Category: Property Division (Community & Separate)

Strategic Property Division in California Divorce: Expert Insights Dividing Debts, Assets, and Retirement Accounts | Navigating Complexities of Community Property | Proving Separate Property | Exploring Family Home Division Options | Mastering Property Division in a California Divorce. Discover comprehensive guidance on dividing debts, assets, and more in a California divorce. Click now to navigate property division intricacies and secure your financial future.

Property Division (Community & Separate)

Community property states| What it is and how it works?

Post author By Dina Haddad
Post date March 15, 2023

Community Property in a California Divorce

What is Community Property in Ca Divorce?

In divorce, how assets and debts are divided is subject to a number of laws. Assets being what you own and debts are what you owe. Since laws are the same for assets and debts, I’ll refer to both collectively as property.

How property is divided depends on its character. There are two types of character, separate property, and community property. Separate property belongs to one spouse, and community property belongs to both. Whether the property is separate or community mostly depends on when you got it. If you received property before you got married or after your date of separation, it is your separate property. This includes the money you earn after you separated, although you may be required to pay support based on your earnings after you separate. Gifts or inheritance is separate property even if received while married. And any increases to the value of a separate property during the marriage, including any appreciation, profits, or rental income, is considered separate property, even though the increased value occurred during the marriage.

All other property received during the marriage is community property and divided equally between the spouses. This includes the salary you earned while you were married because California views marriage as a partnership. If you saved your salary or used it to make a purchase, your savings and what you purchased with your salary are community property too.

In the rare situation that you have less than $5,000 in community property and you cannot locate your spouse, the court has the power to award all of the community property to you.

Otherwise, unless you have another agreement with your spouse, like a prenup, these property laws apply to you. You can agree not to follow them, but if doing so favors one of you more than the other, the spouse getting a bad deal will have an incentive to go to court or not sign the divorce agreement. It’s better to negotiate with an understanding of the property laws, so you can use your knowledge to offer a proposal that is more likely to end in agreement.

At TheCompleteDivorce, we provide you with what you need to successfully do your California divorce on your own. We provide all the required family law court forms in our automated forms program, all the video tutorials, and an automated customizable Marital Settlement Agreement

(Divorce Agreement). If you need more help, you can get our package which includes time with a divorce mediator.

Before you go, consider if we can help you. We have helped thousands of couples in California. Our guided DIY divorce is successful and cheap! Our services

are all 5-star!

Property Division (Community & Separate)

2023 Options for Dividing the Property in a California Divorce

Post author By Dina Haddad
Post date March 15, 2023

Both spouses negotiating about the family home property and sitting together

Options for Dividing the Family Home in a California Divorce

Property to Divide in Divorce:

There are common properties to divide in a divorce like the family home, retirement plans, employee stock plans, household items, and debts. You can

divide these using the traditional divisions discussed, or use more creative strategies like holding the property jointly after divorce or constructing a payment plan for a buyout.

Options for the Family Residence:

You have a number of options for the family home. You can sell the house, one of you can buy it from the other, or you could jointly own the home.

Sell the Home:

If you sell the home, you divide the community proceeds from the sale. The sale proceeds are what you receive after you sold your house; the sale price less the mortgage, any other loans, and the costs to sell.

Once sold, you no longer own property with your spouse and can easily divide the cash between you. However, selling can have downsides. For example, you might want to avoid selling to keep your children in the house and avoid having to change schools and move away. On the other hand, you can minimize the impact by selling during your children’s summer break, a typically high-selling season, and avoid moving the children mid-year.

You can also include in your agreement that decisions to sell the house must be made jointly, like who will be the real estate agent, what will be the listing price, accepting an offer, and dividing the funds from escrow.

Buy-Out:

If you want to keep the house, you can buy your spouse out of their ownership in the family home. You owe your spouse one-half of the community equity in the home. This is calculated as the fair market value minus the loans less any separate property. This amount is then divided in two. You can value the home using comparables, online sites, paying for a formal appraisal, or negotiating a value with your spouse.

You can purchase the property by taking less of other community properties; pay cash for what you owe, or refinance the house to take cash out to pay your spouse. This is called a cash-out refinance. It is an expensive option because you will be paying it back to the bank with interest, and you may end up increasing your mortgage payment. You can also combine these two options by taking less from another asset and paying the rest with the refinance.

You might also negotiate the costs to sell the property, including any taxes, and reduce the amount you need to pay your spouse. Although the judge would not reduce the value of your home for these costs, you can do so by agreement.

