Property Division in Divorce: What You Need to Know

Divorce, Divorce settlement, Family Law, Mediation, Uncategorized

Divorce is a challenging and emotionally charged process, requiring careful consideration and resolution of various legal and financial matters. One critical aspect that often arises during divorce proceedings is property division.This encompasses a broad range of assets, including real estate, investments, bank accounts, vehicles, personal belongings, and more.

When a marriage comes to an end, couples must navigate the complex task of dividing their assets and debts fairly. So before you try to find a divorce lawyer near you in San Diego, this article will shed light on the intricacies of property division in divorce and provide essential information to ensure a smooth and equitable distribution of assets. Read on!

How is the property split in a divorce?

Starting the process of property division in a divorce begins with each party being required to disclose all their assets and debts on their Schedule of Assets and Debts (FL-142). Both parties exchange these forms to ensure equitable division.

How is property characterized for equitable division?

Separate property

Separate property is property acquired before marriage or after the date of separation. This includes, but is not limited to, inheritance, gifts, rents, profits, or proceeds. Additionally, inheritance or gifts acquired during the marriage are also separate property. 

The date of separation is determined by (1) the parties’ intent to end the marriage and (2) the parties’ conduct consistent with the intent to end the marriage i.e., living in separate residences. 

Community property

California is a community property state. Community property is property acquired by spouses during marriage. There is the community property presumption that anything acquired during marriage is community property. This means you and your spouse have a 50/50 interest in the assets and debts acquired during marriage. 

Bank accounts

The characterization of bank accounts depends on when or how the account was acquired. If the account was opened during marriage, the account is community property. However, any bank account opened after the date of separation is separate property. An account opened prior to marriage, but with deposits made into it during marriage is also presumed to be community property. 


If you and your spouse purchase a vehicle together during marriage, it is community property. If you and your spouse have multiple vehicles, a Court will look to see if there is any disparity in the values of the vehicles and then equalize the amounts due to each spouse based on the disparity based on which vehicle each spouse is taking. 

Marital residence

If you and your spouse purchase a residence during marriage, it is considered community property. Upon divorce, spouses usually sell the residence and divide the net proceeds. This is the most financially viable option if neither you nor your spouse can afford the residence. 

A second option is one spouse buying out the other spouse’s community property interest. Usually, a buyout is a one-half payment of the home’s equity to the other spouse and a modification of the home loan. 

A third option is a deferred sale if you and your spouse have minor children.

Personal iInjury awards

The characterization of a personal injury award depends on when the cause of action arose, not when the proceeds are received. However, if the cause of action is against a party for personal injury, then the award is separate property. 

Retirement benefits

When work is performed to earn retirement benefits between the date of marriage and the date of separation, then the benefits are community property. However, if the work is performed before marriage or after the date of separation, then the benefits are separate property.                   

Stock options

When stock options are granted to an employee (spouse) before the date of separation but do not become exercisable until after separation, the court has broad discretion in apportioning the property. 

Disability pay

Disability payments received after the date of separation and before retirement are separate property. 

Severance pay

Severance pay is considered community property to the extent it was earned during marriage because like retirement benefits, it represents a form of deferred compensation. 


Pets are treated as personal property and if acquired during the marriage, they are generally characterized as community property. 


A transmutation is an agreement to either change community property to separate property, separate property to community property, or separate property of one spouse to separate property of the other spouse. 

A valid transmutation must:

  • Be in writing;
  • Expressly declare a transmutation; and
  • Be made, joined in, consented to, or accepted by the adversely affected spouse.

What are the means to divide property in a divorce?

Premarital agreement

A premarital agreement is an agreement between a couple before marriage that contracts out of the community property presumption and allocates the couple’s assets and debts as if there was a divorce. To be valid, this agreement must be voluntary, signed by both parties, and in writing. 

Property settlement agreement

A property settlement agreement is a written agreement between the parties outlining the division of marital property. Marital property includes real estate, retirement accounts, investment accounts, stock options, vehicles, bank accounts, and personal property. 

Court order

A Court must divide all community, quasi-community, and quasi-marital property of the parties, unless divided by the parties in an agreement. Normally, the court has no authority to dispose of either spouse’s separate property, unless requested by either party. However, the court may confirm separate property to the owner spouse.

How is the property split in a divorce

Who is a trusted divorce lawyer near me in San Diego?

At JWB Family Law, we‘re the ideal choice to guide you through the intricacies of property division in divorce. Our experienced family law attorneys understand the significance of this process and the potential pitfalls that can arise.

With our in-depth knowledge and meticulous approach, we ensure that you avoid common mistakes, allowing for a smooth and equitable distribution of assets. Whether you’re navigating an uncontested or contested divorce, we have the expertise to provide tailored solutions near San Diego Bay and across the region.


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San Diego, CA 92101

Phone: 619.234.6123

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Temecula, CA 92590
Phone: 951.297.3871

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El Centro, CA 92243
Phone: 760.460.4608


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