In California, the division of assets and debts in legal separation or divorce is led by the principle of equal division of the community estate. The law requires an equal division unless otherwise agreed to by the parties involved or specific statutory provisions applied that allow for an unequal division. This includes both assets and debts, which must be characterized as either community or separate property before division.
🏛️ Dividing assets and debts is one of the most complex and high-stakes parts of any divorce. California is a community property state, and the rules for division can be confusing.
From our Folsom office, we help clients across Sacramento, Placer, and El Dorado counties navigate this process to ensure a fair and equitable outcome.
Understanding Community vs. Separate Property
Our first step is to help you identify and characterize all assets and debts:
Community Property: This generally includes all assets and debts acquired during the marriage (from the date of marriage to the date of separation).
Separate Property: This includes assets and debts acquired before the marriage, after the date of separation, or received as a gift or inheritance during the marriage.
The “Community Property Presumption”
In California, assets acquired during the marriage are presumed to be community property, even if only one spouse’s name is on the title. To protect your separate property, we must present clear evidence or a valid agreement (like a prenuptial agreement) to prove its separate nature.
How Debts Are Divided
Debts incurred for the benefit of the family during the marriage are typically divided equally. However, if the community debts exceed the community assets, the court has the discretion to assign the excess debt in a manner it deems “just and equitable.” This can be based on factors such as each party’s ability to pay.
Our role is to advocate for a fair division that protects your financial future.
🏛️ A primary concern in any divorce is protecting the assets you brought into the marriage or received as a personal gift or inheritance. From our Folsom office, we help clients across Sacramento, Placer, and El Dorado counties identify, trace, and protect their separate property.
Under California law, separate property is not subject to division in a divorce. It remains your sole property. The court’s role is limited to confirming it as yours, not giving it to the other spouse (unless a specific agreement exists).
Separate property generally includes:
Any property you owned before the marriage.
Property acquired during the marriage by gift, bequest, devise, or descent (e.g., an inheritance).
The rents, issues, and profits generated from those separate property assets.
The most complex situations arise when separate property gets mixed with community property.
Common Scenario: You receive a $100,000 inheritance (separate property) and use it as a down payment on a house you buy with your spouse (community property).
In this case, you may be legally entitled to reimbursement. California law allows a spouse to be repaid for their separate property contributions used to acquire a community asset.
How We Protect Your Right to Reimbursement
To successfully claim reimbursement, two things are required:
Tracing: We must be able to meticulously trace the contribution back to its original separate property source (e.g., bank statements showing the inheritance and the subsequent down payment).
No Waiver: We must show that you did not sign a “written waiver” giving up your right to be reimbursed.
Whether you need to protect a pre-marital business, a family inheritance, or trace a separate property down payment, our firm has the experience to protect your financial interests.
🏛️During a Dissolution of Marriage or Legal Separation, it is critical to be informed and properly navigate the process—especially when your assets are at stake.
From our Folsom office, Scharf Law, P.C. represents clients across Sacramento, Placer, and El Dorado counties, providing the clarity and advocacy you need.
A Confident and Aggressive Advocate on Your Side
In these high-stakes matters, it is essential to have a confident and aggressive attorney to represent and advise you throughout the process. Owner and Managing Attorney Taryn M. Scharf is ready to guide you through this difficult time.
Over Thirty Years of Combined Experience
At Scharf Law, P.C., our team is prepared to assist you with a combined total of over thirty years of legal experience. We are ready to work towards an ideal solution for you.
Schedule Your Consultation Today
For more information regarding your specific matter, request a consultation with our team.
