Property
Separate & Community Property
When spouses divorce or legally separate, they are each entitled to their separate property and a half share of so-called community property.
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property n. all assets and debts, including real property, retirement accounts, stocks, bonds, cash, business interests, intellectual property, household furnishings, and loans. separate property n. any property, and the rents and profits therefrom, acquired by one spouse (i) before marriage, (ii) after marriage through gift or inheritance, or (iii) through the exchange of other separate property (e.g. cash from sale of a house owned before marriage). The earnings and accumulations of one spouse after the date of separation are also the separate property of that spouse. community property n. any property acquired by either spouse between the date of marriage and the date of separation, excepting gifts, inheritances, and property acquired through the exchange of separate property (e.g. cash from the sale of a house owned before marriage). date of separation n. absent a statutory definition in California, generally the date on which the spouses separate with intent to end the marital relationship, either by one leaving the marital home or by agreeing to separate while sharing a residence without sexual relations. |
Dividing Community Property
Identifying what’s separate property and what’s community property is the easy part
in most cases. For example, the wife’s Steinway piano inherited from her grandfather during her marriage
remains her separate property whereas retire-
ment accounts funded during the marriage are community property and therefore
subject to division.
For property as for other aspects of a marital settlement — child support, spousal support, and children — you have a choice: You can either litigate, ultimately allowing a judge to decide who gets what, or you can settle your own division of community property. Our professional mediators help spouses achieve an equitable division that serves both their interests. Compare litigation with mediation and decide for yourself which is the better way to divide your estate.
Litigation
Unless your estate is extensive, you’ll likely have to liquidate much of it to pay your respective attorneys. But cost isn’t the only reason to think twice before engaging your spouse in litigation. A fight over property is emotionally exhausting, and the ensuing rancor can poison your relationship forever. Community property litigation can also slow a divorce or legal separation while spouses squabble over valuations and rightful ownership. And the fees expended will often far exceed the value of the disputed items.
In addition, you’ll surrender control of the outcome, allowing a judge to make decisions such as when and whether the family home should be sold and who should keep which items. Moreover, supposing an unwillingness to settle before the trial date, a judge’s ruling is likely to offend both your and your spouse’s sense of an equitable division.
Mediation
Quite different from contest-oriented litigation, mediation approaches property division as a set of problems or questions to resolve: What are the assets and debts in our estate? Which items are separate property and which are community property? How can we determine fair valuations for each item of community property? How should the community property be divided?
To help answer these questions, parties choose to meet as often as they wish with their consultant attorneys and other experts such as appraisers and CPAs. These specialists can also accompany you to mediation sessions. In this way, you retain control, agreeing only to a property division that you feel is fair. Furthermore, by avoiding the cost of retaining an attorney to represent you in litigation, the total professional fees for dividing your property will be considerably lower in mediation.
Couples frequently argue or withdraw when they try to talk to each other about a division of property. Our skilled and experienced mediators will help you through such an impasse by reviewing options such as:
- Cash buyout. One party can acquire an item by purchasing the other party's interest in that item. Example: the wife pays the husband $35,000 from her separate property for an undivided interest in her (community property) company pension.
- Sale or liquidation. Some or all of the community estate can be sold and the proceeds allocated. Example: the vacation home is sold for $92,000 in equity after paying the balance on the mortgage and real-estate fees.
- Barter or in-kind exchange. Each party takes certain community property items in exchange for yielding to the other party any interest in other items. Example: the husband gains exclusive ownership of the truck and sailboat in exchange for the minivan and the household furnishings.
Presuming you reach an agreement, your mediator will draft it as a Memorandum of Understanding (MoU). This document describes the property division along with other proposed aspects of your settlement in clear language. You can each review the MoU with your consultant attorneys and make any changes as necessary.
You may then ask either our attorney-in-residence or any other attorney on whom you both agree or a Legal Document Assistant to prepare a Marital Settlement Agreement based on your MoU for filing with the court.
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