California is a community property state. At the time of the divorce, the Court will generally divide in half all of the community assets and all of the community debts. Determining what is, or is not, community property in particular circumstances can lead to misconceptions and misunderstandings. Here are a few examples:
Generally, no. Property owned before marriage, or acquired by gift, bequest, devise or descent, including rents, issues and profits thereof, is separate property and therefore not part of the division of community property.
Not necessarily. Under California law, spouses occupy a confidential relationship with each other and are subject to the general rules governing fiduciary relationships. Whenever spouses enter into an agreement in which one party gains an advantage, in a divorce, the advantaged party bears the burden of demonstrating that the agreement was not obtained through undue influence. Determining whether one spouse gained an advantage over the other spouse, or if both spouses benefited from the transaction, is dependent upon the facts of each particular transaction. Determining whether one spouse has taken advantage of the other or exercised undue influence will depend upon the facts of each case and each transaction. If the Court finds that the transaction was the result of undue influence, it can be set aside or disregarded in the divorce. Even if a particular property is deemed to be one spouse’s separate property, the community may still have a partial interest in the property if community funds are used to pay the mortgage or improve the property.
Pension benefits earned over many years of employment can be quite valuable. There are many special rules governing the division of both private and government pension benefits. Pension benefits earned during the marriage are generally treated as community property. While not unlimited, the Family Court has broad discretion to order the division of pension benefits, or the right to receive pension benefits in the future when the earning spouse retires or, in some cases, even before retirement. Don't overlook, or underestimate, the value and importance of pension benefits in a divorce.
Consult with an experienced Family Law attorney to discuss the characterization and division of all assets as part of any divorce proceedings.
Jeremy B. Kline, a Certified Family Law Specialist, is a partner at Feinberg Mindel Brandt & Klein in Los Angeles. He practices in the areas of family law, business, real estate and commercial litigation.