When a couple parts ways, they must divide their property and debts. However, each state has its own guidelines on how a couple should do this. California is a community property state, which means that community property will most likely be divided equally.
Most of the property you and your spouse acquired throughout your marriage is considered community property because when you got married, you and your spouse became one legal community. However, you or your spouse probably also have separate property that is not subject to division in divorce.
How can I tell what is community property and what is separate property?
If you or your spouse acquired an asset or a debt during your marriage, it is most likely community property. Community property also includes money earned during your marriage and anything purchased with those earnings. However, gifts given to only one spouse and inheritances do not count as community property, even if they were acquired during the marriage.
In addition to gifts and inheritances, separate property includes any asset or debt that someone acquired before marriage. Also, any money earned from separate property is also separate property, and any items that were purchased with that money are also separate property.
What is comingling?
Some types of property are especially difficult to classify as either community or separate property. This can be because a property is both community and separate property at the same time, a situation called comingling.
Comingling can occur when an asset, which someone acquired before marriage, is sold and the proceeds are put toward a community asset. It can also occur when community funds are used to add value to the separate asset.
This may occur if one person owns a house before marriage, but then sells that house after marriage and puts the proceeds toward a down payment on a different house. Because both spouses probably contribute to mortgage payments, the separate property was mixed with community property.
Comingling can also occur in retirement benefits if they were earned while one spouse worked the same job before and after marriage. Comingling of any asset can make that assets more difficult to divide.
If you think divorce may be in your future, it can be helpful to prepare for your divorce by listing all of your assets and debts. Then, you can try to classify each, noting whether you believe it should be considered community property, separate property or comingled property. With a good understanding of the property you have and the classifications for that property, you may be able to work more efficiently in negotiations or in court.