Irvine Property Division Lawyers

Among the various aspects involved in the divorce process, the one that is universal for all couples is the division of their marital estate. All couples have property; and, regardless of size of your estate, you will need to thoroughly and methodically address the division of your marital estate in order to avoid running into challenging and costly issues down the line. Our Irvine property division lawyers have extensive experience advising clients regarding property division under a broad range of scenarios, and we can use this experience to ensure that you achieve a favorable result in your divorce.

California’s Community Property Law and Your Orange County Divorce

In California, property division is governed by the law of community property. This means that each spouse is presumed to be an equal owner of all assets acquired during their marriage, and each spouse is entitled to half of the couple’s “community estate” when they get divorced. With only limited exceptions for unique circumstances, this is true regardless of the spouse’s respective financial and non-financial contributions, and the only way to significantly deviate from the strictures of California’s community property law is to rely on a legally-enforceable prenuptial or postnuptial agreement.

However, a key aspect of California’s community property law is that it only applies to assets acquired during the marriage. Assets that either spouse brings into the marriage are classified as “separate property” and are not subject to distribution. There are a few other exceptions as well, including an exception for assets acquired by inheritance between the dates of marriage and divorce. As we help you prepare for your divorce, we will determine the “separate” or “community” nature of all of your assets in order to ensure that nothing is mistakenly placed on the table.

Additionally, as Orange County frequents lists of the wealthiest cities and locations in the US, many clients come to our firm with high asset divorce cases. We take the time to navigate these high end divorce in Southern California, and our experiences have made us among the top in the legal field for these clients.

Our Lawyers Help Divorcing Spouses Make Informed and Strategic Decisions

When getting divorced, it is necessary to make informed decisions about all assets owned by one or both spouses. While it is possible to retroactively address overlooked assets post-divorce, this is an undesirable scenario that should be avoided. In today’s world, painting a complete picture of a couple’s marital estate is becoming increasingly complex, with technological assets such as digital photo libraries and cryptocurrency wallets playing roles of varying centrality during the process. With our practice focused exclusively on matrimonial law, our Orange County property division lawyers are particularly attuned to these types of issues, and we can help you make informed and strategic decisions while avoiding the mistake of overlooking assets that are subject to division in your divorce.

What assets are on the table in your divorce? In a typical case, we will help our client protect his or her interest in community assets including:

Real estate
Savings and checking accounts
401(k), IRA, Roth IRA, and other retirement accounts
Non-retirement investment accounts
Personal property such as vehicles, furniture, artwork, electronics, and jewelry
Bitcoin and other cryptocurrencies
Digital libraries and other digital assets

5 Important Facts About Property Division for Divorcing Spouses in Irvine, CA

Fact #1: The Term “Property” Might Be Broader Than You Think

What constitutes “property” for purposes of your divorce? The answer might be broader than you think. When getting divorced in California, everything you own is considered a form of property, and this means that everything you own must be characterized as either a separate asset or a community asset.

In addition to the types of assets listed above, other forms of property that may also be on the table in your divorce include things like: stock options, insurance policies and business ownership interests. But, these are just more examples, and we recommend that you work with one of our Orange County property division lawyers to make sure you identify all of the assets that are (and aren’t) at stake in your divorce.

Fact #2: It Will Be Up to You and Your Spouse to Identify Your Separate and Community Assets

Identifying your separate and community assets is one of the first steps toward dividing your assets in your divorce, and this is not something that will happen automatically. As the distinction between separate and community assets is based mainly on the date of acquisition (i.e., whether an asset was acquired before or after the date of your marriage), you will need to be able to show when each asset was received to determine its character for purposes of your divorce.

For certain assets, this will be fairly simple, and you and your spouse will likely be able to agree on the characterization of the majority of your assets. However, there can also be some challenges involved, and you may need to be able to track down documentation to prove when certain of your assets were acquired.

Fact #3: In Many Divorces, No “Splitting the Baby” Will Be Necessary

Many spouses assume that dividing their community property means literally splitting it down the middle. But, while this is one option, there are also various alternatives available. For example, in many cases, each spouse will want to keep different community assets, and it will be possible to divide the couple’s community property without dissolving any accounts or selling any assets in order to split the proceeds of the sale.

Fact #4: California Judges are Often Hesitant to Modify Property Divisions Post-Divorce

For various reasons, California judges are often hesitant to modify property divisions post-divorce. This makes it extremely important to get it right the first time around. For example, if you mistakenly identify one of your separate assets as community property during your divorce, this could prove to be a costly mistake with limited options for correction.

Fact #5: Experienced Orange County Property Division Lawyers Can Help You Make Informed and Strategic Decisions about Property Division

Due to the complexities and consequences involved with dividing assets in a divorce, it is important to work closely with an experienced attorney as you begin to prepare. With offices in Orange County, our property division lawyers represent divorcing spouses throughout Southern California, and we can help you make informed and strategic decisions with your long-term best interests in mind.

California Property Division FAQs

Can divorcing spouses agree to the terms of their property division rather than arguing in court?

