| COMMUNITY PROPERTY, SEPARATE PROPERTY |
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"MONEY IS THE ROOT OF ALL EVIL;" this may be an old adage, but its alive and well and living in many a marriage! If you have argued over money during your marriage, then imagine the potential for high conflict during divorce. The irony is that the very argument about money will cost you money...unless you find a way to discuss the division of your property in a faciltated and cost effective forum. In my opinion spouses who trust the integrity of the other (and there are many such couples,) especially where there is no concern of hidden assets, should FIRST embark upon a mediated process where full disclosure is immediate and promptly dealt with. One cannot underestimate how much money one will save through this highly recommended choice of process. Often what can take two sessions with the same neutral can take months and months and thousands of dollars with separate attorneys or Collaborative Law teams. This does not mean you cannot use the advice of separate attorneys on a consulting basis (always advisable) but it does mean that you are maintaining control of the legal bills. ©Melanie Nathan 2007.
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| Division of community property |
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Community Property and Separate Property
California is a community property state. Community property is everything that the spouses in a marriage, or (California State) registered domestic partners own together. This means that both are deemed to equally own all money earned by either one of them during the course of the marriage, defined as from date of beginning of marriage until the date of separation. In addition, all property acquired during the marriage with "community" money is deemed to be owned equally by both the wife and husband, regardless of who purchased it. The date of "separation" is the date when both spouses/ partners decide that the marriage is over, with no intention to stay together as spouses.
Like community property, all debts contracted from the beginning of the marriage until the date of separation are community debts, and thus, each spouse is each equally liable for these debts. In most cases, this includes any unpaid balances on credit cards, home mortgages and automobile loan balances. It is important to close out all credit cards, bank accounts, and all other "joint" accounts as soon as possible after a divorce has been decided. It is not enough to remove names from the account, or both with still remain liable.
Separate property, is everything that one spouse owns separately and does not need to be divided between the spouses. In most cases, separate property includes, a. anything owned prior to marriage; b. anything inherited or received as a gift during the marriage; and c. anything either spouse earned after the date of separation.
Separate property can also include anything that one spouse gives up to the other spouse in writing. In certain cases, separate property can become mixed with community property. In this case, it is important be able to trace the payments and show where certain money came from. For example, a spouse may have put in the down payment for a house, got married, and then paid off the mortgage with community property. In such case, that spouse would be reimbursed for the down payment if he/she could prove that separate funds were used to pay it. No interest would be payable on the down payment amount.
Similar to separate property, separate debts belong to one spouse. All debts incurred before marriage are separate debts. So for example, educational loans or job training loans incurred before marriage are separate debts.
The date of "separation" is a very important date because it marks the end of when property is characterized as community property. Unfortunately, the date of separation is subjective and often open to debate. Courts will look for physical evidence as to a final breakdown of family relations, such as moving out of the house
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| CLICK HERE TO READ ALL CALIFORNIA FAMILY LAW CODE |
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| It is important to note that often couples have misconceptions about community property and entitlement. Often an expert is needed to help Parties define precisely what you community property consist of, with boundaries sometimes skewed by commingling and transmutation. It is important to obtain consultation for your specific situation.
| NOTE; Law provides two forms of reference:
1) Code or satutory law - That being law enacted by government; and
2) Precedent - law passed down by the courts through decisions of judges on particular facts.
Interpretation of the Statutes are often the task of Judges and in doing so a Judge will look at the particular facts of a case and apply the interpreted law accordingly. The result is often not quite what you thought they would be. If it was clear cut, attorneys would be out of business.
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| How should we divide our house? |
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| PRIOR TO ATTORNEY CONSULTATION OR MEDIATION:
Make a list of all your Property/ whether you believe it to be Community or Separate Property and then begin to characterize it with help of an expert. Your list should include all of the following:
REAL ESTATE - residence/commercial/income producing - USA and Abroad
PENSIONS - plans from employment - old/current
STOCK OPTIONS
BUSINESS/ Retail, Share in Corporation/ Professional Practice,
RETIREMENT, 401K , IRA;
BANK ACCOUNTS- savings, checking, joint & separate
BROKERAGE ACCOUNTS -mutual funds, stocks, Reits
TIME SHARE
AIRLINE MILEAGE
PERSONAL PROPERTY - Furniture, fine art,
equipment, pots n' pans, jewelry, tools,library,
computers, collections, vehicles, recreational vehicles etc.
