Property Division Attorney
California Community Property | CFLS
Understanding California Community Property
California is one of nine community property states in the nation. This means that property and debts acquired during marriage are presumed to belong equally to both spouses—and are typically divided 50/50 in divorce.
Property division can be straightforward in some cases and extraordinarily complex in others. Whether you're dividing a family home, retirement accounts, business interests, or untangling years of commingled assets, understanding the rules can help you protect your fair share.
Community Property vs. Separate Property
What Is Community Property?
Community property includes all assets and debts acquired by either spouse during the marriage, regardless of whose name appears on the title, account, or debt. This encompasses:
- Wages and income earned during the marriage
- Real estate purchased during the marriage
- Bank accounts and investments accumulated during the marriage
- Retirement contributions made during the marriage
- Vehicles, furniture, and personal property acquired during marriage
- Debts incurred during the marriage (credit cards, loans, mortgages)
What Is Separate Property?
Separate property belongs solely to one spouse and is not divided in divorce:
- Assets owned before the marriage
- Property received as a gift or inheritance (even during marriage)
- Property acquired after the date of separation
- Assets defined as separate by a prenuptial or postnuptial agreement
- Personal injury awards (except for lost wages)
Commingling and Transmutation
The line between community and separate property isn't always clear. Commingling occurs when separate and community funds are mixed—for example, depositing inheritance money into a joint checking account used for household expenses.
Transmutation is the legal transformation of property from separate to community (or vice versa), which can happen through written agreement or, in some cases, through conduct during the marriage.
When property has been commingled, tracing may be required to determine what portion remains separate property. This can require forensic accounting and detailed financial analysis.
Dividing Complex Assets
The Family Home
The family home is often the most valuable and emotionally significant asset. Options include:
- Buyout: One spouse pays the other their share of equity and keeps the home
- Sale: The home is sold and proceeds divided equally
- Deferred sale: One spouse (often the custodial parent) remains in the home temporarily
Retirement Accounts and Pensions
Retirement accounts earned during marriage are community property. The community interest is typically the portion earned between the date of marriage and date of separation.
Dividing qualified retirement plans (401(k), 403(b), pensions) requires a Qualified Domestic Relations Order (QDRO)—a specialized court order directing the plan administrator to divide the account. Proper QDRO preparation is critical to avoid tax consequences and penalties.
Business Interests
If a spouse owns a business, the community interest must be valued and divided. This may require expert valuation, and options include buyout, continued co-ownership (rare), or selling the business and dividing proceeds.
Stock Options and RSUs
Stock options and restricted stock units (RSUs) require careful analysis of vesting schedules and whether options were granted for past services (community) or future services (potentially separate).
The Date of Separation
The date of separation is critically important because:
- Property acquired after separation is generally separate property
- Income earned after separation is separate property
- It affects the length of marriage (relevant for spousal support)
Determining the separation date can itself be disputed—especially when spouses continued living together after deciding to divorce. Evidence of when one spouse clearly communicated an intent to end the marriage becomes important.
Frequently Asked Questions About Property Division
How is property divided in a California divorce?
California is a community property state. All property acquired during the marriage is presumed to belong equally to both spouses and is typically divided 50/50. Separate property—assets owned before marriage, acquired by gift or inheritance, or accumulated after separation—generally remains with the original owner.
What is the difference between community property and separate property?
Community property includes all assets and debts acquired during the marriage, regardless of whose name is on the title. Separate property includes assets owned before marriage, property received as a gift or inheritance during marriage, and assets acquired after the date of separation. Community property is divided equally; separate property stays with its owner.
How are retirement accounts divided in California divorce?
Retirement accounts earned during the marriage are community property subject to division. Division of qualified retirement plans like 401(k)s and pensions typically requires a Qualified Domestic Relations Order (QDRO)—a court order that directs the plan administrator to divide the account without triggering taxes or penalties.
What happens to the family home in divorce?
Several options exist: One spouse can buy out the other's share; the home can be sold with proceeds divided equally; or the court can order a deferred sale, allowing one spouse to remain temporarily. If one spouse owned the home before marriage, they may retain it as separate property, subject to possible reimbursement claims.
California Legal Resources
Protect Your Property Rights
Fair division requires accurate characterization and valuation of all assets. A Certified Family Law Specialist can help ensure your property interests are protected. Contact us today.