About California Divorce

Even With Community Property, Divorce Settlement can be Difficult

Sep 13, 2009 John Wu

Although martial earnings and assets are divided 50/50 in a California divorce, there are disagreements and issues that may make the fair division of assets difficult.

It is always better for divorcing couples to come up with a divorce settlement agreement quickly to minimize legal expenses. However, dividing everything 50/50 can sometimes be very difficult due to disagreements in valuations or the illiquid nature of some marital assets. And there are ways for lower earning spouses with children to get a bigger share of community property.

If one spouse does not thoroughly understand the rules of a California divorce, he or she should hire professional help, whether it be a counselor, financial planner, or a California divorce attorney. Without a complete understanding, a spouse may get far less than what he or she is entitled to under California law.

California and Community Property

All assets and earnings received during a marriage are split 50/50, absent a valid prenuptial agreement to the contrary. Because California is a no-fault divorce state, that theoretically means a quick divorce settlement without legal counsel can be done. But that is often not the case because it is sometimes very difficult to determine how much community property is worth.

The following are some community property issues for a divorce in California:

• Co-mingling of community property and separate property
• Difficult to liquidate assets or illiquid assets (antiques, family home, etc.)
• Tax consequence of selling assets
• Retirement accounts and pensions
• Business ownership
• Division of debt
• Hidden assets by one spouse from the other
• Degrees and certifications earned by either spouse during marriage

Below are some California specific situations regarding community property as examples of why understanding community property isn't cut and dry.

Degrees and certifications earned during marriage require reimbursement to community property. The cost of tuition, school fees, and books are to be returned to community property. The extra earning power of the spouse with the degree does not need to be reimbursed in California, which is contrary to some other community property states.

A business or professional practice has value, even if it is completely shut down after the divorce due to goodwill. State law assumes that the business will continue operating as a going concern when determining its net value.

Because of these and other issues regarding community property in California, divorcing spouses with high net value community property should seek professional help such as an attorney to make sure they get their fair share.

Alimony and Child Support in California

In California, alimony is designed to be a short term fix while the ex gets on his or her own feet. A spouse who wants a lengthy alimony should get divorced somewhere other than California. If a marriage lasts more than ten years, the court may lengthen alimony or even reserve the right to change the payment amount for a few years after divorce.

In most cases, it is much better for a lower earning spouse in California to go for primary custody to get child support, which lasts until the youngest child reaches age 18. State law requires that the child live as financially well as the higher earning spouse, while taking each spouse's earning ability into account. This means a spouse with primary custody who doesn't make a lot of money could receive a lot of child support from the higher earning spouse. This is why the much lower earning spouse of celebrity couples usually go for child custody.

Note that any terms in prenuptial agreements regarding child support or child custody are not enforceable under California law.

Even though a divorce is in California with its community property laws, it can be difficult to divide money and property fairly to reach a marital settlement agreement. If children or significant assets are involved, getting extra help is highly advised to protect their fair share of community property.

References:

Johnson, Sharon. "No-Fault Divorce: 10 Years Later, Some Virtues, Some Flaws." New York Times. March 30, 1969.

Weston, Liz Pullman. "Celebrity Divorce and the 10-year Itch." MSN Money.

Doskow, Emily. Nolo's Essential Guide to Divorce. Berkeley, CA: Nolo Press, 2008.

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