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Newport Beach Property Division Attorney

How Are Assets & Property Split in California Divorces?

The division of assets in a divorce is often an emotional and contentious process for both spouses; however, this does not always have to be the case. Understanding your state’s law regarding assets and property can be tough to navigate alone.

California is a community property state, meaning that marital property is supposed to be divided 50/50 between the spouses. To ensure proper division of assets in Newport Beach, CA, you need an experienced and aggressive lawyer on your side. You need Bremer Whyte Brown & O'Meara.

Contact us online or call us at (949) 229-8546 today to get help diving assets in divorce. Our experienced Newport Beach property division attorneys can help!

California Family Code § 760 – Community Property

California is a community property state, which, in short, means that assets attained during the marriage, except in very clearly defined circumstances, are considered community property, in which each spouse has an undivided one-half interest. Often, however, divorce and property division is not as simple as dividing everything in half.

Community property can be applied to the following, but is not limited to:

  • Earnings, income, and wages of either spouse during the marriage
  • Interest accrued on bank accounts, pensions, and other types of financial assets
  • Retirement account, assets, and benefits
  • Real estate
  • Mortgages
  • Automobile and motorcycles
  • Furniture

Related: Will the Court Force Me to Divide My Business?

What Is Separate Property?

Separate property, or non-marital assets, are assets that are not subject to division in a divorce. Examples of this include gifts, inheritance, and property that spouses acquire before marriage. Property acquired post-dissolution of marriage are also considered separate property. In short, property and assets that predate marriage — unless “transmuted” into community property — are off-limits during the divorce process.

How Is Debt Split in a Divorce?

In California, debt can also be considered community property when determining the division of assets in a divorce. This means that any debt – even if it's in the name of only one spouse – could still be split between the spouses upon divorce. Joint credit cards can therefore be an issue in the event of a divorce.

When it comes to dividing debt in a divorce, you need an experienced attorney on your side to make sure that the debt is divided fairly under California's community property law, and that your credit is protected after you separate your credit accounts.

Related: Can Community Assets Be Used to Satisfy Marital Debts?

Tips for Dividing Marital Property

Make a List

The first step in dividing marital property is figuring out what you have − so make a list. This list should include ALL assets and debts, whether you think they are separate property or community property.

Some items will be easy to remember, but others may require some research. Don’t forget to include things like retirement accounts, jewelry, and family pets (no matter how much they feel like family, to the courts they are “property”). The list should also include all outstanding debts, such as credit cards, student loans, and taxes.

Next to each item on your list, jot down the date it was acquired.

This is important for characterizing each asset and debt as separate property or community property. As mentioned above, property acquired during marriage belongs to the community. Once you figure out the date the asset was acquired, you can begin to characterize it as community or separate. Don’t forget that gifts, bequests, and devises are separate property, even if received during your marriage, subject to a couple of exceptions related to how the inheritance is held and whether it was mixed with other funds/property.

While some assets may be easy to characterize, others may present more complicated issues. For example, the community may obtain an interest in property acquired before marriage by any of the following methods:

  • Transmutation − an interspousal transfer or agreement to change the character of an asset or debt from separate property to community property or vice versa;
  • Commingling − mixing funds that belong to one spouse with the funds belonging to the other spouse to the extent that each party’s contribution cannot be traced back to its separate property character;
  • Contribution of Funds − enhancing a separate property asset or debt using community funds (for example, buying a home before marriage, and paying the mortgage with community funds). The contribution of separate property to a community asset also results in a right of reimbursement for the person who made the contribution; and
  • Contribution of Efforts − increasing the value of a separate property asset or debt with the time, efforts, and skills of one or both parties during marriage.

Set the Value

The second step to dividing marital property is figuring out how much it is worth.

For every community property asset or debt, you want to know its fair market value. For checking and savings accounts, that means the current balance; for real property (i.e., real estate), that means the current resale value less any outstanding debts (e.g., mortgage); etc. When valuing personal property items (e.g., furniture, dishes, clothing), ask yourself how much it would sell for at a garage sale.

Leave Your Ego at the Door

The last step is dividing the community property. You and your spouse can agree to divide the community property in any manner that you wish.

Remember, if the Court is left with the task of dividing your marital property, it will do so equally. There are many methods by which the court may choose to divide the estate, but ultimately each party must be awarded an equal share.

The most common methods used by the courts are:

  • In Kind Division: dividing assets by awarding one-half to each party
  • Asset Distribution: assigning some assets to one party and other assets of equal value to the other party, with the option of ordering an equalization payment or promissory note at the end

Whether you are using lawyers or mediation to resolve the property distribution, you want to keep your time and cost at a minimum. Don’t get caught up on the little things like dishes. You can protect your money and save time in the long run if you agree to sell the item and split the profits.

Leave your ego at the door and be reasonable.

Instead of spending the money on fees and costs, take your half of the profit and buy a new set of dishes. The same applies to the big assets as well. While the marital home may carry with it endless memories, try to focus on closing the divorce chapter of your life, and move on to creating new memories.

Consult a Property & Asset Division Lawyer in Newport Beach & San Diego

Great care needs to be given to characterizing and valuing your marital assets properly to ensure that each party is awarded his or her fair share of the marital estate during property division in divorce. This is not an easy task to handle alone.

Contact Bremer Whyte Brown & O'Meara today at (949) 229-8546 for an experienced Newport Beach property division attorney! We have an additional location in San Diego, CA.

Why Hire Bremer Whyte Brown & O'Meara, LLP?

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