Legal Center:  Who Owns What

HOW YOUR PROPERTY AND DEBTS ARE DIVIDED

by Aaron Dishon, Esq.

As a general rule, all community property and community debt is split evenly (50-50) between the spouses upon dissolution. This of course does not mean the house or the car will be physically split in half or the spouses will have to share them.

Rather, the rule states each item of community property must be evaluated in terms of its market value. Each spouse is then entitled to receive community assets with a value equal to one half of the entire community estate.

If the parties own a house, the court may award the house entirely to one party and award the other party community assets of equal value. Thus, it is the entire worth of the community estate that is important, and neither spouse has a right to a one-half interest in any particular asset.

For an example, if a couple own a car worth $20,000 and a home worth $50,000 and the husband keeps the car whereas the wife keeps the home, the wife will owe the husband $50,000 less $20,000 = 30,000 divided by two = $15,000. In this example, the $15,000 would represent an “equalizing payment” that would be due from the Wife to the husband. 

This rule is designed to make possible a "clean break" between the spouses by terminating the joint ownership relationship. The nature of the particular asset, however, will be considered by the court when dividing assets.

Common examples of this include circumstances where the sale of the family home would uproot the couple's minor children, or where a particular item has important sentimental value for one spouse. Nonetheless, it is not common for a court to require parties to continue to hold assets together once they have completed a divorce.

As to separate property, California courts may not award any portion of one spouse's solely owned separate property to the other spouse unless both parties request such a division.

There are specific rules for many complicated assets, such as pension plans and business interests, many of which are discussed in other articles on this web site.


This Article How Your Property And Debts Are Divided was written by Aaron Dishon; Copyright Dishon & Block, APC.