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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.

 

Property You Owned Before You Got Married—What Happens To It In Divorce?

One of the biggest reasons people get anxious and worried about divorce is that they expect to suffer financially. They know they will lose money and property, but they don’t know exactly what they will lose.

When two people separate their lives into distinct households, expenses increase for both, so there is no avoiding that challenge. In addition, couples will also need to cover court costs, legal fees, and other technical expenses that come along with the divorce process. However, with assistance from an experienced divorce attorney, you don’t need to worry about losing “everything,” particularly property owned before the marriage started. To understand why, it is helpful to look at California property laws concerning separate property and community property.

Prenuptial or Postnuptial Agreements Take Precedence

The rules about how property is classified and divided in divorce do not matter if you have executed a valid pre- or postnuptial agreement that covers these issues. The contractual terms you establish in this type of agreement override the default provisions in the law.

So, if you owned a business before you got married and you and your partner signed an agreement specifying that the business would remain your property, then you keep the business according to the terms of your agreement. However, it is important to ensure that the agreement was prepared in accordance with California legal requirements, particularly if it was executed after the start of the marriage.

Separate vs. Community Property

Many people are aware that California is a community property state, but they are not always clear about what that means. Our state’s community property laws specify that marital property will be divided evenly in divorce, but the laws do not divide up property that is classified as “separate.” Each spouse keeps their own separate property.

Property that one partner owns before they get married starts out as separate property. If it retains the characteristics of separate property, then if the partners divorce, the partner who brought the property into the marriage can walk out with it. For instance, if you owned a classic convertible at the time you got married, you should be able to keep the car when you get divorced without the need to split the value with your spouse—unless you used “community” property to maintain or improve the car. The rules about classifying property can get very complicated when dealing with property acquired before marriage because property can change from separate to community property, or something in-between. It is vitally important when approaching divorce to locate as many records as possible so that your attorney can trace the history of your separate property, show that it belonged to you before the marriage, and demonstrate that you used few if any marital funds to improve it.

Hybrid Property

Every asset acquired during marriage is considered community property even if it was earned or purchased solely by one spouse. The only exception is for a gift or inheritance that was made specifically to one spouse. That would be considered as separate property—at least initially.

When separate property gets mixed with community property, it changes. For example, a partner might buy a house before getting married, which would be separate property. However, if mortgage payments are made during the marriage with funds earned during the marriage, then the equity accumulated during the marriage is community property. The value of the house belongs partly to one spouse as separate property and partly to both spouses as community property. It is hybrid property. The same holds true for contributions to retirement plans established before the marriage, assets in bank accounts, and all other types of property. Unless a spouse takes specific steps to keep separate property distinct, it can easily become hybrid property subject to division in divorce.

In some cases, it may make sense to work with a forensic accountant who can dig deep to trace assets and spending to show how property should be classified.

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

It is not fair to lose property you owned before marriage when that property should rightfully be your separate property. At Holstrom, Block & Parke, APLC, our attorneys have over 300 years of collective experience protecting property rights in divorce. We understand how to establish the history of separate property and to show why it should retain separate status.

If you’d like to learn more about protecting your separate property during a marriage with a pre-or postnuptial agreement, or you need to protect your property during a divorce, we invite you to schedule a confidential consultation with our team by calling 855-426-9111 or contacting us online.

How You Can Split Assets in Divorce in California

Just because California is a community property state does not mean that you are obligated to follow the state’s plan for asset division in divorce. The law gives you considerable flexibility in developing your own plans for asset division.
It is a good idea to understand how a judge would classify and divide assets under the law, but you can use that position as the starting point for negotiations and devise your own arrangements for property division.

An attorney can advise you of your rights and advocate on your behalf in negotiating a property settlement with your former partner. In addition, a lawyer trained in mediation could also work with you to help you find common ground and create a mutually agreeable plan for dividing assets in a California divorce.

Do You Have a Prenuptial or Postnuptial Agreement?

The first consideration when determining how to divide property is whether you executed a prenuptial agreement before the wedding or a postnuptial agreement during the marriage. If you followed the rules when creating the agreement, then the terms of your agreement will override any provisions of state law and they will establish each partner’s legal right to property in divorce. So it is important to consider your earlier agreements when developing your plans now.

