Legal Question in Family Law in California

She is. Community property includes community debt. Assuming none of this was separate property, the $50k car and the $50k loan were a community asset and a community debt, leaving another $40k community asset - the 401k. Depreciation on the car was a community expense, no reimbursement rights. Appreciation and payments on the debt increased the value of the the other asset, the 401k, and the community debt was paid down with community income. Still no separate property issues, so the changes in value are all community gains and losses. So now you have a $40k asset, the car, a $40k debt, and a $50k asset, the 401k. So you each are entitled to $45k in assets and are responsible for $20k in debt. However, you cannot be assigned the 401k debt, so she is stuck with that. But it is a community debt, so by her relieving you of your half of that debt you owe her $20k. The simple way to satisfy that is to give her your half the car, worth $20k. So now she gets a $40k asset, and a $40k debt, which washes out to $0. Then you divide the other asset, the contents of the 401k, in half. You get $25k.