Unless your spouse agrees to stay on the home loan, you will need to refinance the loan to take your spouse’s name off the loan. You will only be able to refinance in your name if you qualify for the loan, showing that you have the income and assets to take a loan for the increased amount.

If you have trouble removing your spouse from the loan, see if your spouse would be willing to stay on the loan if you provide some safeguards. You might agree that you are 100% liable for the mortgage, and if you miss more than 1 or 2 mortgage payments, your spouse can require that you sell the house. The consequence may seem severe, but although you would be legally liable in family court, the lender can still come after your spouse; and, if you miss a payment, your spouse’s credit will be impacted. And, as long as your spouse is on your loan, your spouse’s ability to qualify for a loan will be limited.

If you are the one staying on the loan for your spouse, consider the risk that your spouse may miss a payment impacting your credit. Also, speak with a lender in your area to learn what the current requirements are for borrowing and whether you would qualify for your own loan if you stayed on the loan with your spouse. You might suggest to your spouse that your name must be taken off the loan if you need to buy a house upon a certain amount of notice, like 90 days. If your spouse fails to do so, you can require the house to be sold.

Deferred Sale & Co-Ownership:

Another option is to postpone the house sale, called a deferred sale. Until you sell, you continue to co-own the house, typically as equal owners. However, one

of you stays in the house and has sole and exclusive use. That person is responsible for agreed to expenses, such as the mortgage, property tax, home insurance, utilities, garbage, and basic upkeep, until the date to sell.

You want to include a firm sell date because it sets realistic expectations and prevents one spouse from keeping the equity in the home from the other. You can time the sale with the children finishing a significant school year such as graduating elementary or high school. If it comes time

to selling, and you both agree, you can agree to extend the sale date.

If you choose to do a deferred sale, you need an agreement that set outs your responsibilities clearly; who will live in the house, who is paying what expenses, what your ownership interests will be, whether you can have a renter or romantic partner living there, whether you can take a loan against the house, and when the house must be sold. The more clearly your expectations are defined, the better the deferred sale will succeed.

Nesting:

Sometimes in a deferred sale, couples will nest. In nesting, the children stay in the family residence, and the parents rotate between the family residence and a smaller place, like a one-bedroom apartment. The parents choose this arrangement so that the children are not disrupted and to save money on a second place. If you are considering this option, consult with a parenting coach or therapist. Nesting requires a lot from parents, from respecting each other’s space to being able to communicate well. Nesting should be in your children’s best interest, not just a financial benefit.

Review each of these options carefully and work with your spouse to reach the best solution for your family.

Before you go, consider if we can help you. We have helped thousands of couples in California. Our guided DIY divorce is successful and cheap! Our services are all 5-star!

Need more? Check out our full-service divorce mediation services, Families First Mediation, https://ffmediation.com.

Property Division (Community & Separate)

Unveiling the Secrets: How to Prove Your Separate Property in a California Divorce

Post author By Dina Haddad
Post date March 15, 2023

Separate Property in a California Divorce - Property Division

How to Prove Your Separate Property in a California Divorce

Figuring out the Character of Property in a CA Divorce: Identifying and Proving Ownership

Community and Separate Property in a California divorce can pose challenges in identification during the complex landscape of a California divorce. In the union of marriage, it’s commonplace to share bank accounts and utilize gifts, inheritance, or pre-marital savings to offset expenses or loans. However, navigating the blurred lines between separate and community property requires a keen understanding of the intricacies involved.

Shared Finances and Mixed Property

Marriage often leads to the intertwining of financial aspects, potentially leading to assets with dual characteristics—both separate and communal—referred to as mixed property. In a litigation scenario, the division of mixed property rests on your ability to substantiate the separate portion. Success in this endeavor results in the separate portion going to you, while the communal portion is equally divided between both parties.

Diverse Scenarios: Community vs. Separate Property

For many couples, community property predominates, especially when they enter marriage with limited assets or haven’t received inheritances or gifts. In such cases, assets are shared equally upon divorce due to the absence of significant separate property elements.

Conversely, some couples acquire separate or mixed assets over time. This situation warrants the obligation to validate your separate property claim—a daunting task, especially in lengthy marriages with inadequate records or fluctuating property values. Nonetheless, with proper information, this can be accomplished.

Proving Separate Property

To establish separate property, several avenues can be pursued, often encapsulated as the “Four T’s“: Time, Tracing, Title, and Transmutation.

