Property division is often one of the most contentious parts of divorce. Most of the time, one or more parties will feel they have the right to retain specific property because they paid for it or used it more during the marriage. In high-asset divorces, property division is often even more impactful as one or both parties may have had separate property that they brought into the marriage. For example, you may have had a home that you bought before getting married or a large 401k balance that you already had before you signed on the dotted line. In this case, knowing how to protect separate property and keep your soon-to-be-ex’s hands off it all together is essential.
What Do You Mean “Protect Separate Property”? Isn’t California a Community Property State?
As with most marriage-related laws, it’s essential to recognize that there is often a lot of nuance. California is a community property state. In simple terms, any assets acquired during the marriage are community property. To illustrate this point, imagine that both spouses have a net worth of $0 when they get married. One spouse works; the other stays at home. At the end of the marriage, they have $1 million in assets. The entire balance of that $1 million is community property. It doesn’t matter who earned it – who went to work and who didn’t – it was earned as part of the marriage and is thus equally divisible per the law.
Typically, though, this scenario is more murky. Suppose one of the spouses owned a home worth $500k before marriage. The family’s total net worth would be $1.5 million – $1 million earned during the marriage plus the $500k brought into it.
Does that mean the spouse automatically gets 50% of the $500k house brought into the marriage? Not always. Not if you protect separate property so that your soon-to-be-ex doesn’t have a claim to it.
What Are the Ways to Keep Individual Property Yours?
First, it’s worth reiterating that California considers all income generated within the marriage as community property. There’s typically no way to argue that property acquired during the marriage is ever separate (inheritances are one of the rare exceptions to this rule as they can be separate property).
However, property brought into the marriage (and inheritances within the marriage) can still be separate property only if you have taken steps to maintain it as separate and you have yet to commingle it with marital assets.
For example:
- Separate: Keeping the home you brought into the marriage in your name only. Keep any rental income from the house in your name only in a bank account and pay for repairs, property taxes, and other expenses out of that account.
- Community: Putting your spouse on the house deed or using marital funds to pay for the upkeep of the These actions can make it easier for a spouse to claim it is marital property.
- Separate: Keeping any inheritance funds in a bank account in your name only.
- Community: Putting the money you got from your long-lost uncle in the family bank account and then spending it on everyday marital expenses.
In each “community” case, one spouse typically takes affirmative action to blend or “commingle” separate property with marital assets. Courts call this transmutation, where one spouse transmutes property from individual to community property – often inadvertently. The court then believes that the spouse intended to make the asset available to the community pot, making it divisible like any other community property.
Protect Separate Property: Speak with a Lawyer Now
No matter what stage you are in the divorce process, if you have any assets you brought into the marriage, you must speak with a lawyer as soon as possible. An experienced legal team can help determine which assets and liabilities could be considered separate property, and they can help guide you on the best ways to protect those assets and preserve them throughout the divorce process.
We invite you to contact us at (408) 560-4487 or complete our secure online form to schedule a case evaluation. We can help advocate for you and help you keep the property that you brought into the marriage separate.
