California courts are generally mandated to divide the martial community property estate equally, unless the parties agree (settle) to an unequal division of property. Under the holding in Marriage of Brewer & Federici, (2001) 93 CA4th 1334, any division by agreement that is unequal must be “based upon a complete and accurate understanding of the existence and value of community and separate assets that are material to the agreement.” Fam C §§2551–2552 instructs the court to determine the character of the martial and non-marital community (Marital community or separate property of one or both the spouses) and to value the assets and liabilities included in the community property estate.
Additionally, Family Code §760 creates a presumption of community property where by statute all real or personal property, regardless of location, that is acquired during marriage while living in California is community property. Under Marriage of Haines (1995) 33 CA4th 277, 289, this presumption can only be overcome by the presentation of credible evidence that the acquisition of the asset came from a separate property source. Family Code §2581 dictates that property acquired during marriage and held in joint form, i.e. tenancy in common, tenancy by the entirety or joint tenancy is also presumed to be community property. Under Fam Code §2581(a), evidence that might effectively overcome this presumption could be where the deed contained an unequivocal statement that the property is intended to be separate property or where a written agreement exists delineating that the property is the separate property of one of the spouses.
Where a court determines that an asset is separate rather than community property, the court generally cannot assert jurisdiction over the disposition of the separate property. However, Family Code §2650 enables the court to split out into separate property interests any real or personal property held as joint tenants or tenants in common, wherever it is situated and regardless of when it was acquired.
Because of the above legal requirements, a central focus of the discovery process in divorce involves obtaining and documenting evidence necessary to determine the character of marital and non-marital property interests and classifying them as separate, community, or mixed. Evidence including the date of acquisition of an asset, its purchase price, the source of funds used to acquire, make improvements to, service any mortgage or debt incurred to finance the asset’s acquisition and acquisitions by gift or inheritance are relevant to making the necessary asset classification. Executed Pre and Post marital, and estate planning documents that reference the martial or separate property at issue are also relevant.