If both spouses agree, you can classify and divide property differently than the terms you set earlier. If one spouse wants to abide by the agreement, however, then both will be bound by it.

Decide How You Want to Classify Various Assets

Even if you plan to develop your own plan for asset division, it is a good idea to agree on how your property should be classified as marital or separate. Marital property is divided in the divorce and separate property is kept by one spouse.

Generally, property one spouse owned before the wedding is considered their separate property while assets earned during the marriage are jointly owned by both spouses, even if one spouse did all the work to acquire that property. It does not matter if only one spouse’s name is on the title—it is generally the time of acquisition that determines whether property is marital or separate. The exception is property received by one spouse as an inheritance. Even when the inheritance is acquired during the marriage, the property received is considered separate property.

However, it is important to understand that separate property can be converted into marital community property very easily. For instance, if one spouse owns a house or car at the time of the marriage but they use marital funds to pay the mortgage or make repairs, then at least some of the value of that asset is marital property.

So if you are developing a plan to divide assets, it is helpful to first establish which property you agree should be classified as separate, which property is marital, and which property is a mixture of both and in what percentage. An attorney can help with the classification process.

Decided How Assets and Debts Will Be Allocated

Divorcing spouses in California are generally free to draw up their own agreement determining how assets and debts will be divided, and that plan does not need to follow the even 50/50 split for community property that is used by the court. However, it is important to understand that the court must approve the arrangement.

If the judge believes that one spouse is cheating the other such as by hiding assets or coercing the other into accepting an unconscionable settlement, then the court might not approve a couple’s plan for property division. When you work with an experienced attorney during the process, your lawyer can work to ensure that your arrangement meets the requirements of California law.

Remember that your arrangement should classify and divide debts as well as assets. This process requires both spouses to provide detailed financial information so that decisions are made on the basis of accurate information.

Experienced Guidance Can Protect Your Interests When Dividing Your Property in Divorce

Developing your own plan for asset division instead of leaving issues to the court can provide an arrangement that satisfies both spouses. However, the process of developing the right plan requires considerable investigation and negotiation.

The attorneys at Holstrom, Block & Parke have over 300 years of combined experience protecting the interests of clients when it comes to dividing complex assets in a variety of situations. Whether you  plan to resolve terms of your divorce settlement through mediation, collaborative divorce, or negotiation prior to litigation, our team can help you achieve your goals. Schedule a consultation today to get started.

Aretha Franklin's Estate: Uncertainty Months After Death

NEW YORK, NY - FEB 18, 2012: Aretha Franklin performs in concert at Radio City Music Hall on February 18, 2012, in New York. (Editorial Use Only)

Based upon documentation filed in Michigan’s Oakland County court, the beloved singer-songwriter’s estate is estimated to be worth approximately $80 million dollars. However, despite her wealth and access to counsel, she died with no will, trust or estate plan. In December, the IRS filed a claim in probate court alleging that Ms. Franklin owed several million dollars in back taxes and penalties at the time of her death. These claims must be either satisfied or contested prior to the distribution of the estate, and could add years to an already complicated, expensive process. To add to the disorder, it is being reported that an heir to Ms. Franklin’s estate is attempting to obtain a court order requiring the estate to provide them with monthly financial documents and that another potential heir suffers from special needs.

Ms. Franklin’s lack of a comprehensive estate plan has resulted in the details of her wealth, debts and family relationships being a very public matter. Generally, the rights to song royalties, copyrights and publishing rights and the inherent difficulty in valuing such assets, lead to prolong battles with the IRS and will ensure a long and very public probate process. Additionally, the consequences of a distribution of funds to a special needs beneficiary can have far reaching, unintended effects to such beneficiary.

A properly drafted estate plan could have avoided this very public probate, kept her estate assets and debts private, expedited the distribution of her wealth and provided appropriately for the special needs of one of her children.

Whether you’re a celebrity or not, the best course of action, always, is to prepare for the eventuality of death with an updated, current estate plan, which takes into consideration all aspects of your life and ensures that your estate, big or small, and the distribution of your assets remains a private matter between you and your loved ones.

