Is your property community (marital) or separate? This is what we mean by property characterization. By “property” we mean any type of asset. In your divorce, you can determine and agree upon your own property characterization and division, perhaps with the assistance of a divorce mediator. When a judge characterizes property in a divorce, the time of acquisition of the property is often critical.
There are two key dates. These mark the beginning and the end of the marriage for the purpose of characterizing your property. They are the date of marriage and the date of separation.
The law here is fairly complex. Here are some legal basics that may be helpful. They relate to how time of acquisition generally affects how a judge characterizes an item of property in a divorce.
Time of Acquisition – Legal Basics
a) Property acquired before marriage is separate property. Also, any “rents, issues and profits” arising from this property are also separate property (even if they arise during the marriage).
b) Similarly, property such as compensation for work that was earned before marriage is separate property (even if it isn’t received until during the marriage).
c) In the same way, “rents, issues and profits” of property acquired during marriage are community property (even if they arise after the date of separation). Work compensation or benefits that were earned during marriage are community property – even if not received until after the date of separation.
d) When community funds are used to make payments on separate property (such as to pay the mortgage on a house a spouse bought before marriage), the marital community acquires a financial interest in the property.
e) Because any income arising from a spouse’s efforts is community property, the community is entitled to a fair share of any profits that result from a spouse devoting more than minimal time during the marriage to handling his/her separate property.
f) Earnings of a spouse after the date of separation are the separate property of the spouse.
g) If after the date or separation a spouse makes efforts to increase the value of community property, the spouse is entitled to receive a fair share of any success in doing so.
h) A cause of action (such as a lawsuit) filed during marriage and arising from a right accrued during marriage is community property, even if the proceeds are received after separation.
i) Income from licensing agreements, copyrights, trademarks and other works produced during marriage are community property, even when received after separation.
j) Separate property includes gifts received by a spouse during the marriage. When there is a question as to whether a gift was to one or both spouses, the intent of the donor at the time of gift is normally the deciding factor.
This information comes in large part from California Judges Benchguide 202 – Property Characterization and Division. It may be wise to consult with a family law attorney with questions about your particular situation.