How to divide marital property in a divorce can be a very contentious issue between the parties involved. There may be some issues as to who gets what, and how certain properties are to be divided so that the parties are getting what they can be considered as “equal shares.”
California is a community property state, which means that as a general rule, and subject to certain exceptions, any and all property acquired by the spouses during the duration of the marriage is considered community property. And the presumption is that both parties have equal shares in community property.
Sometimes, however, issues can become confused, particularly with regards to indivisible properties such as a house, car, or business. To say that they get equal shares may become a confusing question when it comes time to determine the value of each piece of property so that a division can be arrived at that is equitable.
California courts adhere to certain guidelines when it comes to characterizing property involved in Roseville divorce proceedings, one of which is the valuation of property.
Time of Valuation
Property values can sometimes go up or down. For instance, the price of a new car would have gone down appreciably five years after it was purchased. What value should be ascribed to it, the price when it was bought or the price at the time of the divorce? In the same vein, stock prices could have gone up or down appreciably from the time when they were first purchased using community property assets.
Under the California Family Code Section 2552 (a), the assets and liabilities of a community estate should be valued “as near as practicable to the time of trial.”
“Trial,” in this instance, refers to the trial that deals with the division of property.
It could be said that the valuation of property near the time of trial also considers the period of the marriage, during which the parties shared a life together, and together they also share in the appreciation or depreciation of their community assets.
This general rule, however, admits of an exception where the court may set the time of valuation of property on the factual date of separation rather than the date of trial. In order to do this, however, there must be good cause shown. The party must show that using this alternative valuation date is the only way that an equitable division of property can be accomplished.
Hence, even if one or both parties have engaged in conduct that resulted in the dissipation of community property after their separation, or if only one party put in the time, effort and income that resulted in a great increase in value of community property, by using the alternative date for the valuation of property instead of the valuation at the time of trial, courts can arrive at a more equitable division of the community property. This alternative date is the date of separation.
When is the date of separation?
If the alternative date of valuation, or the date of separation, is to be used, the next question to be addressed is when is the date of separation? This is a pretty significant date and courts sometimes conduct a separate trial for this issue since the date of separation essentially dissolves the subsequent community property, as all income and earnings after the date of separation of the spouses are considered separate property.
The “date of separation” under the California Family Code is the date “when a complete and final break in the marital relationship has occurred,” and this can be evidenced by an expression of one spouse to another of an intent to end the marriage, coupled with conduct consistent to this intent.