Worries over finances while going through a divorce are common. You may wonder how your assets will be divided. There are things that you should be aware of to ensure that your net worth is divided properly. A Los Angeles divorce attorney can help.
What is Considered Community Property in California?
California is a community property state meaning that anything that divorcing spouses owned or owed during the marriage should be split 50-50. In general, community property is what either of you earned, bought, or owe (debts) after you married, but before you were separated. Community property belongs to you both equally. This includes real estate, vehicles, savings accounts, pensions, and investments.
Community property excludes assets that belonged to one or the other party before or after the marriage. Income earned before the marriage and inheritances and gifts received during the marriage is not considered community property either.
Debt is also considered community property, so both members of the couple own it. If one of the parties was responsible for incurring more of it, sometimes, the judge will consider this and find the party responsible for a larger percentage of the debt.
The Fair Division of Property
To ensure that property is divided fairly, the court requires each spouse to disclose the entirety of their assets and debts. This establishes proof of ownership. If there is an imbalance in earning capacity, contribution, or needs, the courts may make adjustments to the division of property.
During divorce, retirement accounts such as 401(k) plans, annuities, and pensions are considered community property. This means they will also be divided in the divorce. A Qualified Domestic Relations Order (QDRO), approved by the court, is required to separate retirement accounts.
Professional practices, businesses, and business interests that were obtained during the marital union are also subject to division since they are considered community property. These business assets will be divided based on their current value, not the actual value, at the time of the dissolution of the marriage.
The value of personal property, such as furniture, clothing, household goods, sporting equipment, and collectibles, is taken into account. One spouse is typically awarded these items, but their values are considered when evenly distributing the assets considered community property.
The courts will strive to see that the spouses are treated fairly and receive an equitable amount of the property. Because of this, a judge may award one spouse a larger share of community property to compensate for a significant amount of separate property owned by their former partner.
If the court deems it appropriate, spousal support, or alimony, may be awarded. Alimony can apply if one spouse supported another through higher education with the expectation that they could pursue their higher education later or benefit from their spouse’s future wages. When a divorce happens, the judge may make adjustments to make sure there is not an unfair, inequitably imbalanced economic situation.
After an agreement is reached regarding property division and the division of debts, the former couple will enter into a binding legal agreement. This agreement happens when the couple enters the agreement voluntarily. Having family law experts in your corner can ensure that this binding agreement benefits you.
Protect Your Assets
Protect your assets before, during, and after your separation by contacting Martin Family Law Group. Our goal is to get to know our clients and their cases personally so we may offer attention that many larger family law firms cannot match. Our attorneys tailor our legal solutions to your individual goals. We are in the business of protecting you and your unique interests as we help you make your way through your divorce.