The Impact on Your Estate if You Die Before a Divorce is Final

The untimely death of chef and actor Anthony Bourdain has brought to national attention the potential ramifications of a person’s death during a divorce proceeding. In the same vein, it has highlighted the importance of understanding what would happen to your estate if you were to die during the pendency of your dissolution without having made any changes to your estate plan.

As occurred with Mr. Bourdain’s untimely death, he had been separated from his wife of 20 years for a year and a half. Though the pending “divorce” was made very public, it is unknown whether any divorce filing actually occurred,

What if does indeed happen if you have not taken steps in expectation of a permanent separation (indeed some are more permanent than others)? The broad answer to this complicated issue depends on whether your passing occurs before or after entry of judgment terminating your marital status. This discussion describes what occurs under California Probate and Family Law. The rules for these scenarios may be different in other states.

Death Before Entry of Judgment Terminating Marital Status

If you should die before entry of a status-only judgment, the Family Law Court would lose jurisdiction over all issues, except those already adjudicated. In California, this is called Abatement, and it happens automatically in this situation. Under these circumstances, your share of the community property and all of your separate property would pass as if the Divorce had never been filed! This is true, regardless of who originally filed, how long the divorce went on, how long the period of separation, or how hostile the parties were to each other during the process. It is also true regardless of cohabitation with a new significant other, regardless of the length of that cohabitation.

Therefore, your assets would pass to the beneficiaries of your current estate plan, which is usually your surviving spouse. If you do not have an estate plan, your estate, if over $150,000.00, would pass through probate, and your spouse would potentially receive all of the community property assets and a share of the separate property. Any non-probate assets, such as retirement assets and life insurance plans, would pass to your designated beneficiaries, again, normally your estranged spouse.

Death After Judgment Terminating Marital Status

If you should die after a status-only judgment (a provision of California law that allows the divorce to occur before, or separate from, the resolution of the other issues) that expressly reserves jurisdiction over the remaining issues in the case, the Family Law Court would retain jurisdiction and the property division would take place there. The personal representative of your estate would be substituted in your place in the divorce for this purpose, and the Family Law Court would be able to decide the outstanding issues in the case. It is worth noting, that the court’s jurisdiction over custody, child support, and spousal support would terminate automatically upon your death in the vast majority of cases.

Death after a status-only judgment also has a very different impact on how your estate would be distributed. A judgment of dissolution automatically terminates non-probate transfers between former spouses, including wills, trusts, and beneficiary rights under retirement plans. It also terminates the right of survivorship interest in joint tenancies and community property with right of survivorship. Unless the respective wills provide otherwise, the judgment also revokes all testamentary transfers between former spouses and any provision in a will nominating the former spouse as trustee, conservator or agent. However, a judgment of dissolution does not terminate the surviving spouse’s rights as a designated beneficiary under the life insurance policy. While the ability to change a beneficiary of a retirement plan or life insurance policy may remain during a divorce, California law prohibits such a change after the filing or service of Divorce papers.

One issue that everyone should consider with an impending divorce is that if you do not sign documents specifically stating otherwise, your estranged spouse will continue to hold the power, upon your incapacity, to make medical decisions on your behalf and, like in the case of Anthony Bourdain, will be the person to make all decisions regarding the disposition of your remains.

While no-one anticipates their death, the best course of action, always, is to prepare for that eventuality with an updated, current estate plan, which takes into consideration all aspects of your life, including an impending divorce. Sometimes doing nothing is indeed a conscious choice; by way of illustration a person with knowledge of a terminal illness also going through a divorce who chooses to maintain or change his/her estate plan. Sometimes it’s simply doing nothing.

Obviously we recommend that you always make that conscious choice knowing all of the consequences of that choice.

Who Keeps the Pet?

By Michelle Brooker

The strong bond between an owner and their pet cannot be understated. Whether we’re talking about a dog, cat, goldfish or a Llama, owners often treat their pets almost like children and, for many, they are an inseparable part of the family. Since we care so strongly for our pets, they can be just as much a point of contention as child custody – however, your pet doesn’t enjoy the same legal status as a child would. Many of our clients often ask us, “Who gets to keep the pet?”.

