When it comes to dividing property in a divorce, there is a lot at stake. Couples in California will have to make decisions that could affect them for many years to come, such as what to do with the family home or how to divide retirement accounts. So, it pays to have an understanding of how California law addresses the issue of property division.

First, it is important to understand that California is considered to be a “community property” state when it comes to property division. Basically, this means that each party has an interest in assets obtained while married, since the marriage created a single community. With that in mind, spouses should note the difference between community property and separate property.

Community property consists of all assets purchased with the earnings either party obtained while married. However, gifts and inheritances may not be considered community property, even if they were obtained while the couple was married. In California, since each party has a 50 percent interest in all community property, courts will attempt to divide it equally.

Separate property includes assets a party owned prior to the marriage. Earnings gained from separate property, such as rents, may be considered separate property. Items purchased or income earned after the date that the couple separated may also be considered separate property. Keep in mind that it is possible for separate property to commingle with community property. When that happens, the status of the property may change from separate to community.

As this shows, it is important to have a clear understanding of the difference between community property and separate property when it comes to the division of assets. Many of a couple’s assets, such as the family home or retirement courts are highly valuable, so any decisions made with regards to these assets could affect a spouse’s entire life after the divorce. Therefore, when a person is fully informed about the legal status of their assets, they can make property division decisions that are appropriate for them and hopefully lead to a fair outcome.