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How Will the Court Differentiate Community Property From Separate Property

On Behalf of | May 14, 2021 | Community Property Division

We are often asked how the Court will differentiate community property from separate property in a Carlsbad divorce case.  You are required to fully, truthfully and accurately disclose all assets, property, investments, retirement accounts, business or professional practice interests, collections, debts, obligations, loans and credit cards to the Court at the outset of your divorce.  You will be required to list literally every asset or debt regardless of whether or not it is in your name, your former spouse’s name or a joint account.

Once the Court has marshalled (organized a complete and accurate list) all assets and debts the process of property division can begin.  In most cases the community assets and debts are to be divided equally between the two parties.  In cases where financial conditions dictate the Court may not follow a strict 50/50 division, but work to find a solution which is fair, reasonable and equitable based upon the unique circumstances of the case.  The Court will differentiate community property from separate property and begin the process of valuation for all community assets.

Generally speaking, the assets and debts in your divorce will be divided into two categories: community property and separate property.  Community property is to be divided equitably between the parties.  Separate property will remain the sole asset or debt of one of the parties and is not subject to community property division.

Community property is generally defined as any asset, income, debt or possession which was acquired between the date of the marriage and the date of separation.  This includes but is not limited to income, property, vehicles, collections, retirement accounts and 401(k)s.  Community property will also include mortgages, car loans, credit card expenditures and any other type of loan, debt or obligation entered into during the course of the marriage.

It is important to note that any personal injury settlement, as well as properly structured gifts or inheritances may not be considered to be community assets even though they occurred during the course of the marriage.

Separate property will include any asset or debt which either spouse can prove they owned prior to the date of the marriage, or which was acquired after the date of separation.  This often includes student loans, property, a business interest or participation in a family trust.

Separate property must be kept completely separate from marital property.  In other words, you cannot use marital funds to support a separately owned business or to fix a separately owned rental house.  If marital funds were “commingled” with a separate asset a complex legal and financial challenge will arise.

The legal issues which differentiate community property from separate property and the valuation of assets in a Carlsbad divorce can represent a substantial amount of money to either party.  This is why it is so important to work with the Certified Family Law Specialists at Burke & Domercq.

Protect your own interests and contact us or call 760-389-3927 to schedule an appointment for a remote or socially distanced consultation with one of our experienced Certified Family Law Specialists.