How You Can Split Assets in Divorce in California

Just because California is a community property state does not mean that you are obligated to follow the state’s plan for asset division in divorce. The law gives you considerable flexibility in developing your own plans for asset division.
It is a good idea to understand how a judge would classify and divide assets under the law, but you can use that position as the starting point for negotiations and devise your own arrangements for property division.

An attorney can advise you of your rights and advocate on your behalf in negotiating a property settlement with your former partner. In addition, a lawyer trained in mediation could also work with you to help you find common ground and create a mutually agreeable plan for dividing assets in a California divorce.

Do You Have a Prenuptial or Postnuptial Agreement?

The first consideration when determining how to divide property is whether you executed a prenuptial agreement before the wedding or a postnuptial agreement during the marriage. If you followed the rules when creating the agreement, then the terms of your agreement will override any provisions of state law and they will establish each partner’s legal right to property in divorce. So it is important to consider your earlier agreements when developing your plans now.

If both spouses agree, you can classify and divide property differently than the terms you set earlier. If one spouse wants to abide by the agreement, however, then both will be bound by it.

Decide How You Want to Classify Various Assets

Even if you plan to develop your own plan for asset division, it is a good idea to agree on how your property should be classified as marital or separate. Marital property is divided in the divorce and separate property is kept by one spouse.

Generally, property one spouse owned before the wedding is considered their separate property while assets earned during the marriage are jointly owned by both spouses, even if one spouse did all the work to acquire that property. It does not matter if only one spouse’s name is on the title—it is generally the time of acquisition that determines whether property is marital or separate. The exception is property received by one spouse as an inheritance. Even when the inheritance is acquired during the marriage, the property received is considered separate property.

However, it is important to understand that separate property can be converted into marital community property very easily. For instance, if one spouse owns a house or car at the time of the marriage but they use marital funds to pay the mortgage or make repairs, then at least some of the value of that asset is marital property.

So if you are developing a plan to divide assets, it is helpful to first establish which property you agree should be classified as separate, which property is marital, and which property is a mixture of both and in what percentage. An attorney can help with the classification process.

Decided How Assets and Debts Will Be Allocated

Divorcing spouses in California are generally free to draw up their own agreement determining how assets and debts will be divided, and that plan does not need to follow the even 50/50 split for community property that is used by the court. However, it is important to understand that the court must approve the arrangement.

If the judge believes that one spouse is cheating the other such as by hiding assets or coercing the other into accepting an unconscionable settlement, then the court might not approve a couple’s plan for property division. When you work with an experienced attorney during the process, your lawyer can work to ensure that your arrangement meets the requirements of California law.

Remember that your arrangement should classify and divide debts as well as assets. This process requires both spouses to provide detailed financial information so that decisions are made on the basis of accurate information.

Experienced Guidance Can Protect Your Interests When Dividing Your Property in Divorce

Developing your own plan for asset division instead of leaving issues to the court can provide an arrangement that satisfies both spouses. However, the process of developing the right plan requires considerable investigation and negotiation.

The attorneys at Holstrom, Block & Parke have over 300 years of combined experience protecting the interests of clients when it comes to dividing complex assets in a variety of situations. Whether you  plan to resolve terms of your divorce settlement through mediation, collaborative divorce, or negotiation prior to litigation, our team can help you achieve your goals. Schedule a consultation today to get started.

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