Property and Debt FAQs

Property and Debt — Frequently Asked Questions

Q. Do I need a lawyer if I have property?

A. You may not need a lawyer; it depends on how straightforward your situation is. But if you have anything of value (or if you have significant debt), it is always a good idea to at least have a consultation with a lawyer. You may not need to hire a lawyer to take on your entire case. You may be able to resolve your concerns by hiring a lawyer to help you with just the property part of your case.

Q. When we separated, we each took our own car and the furniture we wanted. So we have already divided our property, right?

A. Not exactly. It does not matter who is using the property or who has control of it; community property items still belong to the community until a judge awards them to 1 of the parties. The separate property of 1 spouse or domestic partner still belongs to that person, even if the other party is using it.

Q. How do I know what the fair market value is?

A. The fair market value of an item is the amount it would bring if you sold it “as is” (in its current condition). The value of furniture is what you would get for it in a yard sale or if you listed it in the want ads. If you are trying to figure out the value of a car, you can check the Kelley Blue Book.

If you want to figure out the value of your home, ask a real estate agent for several comparable values or get a formal appraisal done.

Q. During the marriage or domestic partnership, I worked and put part of my paycheck into my own savings account. I used this to buy a car before we separated. The title is in my name alone. So that means the car is mine, right?

A. No. Half of the value of the car belongs to your spouse or domestic partner. All money earned by both spouses or domestic partners during the marriage or domestic partnership is community property, so anything bought with that money belongs to both parties equally.

Q.My spouse/partner is listing an asset that was purchased during the marriage/domestic partnership as his separate property. I thought that things purchased during the marriage or domestic partnership were community property. Isn’t that the case?

A. It depends on where the money to buy the item came from. For example, if 1 spouse or domestic partner inherits money, even if it is during the marriage or domestic partnership, that is separate property. Whatever the spouse or domestic partner then buys with the inherited money also becomes the separate property of that person.

Always look at the source of the money used to buy an item. In this way, you can decide if the item is separate property or community property.

Q. We have a credit card in both our names. I agree to take on the payments by myself. Is that ok?

A. This situation can present problems for you and your spouse or domestic partner. When you applied for the card, both of you signed the agreement to pay. Later, you terminated your partnership or marriage. Even if you now say that you alone will pay the joint debt, the credit card company is not bound by your agreement or divorce court order. The credit card company can still come after your spouse or domestic partner when payments are not made. If this happens, both of your credit ratings will be hurt.

Q. What happens if my spouse’s or partner’s separate property is put with other money, like earnings from the marriage or domestic partnership, to buy something?

A. This is called “commingling.” A common situation is when 1 party owned a house before the marriage or domestic partnership and then sold it and used the proceeds as a down payment on another house after getting married, or after registering a domestic partnership.

The down payment for this new house would be considered separate property (since the money came from selling a house that 1 person owned before the marriage or partnership). But if the mortgage payments on the new house are made during the marriage or partnership using the earnings of either 1 of you, the equity (value) resulting from paying down the house loan is community property. The result is that the equity in the house is commingled.

If you have a situation like this, it is very important to speak to a lawyer about it.

Q. What about pensions — can they be commingled?

A. Yes. Contributions you each make to your pension before the marriage or domestic partnership are separate property. Contributions made after the date of marriage or registration of the domestic partnership are community property, so they will be equally divided between parties in the divorce case.

Dividing a pension is more complicated than dividing some other kinds of property. This is one of the situations where a lawyer’s help is necessary.

IMPORTANT!!! If you are in a domestic partnership or same-sex marriage, talk to a lawyer. Federal laws apply to pension plans, and recent court decisions have resulted in the recognition of federal benefits and rights for people in same-sex marriages (in states, like California, where same-sex marriages are legal), which may affect how pension plan division and other issues governed by federal law will be resolved. Similarly, the impact of federal laws on pension plans or other federal taxes and benefits on domestic partnerships may also be complicated to figure out on your own.  So make sure you understand how federal law currently applies to you and your situation. Read more about how the new laws may affect divorcing same-sex couples in California. Click for help finding a lawyer.

Q. We each have a pension. Can we just keep our own?

A. You both may be able to keep your own pension. But you need to be sure of the value of each pension. You should talk about this option with a lawyer.

Q. I keep hearing that I need a lawyer to deal with my pension. Why?

A. A pension can be more valuable than any other asset acquired during the marriage or domestic partnership, including a house. It may be worth more than all of the other assets put together.

It is a good idea to have a lawyer’s help any time you have such a valuable asset, but this is even more important when you are dealing with a pension. The reason is that special rules apply to pensions. These are very technical and do not apply to any other kind of asset.

A pension plan must be “joined” as a party in your divorce case before a judge will issue an order about how the pension will be divided. That court order is called a qualified domestic relations order, or QDRO. If you make an error, there could be harmful results. It is certainly worth paying a lawyer to correctly prepare the QDRO for you.

IMPORTANT!!! If you are in a domestic partnership or same-sex marriage, talk to a lawyer. Federal laws apply to pension plans, and recent court decisions have resulted in the recognition of federal benefits and rights for people in same-sex marriages (in states, like California, where same-sex marriages are legal), which may affect how pension plan division and other issues governed by federal law will be resolved. Similarly, the impact of federal laws on pension plans or other federal taxes and benefits on domestic partnerships may also be complicated to figure out on your own.  So make sure you understand how federal law currently applies to you and your situation. Read more about how the new laws may affect divorcing same-sex couples in California. Click for help finding a lawyer.

Q. What if the other party owes me money under our marital settlement agreement (MSA)?

A. It depends. If your marital settlement agreement (MSA) was “merged” or “incorporated into” (became part of) your judgment, then you can enforce it like any family law money judgment. Read the section on Collecting Your Family Law Money Judgment for information and instructions to follow.

But if your MSA was not merged or incorporated into your judgment, it is treated like a contract and not a judgment. This means you cannot enforce it like you can enforce a money judgment. If you want to enforce any of the terms of the MSA, you have to file a civil case for breach of contract and get a judgment through that civil case.

You may want to talk to a lawyer about how to file a civil case for breach of contract. Click for help finding a lawyer.

Q: Who keeps the engagement ring if the engagement is broken before we get married?

A: It depends.

If the engagement is broken by mutual agreement, then the person who paid for the ring may get the ring back or its value, or part of its value. A judge or a jury determines what is a fair value for the ring, if the parties cannot agree.

If the engagement is broken by the person receiving the ring through no fault of the person who paid for the ring, then the person who paid for the ring may get the ring back or its value, or part of its value. A judge or a jury determines what is a fair value for the ring if the parties cannot agree.

If the engagement is broken by the person who bought, and paid for, the ring through no fault of the person receiving the ring, the person receiving the ring can keep it.

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