While many of us view our animals as children, unfortunately, the California courts do not share that view. When parties decide to dissolve their marriage, your pets, despite being living things, are viewed by the California Courts as property.

As the law sees it, your beloved pet is an asset with an assigned value, just as the court views your vehicle, home, and bank accounts. Therefore, in order to determine who will be awarded the property, the court must first determine the character of that property.

How Are Pets Characterized When Determining Property Division

Characterization is a bit of a misnomer to those who aren’t fluent in legalese. Characterization isn’t a description of whether Fido is a “good boy” or a “bad dog”, but rather a classification. Property in the dissolution of a marriage is characterized as either separate property, community property, or sometimes may have a mix of separate and community property. Your pet will be ‘characterized’ as either “separate property” or “community property”, like every other asset involved in your case.

What do those terms mean in plain English? Simply put, Community Property is any property acquired during the marriage, whereasSeparate Property is any property acquired before the marriage, after the date of separation or during the marriage by gift, devise, or descent.

If the court characterizes the pet as the separate property of a person, that person will be awarded the pet. It doesn’t matter who took care of the pet or who loved it more or who the pet is most attached to -it boils down to who acquired the pet and when. If you bought the dog before the marriage, it’s your dog – plain and simple, but if you bought the dog while you were a married couple, that’s where things get complicated.

If it is determined that the pet is community property, the pet will be treated as a marital asset and will be valued and divided along with the remainder of all other the marital assets.

Determining The “Value” Of A Pet – What’s Fido Worth?

When determining the value of a pet, more often than not, the sentimental value given to the animal is usually higher than the actual dollar value of a pet. The problem with sentimental value is that it is not a measurable, tangible thing. What that means is that the court will not consider the sentimental value of the animal, but only the actual monetary value of the pet.

For example, let’s imagine you’re married, and you bought an AKC Certified Australian Shepherd Dog for $900. You have the dog a few years, you and your spouse love the dog, but grow apart and decide to end your marriage. Your dog happens to be the world’s best dog in your opinion, so to you, his sentimental value is $100,000 – but that’s not what he’s worth. For the sake of discussion, let’s say that someone could buy a similar AKC rated dog of the same age for $1200 right now online. – That value of what someone else would pay today on the open market is what the dog is worth in the eyes of the law. This is a simplified example, but conveys the point well enough.

The value of the pet will usually be determined by the amount the animal could be sold for on the open market, thus placing a nominal value to an animal (unless a particular factor gives the animal more value). For example, an animal may have more value if it is a purebred, a stud animal, service animal, a specialty trained animal, or an animal bred for racing.

How The Court Determines Who Gets To Keep Fido

Finally, the court will need to determine who will be awarded the pet – the all important question of who keeps Fido the dog or Fluffy the cat. As a result of the law viewing your pet as property, in our experience over thousands of cases,

The best way to ensure that you are awarded your beloved pet is to compromise with the other party.

Since in most cases, both parties still care deeply for their pets, you may need to give up other items you want in order to have other party agree to have the pet awarded to you. If neither party can bear to part with the pet, another option is for the parties to work out a “visitation” agreement that will ensure both parties are able to see the pet.

However, if the parties cannot come to an agreement then the court will make an order awarding the asset to one of the parties. The current laws surrounding dissolution of marriage and family pets may eventually change. Until the laws change, it’s best to try and work with the other party and compromise in order to arrive at an amicable arrangement ensuring you retain custody of your pet.

Determining Who Gets the House in a Divorce

California is one of only a few states in the country that use community property rules when deciding how assets are divided in divorce. To put it simply, property gained or improved during the marriage will be split as evenly as possible; the same is true for marital debt.

For many divorces sorting through and splitting much of their property isn’t much of a problem, but once the family home is on the table, matters can escalate quickly. And it makes sense that they should. Your home is probably your most expensive asset and everyone in your family depends on it. So who is going to get it when the divorce finalizes?

