It is very important to have the adequate assistance of counsel in dividing your marital estate. This is particularly true for clients with significant individual and marital investments and debt, including:
- Investment assets, stock portfolios and/or trusts
- Pensions and retirement accounts
- Stock options
- Family-owned businesses and closely held corporations
- Significant business or corporate interests
- Professional practice interests, inventory, and investments
- High-value homes
- Multiple real properties
- IRS tax debt
- Credit card debt
While community property is split equally, the remaining “separate property” is not. A person is permitted to retain his or her separate property, which constitutes all of the following:
- Property acquired by a party before the marriage
- Property received by a party after marriage by bequest, devise, descent or gift
- Profits, rents and issues of the aforementioned property
It is not always clear what characterization – community or separate – should be assigned to a type of property. Moreover, there are ways community property can transform into separate property and the other way around.
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Classification of property as community or separate and the division of the community estate is decided by the court during the legal separation or marital dissolution trial. Accordingly, seasoned counsel is necessary to ensure that all assets are discovered and properly characterized. However, if the respective parties to a marital dissolution or legal separation are able to agree on the classification and division of their property (real and personal), the parties may enter into a property settlement agreement and submit the agreement to the court for approval.
Because the Schoenberg Family Law Group, P.C., focuses exclusively on family law matters and has extensive experience litigating divorce cases, drafting marital agreements and handling divorce and property settlements, we have the competence you need to ensure that your marital estate is properly divided. We thoroughly and meticulously conduct the discovery necessary to obtain a comprehensive picture of our clients’ marital estates, ensuring proper classification of the community and separate property. We work with professional appraisers, accountants, and other financial experts to ensure proper valuation of our clients’ marital assets. We also work diligently with our clients to ensure that proposals for property division are fair and equitable.
The Schoenberg Family Law Group, P.C., offers the San Francisco area accomplished and dedicated legal representation to help you navigate property and pension distribution issues in anticipation of your family law trial and prepare a settlement agreement for your marital dissolution.