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As
a general rule, all community property is split evenly (50-50)
between the spouses upon dissolution. This of course does
not mean the house or the car will be physically split in
half or the spouses will have to share them.
Rather, the rule states each item of community property must
be evaluated in terms of its market value. Each spouse is
then entitled to receive community assets with a value equal
to one half of the entire community estate.
For
example, if a couple owns a home worth $100,000 the court
can either order the house to be sold and the profits split
$50,000-$50,000, or the court may award the house entirely
to one party and award the other party community assets of
equal value. Thus, it is the aggregate worth of the community
estate that is important, and neither spouse has a right to
a one-half interest in any particular asset.
This
rule is designed to facilitate a "clean break" between the
spouses by terminating the co-owner relationship. The nature
of the particular asset, however, will be considered by the
court when dividing assets.
Common
examples of this include circumstances where the sale of the
family home would uproot the couple's minor children, or where
a particular item has important sentimental value for one
spouse.
The
rule of equal division will also be modified by a court in
situations where, for example, one spouse has deliberately
misappropriated community funds or where the couple's liabilities
exceed their assets.
As
to separate property, California courts may not award any
portion of one spouse's solely owned separate property to
the other spouse unless both parties request such a division.
There
are several assets that commonly must be divided between the
spouses upon dissolution of a marriage. The following is a
short list of these items and how they are currently characterized
under California law.
Keep
in mind these are generalizations and the particular assets
involved in your case may be classified differently by a court
for a variety of reasons.
If
a life insurance policy has a current cash value, the value
may need to be divided upon dissolution. If community funds
were used to pay the premiums, then the community is a proportional
owner of the policy. If the policy is a "term" life insurance
policy, it is unlikely a court will consider in dividing assets
because it does not have a current cash value.
Retirement
pensions are generally considered community property to the
extent it was earned during marriage. The time when benefits
are actually received is not relevant. Retirement pensions
can get very complicated and you should consult your attorney
for more specific information.
If
the disability pay or worker's compensation is intended to
replace wages earned during marriage, it is community property.
To the extent it is intended to replace post-divorce earnings,
it is separate property.
Education
and training themselves are not community property. In the
absence of an agreement to the contrary, the community may
be entitled to reimbursement for any funds used to pay for
the education or to repay loans related to it. It is also
required that the education or training enhanced the party's
earning capacity. Upon divorce, any outstanding loans or other
debts will be assigned to the spouse that incurred them.
- Personal injury recovery against third party
Any
recovery is community property if the cause of action arose
during the marriage, i.e. the injury occurred during marriage.
If the cause of action arises before marriage then the recovery
will be separate property, but the injured spouse may be required
to reimburse the community or the other spouse if any expenses
were paid by them.
To
the extent the business goodwill was acquired during the marriage,
it is community property. There are a few different ways to
calculate business goodwill and your attorney can help you
figure out which will best suit your situation.
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