How do assets from our marriage get split up?

How do assets from our marriage get split up?

Characterization Generally

“Characterization of property, for the purpose of community property law, refers to the process of classifying property as separate, community, or quasi-community. Characterization must take place in order to determine the rights and liabilities of the parties with respect to a particular asset or obligation and is an integral part of the division of property on marital dissolution.”

Generally speaking, property characterization depends on three factors: (1) the time of acquisition; (2) the “operation of various presumptions, particularly those concerning the form of title;” and, (3) the determination “whether the spouses have transmuted (transferred)” the property in question, thereby changing its character. Id. In some cases, a fourth factor may be involved: (4) whether the parties’ actions short of formal transmutation have converted the property’s character, as by commingling to the extent that tracing is impossible.

“The character of the property as separate or community is fixed as of the time it is acquired; and the character so fixed continues until it is changed in some manner recognized by law, as by agreement of the parties.”

Community Property Presumption

There is a presumption in family law that all property acquired during marriage is community property. Fam. Code § 802. Once it has been shown that an asset was acquired by either spouse during marriage (other than by gift or inheritance), that asset will be treated as community property, unless proven otherwise. If one spouse contends the property is his or her separate property, he or she bears the burden of proving that claim.

Valuation
Valuation is most often done as of the time of trial. Family Code, section 2552, subdivision (a), states: “For the purpose of division of the community estate upon dissolution of marriage . . . of the parties . . . the court shall value the assets and liabilities as near as practicable to the time of trial.”