If you are considering a divorce in California, then you may need to consider the state’s asset division laws. Many states are equitable distribution states, which means that assets are divided by what is fair for both parties. Several factors are considered when deciding the fair distribution of marital assets, such as the length of a marriage, each spouse’s contributions, the age of each spouse and their education. However, California is not an equitable distribution state.
California is one of nine community property states. Community property laws mean that all assets and debts acquired during a marriage are considered the equal property of each spouse. Community property is divided 50/50 in a divorce. This means a house purchased during a marriage, for example, could be sold and the value split between each party. However, the division of assets may not necessarily have to follow community property laws. Here is what you should know:
When are assets not divided 50/50?
There are a few instances when couples do not have to divide the marital estate 50/50. For example, separate property is not subject to community property laws. Separate property can include any assets acquired before marriage. For example, a spouse may keep their business if it was formed before marriage. However, investments in the businesses and any profits made after a marriage may be divided between parties.
Another way couples could circumvent community property laws is if they have a valid prenuptial agreement. A prenup can predetermine the division of assets if a marriage ends.
Couples may also agree to divide assets that do not follow an even 50/50 split. However, a judge may not approve of the agreement if it appears unfair. Legal guidance may be necessary when deciding the division of marital assets.