Deciding Factors the Court Will Review

Unless you and your spouse worked out ahead of time who gets your family home and why – this would be a considerable stroke of luck – a California divorce court is going to have the final say in the matter. Knowing what the court is looking for when coming to its decision can help you gain an advantage and increase your chances of keeping the house you put so much time and energy into.

Some of the factors the court will consider are:

  1. Separate or community: First of all, what kind of property is your home: separate or community? And are you certain? Separate property is what belonged to just you or just your spouse before you got married, and sometimes specific inheritances and gifts. Community property is what you purchased together, or improved together while married. Your ex-spouse may have owned their home before you even met them, but if you contributed to the household significantly during the marriage, it could have been changed into community property in the court’s eye.
  2. Child custody: The divorce court’s credo may as well be “best interest of the children.” Whenever two parents divorce, each decision needs to weigh how it will affect their children. This is true for deciding who gets the family home. The parent who earns primary or sole custody rights is more likely the one who keeps the home because it eliminates the stress of moving, possibly to a new neighborhood or city, that children can experience.
  3. Practical considerations: How much money has been put towards the home so far? How much still remains before it is paid off? What is the mortgage amount right now? The court needs to consider whether or not each spouse can afford to keep the home, or if any of them can on their own. If not, it could be more practical just to sell the property and evenly divide the collected value.

Room for Explanations & Arguments

Nothing is set in stone when it comes to legal matters, no matter how serious the legalese on the paperwork. If you are worried that your family home will go to your ex-spouse instead of yourself, don’t just sit idly by and let it go away. Make an argument as to why you should keep the home, refine it, and bring it to court. You never know what will influence the judge to see things your way.

At Holstrom, Block & Parke, APLC, our Southern California divorce attorneys can help you understand your property rights and compete for your family home. With more than two centuries of total legal experience focused primarily on family law, you know you can trust us when it comes to even the most complicated of divorce cases. Contact our firm today and ask about scheduling a free consultation over the phone.

We Don't Need No Stinkin' Prenup: Lessons for Johnny Depp

by Chandra Moss

As most persons have “heard” by now (pun intended), actors Johnny Depp and Amber Heard went through a heavy divorce battle. Unfortunately for Mr. Depp, per media reports, the parties did not sign a prenuptial agreement. Why unfortunate? Because under California’s community property laws, Ms. Heard may be entitled to one-half of all property and income accrued during the short fifteen month marriage.

What is a prenuptial agreement? Under California law, prior to marriage, parties may agree to limit the effects of the state’s community property rules. For example, they can decide what current and future property remains the separate property of a party, waive apportionment of increases in value of businesses during marriage and determine whether future wages and salaries are a party’s separate property and not amenable to division.

Parties to a prenuptial agreement may provide for a method by which community property is obtained, how community expenses are to be paid and whether or not there is a “minimum” community property estate – in other words, a minimum amount of a person’s separate property which would be community upon divorce. Parties may even negotiate, limit or waive spousal support, or alimony as it is often called. These limits might include the maximum amount of total spousal support payable or the term for payment of spousal support.

In Mr. Depp’s case, he may well rue the lack of a prenuptial agreement protecting his estate. Consider this:

  • During his short term marriage to Ms. Heard, Mr. Depp worked on two notable major productions – “Pirates of the Caribbean: Dead Men Tell No Tales” and “Alice Through the Looking Glass”. Not only might he be on the hook for giving Ms. Heard 50% of his wages, he may also be paying her 50% of the residuals. Residuals are like a royalty paid to a performer for repeat of the production.
  • Mr. Depp is no doubt the high wage earner of the duo. While this marriage is considered short term by the Court (and therefore spousal support is generally paid for half the length of the marriage), he could be paying out big time to Ms. Heard. The Court might not have issued a spousal support order on an emergency basis, but you can be sure the issue will be “heard” at some date in the near future.

This by no means is a full recitation of what Mr. Depp stood to lose for his failure to plan. While most of us don’t have quite so much to lose, considering a prenuptial agreement to protect separate assets, limit alimony liability and to reduce future litigation can save headaches and costs in the event of a dissolution. If you have any questions about the advantages preparing a prenuptial agreement, please give us a call.

