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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.

 

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