How to Ensure a Fair Property Division During Your Divorce
When a person decides they want a divorce, they probably want to move on as quickly as possible. There is just one problem: they have to divide their assets first.
Property division is often a serious source of conflict in a divorce. Many people want to avoid giving what they feel are “their possessions” to their spouse, but the truth is that the vast majority of these assets are considered marital property and subject to split in a divorce.
While most states follow equitable distribution laws, California is a community property state. This means that California law entitles each spouse to a 50/50 share of equitable distribution, while other states focus on splitting assets fairly, but not necessarily 50/50.
However, it can be hard to split assets right in the middle. This may be easy with bank accounts and cash, but when you have physical assets such as vehicles and houses, they need to be appraised.
Ultimately, a judge will decide what is fair and make a decision accordingly. Even if you and your spouse have agreed on property division on your own, you will need to have a judge make a formal order at a hearing or trial.
So how do you ensure your assets are divided fairly? Ensuring a fair property division during divorce requires careful planning and legal awareness. Here are key steps to take.
Consult a Divorce Attorney
It’s in your best interest to start your divorce off right. You can do so by hiring a divorce attorney, even if you do not have a lot of assets. A lawyer ensures your legal rights are protected and helps negotiate a fair settlement. They can advise on how to approach property division, especially in complex cases involving businesses, pensions, or high-value assets. Consulting an attorney ensures you understand the long-term financial impact of any agreement.
Understand State Laws
As mentioned earlier, the way property is divided depends on whether you live in a community property or equitable distribution state. In California, all marital assets are split 50/50, regardless of who contributed to the assets.
Marital assets refer to what you own or owe together during your marriage. Separate property, on the other hand, is defined as what you each own or owe individually from before you married or after you separated. Any gifts or inheritance is also considered separate property, regardless of when it was received.
Figuring out your date of separation can be tricky. Generally, it is referred to as the day that one spouse lets the other one know that they wanted to end the marriage.
Community property is shared equally and is referred to as:
All money and assets you earned while married.
Anything you bought with money you earned while married
Debt you take on while married.
You likely have more community property than you realize. For example, even if you bought a car with money you earned and put the vehicle in your name only, it is still community property and your spouse is entitled to it in a divorce. If you took out a mortgage to buy a house while married, you are both responsible for it, as it is community debt.
Keep in mind that sometimes separate property can become community property. For example, an inheritance is separate property. However, if you use that money to buy a marital home that you and your spouse both use, that is called commingling and that home can now be considered community property.
These laws can make property division complicated. Contact a lawyer for advice.
Identify and Value All Assets
In order to split property fairly, you will need to accurately value everything. Start by listing everything you and your spouse own, categorizing assets as marital property or separate property. Include common assets such as homes, vehicles, retirement accounts, investments, businesses, and valuable personal property. Get professional appraisals for real estate, jewelry, businesses, and other high-value items.
Gather Financial Documentation
Collect financial records, including bank statements, tax returns, mortgage documents, investment accounts, and debt records. This documentation helps determine the total value of the marital estate and prevents disputes over missing assets. If your spouse handled most of the finances, you may need to request financial disclosure during legal proceedings.
Consider Mediation or Negotiation
Mediation allows couples to work with a neutral third party to reach an agreement without going to court. It can be less expensive and more amicable than litigation, helping both parties feel satisfied with the outcome. If mediation isn’t an option, negotiation through attorneys can also help reach a fair settlement before resorting to litigation.
Account for Debts
Debts must also be divided. Common debts include mortgages, car loans, credit cards, and business liabilities. Determine whether debts are joint or individual. Ensure your name is removed from any debts assigned to your spouse to avoid financial responsibility later.
Protect Against Hidden or Undervalued Assets
Some spouses attempt to hide money or undervalue assets to receive a more favorable division. Look for signs like sudden cash withdrawals, transferred funds to family members, or underreported business income. Hiring a forensic accountant can help uncover hidden assets or financial discrepancies.
Stay Objective
It’s hard to not get emotional about the divorce process, especially when it comes to dividing assets. Emotional attachment to certain possessions can cloud judgment. Try to remain objective and focus on what’s most important for your financial future.
Contact Us Today
Property division can be a tricky situation in a divorce. You may think what you want is fair, but the courts may think otherwise.
Having an attorney on your side throughout the process can help ensure equitable asset distribution during divorce property division proceedings. Ashley A. Andrews, APC, is an Arcadia property division attorney who can help you during this emotional time. We will guide you through splitting up assets and property, considering all factors that go into deciding how to divide them. Call (626) 346-0114 or fill out the online form to schedule a consultation today.