California divorce law explicitly states that as a general rule, property acquired by couples during a marriage is community property, subject to division. And while this rule seems fairly straightforward, virtually no divorce case is without complications when it comes to the division of property. As the parties are separating and beginning to consider their new future, each spouse will most certainly try to preserve and protect their separate financial interests moving forward. To be sure your rights are protected throughout your divorce proceeding, it is imperative that you contact a local family law lawyer from the San Diego area.
Property subject to division in divorce includes bank accounts, the marital home, other real estate interests, investment accounts, and many other items. In order to allocate assets and debts in divorce, courts must determine what is separate versus community property. While the timing of the acquisition is of primary importance, additional factors may affect the characterization of property. For instance, assets may have been accumulated during the marriage, but what happens if one spouse used their own, separate funds initially to acquire that jointly held property?
A recent case in California addressed this issue, among other intriguing family law topics in contention. Here, the parties were married in 1988 and began living apart in 1995, but both did not consider the marriage to be over until mid-2004. The husband filed for divorce in 2005 in Hawaii, even though the wife lived in California, and so did the parties during their marriage. The wife filed for dissolution of marriage in California in 2006. After several years, the Hawaii court action was ultimately dismissed for lack of jurisdiction.
In 2012, a California trial court entered a judgment of divorce as to “status only,” reserving jurisdiction over all other matters. Among the disputed issues were four “jointly-titled” investment accounts that the wife claimed were opened with her separate funds. The husband argued that the investment accounts were opened during the marriage and held in their joint names, so they should be presumed to be community property. The trial court ruled, among other things, that the investment accounts were the wife’s separate property, not to be divided in divorce. The husband appealed this issue as well as other related rulings, arguing that the court erred in finding that the wife owned the four investment accounts.
The court of appeals reviewed the applicable law: 1) Family Code Section 760, which pertains to community property generally, and 2) Family Code Section 2581, which establishes a presumption for property held in joint form to be community property. The court pointed out that the presumption of Section 2581 applies when a party acquires property during the marriage in joint title form. Furthermore, the presumption cannot be overcome simply by tracing the source of funds for the property acquired during the marriage, as the wife tried to do in this case.
The court of appeals reversed this ruling on this issue, concluding that since all four investment accounts were held in joint title form and were acquired during the marriage, they are community property. The wife failed to introduce documentary evidence rebutting the joint title presumption. However, the court did rule that Section 2640 gave the wife the right to reimbursement for her separate property contributions to the investment acquisitions.
This case clearly illustrates the complicated process of property division in divorce and how important it is to consult with an experienced family law attorney as early in the process as possible. For more than 20 years, Roy M. Doppelt has been representing parties in divorce matters in Southern California. Doppelt & Forney serves clients in Linda Vista, Encinitas, Scripps Ranch, San Diego, and throughout Southern California. For a free consultation with a dedicated and experienced family law lawyer, contact Doppelt & Forney through the law firm’s website or give us a call toll-free at (800) ROY IS IT (769-4748).
Related Blog Posts: