With the Centers for Disease Control and Prevention reporting over 689,000 divorces in 2021 in the country, many couples began to understand how tricky it can be to divide assets. How states handle property division can further complicate the process.
California is one of nine community property states. Divorcing here requires a good understanding of how this concept works to avoid issues and conflicts during the process.
Community property basics
Community property considers all assets and debts acquired during the marriage joint property of both spouses. This includes income earned, property purchased and debts incurred. It is a concept rooted in the idea that marriage is a partnership, and as such, both spouses should share everything equally.
Property division process
Under the community property rules, the state requires the division of marital property equally between the spouses, regardless of who earned the income or whose name is on the title of the property. This principle extends to other assets, including retirement accounts, investments and even debts.
Exempt property rules
Not all property is community property. Assets acquired before the marriage or received through gifts or inheritance are separate property and are not subject to equal division. This distinction can be a point of contention during divorce proceedings, as spouses may dispute whether certain assets are community or separate property.
Understanding the basic principles of community property can help individuals navigate divorce more effectively. While these laws work to promote fairness and equality in divorce proceedings, they can complicate the process.