TIME:

This concrete factor highlights the property’s character. Demonstrating that an asset was acquired before marriage or post-separation solidifies its status as separate property. However, merely proving time isn’t enough. If you included your spouse’s name in the title while married, the property might have been conveyed to the community.

TITLE:

Ownership is showcased through a title. Assets like cars, real estate, bank accounts, and life insurance are prime examples. Sole ownership implies separate property, whereas joint ownership leans toward community property. Exceptions exist for assets exclusively titled in one person’s name.

TRACING:

Employing evidence, such as bank statements, traces an asset’s original source and current status. For instance, showing a savings account statement from before marriage establishes funds as separate property. Subsequent statements detail how those funds were utilized—whether saved, invested, or commingled with community assets.

TRANSMUTATION:

Even with established separate property, transmutation—an intentional change in property’s character—can occur. Property can transform from separate to community or vice versa, usually through a written agreement, unless specified otherwise.

Complex Cases and Expert Consultation

Matters like retirement accounts complicate property division due to market fluctuations affecting contributions. Expert advice, often from a divorce professional, is crucial for accurate evaluation of property portions.

Achieving Clarity in Property Division

Successful establishment of property character results in a judge confirming ownership. Failure to prove separation leads to a 50-50 division of communal property. Negotiations may also secure partial separate property credits, even if conclusive proof is elusive.

The Core of Property Division

Ultimately, reaching a fair and sensible agreement in asset and debt division remains paramount. Unveiling your separate property’s worth may be crucial, emphasizing the significance of meticulous record-keeping for proof. Even with limited documentation, amicable negotiation can ensure equity.

Empowering Your Divorce Journey

At TheCompleteDivorce, we empower you with the tools necessary for a successful California divorce. Our offerings encompass required family law forms, comprehensive video tutorials, and customizable Marital Settlement Agreements. Should you require further assistance, our package includes valuable time with a divorce mediator.

Book Strategy Session

Before departing, reflect on the potential support we can offer. With a proven track record of aiding countless California couples, our guided DIY divorce process is cost-effective and successful. Our services are consistently acclaimed, reflected in our 5-star reputation.

Property Division (Community & Separate)

Dividing Community Property vs Separate Property | Ca Divorce

Post author By Dina Haddad
Post date March 15, 2023

Divide Community Property in a California Divorce 1

How to Divide Community Property in a California Divorce

Dividing Community Property:

When it comes to a divorce in California, the division of community property is a crucial aspect that needs careful consideration. Understanding the various methods for property division can help ensure a smoother process. Let’s delve into some effective strategies for dividing community property and address the legal aspects associated with it.

One common method to divide community property is “in kind.” This involves both spouses receiving an equal share of the property, maintaining fairness in the division. For instance, if you possess 100 shares of a company valued equally, both spouses would receive 50 shares each, assuming the same tax or cost basis. Similarly, if you have $5,000 in a joint savings account, the account would be split into two, with each spouse receiving $2,500. However, it’s important to note that for this method to work, you must possess identical assets with the exact same value.

However, not all properties can be divided in this manner. Assets like cars cannot be divided “in kind.” In such cases, a buy-out option comes into play. One spouse may choose to retain the car and compensate the other spouse for their share of the car’s value. It’s important to determine the present value of the property, rather than its value at the time of separation or purchase. This means that if a buyout is chosen, only half of the property’s value is owed to the other spouse, as you already own the other half.

For couples with diverse assets, totaling the value received by each spouse is an option. If there’s a discrepancy in the total values received, the spouse who received more compensates the other to balance the division. This type of payment is known as an “equalization payment,” and it’s worth noting that it isn’t taxable.

Should your case go to litigation, a judge will employ one of these division methods to distribute your property. However, if you’re negotiating an agreement, an additional option is available to you – the choice to jointly hold certain properties post-divorce. It’s wise to consult a divorce professional to ensure proper titling and to comprehend the potential legal or tax implications of jointly holding property after divorce.

Dividing Community Property in a Ca divorce -Cheap online divorce in San Diego

Dividing Separate Property:

Separate property or debt acquired before marriage or post-separation is considered individual ownership and is not part of the community property equalization process. At TheCompleteDivorce, we’re dedicated to assisting you with your California divorce journey. Our comprehensive package includes all the necessary family law court forms, informative video tutorials, and a customizable Marital Settlement Agreement. For those in need of more support, our extended package includes time with a divorce mediator.

