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In California, Can My Spouse Take A Share Of Assets I Owned Before We Got Married?

California community property laws are one of the factors divorcing couples are often most worried about. The laws give both spouses a joint and equal ownership right in all marital property. So if you owned a classic car before you got married, does your spouse now get half of it? What about a house or a business?

The answers are not always clear cut. Working with a dedicated attorney is one way to ensure that your property interests are protected to the fullest extent, but here are some factors to consider.

Community Property = Marital Property

While California community property laws require spouses to split community property in divorce, it is important to realize that not everything is treated as community property under the law. Community property is marital property. But some property is probably separate, and that property does not get divided in divorce. The spouse who owns separate property gets to keep it.

Just to make the situation additionally confusing, some property can be a hybrid mix of separate and community property. That means some of the value of the asset would be split and some would be kept by the spouse holding it as separate property.

Finally, to complete the confusion, we need to point out that property can start out as separate and become community property, or a hybrid. This can either occur through an express agreement such as a transmutation agreement, or through the actions of the spouses over time.

What is Separate Property?

Assets you owned before you got married are separate property—at least at the start of your marriage. The means if you owned a business before the marriage, that business was your separate property. The same holds true for the classic car, house, and wages and retirement income you accrued before you got married. It was your separate property.

Assets you individually receive as an inheritance or gift (from someone other than your spouse) are also your separate property even if you receive them while you are married.

However, if you don’t take the right steps to keep separate property distinct, it can be commingled with marital property and lose its separate character.

What is Marital Property?

Marital property is the default arrangement for property among married couples. Everything acquired during the course of the marriage is presumed to be marital property, regardless of whether only one spouse bought it, a single spouse earned it, or one spouse put only their name on the title. The only exception to this rule is for gifts and inheritances, and they can become hybrid or full marital property if the separate property is not kept separate.

How To Protect Separate Property

The best way to safeguard separate property, including property you owned before you got married, is to take steps early on. Preparing a prenuptial agreement specifying that your specific property will remain yours, and including a description of that separate property, can ensure that it will continue to belong to you in case of divorce or pass to your heirs at your death.

If it’s too late for a prenuptial agreement, it is possible to execute a postnuptial agreement, but if you’re headed for divorce, it’s too late for that as well.

Keeping separate property distinct and not using marital funds for upkeep is a good way to protect its separate character. For instance, if you owned a house and paid all maintenance expenses from an account funded with money earned before you were married, you have kept that asset separate. However, if you paid the mortgage with funds earned while you were married, then you have started the process of transforming the house into community or hybrid property. If your spouse helps you make improvements on the house, it is even less likely to be considered separate property.

Most people wait until it is too late to take the best steps to protect their separate property. However, in preparation for divorce we can often work with forensic accountants to trace funds and thus preserve some of the separate value of property owned before marriage.

Talk to Our Team About Protecting Your Property in Divorce

The team at Holstrom, Block & Parke, APLC has over 300 years of experience helping clients protect their assets during the California divorce process. We understand complex assets and know how to work with forensic accountants to trace property history.

The sooner you begin working with our team, the more opportunities we have to secure your rights in your separate property. Contact us today to schedule a confidential consultation to learn more about the ways we can help.

 

How Does Alimony Work In California?

If you are planning to get a divorce in California, you’ve probably heard a lot of rumors about alimony. Some people think alimony is old-fashioned and no one pays it anymore. Other people think courts automatically award it if a marriage has lasted a certain period of time. Both of these general assumptions are false—alimony is determined according to the specific facts pertaining to the marriage. That means it is important to ensure that your divorce attorney presents the right facts to justify your goals for alimony.

While we cannot give you cut and dried rules about how alimony is determined, we can explain how decisions are made in California.

A Prenuptial or Postnuptial Agreement Can Determine Everything

California laws establish some expectations and factors for courts to consider when making decisions about whether to award alimony and how much to award, but the default provisions of the law only come into play when the couple has not created their own binding agreement regarding alimony. If you and your spouse executed a prenuptial agreement before you got married or you entered into a valid agreement during your marriage, the terms in that agreement will control the outcome. 

These agreements must meet certain legal requirements to be valid, so if you did not consult an attorney before signing and you think the agreement might not be valid, it is a good idea to discuss this with your divorce attorney as soon as possible. Among other requirements, you must either have received and provided full disclosure about financial issues before signing, or you must have specifically waived the disclosure requirement.

Couples Can Make Their Own Decisions About Alimony

If you did not prepare a prenuptial or postnuptial agreement, you and your soon-to-be former spouse still have the ability to make your own determinations about alimony. The difficulty is that you need to reach agreement on whether one spouse will pay, how much they will pay, and how long payments will be expected to continue. Your attorney may be able to negotiate a reasonable arrangement with your spouse’s attorney. When that happens, the court is likely to approve whatever terms you have established, unless one party has acted improperly in some way. Of course, before you start negotiating your own terms, you would probably find it helpful to know what the law considers relevant to the decision.

California Law Refers to Alimony as Spousal Support

To understand the provisions of California law regarding alimony, you need to know that the courts use the term “spousal support” and they can award two main types of support. Courts often order temporary spousal support to help a spouse while the divorce proceedings are in progress. In some counties, courts do use a formula to establish an amount, but that can be adjusted.

