It is no secret that property division during a divorce can be challenging. In California, community property laws are followed when dividing property upon divorce. Under community property laws, property acquired during the marriage is owned equally by spouses and is divided equally when they divorce. It is oftentimes thought of as a fifty-fifty split of property upon divorce.
Under a community property system of property division, certain categories of property are not considered martial property and are not subject to division. These categories include property acquired before the marriage, property one of the spouses receives as a gift and inheritances that have not been co-mingled such as in a joint bank account. It can be helpful for spouses to keep assets they brought into the marriage and inheritances in separate accounts.
Community property rules may have a unique impact on the division of personal injury settlements. If the personal injury settlement is to address damages suffered to items belonging to the marriage, it may be considered community property. Damages related to pain and suffering of the spouse that was injured, however, belong to the victim to compensate them for their pain and suffering and may not be divided.
The legal process surrounding divorce is designed to help both parties move forward following the divorce with as positive a financial outlook as possible. Divorce mediation can be used to arrive at a fair settlement concerning property division and other divorce-related issues. Additional options are available to spouses through the family law process to help them resolve divorce-related issues such as the division of property. The couple is always free to reach agreements between themselves but the court is available to intervene when the couple needs help resolving divorce-related issues such as property division.
Source: The National Law Review, “Is Personal Injury Award Considered Community Property?” Aug. 1, 2016