California follows community property laws, which often, but not always, means an even split between spouses. Protecting your rights in a divorce starts with knowing the most common property division mistakes to avoid in divorce in California.
In California, nearly every asset and debt acquired during a marriage is considered to be jointly owned by both partners, regardless of who actually made the purchase. This principle is called community property, which means that when a couple divorces, their assets and debts are generally split evenly between the two partners. Assets and debts of each spouse from before or after the marriage are considered separate property and not subject to division.
The Golden State is the most populous state in the US, with about 39 million residents, according to the most recent American Community Survey by the US Census. This includes about 13.7 million families.
About 47% of California families are married, and nearly 28% of families in California have at least one child under the age of 18 living at home. California’s divorce rate is 5.88 per 1,000 people. The national divorce rate, by comparison, is 7.1 per 1,000 people.
Given the complexities, it can be easy to make mistakes in the divorce process that can end up costing you in the long run. One of the biggest mistakes people make in property division is rushing the legal process of divorce. It is understandable to want the divorce to be settled so you can move on as quickly as possible. However, not taking the time to make sure all avenues are considered can lead to big mistakes, including:
Understanding the difference between community property and separate property is key, but it is also essential to ensure that you identify all separate property so it is not included in the total value of the marital estate. This may include gifts, inheritances, financial accounts such as investments or trusts that were owned before the marriage, and income from rent or profits from premarital property.
If property was acquired by one spouse before the marriage and then becomes mixed with community property, the other spouse may be entitled to reimbursement. For example, if money from a separate financial account is used to improve the family home that is owned by both people, the individual who owns the account may be able to be reimbursed for some or all of the renovations.
In California, divorcing spouses are required to disclose all their debts and assets as part of the divorce process. Failing to do so can take the form of hiding or understating the value of assets, omitting or providing false information about income, expenses, or debts, or otherwise intentionally misrepresenting the value of property to gain an advantage in the property division.
Generally, there are no immediate tax implications for transferring ownership from one ex-spouse to another. If the person later decides to sell the property, they may have to pay additional taxes on the increased value between the time of the divorce and when they sell. This means it sometimes makes more sense to sell assets and split the proceeds.
When a couple divorces, their assets are assigned a value based on what they would sell for in the local market at the time of divorce. However, if the assets have not been appraised recently, their value may have changed, which can significantly impact the overall marital estate value, especially for large or complex assets. Appraising assets is essential to ensure accurate property division.
In many cases, even if you disagree with or plan to appeal a court order, there are often financial and legal consequences for disregarding a court order. Actions such as failing to transfer property ownership, violating domestic violence protective orders, failing to pay equalization payments or legal fees, or hiding assets can result in contempt of court charges, fines, asset seizure, or wage garnishment.
In addition to hiding or falsifying information about assets, financial misconduct may include excessive gambling, destroying or selling property below its value, or gifting assets to others to avoid division. Such actions may be grounds for the court to deviate from the standard even split of assets to adjust for the financial loss suffered by the other spouse as a result.
In California, the assets that can’t be split are generally considered separate property. This is usually property that was acquired before the marriage, after the separation, or through gifting or inheritance to the individual. There may be other exceptions in some cases, and a qualified divorce attorney can help you determine which of your assets qualify.
A divorce goes smoothly when both parties are committed to minimizing conflict and reaching a resolution that is amicable. This generally focuses on open communication, working together, and being willing to compromise on divorce issues, such as child custody and support, spousal support, and property division. As nice as it is to have a smooth divorce process, it can be more important to assert your rights in your settlement.
In most cases, child support and spousal support do not impact property division directly, as splitting assets is a separate process. But in some cases, negotiating the various elements of dissolving the marriage can indirectly impact property division. These family matters are generally handled by the Superior Court in the county where at least one spouse resides.
While divorcing, you should not take actions that could harm your case, complicate the process, or have a negative impact on yourself or your children. Examples include lying, hiding assets or information, violating court orders, trying to get revenge, using children as pawns, posting negative comments on social media, or making unrealistic demands.
The divorce attorneys at Edgar & Dow Family Law have been helping families in Southern California since 2004. If you’re going through a divorce, contact our office today to schedule a consultation and discuss your specific case.
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