SAN FRANCISCO BAY AREA DIVORCE ATTORNEY
ASSET & DEBT DIVISION – COMMUNITY PROPERTY & SEPARATE PROPERTY
Community property and community debts are generally acquired between the date of marriage and date of separation. Community property includes all of the earnings that either spouse earned during the marriage and everything bought with those earnings.
Each spouse owns one-half of the community property, and each spouse is responsible for one-half of the debt. This is true even if the debt was incurred by only one of you, or even if a credit card was in the name of one spouse or partner only. All community property and community debts, as of the date of separation, are to be divided equally between the parties in as practical a manner as possible. An experienced divorce attorney is an invaluable resource in helping you navigate this complex area of family law.
Separate property is property belonging to a person who acquires it before the date of marriage, by gift or inheritance during the marriage, or after the date of separation. Separate debts are debts incurred by a person before the date of marriage and after the date of separation.
Some things are part separate property and part community property. A common example of this is when one party has a pension or retirement benefit from a job held before and during the marriage. The contributions made before the marriage and after the date of separation are separate property. The actual division of the retirement is quite complicated and requires a separate court order to implement.
Another common example of mixed community and separate property is when 1 party owned a house before the marriage and then sold it and used the proceeds as a down payment on another house after getting married. The down payment for the new house would be considered separate property. But if the mortgage payments on the new house are made using earnings during the marriage, the equity resulting from paying down the loan is community property.
Fair Market Value
In a dissolution proceeding, your possessions are valued based on their “fair market value.” The fair market value is an estimate of the amount of money you could obtain if you sold the items to a stranger, as for example, through an ad in the newspaper. It does not mean what you paid for it originally, or how much it would cost you to replace it.
Community vs. Separate Debts
When dividing a debt, you must first determine whether the debt is “community” or “separate.”
Community Debt: In general, community debts are those incurred after the date of marriage, but before the date of separation. Debts incurred during marriage belong to both spouses equally, even if only one spouse incurred them (e. g., only one spouse signed the credit card slip).
For example, if during the marriage, one spouse purchased all of the children’s clothing and other necessary items using one credit card that was held in that spouse’s name alone, both spouses are still equally responsible for the charges made on that card. Similarly, both spouses are responsible for one spouse’s income tax obligation, as long as it accrued during the marriage.
Separate Debt: Debts incurred before marriage or after separation are separate debts and belong only to the spouse that incurred them.
This is a complicated area of family law. Norbert U. Frost is an experienced divorce attorney who can help protect you and your assets. Call us at (707) 553-7356 to schedule a consultation. We look forward to meeting you.