Huntington Beach Property Division Lawyers

Marriage is a significant commitment that ties two people together legally, so ending a marriage can be time-consuming, emotional, and costly.  The former couple will have to complete many steps to ensure that they are no longer legally bound, including spousal support (when it is necessary), how child custody and support will be determined, and dividing their property and assets. Deciding how assets and property that were shared during a marriage will be divided once it ends can be challenging and cause additional conflict during the divorce process. A Huntington Beach property division attorney from the Law Offices of Lisa R. McCall can help you through the entire divorce process to ensure that assets and property are divided equitably in Huntington Beach, CA.

Understanding Property Division

During your marriage, you and your former spouse worked to build a life that you enjoyed. This may have included home purchases, investing portfolios, vehicle purchases, and more. These things were all shared while you were married, but when you are dealing with a divorce, you are required to divide them between you both. This is referred to as property division, and it is an integral part of the divorce process in California. You want to ensure that the division of assets is fair, but you must also follow the laws and regulations put in place by the state of California.

Community Property vs. Equitable Distribution

Each state is able to create its own regulations for the divorce process, so it is important to understand the statutes that are in place in the state where you live. There are two primary ways that a state may require property to be divided during the divorce process: community property and equitable distribution.

1. Community Property: This type of asset division is fairly rare, with only nine states currently using this model. When the community property process is used to divide assets, it ensures that everything is divided equally, 50/50, between the two spouses. To accomplish this, the courts will determine what property is shared. This will be considered community property, and the court will divide those assets equally.
2. Equitable Distribution: This is the most common process for property division in the United States, as forty-one states currently use this model. When property is divided equitably, a judge will determine what division is fair for the couple, but that does not mean that the division will be exactly equal. If one spouse has kept certain assets hidden, or wasted an egregious amount of property, for example, they may be required to give a portion of their assets to the other spouse as compensation.

California is one of the few states that adhere to the community property model when property is being divided during a divorce. This means that any property that was acquired during the marriage, and is considered community property, will be split directly down the middle between the spouses. While all property and assets will be divided equally, that does not mean that specific objects or pieces of property will have to be divided. Rather, there will be an overall value assigned to a couple’s property, and each spouse will receive assets and property equal to their share of the full estate.

The Property Division Process

When you are working to equally divide the property you acquired during your marriage, it is important to have all the necessary information, including:

1. When certain purchases were made
2. What the value of various assets are
3. Whether the property is shared or belongs only to one spouse

This could take a great deal of time and attention, but the overall process can be divided into three primary steps.

1. Figure out what property is community property and what is separate. To determine what property is shared and what is separate, you will need to look at factors such as when the property was acquired, if any property or assets were gifted to you, and if any property provides the owner with income. If you own a business or any rental properties, then the process of determining what property is community and separate can be especially challenging. An accomplished property division attorney can help you simplify this process by assessing the value of those assets.
2. Assign a specific value to each piece of property being divided. Once all the community property has been properly designated, then you will begin the process of assigning a monetary value to each piece of property. Assets such as retirement accounts, employment benefits, and profit-sharing accounts are all considered community property if they were started during the marriage. These things may require advice or evaluation from a financial advisor, such as a CPA, before their full value can be determined.
3. Complete the division process. This is the final step before the property division will be finalized and could cause tension during the process. Unlike an equitable distribution process, the overall value is not tied to specific assets that will have to be sold so the money from the sale can be split equitably. Instead, community property states use the overall value of a couple’s estate to determine how property will be divided. When the total value of community property has been finalized, then the couple will determine who will receive which things so that they each have property with the same overall value.

The process of designating all community property, finding the overall value of your community property, and finalizing a division of assets can be stressful and will likely be a major time commitment. If you wish to avoid this, then you can create a legally binding document, such as a prenuptial agreement, that outlines how you wish for your property to be divided in the event of a divorce. A member of the team from the Law Offices of Lisa R. McCall can assist you with any part of this process.

What Is Considered Community Property in California?

According to the state of California, any property that was purchased during your marriage is considered community property. This includes real estate holdings, stocks, personal property, and any other assets. It does not matter if only one spouse purchased the property or if there is only one name on the title. All property purchased or accumulated while you are married will be classified as community property, have its overall value determined, and be divided equally between spouses.

