There are a lot of steps that must take place during a divorce. One of them is deciding how to divide the marital assets and debts. In an ideal situation, the couple will be able to come to an agreement about how to divide everything that belongs to both, and that will make the whole process a lot easier and faster to get through. Of course, most divorces are not ideal, and the spouses end up fighting even over petty things, never coming to an agreement at all. In such a situation, the matter will end up in court and either an arbitrator or a judge will have to decide how the marital assets should be divided. This will take a lot longer and it will be more expensive. An Orange County Divorce Lawyer can help. Whether both spouses come to an agreement and are able to decide how to divide their assets or a judge does it there will be three steps that must be followed:
1. Marital vs. separate property
The only property that should be divided is marital property. This is the property that was obtained during the marriage. Separate property is generally property that belonged to either of the two before the marriage and should not be divided. But although the line between both seems obvious, there are situations that merit separate property being considered marital property and vice versa, so the advice of a family law attorney is essential.
2. The value of marital property must be determined
Determining the value of the marital property is not as easy as it sounds, so it should be done with utmost care. Again, a family law attorney’s advice would help a great deal in this matter. The spouses are expected to assign the value of all their property but often fail to agree on this so the court must do so in the end. Something that can help both parties come to an agreement on this point is any appraisal that has been done on any property. With an appraisal, the value is quite clear as long as those appraisals are not too old to be properly relied upon.
3. Divide the marital property
Once the value of the marital assets has been determined, negotiations can begin about who gets what. The two parties can come to an agreement about dividing their assets by assigning specific items to each spouse, by letting one “buy out” the other’s part of an asset, or by choosing to sell off assets and dividing the money that they get from the sale.
Incredibly, a divorcing couple can also choose to continue owning property together even after the divorce if that happens to be in their best interest. Continuing to own property or other assets together is not an option for most people because it implies a continued financial relationship, but it might be beneficial to both in certain circumstances such as when divorced couples decide to keep a family home until children are older. But marital property is not the only thing that has to be divided at this point.
The divorcing couple also has to divide any debt that they acquired during the marriage; this can include mortgages, car loans, credit card debts, and others. The court has the authority to put a lien on a spouse who owes the other but it is much more preferable to simply pay off all the marital debt at this stage so that both parties can go on with their lives with no further complications. One good reason to pay off all the debt is that neither separation nor divorce matters to creditors who may continue to hound either party over any debt.
Community property in California
In the state of California, a couple’s marital property and debts are actually referred to as “community property.” If the separate property was used to acquire other items, then those items are not community property. Property that either of the two acquired after separation but before the divorce is final is also considered to be separate property.
However, California law recognizes separation only when there is a physical separation that shows true intent to end the marriage. In other words, just saying you want a divorce is not good enough. The actual date of separation can become a heated issue in situations where a large amount of money was either made or spent during that time. If the spouses cannot come to an agreement about the date of separation because of such a complication, the court will consider all the evidence it can before rendering a decision about the matter. You should know that when such a dilemma presents itself, judges tend to lean toward a later date in order to include more property as community property.
Again, what is marital or separate property can get confusing at times. Spouses can choose to change separate property into marital property and the other way around, but this must be done in writing to show the implicit intent. One of two can also mistakenly change the status of property by certain acts such as paying the mortgage for a house that was separate property of the other spouse.
Another fact that further complicates matters is that some property can be considered to be partially community property and partially separate property depending on the circumstances. For example, if one spouse has a bank account before the marriage but the other spouse begins to contribute to that account during the marriage then what category that account fits into becomes very difficult to determine and often ends up being considered to be partially both.
Because determining whether property is community or separate property during a divorce is so important, the best advice that anyone can possibly give you is to seek advice from a family law attorney in order to come to the right conclusion and decision. Remember that if you cannot come to an agreement a court will have to decide and that might not necessarily be in your favor. Plus, the process will take much longer and you will end up spending more money.
Listing your assets and debts
A family law lawyer’s advice is essential in order to list your assets and debts properly. Even people with some knowledge of this might end up making mistakes that can cost them a lot of money. If you are on friendly terms with your spouse and are simply making your own agreement about all your assets and debts, it is still a good idea to have a competent family law attorney take a look at it to ensure that there are no crucial mistakes.