Marital Property Settlements
Under California law, property and assets acquired during a marriage are generally considered community property. In a divorce, each spouse gets half the value of the community assets and keeps his or her own separate assets. Community property may include income, real estate, personal property, a closely held business or professional practice, and retirement benefits. The community estate may also be entitled to reimbursement for educational expenses incurred by one spouse during the marriage. Debts acquired during the marriage are typically considered community debt, even if one spouse made most of the expenditures. Often, spouses are able to resolve these complex issues by negotiating a marital property settlement. At Lerner Poole, our skilled divorce lawyers help individuals in San Francisco and throughout the Bay Area reach agreements that protect their interests.Marital Property Settlements
Usually, each spouse works with his or her attorney to start formulating a marital property settlement by making a list of everything the couple owns and determining which assets are separate property and which are community property. The value of the property must also be determined. In high net worth divorces, it may be necessary to retain an appraiser and other experts to evaluate various assets.
As part of the divorce, you must make financial disclosures by exchanging a Schedule of Assets and Debts. Each spouse owes the other a fiduciary duty that is equivalent to the duty owed by a trustee to a beneficiary. Therefore, the schedule must be completely honest about community property, separate property, and debts. The couples compare schedules to identify where there are disagreements about the character of the property or the value of the property. Once the schedules are prepared, each spouse usually proposes a way to divide the property and community debt so that each spouse winds up with an equal net share.
California does not require an "in kind" split. A single item of property need not be split 50/50. Instead, the net value of the assets each spouse receives must be equal. It is not uncommon for one spouse to be awarded a family home, while the other spouse receives the family business, as long as these are equivalent. Similarly, each piece of personal property need not be individually divided. For example, if you keep a piece of furniture worth $20,000, your spouse could receive a group of furniture and art that totals $20,000. If you have two bank accounts with roughly the same worth, each spouse can theoretically take a bank account. However, if one account has significantly more money in it, you may add jewelry or some other property to the other account to balance out how much each of you receives.
Debt can also be used to balance out a division of assets. The spouse who gets the larger bank account may also receive a higher percentage of credit card debt to pay off. However, it is important to be aware that those to whom you owe money need not honor your marital settlement agreement. Creditors can generally pursue both spouses, even if the other one agrees to pay the debt in a marital settlement agreement. You also can agree to pay off debts using money from the sale of property, such as real estate or vehicles, at the time of the divorce.
Many couples can reach a marital settlement agreement (MSA) without requiring court action, but the settlement will not be final until a judge signs off on the agreement and issues a final order. As long as an MSA is incorporated into a judgment, it can be enforced like a money judgment. However, if it is not merged or incorporated into the court's final judgment, it is a contract that must be enforced through a separate lawsuit, like any other contract.Protect Your Interests During Property Division with a Contra Costa Lawyer
Many couples prefer to work on a marital property settlement through mediation or negotiation, rather than have the judge determine how their assets are split. Moreover, you may be able to achieve greater control over your future by negotiating rather than leaving it to the court to decide. With more than 50 years of combined experience, the attorneys at Lerner Poole are Certified Family Law Specialists who have negotiated property division matters for numerous Bay Area residents, including those living in Contra Costa County communities such as Walnut Creek and Danville. Contact us at 415-391-6000 or via our online form to schedule an initial consultation to discuss your needs and goals.