Debt also factors into the division of property when a divorce is being finalized. Any debt that was accumulated during your marriage will be split equally between spouses. This may include the remaining balance of a mortgage, payments for a car loan, and any credit card debt. The debts that can be paid off with community assets will be, but that is not always possible. Any debts that have a value higher than that of the overall community assets will be divided between spouses in a way that the judge deems fair. Debts that were acquired prior to the marriage will remain the responsibility of the spouse who owns them.

What Is Considered Separate Property in California?

It is important to know what you will be able to keep during a divorce, whether you have multiple high-value assets or simply things that are sentimental to you that you wish to keep away from the division process. There are certain things that California considers separate property that are most often not divided during a divorce.

Any property or assets that you owned prior to the marriage will be considered separate property. If, for example, you purchased a car prior to your marriage, but it was your spouse’s primary vehicle, then it will remain in your possession and will not be included in the overall value of community property. There are some assets that are gained during a marriage that will also be excluded from community property. If you were gifted property, such as a home or a piece of valuable memorabilia, during your marriage, then that property will not be subject to the community property division. Similarly, if you inherited any property or assets through a will, then those will be considered separate property and will not be divided.

What If the Property Is Difficult to Classify?

There are some assets and property that can be particularly difficult to classify as either community or separate. If one spouse does not technically own an asset or property, but they were integral in how that property was developed, then they may be entitled to interest or compensation for that.

Some of the common assets that are difficult to classify include:

1. Degrees and Professional Licensures: Any higher education degrees or licenses that were earned during a marriage will be divided as community assets, but there are restrictions in place. If your spouse completed a professional license or earned any kind of degree during your marriage, then you will receive reimbursement, including interest, for the cost of their education. The reimbursement amount is often limited to things like fees, books, and tuition. It does not include the cost of student loans, which are considered separate property.
2. Family Homes: Having to find a new place to live is challenging, especially when you are already facing the stress and financial strain associated with a divorce. Determining who will be allowed to keep the family home can be an additional challenge. In many cases, particularly those that involve children, the parent who has primary physical custody of the children will stay in the home until the divorce is finalized. During the process of property division, the spouses will be able to decide whether that arrangement will be permanent, the non-custodial parent will take the house, or the house will be sold.
3. Pets: Couples who share pets may find that deciding who will keep their animals is a sticking point during their negotiations. If they are unable to reach an agreement on their own, then they may ask the judge to make a decision regarding the custody of their pet. The judge will consider factors such as the safety of the pet, whether they will have adequate necessities, and what kind of veterinary care will be available when making their decision. They may grant sole custody to a single spouse or recommend shared custody, where the pet moves between each spouse’s home.
4. Businesses: If a business was started and developed during your marriage, then it will be considered community property in California, regardless of how involved the other spouse was. The overall value of the business will be determined through a process called a business valuation. Some judges may allow the couple to determine the value of the business but, in most cases, a professional opinion from a business appraiser or a CPA will be required to move forward.

Is Mediation Helpful When Dividing Property?

During the process of finalizing a divorce, emotions are often running high. Both parties are facing the stress of potential financial strain, and you may not share the same views of what an equal division of property is. These factors, along with many others, can make any negotiations seem nearly impossible without help. If you are struggling to reach an agreement about property division with your former spouse, then mediation may be the answer.

When you enter mediation, you and your former spouse will meet with a neutral third party, both together and separately, and attempt to reach an agreement. The mediator can walk you through all possible solutions, go between both parties with offers of compromise, and help you reach a final decision. The team at the Law Offices of Lisa R. McCall can help guide you through a mediation case to determine how your property will be equally divided.

Trust the Law Offices of Lisa R. McCall for Property Division Assistance

The process of legally ending a marriage can take a great deal of time, be a significant financial obligation, and stir up unexpected emotions. Dividing the assets that were shared during the marriage can be a particular challenge, especially if you do not have a cordial relationship with your former spouse. Working with an experienced property division lawyer can give you peace of mind as you work to divide all marital assets and property equitably. Contact the team at the Law Offices of Lisa R. McCall today for assistance.