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How to keep individual property separate in California

Some residents of Oakland, California, may be unaware that California divorce law designates it a community property state and in the event of a divorce, assets are distributed equitably between the couple. In a community property state, all assets acquired during the marriage are considered marital property and are equitably distributed.

However, separate assets, if not comingled with marital assets, will not be part of equitable division in property division proceedings in a community property state. It is important to keep separate property separate for a secure financial life in the event of a divorce. Many ways exist for a resident to keep separate property separate.

One popular way is to draft a prenuptial agreement before the marriage. The agreement should clearly identify personal assets and property that should remain separate from marital assets in the event of a divorce. If a person is married without a prenuptial agreement, the person can prepare a postnuptial agreement clearly distinguishing personal property from marital property. Another way to keep personal property separate is by creating a trust or by keeping personal property solely in one spouse's name.

After the decision to keep personal property separate is made, it is important not to comingle personal property during the marriage. Some common mistakes often made by spouses are can result in separate property becoming marital property. Personal assets should be in a separate account, not a joint, account. Investments accounts should be kept separate for depositing dividends and interests.

A house purchased before the marriage without the benefit of a prenuptial agreement identifying it as personal needs special attention, especially to the name on the deed. If both the spouses pay the mortgage and property tax payments from separate accounts, the house may be considered marital property. If a spouse does not want personal assets to become marital assets, it is advisable not to deposit funds from separate property sources into joint accounts.

Source: NerdWallet.com, "The Do's and Don'ts of Keeping Assets Separate in Marriage," Kathleen Nemetz, Mar. 26, 2015

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John T. Chamberlin, Attorney at Law
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