California Divorce - Community Property
Under California state law, all property acquired during the course of a marriage is community property. This includes both material possessions and wealth in other forms, such as cash, savings and investments. In the event of a divorce, community property is divided 50-50 among the divorcing parties unless they come to a different agreement.
Frequently, the division of property is adjusted to include other factors such as spousal support or child support. The 50-50 division of community property can be modified such that one spouse receives a smaller portion of community property as an offset for monthly payments from the other spouse. Moreover, because the family’s home is generally one of the larger assets in a marriage, the division of other properties and monies is skewed in cases when one spouse is awarded and chooses to remain in the home. Alternatively, some couples sell the home and divide the profit or loss equally.
Community property does not include assets accrued by either partner before the marriage. However, proof of burden is upon the divorcing party to provide legally viable documentation that the property in question was indeed their own prior to the marriage. This situation can become complicated if the property in question involves investments, the value of which can fluctuate over time. If a home was purchased for $67,000 in 1967, prior to a marriage, but has increased in value to $458,000 over the course of a forty-year marriage, is the increase in value community property? The answer to this question is not simple, and frequently results in a lengthy arbitration process during a divorce.
To avoid later issues with community property versus personal property, many couples choose to implement a prenuptial agreement. A prenuptial agreement outlines prior to the marriage exactly what properties will belong to which spouse in the event of divorce. It applies to both properties owned prior to the marriage and to properties accrued during the marriage. Moreover, a prenuptial agreement is renegotiable at any time during the marriage, provided that both spouses agree to its terms.
The decision of whether or not to draft a prenuptial agreement is a tricky one for most couples. For many people, a prenuptial agreement is an indication that the couple is considering a divorce situation prior to marriage. For some, this implies both a lack of commitment to the marriage and a lack of trust on the part of their fiancé. Assuming they will never divorce, and also assuming that they will never make an effort to take more than they deserve from a marriage, and that their partners should trust that, many believe that a prenuptial agreement is a very negative contract for two people entering a marriage.
On the other hand, many see a prenuptial agreement as merely a practical way to achieve peace of mind and a sense of fairness. In considering the high divorce rates in the United States, those in favor of prenuptial agreements might consider that the odds of a divorce are reasonably high whether they intend on going into a marriage or not. Moreover, if there is never a divorce, the prenuptial agreement never comes into play and is thus obsolete. A couple’s decision as to whether or not to engage in a prenuptial agreement is ultimately very personal, and their ability to come to an agreement on this issue may be a reflection of their ability to agree upon other issues as well. If a couple cannot make this important decision together, what other important decisions will cause problems later in the marriage? It is wise question for engaged couples to ask themselves.