Alimony payments that are made after the divorce is finalized are considered long-term spousal support. In a divorce decree, the court can go one of three ways with regard to alimony. The court can order support, it can deny support now but retain the right to order support later, or the court can terminate the issue and end its ability to order alimony.

Factors That Affect Alimony Decisions

Support is designed to give a spouse who earns less money a reasonable amount of time to become self-supporting. The longer a couple has been married, the more likely it is that one spouse has stayed out of the workforce to focus on home for a longer period of time, so that spouse will need more time to redevelop their earning potential. For that reason the length of a marriage is one of the key factors affecting alimony determinations. 

If a spouse demonstrates that they have a need for support and the other spouse has the ability to pay support, then if they were married for less than ten years, California law assumes that it would be reasonable to order alimony payments to continue for half the length of the marriage. If the marriage lasted more than ten years, it is considered a long-term marriage, and there is no assumption about how long alimony should continue.

In addition to considering a how long a couple has been married and the receiving spouse’s need and paying spouse’s ability to make payments, courts are also supposed to consider:

  • The age and health of each spouse
  • Current income and potential earning capacity of each spouse
  • The standard of living during the marriage
  • Property and debts of each spouse
  • Any history of abuse
  • Whether one spouse helped the other further their training or education
  • The impact of childcare on both spouse’s careers

When a court orders alimony payments, those payments are expected to continue until the date specified in the order or agreement, or until one spouse dies or the receiving spouse remarries. If a receiving spouse is living with a new partner, the paying spouse can ask the court to modify or terminate alimony.

Holstrom, Block & Parke APLC Can Help You Secure the Right Alimony Arrangements

If you are interested in seeking alimony or you believe your spouse will request alimony, it is a good idea to begin working with an experienced divorce lawyer as soon as possible to start gathering evidence to help you achieve the right balance in the decision. At Holstrom, Block & Parke, APLC, our Certified Family Law Specialists and associates understand the most effective strategies to protect your interests in all types of divorce situations. To learn more about the protection we can provide, schedule a consultation with our team today. 

Is My Inheritance at Risk During Divorce?

California’s community property laws often trigger serious financial worries in divorce. We’ve all heard horror stories of people losing “everything” at the end of a marriage, so if you have or expect to receive an inheritance, you may be concerned that your legacy will be put at risk in a divorce.

The best way to protect your inheritance is to work with an experienced divorce attorney who understands the most effective strategies for achieving your goals in property division and other critical issues. While it is not always easy to predict whether an inheritance will be at risk due to divorce, here are some guidelines to keep in mind.

Understanding Community Property in California

Many people have heard that California is a community property state and they assume that means everything is split 50/50 in a divorce. However, this is not strictly true.

The law generally provides for a 50/50 split of property that is considered “community property.” However, not everything in a marriage is community property. Each spouse has their own separate property. And some property may be considered partially separate and partially community because it has been commingled together.

So, if your inheritance is considered to be community property, it will generally be split, but if it is treated as your separate property, then you get to keep all of it. If it has become hybrid property that is part community and part separate, you may need to divide part of it.

Inheritances are Generally Treated as Separate Property

Classifying property as community, separate, or hybrid can be a very complex undertaking, which is one reason it is so critical to work with a knowledgeable attorney. On general principle, anything you earned while you were married is considered community property. The same holds true for any property you purchased with money you earned during the marriage.

However, property you receive as a gift or inheritance while you were married is usually considered to be your separate property and not community property. This rule balances some competing rights. Each spouse has a general right to an equal share of assets acquired during the marriage, but families also have the right to leave an inheritance to loved ones without losing half of the legacy in divorce.

If there is a bequest made specifically to both spouses or to the family, then that property would be community property. But a bequest or inheritance in the name of one spouse will initially be treated as that spouse’s separate property that they do not have to share in divorce. Over time, however, that separate property can change.

Certain Actions Can Turn Inherited Property into Community Property That Must Be Divided

While an inheritance may start out as separate property, if it is not carefully kept separate, it can be partially or completely transformed into community property in a variety of ways. For instance:

  • Inherited funds may be placed in a joint account and commingled with community funds
  • A spouse might add their earnings (community property) to an account started with the proceeds of the inheritance
  • The spouse who inherits a vehicle or real estate might add the other spouse’s name to the title
  • The non-inheriting spouse might spend considerable time making improvements to an inherited property
  • Community funds might be invested in an inherited vehicle or real estate
  • Inherited funds might be used to buy a home lived in by the family

To protect an inheritance as separate property, it is wise to execute a pre- or postnuptial agreement specifying that the inheritance will remain the property of the spouse who inherited it. It is also wise to keep inherited property apart from community property to the greatest degree possible.

If it is too late and the property has already been commingled, attorneys might use forensic accountants to trace the separate property so that the inheriting spouse can claim the greatest possible share of it in divorce.

Holstrom, Block & Parke, APLC Understands How to Protect Your Property in Divorce

If you can take preventative steps before receiving an inheritance, you give yourself the best opportunity to protect that inheritance. However, regardless of how the inherited property has been treated, the dedicated attorneys at Holstrom, Block & Parke, APLC can still use a variety of strategies to preserve the value of your inheritance in divorce.

Call us at 855-426-9111 or contact us online to schedule a confidential consultation to learn how our team can fight to protect your inheritance in Southern California.

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