Community Properties
California is a community property state. All property purchased or acquired during the marriage, or converted (changed) into joint property during the marriage is joint property.
Husband and wife in marriage, each has half an undivided share in all joint property in marriage.
Joint property is not divided, unless the divorce process begins, or after the death of the husband or wife.
Community property can be real property or private property. Joint assets can also be in the form of a business, a pension plan, or any other type of tangible object acquired during the marriage.
Joint property is usually one of the main issues involved in divorce proceedings.
Quasi Community Properties
Quasi-community property is property acquired outside the state of California during a marriage. Although a married couple may have purchased property in a state that is not a community property state such as California, the property will essentially be treated as if it were community property for the purpose of apportioning in a divorce act in the state of California.
Business
Businesses started during the marriage are joint property.
In some cases, a person may already own an existing business before they were married, and continue the business after marriage. In a divorce suit, the court will allocate a percentage of the value to the business “after marriage” to determine which part of the business is jointly owned.
If you have an existing business before marriage, it is very important that you consult a lawyer in divorce proceedings as soon as possible.
Pension
Any portion of any Retirement, IRA, 401(k), Retirement plan, etc., that is donated during the marriage is joint property.
Usually funds from a pension plan cannot be obtained until the pension plan vests and matures. Therefore a special order from the court is required so that each party can get their share of each pension plan after maturity and vest. These orders are usually called qualified domestic relations orders or QDRO for short.
Obviously the divorced parties have a vested interest in ensuring that they get their fair share of any retirement or retirement plans following the divorce.
Community Income, Bank Accounts, Stocks, and Investments
All income earned during the marriage is considered community income. This is true even if one of the parties to the marriage is making money in the business they had before the wedding. Community income is the same as community property, where each party has an undivided half of the community income.
Each party to the marriage has the right to spend and use the community’s income, even though they are not the ones who get the money. However, after legal separation or the commencement of divorce proceedings, the parties can only use the joint property for subsistence and to pay for their attorneys.
Similarly, any bank accounts, shares, and/or investments acquired during the marriage are also joint property. This applies even if the bank account, shares, and/or investment are only in the name of one of the parties.
Some parties try to keep money in a separate bank account during the marriage, and/or hide assets acquired during the marriage from other parties.
If you are a party to a divorce action, you have what is called a fiduciary disclosure obligation. This means that you must disclose all assets, bank accounts, and other investments made during the marriage to the other party. If you fail to fully disclose your assets and/or income to the courts and others, the courts may severely penalize you.
You may have read about a case where a wife won the lottery, and then started divorce proceedings against her husband. She failed to inform the court and her husband about the fact that she won the lottery. As punishment for her failure to disclose the fact that she won the lottery, the court awarded her husband the entire amount of the lottery winnings.
Separate Property
Separate property is all property acquired before marriage; during marriage by design, will, or inheritance; and after legal separation. The proceeds from the judgment or settlement of personal losses are also separate property, even if received during the marriage.
After the court decides that the property is separate property, the person who owns the separate property will leave the marriage with his separate property.
Separate properties can be converted (converted) to community properties on purpose, or by accident. For example, a party may have a separate bank account prior to marriage which would be considered separate property. If the parties then take the income earned during the marriage and deposit the money into their separate bank accounts, they may inadvertently turn the bank account into a joint property.
Obviously, the parties to the divorce proceedings will most likely want to keep their own separate property after the divorce is complete. It is very important that you contact an attorney regarding separate property matters to ensure that you can retain the separate property after the divorce.
If you are considering filing for divorce or are involved in divorce proceedings, you can contact our law firm for a free consultation at 818-739-1544 ext. 10, or visit our family law website at http://www.divorce-legal.net .
By Norman Gregory Fernandez, Esq., © 2006