The divorce process is always a turbulent time. Divorcing spouses face the tough financial consequences of transforming a joined household into two separate ones, at the same time that they’re navigating the difficult emotions that come with separation. In California, the state’s 50/50 division of community property laws during divorce can dramatically alter the socioeconomic status of both spouses. While the emotional aspects of a divorce are difficult, it’s often the division of financial assets that causes the most rancor in a contentious divorce in California.
If you’ve decided that divorce is inevitable in your marital situation, it helps to know the most important financial questions to ask your attorney or a financial expert during the process.
How Will Our Property Be Divided?
California is a community property state. When spouses marry, they essentially form a marital community, and any assets and debts they acquire during the marriage belong to the “community.” When they divorce, the state aims for as close to a 50/50 division as possible with the exception of anything the state considers separate property. Separate property includes:
- Any assets or real estate property acquired before the marriage
- Any inheritance left to a spouse before or during the marriage
- Any gifts that were given specifically to one spouse
The above assets are not subject to division but remain the separate property of the spouse. On the other hand, community property includes:
- Any assets or real estate property obtained during the marriage
- Any bank accounts opened during the marriage regardless of whose name is on the account
- Any investment accounts opened during the marriage
- Household contents including furniture, appliances, artwork, antiques, and electronics
- Separate accounts belonging to one spouse before the marriage if the other spouse was given access to the account during the marriage
- Separate property belonging to one spouse before the marriage if the other spouse invested money and time into the property or made substantial improvements to the property, thus making it joint property
It’s always best to speak to your Palo Alto divorce attorney and/or a financial counselor about the division of marital property in California during a divorce, especially in high-asset divorce cases.
How Are Debts Divided in a California Divorce?
The state considers any debts acquired during a marriage as community debts, even if they are only in one spouse’s name. These debts are evenly divided between divorcing spouses. However, it’s important to note that individual creditors may still hold you responsible for a debt given to your spouse unless you take steps to remove your name from the account.
Any debts acquired before the marriage or after separation belong only to the individual.
How Does Child Support Work in California?
A family law judge or child support commissioner determines the amount of child support payment one spouse must pay to the other during a divorce involving children. The amount paid is determined by the following:
- A review of the monthly net disposable income of both parents
- The amount of parenting time each parent has with the child
Typically, the higher-earning parent must pay the lower earner but the amount is reduced by the amount of time the higher-earning parent spends with the daily care of the children.
Will I Pay/Receive Alimony?
Alimony or spousal support is meant to maintain the standard of living of both parents as equally as possible after a divorce in California. It serves to bridge the gap between income levels for a specific period of time based on the following:
- The length of time the couple was married
- Whether or not one spouse supported the other during their education
- The amount of time one spouse lost in the workforce or limited their own career opportunities to stay home and care for the house and children
Determining spousal support is a gender-neutral process in California. Not all divorcing spouses will receive alimony orders. If both parties earn similar incomes, a judge will most likely decline to issue orders for spousal support.