Posted in Divorce
Divorce is one of the most stressful legal processes a person will ever go through, and stress tends to breed misinformation. Friends, family members, and even daytime television love to share “facts” about divorce that simply aren’t true in California. When you’re making decisions about your home, your retirement accounts, your business, or your children, bad information can cost you real money and real time.
Our founder Matthew Skarin is a California family law attorney who is also a Certified Public Accountant, so he sees the financial side of divorce that many lawyers miss, and he also sees how often clients walk in repeating myths they picked up online or from a well-meaning relative. Below, we break down some of the most common myths about divorce in California, especially the ones that tend to trip up high net worth individuals, business owners, and professionals with complex finances. Redondo Beach, CA divorce lawyer
Myth #1: “Everything Gets Split 50/50, No Matter What”
This is probably the most widespread myth about California divorce, and it’s only partly true. California is a community property state, which means that income, assets, and debts acquired during the marriage are generally divided equally. But “equally” refers to the overall value of the community estate, not to every single item.
In practice, one spouse might keep the family home while the other receives a larger share of investment accounts or retirement funds, as long as the total value comes out even. There are also major exceptions. Separate property, meaning anything you owned before marriage or received individually as a gift or inheritance, is not automatically split. Valid prenuptial and postnuptial agreements can also change the default 50/50 framework entirely.
For high-net-worth individuals, this distinction matters enormously. Business interests, stock options, restricted stock units, and out-of-state real estate all have their own valuation and division rules. Treating every asset as automatically “half yours, half mine” without proper analysis can lead to a settlement that shortchanges one spouse, sometimes by hundreds of thousands of dollars.
Myth #2: “If It’s in My Name Alone, It’s Mine”
Many people assume that because a bank account, car, or investment account is titled solely in their name, it belongs entirely to them in a divorce. Under California Family Code Section 760, that’s not how it works. Property acquired during the marriage is presumed to be community property regardless of whose name appears on the title or who earned the income that paid for it.
This myth becomes especially costly when business owners assume their company is untouchable simply because they’re the sole shareholder or managing member. If the business was started or grew in value during the marriage, the community may have an interest in it, and that interest typically needs to be professionally valued. As a CPA, Matthew Skarin works through financial statements, tax returns, and valuation reports regularly, which allows him to evaluate whether a business valuation is accurate or whether it’s being manipulated to minimize what one spouse appears to be worth.
Myth #3: “My Separate Property Is Automatically Protected Forever”
The flip side of Myth #2 is just as common: people assume that once an asset is separate property, it stays separate property no matter what happens during the marriage. Unfortunately, separate property can lose its protected status through a process called commingling.
A classic example: you owned a home before marriage, but your spouse’s income was later used to pay the mortgage, or marital funds were deposited into the same account as your premarital savings. Over time, those contributions can transform a once-separate asset into a mixed asset, with both community and separate components. If you can’t clearly trace the separate portion with documentation, a court may treat the entire asset as community property.
This is exactly why high net worth clients benefit from a lawyer who understands accounting. Tracing separate property often requires reconstructing years of bank statements, brokerage records, and tax filings, which is detailed financial work, not just legal argument.
Myth #4: “Living Together for Seven Years Creates the Same Rights as Marriage”
This myth persists despite being completely false. California abolished common law marriage in 1895. No amount of time spent living together, regardless of how it’s split financially or how the relationship looks to outsiders, creates automatic community property rights. There is no “seven-year rule,” no “ten-year rule,” and no informal shortcut to marital property rights in California.
Unmarried couples generally have no claim to a partner’s separate assets unless they have a written cohabitation agreement or can prove a contract existed. If you’re in a long-term relationship without a marriage license, and significant assets are involved, this is a conversation worth having with an attorney well before any breakup occurs, not after.
Myth #5: “Prenups Become Worthless Once You’re Married”
Some people believe that once the wedding happens, a prenuptial agreement loses its teeth or becomes “just a formality.” In reality, California recognizes both prenuptial and postnuptial agreements as legally binding contracts, provided they meet specific requirements: full financial disclosure, voluntary execution, and independent legal representation for both spouses, among other formalities.
These agreements can define what counts as separate versus community property, set or waive spousal support terms, and significantly reduce the conflict and cost of a future divorce. They can be challenged in court, but only under specific circumstances, such as evidence of fraud, duress, or a lack of proper disclosure at the time of signing. A well-drafted agreement, reviewed by both legal and financial professionals, tends to hold up.
Myth #6: “Spousal Support Is Calculated with a Simple Formula”
Child support in California does follow a guideline formula, but spousal support for higher earners is a different story. Courts weigh numerous factors under Family Code Section 4320, including the marital standard of living, each spouse’s earning capacity, the length of the marriage, and contributions made to the other spouse’s career or education.
For high income earners, “the marital standard of living” becomes the central issue, and it’s rarely as simple as looking at a pay stub. Income from closely held businesses, trust distributions, K-1 partnership income, deferred bonuses, and stock compensation all require careful financial analysis to determine what truly counts as income available for support. This is where a family law attorney with CPA-level financial fluency can make a meaningful difference in the outcome, both in presenting your own financial picture accurately and in scrutinizing your spouse’s.
Myth #7: “Hiding Assets Is a Victimless Shortcut”
Some spouses, particularly business owners, are tempted to underreport income or undervalue a company to reduce what they might owe in property division or support. This is far from a victimless or low-risk strategy. California law treats spouses as financial fiduciaries to one another, and courts take asset concealment seriously. Penalties can include awarding the hidden asset entirely to the other spouse, sanctions, and additional legal fees.
Forensic accounting has become standard practice in high-net-worth divorces specifically because hidden or undervalued assets are discovered more often than people expect. Transparency, while difficult, almost always produces a better long-term outcome than the risks of getting caught.
Why the Right Legal and Financial Guidance Matters
Divorce myths aren’t just harmless misunderstandings. They shape the decisions people make about settlement offers, business valuations, and long-term financial security, often before they’ve even spoken with an attorney. For individuals with significant assets, complex compensation structures, or business ownership, the stakes of getting this wrong are simply higher.
Matthew Skarin brings a unique combination of family law experience and CPA-level financial expertise to divorce cases throughout California. That dual perspective allows for a more accurate read on business valuations, tax consequences, and support calculations than a traditional family law approach alone can offer.
If you’re facing a divorce involving high net worth assets, business interests, or complex compensation, working with an attorney who understands both the law and the numbers can make a meaningful difference in your outcome. Contact our office to schedule a consultation and get clear, accurate guidance instead of secondhand myths.
If you are facing a divorce involving substantial assets, business interests, or other complex financial issues, the attorneys at Skarin Law Group can evaluate your circumstances, explain your legal options, and provide guidance tailored to your financial and family law needs.
