Getting married means joining two lives, and getting divorced means separating those lives—including property. But can you divorce without splitting assets in California? You can do so in specific circumstances, typically involving voluntary consent from both spouses.
Contact a divorce lawyer near you for help understanding your property rights and obligations during marriage and divorce. In every case, our family lawyers work earnestly and diligently to keep costs low and avoid creating or worsening family tension.
Although we will take your case to court if necessary, we believe reasonable solutions can often be found, even for seemingly impossible issues. Divorcing without splitting assets in California is possible under specific conditions. Spouses can negotiate agreements, use prenuptial contracts, or exchange assets for spousal support or debt liability. Courts divide community property unless an alternative agreement is approved. Mediation helps find solutions to avoid selling assets.
What Does Not Splitting Assets Mean?
To different people, not splitting assets may mean:
- Each spouse keeps their property,
- One spouse keeps all community property,
- The spouses divide only certain assets, or
- The spouses divide property without selling any of it.
The stricter definitions are less likely to apply to any given situation, so we address the alternatives, too.
California Divorce and Property Distribution Laws
In California, you need a court order to legally divorce your spouse. If you do not negotiate the terms of your divorce, the court decides how to divide your property. It identifies each spouse’s separate property, the community estate, and community debts. Then, the court fairly divides the property that is subject to division.
The Community Estate
In the absence of an agreement to the contrary, the property the couple acquires after they get married is community property—unless it qualifies as separate property. Property is separate if acquired:
- Through a gift to one spouse;
- From a will or inheritance;
- Before marriage; or
- As profits, rent, or issues from separate property.
The community estate includes property of all types acquired during the marriage, such as:
- Salaries, wages, or other earnings;
- Financial or bank accounts;
- Retirement benefits;
- Real estate; and
- Personal property used by both spouses.
Property outside of California is still subject to state distribution laws if you file your divorce here.
Debts and Liabilities
Debt can be separate or community property, too. Courts consider debt incurred before the marriage to be separate, while most debts acquired during the marriage are community. Some debts, like student loans and legal liability for wrongful death or injury, may belong only to the spouse who incurred them, but the circumstances of each case will determine that.
Dividing Property in a Divorce
After the court identifies shared assets and liabilities, it divides the community estate equally or, at least, substantially equally. It may order reimbursement of a spouse’s contributions to community property acquisition or the other spouse’s education or training.
The court need not divide property equally in certain situations. If the spouses propose a written agreement dividing assets and liabilities, the court typically approves it, even if it is unequal. And the spouses can state how they want to distribute property on the record in a court hearing.
Ways to Divorce Without Splitting Assets in California
To successfully divorce without splitting assets, you typically need to reach a mutual agreement with your spouse. In rare circumstances, dividing the community estate substantially equally could mean not splitting assets. Your success at not splitting assets may depend on what you and your spouse want, what you have, and how you define splitting assets.
Agreement
Usually, you negotiate an agreement with your spouse to avoid splitting assets. A premarital or prenuptial agreement defining each spouse’s property rights can do the trick.
If you are already married and have not decided whether to divorce, you can also transmute (convert) one type of property into the other. You typically convert community property to separate property in a written document you both sign. You can also convert the property by transferring it in a way that makes your intent clear. For example, you may transfer funds from a joint account to one spouse’s solo account.
Otherwise, you typically address asset distribution during the divorce process. In limited circumstances, you may divorce without splitting assets by offering certain things in exchange for community assets, like:
- Spousal support,
- Separate property, or
- Liability for debts.
Many couples benefit from mediation in property negotiations. A mediator is a neutral third party—someone not involved in the case—who leads a conversation between the spouses. In the collaborative mediation environment, many people find new, innovative solutions that work for both parties.
Special Justifications
Rarely, dividing property substantially equally may mean not splitting assets if, for example, one spouse:
- Incurred significant debt that did not benefit the other;
- Wrongfully wasted or misused community assets to reduce the amount the other could keep; or
- Is awarded civil damages in a domestic abuse-related lawsuit.
Generally, the debt or misappropriation must equal or exceed the community estate to avoid division.
Alternatives to Divorce Without Splitting Assets
Can you divorce without splitting assets in California if you and your spouse’s lives and property are mixed together? Usually, no—even if both spouses are motivated, it is sometimes impossible to divorce without dividing the community estate. Yet, many spouses are more concerned about not splitting or selling specific assets, as opposed to being concerned about the entire estate.
Divorce Without Splitting Specific Assets
Sometimes, a spouse may accept dividing some assets but not others. For example, many people grow nervous at the thought of a former spouse retaining part of their retirement benefits.
If both spouses have earned relatively equal benefits, each may want to keep their own. If one spouse has significantly better benefits, you can negotiate. The spouse with benefits in their name may offer spousal support or a lump sum payment now to compensate for the other spouse not receiving benefits later.
Divorce Without Selling Assets
Spouses sometimes want to avoid splitting assets because they are concerned they will have to sell certain property. This can be especially true when the community estate includes one asset that far exceeds the value of others—typically the family home.
You can often find solutions to avoid selling. One spouse may offer a lump sum, essentially buying the other out of their one-half interest in the property. If neither spouse can afford that, the spouse who keeps the house may arrange to buy out the other spouse over time.
Or, the spouses may agree to exchange other property, pay out of separate assets, or any number of options depending on their unique situation.
Create a Property Distribution Plan
If you are considering or in the process of divorcing, Pakpour Banks LLP can help. We can advise you on what options, if any, are available for you to avoid splitting assets.
And, if completely avoiding splitting assets is impossible, we can help you identify what you want, decide what you could offer in exchange, and negotiate terms on your behalf. Contact us to discuss the options available.
Brian enters the family law profession with a refreshing approach to these proceedings: heal families; don’t destroy them. In some cases, this means the family is going to look different than it did before. In other cases, this means a new family is created where there was none before. Either way, individuals should leave family court knowing their voices were heard, and with healthy attitudes about themselves and those they love.