Navigating Divorce: Financial Implications and Asset Division
July 2, 2024California is a community property state, so any property that was acquired during the marriage will be split 50/50. This does not include separate property, which is any property that was owned separately before you were married. In a divorce, a judge will make the financial decision on how property is distributed and debts are divided.
In this blog, our Ventura divorce lawyers discuss how assets and debts are divided in a community property state and when you may need the assistance of a Ventura divorce lawyer.
Community Property States
In community property states, such as California, assets are distributed equally between a divorcing couple. When distributing assets in a divorce, it is important that you know which assets were acquired outside of the marriage (separate property) and which were acquired during the marriage (community property).
In the Golden State, the following property would qualify as separate property:
- Any property that you owned before you were married
- Any debts that you owed before you were married
- Any property that you acquired after you separated
- Any debts that you acquired after you separated
- Any gifts or inheritances
In contrast, community property is any property that was acquired during your marriage. This includes both assets and debts. This will include the following:
- Any income earned during the marriage (i.e., wages, pensions, or retirement plans)
- Anything bought with marital money during the marriage
- Any debt that was acquired during the marriage
Commingled Property
Property can be a combination of part community property and part separate property. This may occur if a spouse uses the income he or she made prior to getting married to fund the downpayment on a home. Once the couple is married, both persons will likely use marital funds to pay the mortgage. In this situation, the equity in the house (money you paid into it) will be labeled part community and part separate property.
The Impact of Divorce on Your Finances
Although getting a divorce does not directly hurt your credit score, it can affect it. If you are forced to make payments without the financial support of your spouse, you may be having trouble paying your bills. This may result in late or missed payments, which will impact your credit score over time. If you are a lower-earning spouse, you may want to speak with a divorce lawyer to find out if you qualify for alimony (known as “spousal support” in California).
When You Should Speak with a Divorce Lawyer
You may be surprised to learn that California has one of the lowest divorce rates in the nation, with a reported 5.88 divorces per 1,000 women. Even so, you may need to consider consulting with a divorce lawyer if you and your spouse are having any disagreements over whether a property is separate or community property.
Other reasons you may want to consider speaking with a divorce lawyer may be:
- You have a massive amount of marital debt
- You signed either a prenuptial or postnuptial agreement
- Your spouse took out a loan or acquired debt without your knowledge
Considering Divorce? Speak with our Ventura Divorce Lawyers Today
If you are in the midst of divorce, you are likely wondering what financial hardship you may be up against. When you work with our Ventura divorce lawyers, we take the time to hear your concerns and provide the information you need to feel at ease during the entire process. To schedule your free case evaluation, contact us online or by phone.