PRECIOUS METALS eg. Gold
CASH
TAX REFUNDS due or received
FAMILY/INDIVIDUAL TRUSTS
DEBTS - mortages, cedit cards, revolving accounts
Vehcile loans, Home equity, personal loans,
Student loans, Taxes owed etc.
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| Who gets the pots n' pans? |
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| How do we appraise our furniture? |
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FAMILY.CODE
SECTION 750-755
750. A husband and wife may hold property as joint tenants or tenants in common, or as community property, or as community property with a right of survivorship.
751. The respective interests of the husband and wife in community property during continuance of the marriage relation are present, existing, and equal interests.
752. Except as otherwise provided by statute, neither husband nor wife has any interest in the separate property of the other.
753. Notwithstanding Section 752 and except as provided in Article 2 (commencing with Section 2045), Article 3 (commencing with Section 2047), or Article 4 (commencing with Section 2049) of Chapter 4 of Part 1 of Division 6, neither spouse may be excluded from the other's dwelling.
754. If notice of the pendency of a proceeding for dissolution of the marriage, for nullity of the marriage, or for legal separation of the parties is recorded in any county in which the husband or wife resides on real property that is the separate property of the other, the real property shall not for a period of three months thereafter be transferred, encumbered, or otherwise disposed of voluntarily or involuntarily without the joinder of both spouses, unless the court otherwise orders.
755. (a) The terms "participant," "beneficiary," "employer," "employee organization," "named fiduciary," "fiduciary," and "administrator," as used in subdivision
(b), have the same meaning as provided in Section 3 of the Employee Retirement Income Security Act of 1974 (P.L. 93-406) (ERISA), as amended (29 U.S.C.A. Sec. 1002). The term "employee benefit plan" has the same meaning as provided in Section 80 of this code. The term "trustee" shall include a "named fiduciary" as that term is employed in ERISA. The term "plan sponsor" shall include an "employer" or "employee organization," as those terms are used in ERISA (29 U.S.C.A. Sec. 1002). (b) Notwithstanding Sections 751 and 1100, if payment or refund is made to a participant or the participant's, employee's, or former employee's beneficiary or estate pursuant to an employee benefit plan including a plan governed by the Employee Retirement Income Security Act of 1974 (P.L. 93-406), as amended, the payment or refund fully discharges the plan sponsor and the administrator, trustee, or insurance company making the payment or refund from all adverse claims thereto unless, before the payment or refund is made, the plan sponsor or the administrator of the plan has received written notice by or on behalf of some other person that the other person claims to be entitled to the payment or refund or some part thereof. Nothing in this section affects or releases the participant from claims which may exist against the participant by a person other than the plan sponsor, trustee, administrator, or other person making the benefit
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FAMILY.CODE
SECTION 760-761
760. Except as otherwise provided by statute, all property, real or
personal, wherever situated, acquired by a married person during the
marriage while domiciled in this state is community property.
761. (a) Unless the trust instrument or the instrument of transfer
expressly provides otherwise, community property that is transferred
in trust remains community property during the marriage, regardless
of the identity of the trustee, if the trust, originally or as
amended before or after the transfer, provides that the trust is
revocable as to that property during the marriage and the power, if
any, to modify the trust as to the rights and interests in that
property during the marriage may be exercised only with the joinder
or consent of both spouses.
(b) Unless the trust instrument expressly provides otherwise, a
power to revoke as to community property may be exercised by either
spouse acting alone. Community property, including any income or
appreciation, that is distributed or withdrawn from a trust by
revocation, power of withdrawal, or otherwise, remains community
property unless there is a valid transmutation of the property at the
time of distribution or withdrawal.
(c) The trustee may convey and otherwise manage and control the
trust property in accordance with the provisions of the trust without
the joinder or consent of the husband or wife unless the trust
expressly requires the joinder or consent of one or both spouses.
(d) This section applies to a transfer made before, on, or after
July 1, 1987.
(e) Nothing in this section affects the community character of
property that is transferred before, on, or after July 1, 1987, in
any manner or to a trust other than described in this section.
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