Yes, in fact the majority of divorces are resolved by collaborative agreement without court intervention. This is true not only with regard to property division, but with regard to spousal support, child support, and parenting time as well. Our Orange County lawyers have significant experience helping spouses negotiate favorable property distributions; and, when necessary, we have also helped many of our clients secure favorable outcomes through divorce mediation.

How can I prove that an asset is my “separate” property?

There are various ways to prove that an asset is properly classified as “separate” property and therefore not subject to distribution during the divorce process. In many cases, divorcing spouses will be able to reach an agreement regarding the majority of their separate assets, as both will have an interest in keeping their separate property out of their community estate. When it is not possible to reach an agreement, evidence ranging from old photographs to credit card statements can be used to establish that specific assets were owned prior to the date of marriage.

What if an asset that I owned prior to getting married appreciated in value during my marriage?

When a separate asset appreciates in value during a marriage, the appreciation in value will generally remain separate property under California law. As you can imagine, appreciation of business interests where significant effort was contributing during the marriage can create a community property interest. If you have separate assets that appreciated in value during your marriage, our attorneys can walk you through the options that you have available.

What are the exceptions to California’s community property law?

As we mentioned above, one exception to California’s community property law is that assets acquired by inheritance generally are not subject to distribution in divorce. This is also true for:

Gifts given by one spouse to the other
Assets purchased using separate funds
Assets acquired while living separately

However, there are certain caveats, and establishing that an asset is exempt from distribution is not always (or even often) a straightforward process. Once again, our Orange County property division lawyers can help, and we can advise you in executing a plan to protect your separate assets in your divorce.

Are there tax consequences to dividing community assets in a divorce?

Potentially. Although exchanges between spouses generally are not taxable events, if you sell a piece of real estate or another asset during the distribution process, this could have tax implications. As we work with you during your divorce, we will discuss any tax (and other) implications with you in order to ensure that you are making fully informed decisions every step of the way.

Contact Our Irvine Property Division Lawyers for a Confidential Consultation

Are you contemplating a divorce? Do you have questions about protecting your assets under California’s community property law? To speak with a divorce lawyer at Seastrom Tuttle Murphy Dockstader in confidence, call 949-474-0800 or request an appointment online today.

Common Questions About Property Division in an Orange County Divorce

Who at the firm handles complex property division?

The firm practices family law exclusively and has represented Orange County families since 1976. Its Certified Family Law Specialists, certified in family law by the State Bar of California’s Board of Legal Specialization, are Brian G. Seastrom, Philip G. Seastrom, Thomas W. Tuttle, Janet E. Dockstader, and Ryan Patrick Murphy. Certification requires demonstrated experience in family law, peer review, and a written examination. The firm handles tracing after commingling, multi-entity business holdings, contested business valuations, real estate portfolios with 1031 exchange chains, carried interest and waterfall distributions, RSUs and deferred compensation, and goodwill allocation disputes.

Does an equal division mean every asset gets split in half?

No. California requires an equal division of the net community estate, not of each individual asset. Assets that cannot sensibly be divided, a business, a house one spouse will keep, a professional practice, are ordinarily awarded whole to one spouse with an offsetting allocation to the other. That makes valuation the decisive issue, because the offset is only as accurate as the values behind it, and it makes liquidity a real problem when the estate is concentrated in illiquid holdings and the equalizing payment has to come from somewhere.

How is separate property distinguished from community property?

By when and how it was acquired. Property acquired during marriage is presumed community. Property owned before marriage, or received during marriage by gift or inheritance, is separate, along with anything traceable to those sources. The difficulty is that separate property rarely stays segregated. Inherited funds get deposited into a joint account, a premarital home gets paid down with community earnings, a separate business grows through a spouse’s labor during marriage. Each of those creates a mixed asset that has to be sorted by tracing or apportionment rather than by a simple label.

What happens when separate and community funds have been mixed together?

The burden falls on the spouse claiming a separate interest to trace it, and the presumption favoring community property governs whatever cannot be traced. Tracing is done from records, following the separate dollars through the account activity, and it succeeds or fails on the completeness of the documentation. Where records are missing for part of the period, the untraced portion is generally treated as community. This is the single most common reason a legitimate separate-property claim is lost, and it is usually a records problem rather than a legal one.

Who is responsible for debt incurred during the marriage?

Debt incurred during marriage is generally a community obligation regardless of whose name is on the account, and it is divided along with the assets. Debt incurred before marriage or after separation is ordinarily the separate responsibility of the spouse who incurred it. There are important exceptions, including debt incurred for a spouse’s education and obligations arising from conduct that did not benefit the community. Because creditors are not bound by the divorce judgment, an order allocating a joint debt to one spouse does not protect the other from collection, so the judgment should address refinancing or indemnity rather than allocation alone.

About the Firm

Seastrom Tuttle Murphy Dockstader is a family law firm in Irvine representing clients throughout Orange County, and in Los Angeles County. The firm practices family law exclusively. Its attorneys include Fellows of the American Academy of Matrimonial Lawyers and of the International Academy of Family Lawyers, and attorneys certified as specialists in family law by the State Bar of California Board of Legal Specialization. Call 949.474.0800 to discuss a property division matter with the firm.