NBI Course Manual: Handling California Divorce Cases from Start to Finish
II. DIVIDING ASSETS AND DEBTS
The starting point for any discussion of marital property in California must start with a discussion of what is community versus separate property. This is the starting point for most of my initial client consultations and it should be the starting point for your analysis of the property segment of your case. In broad terms those definitions follow.
Community Property Defined. The California Family Code (simply “FC” hereinafter) at section 760 defines community property as “[e]xcept as otherwise provided by statute, all property, real or personal, wherever situated, acquired by a married person during the marriage while domiciled in this state…” For simplicity I explain to clients at the initial consultation that this means anything earned or acquired during the marriage, with some exceptions, is community property. For the most part the exceptions are things received by either party as a gift or bequest.
Separate Property Defined. If an item of property is not community property, it is the separate property of one of spouses. Separate property is defined by statute in FC 770 by listing, in nonexclusive terms as follows:
1. All property owned by the person before marriage;
2. All property acquired by the person after marriage by gift, bequest, devise, or descent.
3. The rents, issues, and profits of the property described in this section.
The Court’s job, in part, is to characterize property as community versus separate. If property is separate property it is not subject to division in the court. If it is community property, it is subject to equal division. That is, the Court must divide the property equally between the parties. (see FC 2550). Equal division does not mean that each party gets ½ of an asset, but the community estate, all the assets of the community, will be accounted for and equitably divided between the parties. Liabilities and debts are characterized as community and separate property as well (see FC 2551)….