As a community property state, California considers a married couple one legal “community.” The law views all assets and debts obtained by either person during the marriage as shared property.
During a divorce, the courts typically divide this community property equally. However, there are ways to keep separate assets unconnected to your marital estate.
Draft prenuptial or postnuptial agreements
One way to protect your holdings in a divorce is with a prenuptial agreement stating that you retain certain assets in a divorce. A postnuptial arrangement can also distinguish your individual property from marital property. These contracts usually prevail over the court’s general division rules.
Prove your property is separate from the marital estate
You can protect your assets by showing they meet the legal requirements of separate property in California:
- You inherited property during your marriage
- You obtained property as a gift
- You owned the property before you married
- You earn income from your separate property
- You purchased assets with your separate property
Maintain a dedicated bank account for your personal assets
Separate assets can become community property during the marriage if you pay marital expenses from the individual property income or if both spouses deposit money into the account. It is crucial to keep this money unattached from your joint finances.
Agree on an equitable division of property
If you cannot prove your assets are separate property, you can negotiate an agreement protecting your holdings. You can give your spouse a different asset of similar value to create an equal division. Obtaining appraisals or valuations of each asset can help with this process.
Thorough knowledge of California laws and early action can help you avoid mistakes and keep your individual assets during a divorce.
