When you get married, you merge every aspect of your life with your spouse.
Married couples typically combine bank accounts, buy property together, establish retirement accounts, and accumulate debt.
When you get divorced, you have to divide that property, and debt, in a fair and balanced way. That’s not always easy to do, especially when emotions are high and your financial future is at stake.
Community vs. Separate Property
After all disclosures have been completed, your property must be “characterized” as either community property or separate property.
California is a community property state. That means that property acquired during the marriage is presumed to be community property unless it can be traced back as separate property.
Generally, separate property remains separate, and community property is divided equally between the two parties. If property is not characterized correctly, it could potentially cost you thousands of dollars.
Split Community Property
After you’ve identified, characterized, and valued all assets and liabilities, the community property must be divided.
Community property is generally divided equally in California. While that means 50-50, it doesn’t mean that each person will get 50% of each specific asset.
Dividing property might seem simple at first glance, but it can get quite complicated for large estates.
If you’re thinking about hiding assets to get a better financial result during your divorce, forget about it.
In California, you have a “fiduciary duty” to your spouse. That means that all financial information must be disclosed voluntarily.
California requires both parties to disclose all assets and liabilities, including income and expenses, as part of the standard divorce filings. The only way to divide property fairly is if both parties disclose everything.
In order to divide property equally, you must value the property first.
Some items will be easy to value, some will not be so easy.
For example, if you and your spouse disagree on the date of separation, that could have a significant impact on the value of all “marital” savings accounts, investments, retirement accounts, etc.
Even if you hire experts to value specific assets, it’s not unusual for experts to disagree on value.