Before making any decisions, consider the benefits of our services. With numerous successful cases in California, our guided DIY divorce process is not only efficient but also cost-effective. Our consistently top-rated services speak for themselves

Property Division (Community & Separate)

How to Divide Household Items in a California Divorce (2023)

Post author By Dina Haddad
Post date March 15, 2023

How to Divide Household Items in a California Divorce

Household, Sentimentals, Antiques:

Household items, like furniture, kitchen appliances and cookware, backyard furniture, and tools, also need to be divided. The court values these items at

resale value, not replacement value.

Make a list of what you have:

It’s an acceptable choice to go through each room in the house and make a broad inventory of everything that is shared marital property, which could include:

Electric household appliances
Reclining chairs and sofas
Tables and sets for dining
Dinnerware sets
Outdoor equipment
Jewelry

Flip a Coin:

Couples can easily sit down and divide the items. If you have a hard time dividing the household items, you can list the disputed items in order of preference. Flip a coin with your spouse, and the winner of the coin toss goes first and picks an item on the list. Then it’s the other’s turn to pick. Continue alternating turns.

You could also value the items. If you are unsure of the value of an item, look to find one in a similar condition online. If it’s an antique, art, heirloom, or collectible, you may want to appraise the item. Once you have a value, you can buy it from your spouse for one-half the value. If you both are willing to buy it, it might be whoever is willing to pay the most. If that doesn’t work, you can sell it and divide the proceeds.

If you can’t take the furniture:

this can be stressful because it typically costs more to replace household items. Even though it’s not what a judge might do, see if you can negotiate a replacement cost into the division.

You may also have significant rewards, like airline miles, credit card points, or special privileges. Airlines miles usually cost money to transfer from one person’s name to the other. If one of you has community miles, you can value the miles and the other spouse can receive one-half the value in cash or in another property. Or, the owner can hold the miles in the account, and when the spouse is ready to use them, the spouse that owns the miles will purchase the flight for the

other.

You also can discuss how irreplaceable items like family photos, videos, or children’s crafts, are going to be shared to prevent any unpleasant surprises. With a little effort, you each can easily upload family photos and videos to a photo-sharing website or external hard drive. As for your children’s crafts, you can divide them or one of you can hold the items and give them to your children at an agreed to age.

Which things do not Include in Household Items:

Household items do not include your gifts, inheritance, or heirlooms. These are your separate property. If your spouse gave you a gift of a personal nature, such as an anniversary gift, then it is also considered your separate property. If the gift was substantial in value and purchased with community funds, and there’s no written agreement stating otherwise, then it can be considered part of the community division and not your separate gift. Substantial value depends on each family’s financial situation.

You can also be creative with the division of your property and debts. You can incorporate joint ownership of a property or a payment plan for an amount owed between you. This is one of the best advantages of having control of your divorce. Rather than approaching the property division in strict terms, you can negotiate an agreement that meets your personal goals.

Whatever you agree, once you have a divorce agreement about your property, it is final and cannot be changed, so make sure you take time to fully understand your property so that you make the right decisions.

Book Strategy Session

At TheCompleteDivorce, we provide you with what you need to successfully do your California divorce on your own. We provide all the required family law court forms in our automated forms program, all the video tutorials, and an automated customizable Marital Settlement Agreement (Divorce Agreement). If you need more help, you can get our package which includes time with a divorce mediator.

Before you go, consider if we can help you. We have helped thousands of couples in California. Our guided DIY divorce is successful and cheap! Our services are all 5-star!

Property Division (Community & Separate)

2023 Employee Stock Plan Accounts in a California Divorce

Post author By Dina Haddad
Post date March 15, 2023

Dividing Employee Stock Plan Accounts in a California Divorce

Employee Stock Plan:

With employee stock plans, the company offers the employee company stock, like stock options or restricted stock units, as part of the employee’s compensation. The company offers these benefits to attract talent and encourage employees to invest in their company’s growth. If their company does well, they do too.

The employee receives the stock in an award called a grant, and doesn’t get all the stock at once. Usually, the stock is given over a four year period in equal amounts. The process of receiving or earning the shares over time is called vesting. Only when the shares vest does the employee actually own the shares. For most of these benefits, the employee spouse pays the taxes automatically when the shares vest.

Figuring out which shares are community and which are separate does not solely depend on the date the grant was given to the employee. If the grant was given during the marriage, the shares that vested during the marriage are community but a portion of the unvested shares, which vest after the date of separation, will be community and some will be separate. Only if the grant was received after the date of separation will all the shares in that grant be the employee’s separate property.

