If you are thinking about or starting a divorce, you may have some big questions about how assets and debts are divided and what are your property divorce rights are? After child custody, issues surrounding assets and debts are the most hotly contested of matters in a typical divorce case. The most common misunderstandings people have about property divorce rights in a California divorce are:
- Retirement – it doesn’t just go to the employee who earned it.
- Not ALL property (or debt) is community property / debt. There is a scarily (or delightfully, depending on which side of the argument you’re on) long list of exceptions.
- Student loan are usually not community debts. Typically, they follow the student spouse. Naturally, there are exceptions. 😉
- Inheritance and gifts received (from someone other than the spouse) are the “separate property” of the spouse who got the money or asset.
A complete list might require its own book. But, knowing this will save you time and money. Consider this just a starter.
Equitable (fair) Distribution
Most jurisdictions in the United States today apply the doctrine of equitable, or fair, division when it comes to dividing the assets and allocating the debts accumulated during the course of a marriage. In very simple terms, under the doctrine of equitable distribution, a court will divide assets and distribute debts in a fair manner. Mostly, but not always, that means “equal.” (Again, this is a general explanation using non-legal terminology.)
In determining how assets and debts will be divided, the court will look to the current financial position of the parties as well as the assets and debts themselves. The Court will be on the lookout for imbalances that may, or sometimes must be corrected. The court in many instances will also look at the future earning capacities of the parties. Finally, the court has to consider any property that either of the parties owned before the marriage (or received by gift or inheritance) and disregard those from the division of “community” assets calculation. The same will hold true for any debts that were incurred by either the bride or groom before they tied the knot.
Understanding Community Property Concepts
Some states in the United States — California perhaps being the best known — are what are known as community property states. These states generally divide in half the assets and debts that are accumulated by the parties during the course of the marriage. The idea is that each party contributes equally to the marriage, and thus should share equally in the assets that are gained during the term and course of the marriage. Similarly, it is presumed that the parties were equally responsible for taking on debts that are created during the term of the marriage as well.
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