Help With Divorce Property Division

Dividing property in a divorce is often stressful and complicated. It is helpful to seek the assistance of an experienced attorney. There are three steps to divorce property division in California: 1) determining whether the property is marital or separate, 2) valuing the marital property, and 3) deciding how to divide the marital property.

  1. Determining Whether the Property is Marital or Separate

Separate property does not need to be divided equally in a divorce. Whereas, marital property must be divided equally. Property refers to both real and personal property and includes debts and assets.

Separate property includes:

  • All property acquired before the marriage;
  • All property inherited, even if during the marriage; and
  • All property gifted to one party individually, even if during the marriage.

Marital property is all property that is not separate. It includes:

  • All property acquired during the marriage that is not a gift or inheritance; and
  • Any increase in the value of separate property during the marriage.

Marital property is much broader than some people recognize. It can include pension rights, salable stock option rights, or other employee benefits acquired during the marriage. Additionally, it does not matter whether the property is titled solely in one spouse's name. It is still marital property if it falls into one of the above categories.

When separate property is commingled with marital property, the process of determining its classification can become extremely complicated. One common situation of commingling is when one spouse owned a house before marriage and after marriage sold the home and used the proceeds as a down payment on a new house. But then the mortgage payments on the new home were made with the couples' earnings during marriage. The old home and the proceeds from its sale are separate property, but the mortgage payments were made with marital property. A lawyer's help is necessary in scenarios where the property has become commingled.

  1. Valuing the Marital Property

For some assets, such a bank account, valuation can be simple. However, with more complex assets, agreeing on a valuing can be a difficult and contentious area of divorce. Some examples of complex assets include businesses, professional practices, retirement accounts, investment property, intellectual property, and stock options.

Experts, like accountants, business appraisers, and pension valuators, are often needed to value the assets accurately. It is typically the quickest and most cost-effective for the parties to together hire experts, rather than have each party hire their own and fight over whose valuation is correct.

  1. Deciding How to Divide the Marital Property

You have two choices when dividing marital property. You can either enter into an agreement with your spouse, or you can let the court decide for you. Even if you come to an agreement, the judge still must sign off on it. Rarely, will a judge refuse to sign a judgment on the division of property.

If you fail to come to an agreement, the court will apply California law to decide how your property will be divided. California is a community property state. This means that all marital property is divided equally.

Dividing property equally can be more tricky than it seems at first glance. The law does not require that every piece of property be split down the middle, but rather that the net value of the assets and received by each party be equal. This can be achieved in many different ways, including:

  • Each spouse can be assigned certain items;
  • A spouse can buy-out the other's share in the asset;
  • The asset can be sold and the proceeds divided; and
  • The parties can agree to together hold the property, even after divorce.

It is rare for parties to continue to own property together after the divorce, but there are situations where this is the best option. For example, parties that own a business together may want to continue running it together after their split if they are both heavily involved in the operations.

The parties must also divide all debts that were acquired during the marriage (whether or not they are only in one party's name). This includes credit card debt, mortgages, car loans, and personal loans, among other types of debt. Importantly, separation agreements and divorce orders are not binding on creditors, and creditors may continue to collect marital property from either spouse. Therefore, it is best practice to pay off all marital debt at the time of the divorce.


If you are getting a divorce in San Jose and have questions about property division, you should contact the experienced attorneys at Moreno Family Law Firm. Many complications can arise during property division, and the cost of making a mistake can be high. 

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