One of the more complex aspects in the divorce process is the division of assets accrued throughout your marriage, particularly if it is a high-asset case, or where businesses or stock is involved.

 

California is a community property state, which means that all assets and debts acquired during the marriage belong to both you and your spouse equally. Assets include income, savings, real property (houses), vehicles, and other personal property acquired; debts accrued during your marriage can encompass credit card debt, loans, medical bills and other liabilities. These assets and debts must be apportioned between you and your spouse upon the dissolution of your marriage. Discussions on how to divide property can occur during mediation between you and your former spouse, or settlement officer conference. Often the final property agreement is negotiated by your attorneys who work closely with their clients to resolve the issues.

 

If an agreement cannot be reached, then putting the property issue(s) before the Court will be necessary in order to determine which party will be granted what property; the court will first take into account any pre or post-marital agreement that may have been signed. These agreements serve to protect the assets of the parties in a marriage in the event of the marriage’s dissolution. If no such agreement exists, and the parties cannot settle the matter through mediation or negotiation, the court will then hear argument and review evidence concerning the division of property and other assets in question and make orders to effectuate an equitable division.

 

Once the characterization (separate or community property) of the assets and debts has been determined, community property assets will be divided equally between each spouse and separate property awarded solely to the spouse who has successfully proven their separate property claim.

 

Real property can pose difficult issues when it comes to division and is typically reserved for trial. The issue becomes less difficult to resolve if joint funds were used to purchase the home, giving the community equal interest in the real property as well as encumbrances on the property. When this occurs, the court is likely to find that the home should be sold and the proceeds from the sale distributed equally between the parties. An issue that often arises is when one party wants to ‘buy out’ the other, by the “buyer” giving the “seller” their half of the fair market value (FMV) of the home. This generally requires agreement and cooperation between the parties to agree upon the FMV and effectuate the sale.

 

Things become even more complex, however, if the property was purchased by one spouse prior to marriage, while the other may or may not have contributed to mortgage payments at some point after marriage. In these cases, a determination will have to be made on how much shared responsibility the contributing spouse has for the home, how much the reimbursement claims for a spouse’s use of the property after the date of separation or for the amount the spouse contributed toward the home during the marriage.

 

If your divorce involves assets with a high net-worth, it may be necessary to seek qualified experts, including forensic accountants, to trace finances, determine the appropriate division and amounts for reimbursement, and other experts to provide formal appraisals of property or personal assets such as art, jewelry, vehicles, etc.

 

After determining character of assets, the appropriate division and amounts for reimbursement, the attorneys are more often able to determine the correct division and negotiate settlement of property.