For the community shares that do not vest until after separation, the employee spouse is only required to give one-half of the community shares to the non-employee spouse after it vests. Since each spouse needs to be responsible for the taxes on his or her portion, the couple will need to divide the tax obligation equally. You will have to file the right tax forms to do this. If you or your spouse has unvested shares, reach out to a divorce professional like an attorney-mediator or forensic accountant to help you with the calculation and the tax allocation.

At TheCompleteDivorce, we provide you what you need to successfully do your California divorce on your own. We provide all the required family law court forms in our automated forms program, all the video tutorials, and an automated customizable Marital Settlement Agreement (Divorce Agreement). If you need more help, you can get our package that includes time with adivorce mediator.

Before you go, consider if we can help you. We have helped thousands of couples in California. Our guided DIY divorce is successful and cheap! Our services

are all 5-star!

Need more? Check out our full service divorce mediation services, Families First Mediation, https://ffmediation.com

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Property Division (Community & Separate)

How Assets and Debts Divide in a Ca Divorce law

Post author By Dina Haddad
Post date March 15, 2023

How Assets and Debts Divide in a Ca Divorce law

While you work through your property to divide, remember to also work through your debts. Debts are assigned in the same way as property. If incurred during marriage, the debt is a community obligation, unless it was incurred in a frivolous or fraudulent manner. If the debt is a community, you are each responsible for one-half.

If you incurred a debt prior to marriage or after the date of separation, this is your separate responsibility. School loans are the exception. Even if you incurred school loans during marriage, the loans are your separate responsibility.

Make sure you are aware of all outstanding debts. This includes credit cards, car loans, and money you borrowed from a family member. Run a credit report to get a comprehensive list of debts. You are entitled to one free credit report a year and your credit score is not negatively impacted when you look up your own credit.

It is especially important to know whether you are both named on the debt. At the end of your divorce, you do not want to be named on any debts with your spouse. If you are both in debt, the creditor can come after either of you, even if your agreement says your spouse is responsible. If you have joint credit cards, agree to close those cards. If you are an authorized user, you do not need to close the card. The owner just needs to remove you as a user, and then the owner’s spouse can continue using the card.

The most important part of the asset and debt division is to reach an agreement that is fair and makes sense for you and your family. Identifying your separate property may be very important to you. If so, take time to pull records, like bank statements, receipts, or deeds, to prove your separate property. Even if you don’t have the best records, you can negotiate an amount with your spouse that you believe is fair.

Book Strategy Session

Before you go, consider if we can help you. We have helped thousands of couples in California. Our guided DIY divorce is successful and cheap! Our services are all 5-star!

Property Division (Community & Separate)

2023 Dividing Retirement Accounts in a California Divorce

Post author By Dina Haddad
Post date March 13, 2023

Dividing Retirement Accounts in a California Divorce

Retirement Plans:

Many couples have community retirement accounts. Any contributions made during marriage, whether 401(K)s, 403(B)s, IRA, Keoghs, military retirement benefits, or pensions, are community and each spouse is entitled to one-half. This includes any years of service earned as part of a pension plan during the marriage, or contributions your employer made on your behalf during marriage. If you contributed before marriage and after the date of separation, that portion is your separate property.

Retirements are grouped into two kinds; either a defined benefit plan or a defined contribution plan. With a defined benefit plan, you receive a monthly benefit at retirement based on a predetermined formula that uses factors like years of employment, salary, and age. This is typical of pensions. With a defined contribution plan, either the employer, employee or both make contributions to the retirement plan on a regular basis. Common examples are 401Ks and 403Bs. In order to divide the community portion, you will need a Qualified Domestic Relations Order, called a QDRO. QDROs are very complicated and require legal expertise. It is very important to have a QDRO specialist prepare one for you.

IRAs have less restrictions. You do not need a QDRO to transfer funds. You can rollover the funds from your IRA to a rollover IRA in your spouse’s name as part of your divorce agreement. Just determine what portion is to be transferred from one spouse to the other, and include that in the agreement. The spouse that owns the IRA gned agreement to the financial institution and requests that the funds owed to the non-owner spouse be rolled into a separate account for the spouse.

So long as the retirement division is in your divorce agreement, you can divide these accounts without incurring any penalty fees or taxes.

Book Strategy Session

Before you go, consider if we can help you. We have helped thousands of couples in California. Our guided DIY divorce is successful and cheap! Our services are all 5-star!