California is a community property state, which means that marital estates are generally divided equally during a divorce even if one of the spouses involved earns significantly more than the other. Marital estates are made up of the assets acquired and debts taken on during a marriage. These assets usually include real estate, automobiles, furniture and jewelry, retirement funds, investment portfolios and artwork. Debts taken on during a marriage are considered community property even if only one spouse signed the credit paperwork.
Money earned and assets acquired before a marriage and inheritances and gifts received during a marriage are generally not divided during a divorce in California as they are considered separate property. Determining what is and what is not separate property is not always easy as these assets sometimes become commingled with the marital estate. This often happens when a divorcing spouse has business interests that predate the marriage. In these situations, the business is separate property, but any profits it generated during the marriage are considered community property.
This means that property division negotiations often become contentious, and this is especially true if the marriage was a short one and one of the spouses earned most of the money used to acquire the marital estate. These discussions are even more complex when retirement funds are involved as spouses often contribute to pension plans before and after they marry and a judge must issue a qualified domestic relations order to divide them.
Quasi-community property is any type of property that was acquired by either one or both spouses when living in another state that, had it been acquired while living in California, it would have been considered community property. Experienced family law attorneys in community property states may advise couples to consider entering into prenuptial or post-marital agreements. These contracts clear up ambiguity over marital estates and allow spouses to set their own property division rules.