Will I Keep My House, Car, and Personal Property After Divorce?

In most cases, you keep personal property, such as your clothing, after a divorce. Everything else is subject to equal division since California is a community property state. Division of property and debts is a complicated issue, especially when one spouse or domestic partner brought his or her own property into the marriage. You should always seek the counsel of a divorce attorney if you have a significant number of assets and amount of debt unless you can amicably divide your property and debt.

California Divorce Basics

California is a no-fault state, which means that you do not have to allege wrongdoing by your spouse or domestic partner to get a divorce. You simply allege “irreconcilable differences.” Even if your spouse or domestic partner does not want a divorce, annulment, or legal separation, he or she cannot stop the process, even if he or she does not participate. In fact, if your spouse or domestic partner does not file a response to your petition for divorce, the court might grant you a default divorce, annulment, or legal separation.

Community Property

Because California is a community property state, anything you bring into the marriage, including cars, homes, most personal property, and any debts, are equally divided. The division of property is often difficult because you cannot divide a house or a car unless you sell it and divide the cash. Retirement accounts, stock accounts, and other investment accounts have their own difficulties.

Because everything, including income you made during the marriage, is equally divided, some spouses or domestic partners might be tempted to “waste assets” or spend the money so that his or her spouse or partner does not get it. However, California issues an automatic temporary restraining order on the summons to prevent spouses and partners from wasting assets.

Wasting assets includes spending lavishly on a new girlfriend or boyfriend, hiding money in a separate account, or selling assets for a fraction of their worth.

If the court finds that you or your spouse is wasting assets, you could suffer penalties, including being charged under Section 278.5 or Section 273.6 of the California Penal Code. Other penalties might include sanctions by the family court and/or paying your spouse or domestic partner extra money in the form of cash or assets.

Division of Community Property

In many cases, it’s easier to sell a car or house and split the equity. However, if you want to keep the property, you can “trade” something else of equal value if your spouse or partner agrees. For example, you want the house, which has $250,000 in equity, and you still owe $400,000. You could give your spouse or partner $125,000 in cash or another asset with the same value to equal the equity to “buy out” the equity. As for the debt, since you want to keep the house, your spouse keeps half of the debt – the mortgage. Your spouse or partner could take on additional debt so that the division of debt is equal, or could take less of the equity to equal it out.

For vehicles, a family often has two vehicles. You might keep one while your spouse or partner might take the other vehicle, especially if they are of nearly equal value. If you want to keep the newer vehicle that is worth more, you could offer your spouse or partner additional assets to keep the division of assets equal.

Non-Marital Property

The court does not consider some property as community property unless you co-mingled that property. Inheritances and gifts given to one spouse belong to that spouse. However, if you co-mingle the property, the co-mingled part becomes community property. For example, you sell a house and put down $100,000 on a home you share with your spouse or domestic partner, then he or she helps pay the mortgage and shares in the cost for upgrades and upkeep. Only the $100,000 is your separate property. All equity in the house and joint debt is community property.

Another example is a retirement account. If you have a retirement account, but then you continue contributing to it with wages you earned during the marriage or domestic partnership, the value of the account as of the date of the marriage is community property because you contributed to it with wages that are community property.

Division of Assets and Debts

Because dividing assets and liabilities is often complicated, especially when you and your spouse cannot agree on the division, you should always contact a divorce lawyer to help you through this difficult part of your divorce, especially if the divorce is not amicable because of domestic violence and other issues.

A divorce attorney can tell your spouse’s attorney of your wishes. If you still cannot come to an agreement, your attorney might suggest mediation. You do not have to be in the same room to attend mediation. Your attorneys will shuttle between rooms to help you and your spouse or partner negotiate a fair division of assets and liabilities.

If you are amicable with each other and are able to come to an agreement regarding the division of assets and liabilities, always use the services of an attorney to draft a settlement agreement. While you should be able to trust your spouse or domestic partner, keep in mind that you are getting divorced or legally separated. It’s better to have the division of assets in writing.

Finally, you might need an official document showing sole ownership of a certain asset if you decide to sell it later, or if you decide to refinance a home you kept.

Contact Pedrick Law Group

If you are ready to file for divorce, legal separation, or an annulment, or if you have been served with a dissolution of marriage, contact Pedrick Law Group at (949) 388-8682 to schedule a consultation. Keep in mind that you have a certain number of days to respond to the lawsuit if you were served. If you do not respond on time, the court could grant your spouse or domestic partner a default divorce.

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