But what does that mean to you?
In general terms, it means that whatever you and your spouse acquired “through effort”, debts as well as assets, from the date of the marriage until the date of the separation (and the date of separation is often disputed) is community and will be divided equally. By “through effort”, we mean you did something to acquire it; gifts and inheritances are separate property and not subject to a property division by the court.
Property may be a “hybrid” of community and separate, or otherwise be subject to separate property reimbursements. For example, if you married in 2000 and at the time had $100,000 in savings, then used that money to buy a house together during the marriage and in 2012 you are in a divorce, you would likely be entitled to your original $100,000 back per Family Code section 2640. The remaining equity would be divided as community property.
Other hybrid assets might be found in the area of stock options, restricted stock benefits and retirement/pension plans.
We also have to be certain to divide tax-deferred accounts taking into consideration division of post-tax accounts. In other words, we make sure we are getting apples for apples with nary an orange in sight! If there is need for a Qualified Domestic Relations Order (for ERISA plans) or DRO (for public plans), we will arrange for that. We are also quite conversant in dealing with DFAS and military retirement/disability.
Community debts are divided as well, usually equally. Exceptions to this might be student loans and gambling debts. We will also deal with property located outside the State of California (usually known as “quasi-community” property).
Generally, the transfer of property between spouses in a divorce is a “tax free exchange” under Internal Revenue Code section 1041
We will be happy to assist you in obtaining a fair settlement of the division of assets and debts, applying a deep understanding of the relevant statutory and case laws. Call us at 858-278-8080 for an appointment or contact us by email.