If you and your spouse decide to divorce, then one of the most hotly contested issues will be who gets what. Property distribution is often one of the most contentious aspects of a divorce, especially if there is a lot to divide, and if there are no children from the marriage. A prenuptial agreement might be the way to go.
In California, when a couple legally separates, their property goes through the process of property distribution. California law defines community property as “any asset acquired or income earned by a married person while living with a spouse.” The law requires that the community estate be divided equally if there is no written agreement requiring a particular division of property. This means that from the total fair market value of the community assets, the joint obligations of the parties are subtracted, yielding the net community estate. Unless agreed otherwise, each spouse must receive half of the net community estate.
The law does not require an “in kind” division of the community property, which would mean you would have to divide each physical object. All that the law requires is that the net value of the assets received by each spouse must be equal. Thus, it is not uncommon for one spouse to be awarded the family residence, with the other spouse receiving the family business and investment real estate, as long as each spouse gets assets that are equivalent in value. Since the total net value of the assets being received by each spouse is equal, the division is okay.
It is not difficult to determine whether a particular asset is community or separate property, ordinarily. However, certain types of assets can pose unique problems in this regard, including a business that one spouse owned before marriage and both spouses worked on during the marriage, or property that belonged to one spouse before marriage but was shared during the relationship. Also while property owned before marriage or inherited during marriage is separate property, couples often co-mingle this with community property accounts which blur the determination.
One of the best ways to make sure that your separate property does not become marital property or get confused with it is to execute a prenuptial agreement before your marriage. One of the prime reasons for making a prenuptial agreement is to protect your property in the future. In the agreement, you can list the property that you are bringing into the marriage, and specify that these assets are to remain separate property. In this way, you can avoid a huge hassle, should you and your spouse ever decide to divorce, and you can rest assured that the property will stay with you.
If you want to execute a prenuptial agreement before tying the knot with your significant other, contact the Sonoma County family law attorneys at Charles D. Stark Attorney at Law online or at 707.527.9900 to discuss your options and start planning for your future.