3 Ways the California Courts Divide Community Property Real Estate in Divorce

May 16, 2022

Under California’s Community Property model, divorcing spouses each own half of their real property and half of their debts equally. Separate property—property that was acquired by one spouse before the marriage and was never commingled into the marriage—is an exception, but, for the most part, California couples can expect to split the total value of their jointly-owned property and debts right down the middle.

Note: Quasi-community property—jointly-owned out-of-state property—is treated as community property in California.

That said, divorcing couples are allowed to develop and agree upon a property division plan before going to their California court. Bear in mind: both parties will still be jointly responsible for all community property and debts until a judge reviews the plan and issues a final order, so couples should keep paying their bills until their case is closed.

Here are 3 ways the court divides community property in California

Buyout

If one spouse wants to keep the family home, they may be able to “buy out” the other spouse’s ownership stake in that home. The benefits of buying out are usually related to maintaining a stable living environment for the couple’s children because it means the kids won’t have to change schools or leave beloved friends behind. But a buyout can also make sense if the divorce is taking place during unfavorable real estate market conditions. An experienced REALTOR® can help you decide if this is the right option for you. Bear in mind that once a buyout is complete, the out-spouse will no longer benefit from any increase in the future value of the home.

Assigning Items

Another way one spouse might keep the home is if it’s assigned by a judge. If that happens, the marital assets will be divided equitably and the in-spouse will refinance the home solely into his or her own name. Because the value of assets and debts, as well as each spouse’s education attainment and employability, are inherently unequal, a judge can help the divorcing couple determine how to divide the marriage in a manner that is fair to both parties. However, if the couple agrees on a mutually acceptable division of property on their own, then equitable distribution rules may not apply.

Sell and Divide Proceeds

The third way the court could divide the couple’s home is by ordering it sold and divided equally. This is the surest way to ensure equal division because the value of the sold property will be split down the middle, with half distributed to each spouse. This eliminates bickering and provides each spouse with cash-in-hand to start their new lives.

There is a lot to know when it comes to real estate and divorce, especially in high-value markets like California’s. To make sure you get the most value from your home, don’t trust it to just any real estate agent—enlist the help of a Certified Divorce Real Estate Expert (CDRETM), a specially trained agent who knows what to look for and will keep both spouses focused on what’s important: protecting the equity in your family’s home.

If you need advice on real property issues—or have a property that needs to be listed—give me a call or send me an email. I’m always happy to help!

650-550-8646

Shannon Rose
CDRE, SRES, CDPE, CLHMS, GPS
DRE# 01422955
Los Gatos, CA
1-650-550-8646
DivorceRealtor@RoseGroupRE.com

BAY AREA DIVORCE REALTOR®

SHANNON ROSE/ROSE GROUP
DRE #01422955

KW BAY AREA ESTATE
DRE #01526679

16780 LARK AVE.
LOS GATOS, CA 95032

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