HOW TO DIVIDE UP ASSETS IN A DIVORCE

In a community property state such as California, all assets acquired during the length of the marriage (but prior to separation) must be equally divided during a divorce. Separate property includes any asset acquired before the marriage or after the separation date, and is not included in community property. California courts require the “equitable distribution” of all personal property, and full financial disclosures are an essential part of the divorce proceeding. Both parties’ resources are used to determine their financial needs and ability to pay spousal support. Spouses have to complete an income and expense form, where they will list all sources of income, including bonuses, overtime, and benefits, as well as list all possessions and debts and categorize them either as separate or community property. Most items have a measurable value and should be factored into a spousal support negotiation and calculation. Inheritances or gifts received by a spouse during the divorce is usually not included in community property, unless the inheritance was used to acquire community property assets.

The Acquisition of Assets in a Marriage

Many couples acquire assets during their marriage, such as homes, savings accounts, and retirement plans; pension plans; 401(k) Plans and the like. Dividing these community assets fairly and equitably is an important step, especially for non-working spouses, who may have contributed to a long marriage in many important ways, but not financially. Unlike retirement accounts, Social Security isn’t considered an asset and can’t be divided in court. However, if the marriage lasted 10 years or more and the non-working spouse in need of retirement funds is 62 years old or older, he/she can start collecting Social Security as soon as the divorce is over. The non-working spouse can receive a portion of the other's Social Security benefits and it will not affect the primary wage earner's monthly check at all.

Any debts acquired during the marriage (link to blog post on “Dividing debt in divorce? Who pays what?”) also are considered community property and need to be paid off if possible, or divided equitably. This includes credit cards run up by each party. For couples who own intangible assets, such as intellectual property, the division process can become more complicated. It is important to understand what constitutes intellectual property as marital property and what current California court rulings state in order to divide intellectual property accurately.

Personal Property

Personal property items can sometimes be hard to divide. While they don’t always have a high monetary value, they may still have a sentimental value. Under California law, any personal property item is valued at the price you would get for it if you sold it at a yard sale, which may not be much. It is not worth letting emotions get in the way and spend exorbitant attorney fees fighting over such items. It may be hard to see while going through a divorce, but fighting for personal property you may eventually get rid of down the road is not worth the stress or the hassle. Divorce mediation can be very helpful when it comes to solving this type of disagreement. Both spouses get placed on a level playing field and are usually more open to negotiating the fair division of their assets. They understand that their ultimate goal is a peaceful life after divorce and they want to get there as soon and as painlessly as possible.

Pets

As for pets, many of us consider them family members and California family law is starting to recognize pets and give them more rights. A mediator can help couples come up with a solution that will please everyone. One spouse could keep the pet full time and assumes all financial responsibility once the divorce is final, or spouses can decide on a pet-sharing schedule, where the pet spends equal time with each spouse and both spouses are responsible for any pet-related expenses. For more information on pets during a divorce, view "PET MEDIATION IN A DIVORCE: NAVIGATING THE EMOTIONAL WATERS"

About A Fair Way Mediation

A Fair Way Mediation Center offers a relaxed, compassionate atmosphere in an informal setting that encourages a calm and objective approach. This is a safe space that avoids the stress and embarrassment that courtroom procedures can inject into any divorce or separation. All couples are welcome, including traditional or same sex families.