There are three major components of resolving property issues in a California divorce proceeding: characterization, valuation, and, eventually, division and distribution.
Characterization: What is Community Property?
The first step in dealing with property issues in a divorce proceeding is to characterize each item of property held by the parties as community property or separate property. (Several other characterizations are possible, but they are less common.) California law related to the characterization of property is contained in statutes and in a vast body of case law which has been developed over time. In some instances, different laws suggest different results, and a judge must look to California's overall characterization scheme in order to properly characterize a particular item of property.
Very generally speaking, the characterization of each particular item of property as community property or separate property is determined based upon the time of its acquisition, and by the law in effect at that time. California community property is defined negatively: it includes all property acquired by a married person domiciled in California that is not specified by statute to be separate property. Separate property is statutorily defined to include all property owned before marriage, acquired after the date of separation, acquired by gift or inheritance, or produced by or from separate property.
Valuation of Property: Use of Experts
The valuation of property ranges from extremely simple-i.e., the value of a bank account as reflected in readily available bank statements-to extraordinarily complex-i.e., the valuation of a spouse's interest in a business or professional enterprise, located in California or elsewhere in the world. Valuation experts, persons with special training, experience and skill in evaluating the particular enterprise involved, are frequently required. If the parties engage independent experts, and if those experts do not agree, then the experts' credibility and the accuracy of their respective valuations will ultimately have to be determined by the judge after testimony at trial.
Division of the Parties' Property
Once all of the parties' property has been characterized and valuated, the separate property of each of the spouses can be confirmed to him or her, and the community property can be divided between the parties. A judge is required to divide the community property equally between the parties. If the parties settle their case before trial, while they are free to divide their property in any way they choose, they also attempt to reach a fair and equal division of all of their community property.
If you have questions about how your property might be characterized, valuated or divided, contact the California Family Law offices of Virginia H. Gaburo & Associates to schedule a consultation.
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