There are many things that are already complicated when you are going through a divorce. Figuring out how to divide up your assets, especially property, 401k’s, and pensions can be very difficult and trying. This is why Farbod Majd & Associates will help make sure that you keep or receive your fair share of the assets in your case.
Regarding California’s Community Property Laws
California is one of the nine states that has community property laws in place in the event of a divorce. The other states that have community property laws are Washington, Arizona, New Mexico, Nevada, Idaho, Wisconsin, Louisiana, and Texas. Other states operate underneath equitable distribution laws. Equitable distribution laws state that property acquired during the marriage belongs to the spouse who deserves it and that the marital property will be divided in an equitable manner depending on several factors.
Community property laws are different in that they divide marital property in the middle, regardless of any circumstances involved within their case. For example, one spouse could have been employed during the marriage while the other wasn’t but both halves of the couple still own all of the money equally. This equal ownership under community property laws will extend to debt as well. Regardless of whether one party was aware of the debt or had anything to do with it, both parties will become responsible for paying it off.
One of the largest disputes between a couple getting a divorce, alongside child custody, is property division. Both sides are likely very concerned about how the assets will be distributed and if they will receive as much as they feel they should.
Many factors can play into how the property will eventually be distributed, even in a community property state. Having a knowledgeable attorney to help you with your case who can help make sure that you receive a share of the property proportionate to what you deserve.
The Difference Between Separate and Marital Property
Under community property laws, the presumption that all property that is acquired during the marriage while they are a resident of the state is community property. Even if the property in question is real estate outside of the state, this will be considered irrelevant as long as both parties still live within the state. Sometimes settlements in regards to a personal injury lawsuit can be considered community property as well.
There is an exception to the community property laws in a pre- or post-nuptial agreement. In this agreement, there is a specification that the property is separate from the community property. It is possible for you attempt in court to counter the argument of the item being a community property under California Family Code 760-761. In this case, however, the judge will need a preponderance of evidence to claim it as community property.
A few other important facts that should be known about the community property distribution in California include the following:
- Neither partner can sell or give away community property legally unless the other partner has agreed to it;
- After a California divorce petition has been filed, there will be restrictions put in place that will limit property transactions;
- Property allocation can only be avoided if there was already a written and valid agreement put into place; and
- Married couples are typically allowed to control their own property separately from their spouse, but after a divorce or legal separation has started, there will be temporary restrictions in place that even affect separately owned real estate.
There are a few characteristics that define separate property in California This includes:
- property that was owned by one partner before the marriage;
- profit made from the property before the marriage – with a few exceptions to this law;
- property inherited or gifted before or after the marriage;
- profit made from the inherited or gifted property before or after the marriage;
- any earnings made after a legal separation has already been put into place; and
- income earned separately while both parts lived apart
When Is Separate Property Turned into Community Property?
If both parties agree, separate property can be turned into community property or the other way around by recording a title change. This is also known as transmutation. This typically means that the other partner’s name will be added or removed to the title.
In order to have a valid transmutation, it has to be in writing. If this transmutation impacts a third party, like a creditor, the third party must be informed about this new change in ownership. All assets and debts will be investigated throughout a divorce and then defined as either community or separate property.
Complex Property Division
Complex property division occurs when there are things like stocks, pensions, or large amounts of real estate, among other things, involved in the case. In these complex cases, you’ll often have to work with professionals like forensic accountants to have the case settled. Divorces with complex property division involved must be handled very carefully with all assets and property being very thoroughly evaluated.
Complex property divisions can include the following matters:
- Dividing up a business primarily operated by one partner;
- Having a business valued, especially in the case of a family business;
- Having corporate partnership assets divided;
- Having commercial real estate and ranch real estate valued and divided;
- Stocks needing to be valued;
- Determining if any inheritances fall under marital or separate property;
- Determining how taxes will be affected by both partners;
- Having the pension of one spouse divided;
- Dividing up retirements assets like 401k’s and IRAs;
- Preparing Qualified Domestic Relations Orders;
- Taking a closer look at pre- or post-nuptial agreements made; and
- Setting spousal and child support amounts.
Having Properties Valued in a Divorce in California
If spouses disagree over the value of any asset, a real estate appraiser or another appropriate professional may need to be called in to determine the value of said assets. The marital house or other houses will have their value determined through a comparative market analysis. This analysis takes into account any similar homes that have recently been sold or are currently listed for sale within the same neighborhood. The appreciation, depreciation, and home improvements over the course of owning the home will be considered as well.
There are three common methods used to value personal property. One is that property will be valued for the same cost it would be for the partner to replace the item. A second is that the market comparison can be used for rare or collectible items that can’t be easily replaced. This method will look at the recent sale of similar items to determine a value. A third is having an expert appraiser brought in to determine what the future value of an investment would be, like an art piece in the home.
When a business is being given a value, a professional forensic accountant will consider all the assets and debts of the business in addition to the profits of the business and if the business has increased in value at all since the marriage had begun.
Call Our Beverly Hills Property Division Lawyers at Majd Law Firm
Having a lawyer who knows how to handle the complex property division issues, and any negotiation and litigation involved with property division issues is important during this trying time. At Majd Law Firm, we have incredible family lawyers who have an extensive range of knowledge regarding the laws that will impact you and any benefits are you are looking to receive.
Having one of our lawyers fight for you will help you greatly in your complex legal situation. We are sure to do everything possible to make sure your rights are protected and that you receive an equivalent amount of assets as those who deserve. Call us today for a further consultation on your particular situation in having your property divided.