When couples decide to part ways, one of the most complex and contentious issues to address is the division of property. In the U.S., states have different approaches to how property acquired during a marriage should be divided during a divorce. Two common methods are community property and equitable distribution, and understanding the difference between these approaches is crucial for anyone going through a divorce.
Understanding the difference between community property and equitable distribution is crucial if you are navigating a divorce. In California, community property laws generally lead to a 50/50 division of assets and debts acquired during the marriage. In contrast, equitable distribution states consider a broader range of factors to determine a fair division of property.
What Is Community Property?
California follows the community property system, which is grounded in the idea that both spouses contribute equally to the marriage, whether financially or in other ways. Under community property law, all property acquired during the marriage is considered jointly owned by both spouses, regardless of who earned the income or whose name is on the title. This means that, unless otherwise agreed upon, everything obtained during the marriage is typically divided equally (50/50) when the marriage ends, whether that’s through divorce, annulment, or death.
The key point here is that property acquired before the marriage, or after the separation, is generally considered separate property and is not subject to division. Separate property includes things like:
- Property owned by one spouse before marriage
- Inherited property or gifts received by one spouse
- Income earned or property acquired after separation
Example: Imagine a couple gets married in California and buys a house. If the house is purchased during the marriage and the spouses are unable to agree on who should receive the home, the property is subject to community property laws and will likely be split 50/50.
What Is Equitable Distribution?
Unlike community property states, most U.S. states follow the equitable distribution system for dividing property during divorce. In equitable distribution states, property is not necessarily divided equally; instead, it is divided in a way that is deemed fair, or equitable, based on a variety of factors. Importantly, "equitable" does not always mean "equal."
The court considers many factors when deciding what is fair, including:
- The length of the marriage
- Each spouse’s financial contributions to the marriage (whether monetary or non-monetary)
- The economic circumstances of each spouse
- The standard of living during the marriage
- The age and health of both spouses
- The contributions of one spouse to the other's education, career, or earning potential
- Any other factors the court deems relevant
California's Community Property Laws: What to Know
As a family law attorney, I am often asked how the community property system works in practice. The following are a few important points to keep in mind about California’s laws:
- Everything acquired during the marriage is community property. This includes not just the house or car, but also pensions, savings, and even debts incurred during the marriage. If the property was purchased or acquired during the marriage, it is presumed to be community property.
- Separate property is not divided equally or equitably. Anything that one spouse owned before the marriage, as well as any inheritance or gifts received during the marriage, is generally separate property and is not divided in a divorce.
- Debt falls under community property. Debt acquired during the marriage is also divided equally, unless it was incurred for one spouse's sole benefit (e.g., a gambling debt).
- There are exceptions. California law allows for exceptions to the community property rules. For example, if a spouse can prove that certain assets were obtained with separate funds or were kept separate, they may be able to retain ownership of that property after the divorce.
- Spousal support can also be impacted. In addition to dividing property, California courts may also grant spousal support (alimony), depending on factors such as the length of the marriage and the needs of the spouse requesting support.
If you are in the midst of a divorce and need advice on how property division laws apply in your case, it’s important to consult with an experienced family law attorney who can help you navigate your state’s specific legal framework. At Apex Lawyers, we represent our clients in resolving the property that was acquired during the marriage and achieving a fair distribution.