Assets Before Marriage: How Divorce Impacts Them

California is one of only a few states that considers marital property to be communal, meaning it belongs equally to each spouse, regardless as to how the item, asset, or property was actually obtained. You could pay 100% for an item while you are married and half of its value would still technically belong to your spouse. This community property rule for property division is the groundwork for heated disputes in a lot of divorces in the state.

But what about property that you acquired before you were married? Do you have to split that up, too, if you and your spouse call it quits?

Separate Property Rules in California

Separate property is any sort of property – cash, control of businesses, real estate property, material goods, etc. – that you had acquired before marriage. It is called “separate” because it does not get included in community property should you ever divorce. Certain pieces of inheritances or gifts made directly to you in particular can also be considered separate property, even if you are married at the time you obtain them.

You cannot simply assume that your separate property has stayed that way throughout your marriage, however. If your spouse frequently benefitted from a piece of separate property, or if they took reasonable effort to improve upon a piece of separate property, it could become community property. For example, if you owned your home before you got married but then your spouse helped you with renovations that increased its sell-value, they would probably be given a 50% share of that home’s value in your divorce. As another example, if you were given a lump sum of cash in inheritance and used it to fund your spouse’s college education, the money has become community property because it benefitted them and contributed to their lifestyle significantly.

In the end, it is always the safer choice to consult with a Southern California divorce attorney before you get too involved with property division. Without the guidance of a professional lawyer, you could accidentally give up items that are not communal, or illegitimately attempt to hold onto items that actually are not separate. Feel free to contact Holstrom, Block & Parke, APLC to speak to our team about your case and options today.

Losing Your Separate Property House

WHAT DO YOU MEAN THE HOUSE IS NO LONGER MINE?
THE DIVORCE DILEMMA: LOSING THE HOUSE YOU PURCHASED BEFORE MARRIAGE

Written by Scott Feig, Esq.

What do you mean the house is no longer mine? I purchased it before I married her. And all the mortgage payments were made from my salary while she stayed home with the children. How can this be?!

This exclamation is often heard in the halls of the Family Law attorney’s office. In fact, all too often a spouse, to his or her dismay, learns that the house that he/she purchased before the marriage is now partially his/her soon-to-be ex-spouse’s upon the dissolution of the marriage. The misconception that so many people share is that the house they purchased before the marriage is 100% percent their house upon divorce. But, in California, this may not necessarily be true. For many people, this is a tough pill to swallow.

So, the best place to start is to understand that California is what we call a community property state. In fact, California is one of only 9 community property states. To keep it simple, without discussing any of the exceptions, generally, community property is all property, such as homes, land, cars, and personal belongings acquired by you or your spouse during the marriage. Note the operative term here—during. Generally, and to keep this very simple, community property is often split up between the spouses at divorce.

Thus, the flip side of this is to understand the other type of property—separate property. You can see where this is going. Generally, separate property is all the property you acquire before the marriage. Again, note the operative term—before. Generally, and to keep it simple, people often keep their separate property at divorce.

So, with this understanding, it makes sense if you are exclaiming: “My house that I purchased before marriage is mine, right?!” To your dismay, possibly not. Up until the date of marriage, the house was your separate property. But let’s look closely at the mortgage payments. If you paid the mortgage from your salary, note that California considers your salary community property, absent an agreement to the contrary, because your effort to earn it is a community effort, even when the other spouse stayed home with the children. Again, this may be a tough pill to swallow.

Thus, during the marriage, when you paid the mortgage on “your” house, the community began to earn a percentage in the home. Some of it depends on how much you paid down the mortgage during the marriage. The community may have a 10%, 20%, 30% or even much more interest. And, remember what was said above, generally community property is divided at divorce. So, at divorce, you may find yourself having to split part of the value of “your” house with your ex-spouse.

Please note that the above information was kept in simplest form to help give you a primer of a situation that surprises many people at divorce. As many areas of law, the complexity is understood and handled well by an attorney. Thus, it’s helpful to know that an experienced Family Law attorney is a phone call, or email, away to help provide guidance both before the marriage and at the difficult time of dissolving the marriage.

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