When people get divorced in California, the law mandates that their "community property" be divided equally between them. This means that any property accumulated during the marriage, with the exception of inheritances and gifts, is subject to even distribution. While this sounds like a simple premise, if the spouses have property and assets of significant value, the whole procedure can become complicated fairly quickly. To ensure that you are sufficiently aware of the marital assets to be divided between you and your spouse, it is important that you consult with an experienced San Diego family law attorney as soon as possible.
Properly preserving the right to marital property that is eligible for distribution has the potential to affect each spouse's future financial position. By most accounts, this is a critical phase in the proceedings. One challenging aspect is determining what is separate and community property, respectively. A recent court of appeals case involving Frankie Valli and his wife, Randy Valli, addressed the issue of whether a life insurance policy is deemed community property to be split during the dissolution of the marriage. The parties had been married for 20 years when they decided to separate in 2004. The year before the separation, the husband used community property funds from a joint back account to pay for a life insurance policy valued at $3.75 million. His wife was named the sole owner and beneficiary.
At trial, the court determined that the life insurance policy was community property because it was acquired with community funds during the marriage. In crafting its judgment, the court awarded the policy to the husband but required him to buy out his wife's interest, namely one-half of the policy's cash value at the time of trial. The court of appeals reversed, concluding that the insurance policy was the wife's separate property.