Couples who decide to pursue a divorce in California are faced with a complex problem that can prove to be one of the greatest challenges and most conscientious issues of a divorce – the division of property. The matter is indeed delicate – after all, for a number of years, both spouses may have worked equally hard to accumulate and take care of shared marital wealth. Some assets or property – such as a house or a car – cannot be physically divided in any obvious way. Others may have a special emotional value for both parties.
In order to facilitate property division in a divorce, California family law contains detailed provisions regulating this potentially nerve-wracking process. In this article, we will briefly explain the most important aspects of property division in a California divorce.
California law makes an important distinction between community property and separate property in marriage. Separate property includes assets acquired before the marriage or after the couple separated. It also encompasses what was obtained during the marriage by one of the spouses by means of a gift or inheritance. In a divorce, each party retains the rights to assets that constitute their separate property. Community property, on the other hand, is defined as any property, asset, or income acquired or earned during the marriage by either of the spouses.
Rather than dividing each and every physical object so that both spouses receive an equal share, California requires that the net worth of the combined marital wealth be calculated and that the net value of assets each of the spouses will receive is identical. Therefore, spouses may end up with different kinds of assets as long as, in the end, the total net worth received by each spouse is equal.
In order to ensure equal division of community property, both spouses must create and serve to each other a list of all assets owned at the time of separation as well as each party’s debts. This list is called Preliminary Declarations of Disclosure (PDOD). If spouses disagree on the value of any particular item, they can hire a professional appraiser to evaluate it. When it comes to debt – such as credit card debt or loans of another kind – with but a few exceptions, spouses will have to split all financial obligations incurred during the marriage.
Future income from retirements or pension plans can be the most valuable asset possessed by either spouse. These may include IRA accounts, 401(k), 403 (b) or 457 accounts, and other deferred compensation accounts. It also includes pension and annuity type retirement plans. All of these plans are subject to the general marital property division in a California divorce but the means to that division can get complicated. The amounts may need to be apportioned to both separate property and community property for the period of employment that occurs during the marriage Since laws regulating retirement accounts and pensions are complicated the Court and the plans usually require a “Qualified Domestic Relations Order” in order to divide the benefits. QDROs are complicated and highly technical, it is best to seek assistance from an experienced divorce attorney. A qualified lawyer will help you ensure an appropriate division of this important marital asset.
Of course, the information presented in this article relates to the basics of property division in a California divorce. If your marriage is headed for divorce, you will need more specific legal advice – especially if high-value assets and property will be involved. Our attorneys at Carroll Law Office can provide such advice as well as comprehensive legal assistance throughout your divorce case. Contact us today to schedule a consultation with our legal team.
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