When you file for divorce in San Diego County, all assets and debts acquired during the marriage must be equally divided. This includes real estate, personal property like furniture, investments, IRAs, pensions, and loans. As you can imagine, this division can have significant consequences for both parties, which is why it’s critical to have an experienced property division attorney on your side.
At the Law Office of Renkin & Associates, we recognize that each divorce case brings its own set of challenges when it comes to property division. This includes valuations and divisions of businesses and professional practices, complicated real estate holdings, and similar assets. We have the resources, experience, and knowledge to handle practically any property division matter, so when you hire us, your future is in good hands.
Community Property Laws in California
California’s community property laws are used to determine how property is divided between spouses in the event of a divorce. They state that any assets and debts acquired during the marriage are considered “community property” and divided equally between the spouses, regardless of who earned them or whose name is on the title.
The law presumes that all property acquired during the marriage is community property unless it was owned by one spouse while still single or received as a gift or inheritance. Profits or gains from the separate property also remain separate unless they were commingled with community property.
Here are some more facts about property division in San Diego and the rest of California:
- During the divorce process, neither spouse can legally sell or give away community property without the knowledge and/or consent of the other spouse.
- In cases where spouses have a prenuptial or postnuptial agreement, the terms of that agreement may override the default community property rules. Such agreements often specify which properties or assets are considered separate.
- Filing for divorce imposes restrictions on property transactions, including a prohibition on borrowing against marital assets.
- Although married individuals generally retain control of their separate property, once the divorce process begins, temporary restrictions will be in place. This includes a restriction on selling separately-owned real estate.
Hopefully, a settlement can be reached without the involvement of the court. A property division attorney in San Diego County can suggest creative strategies such as dividing assets in half or providing a cash payment in exchange for a spouse’s community property interest in a particular asset. This approach works best when the parties are willing to work together for the best possible outcome.
Property Division Challenges in Divorce
Divorcing couples often face challenges when dividing property. Several of these situations are highlighted below.
When separate property and marital property are mixed, it complicates division. Below are some common examples of situations where separate and marital assets can become commingled:
- High-Value Purchases: A couple uses money from a joint account (marital property) and funds from an account one spouse had before marriage (separate property) to buy a house after getting married.
- Investment Accounts: A spouse has an investment account before marriage (separate property) and continues to contribute to it with earnings from their job during the marriage (marital property).
- Renovations and Improvements: A spouse owns a property before getting married. After marriage, the couple uses funds from their joint account (marital property) to renovate or improve this property.
In each of these cases, the original separate property becomes mixed with marital property, creating a blended asset that will need to be untangled during divorce.
Dividing retirement plans like pensions can pose challenges, especially if contributions to the plan occurred before AND during the marriage. Since many retirement plans incur penalties if cashed out early, planning and specific procedures are required for division or transfer. This often involves creating a qualified domestic relations order (QDRO), which must be approved by the court and the benefits provider.
Personal Injury Lawsuit Settlements or Awards
If one spouse was injured while married and received a settlement or award from a personal injury lawsuit, all the money may not be divided equally unless it reimburses expenses paid from community property. [deleted as this is wrong in CA]
When a spouse owns a business, it becomes a critical part of the divorce settlement. Typically, the other spouse may be entitled to half of the business’s earnings. However, if the business was established before the marriage, determining its value can be challenging. The decision of which spouse(s) should retain ownership interests in the business post-divorce also needs to be addressed.
In cases where one spouse uses community assets for personal benefit without the other’s knowledge and/or consent, this misappropriation can affect how property is divided. Misappropriation includes activities that do not benefit the community such as:
- Using the money to buy drugs
- Illegally gambling away marital funds
- Wrongfully handling of marital resources (for example, giving away large sums or buying expensive gifts without the consent of the other spouse)
Things like extravagant purchases for themselves, legal gambling, or running an unsuccessful business do not typically qualify as misappropriation. Because this can be such a gray area, retaining a property division attorney in San Diego County is strongly recommended.
Questions? Speak to a Property Division Attorney in San Diego County Today
Property division in a California divorce can have a significant impact on both parties involved. At the Law Office of Renkin & Associates, we will investigate your situation and, when necessary, use experts like appraisers and forensic accountants to accurately value your assets and liabilities. Our law firm has extensive experience with these complicated property division matters and will aim to help you leave the marriage with the money and property you need to start over. For more information or to schedule a consultation, call 619-304-4760 or contact us online.
Understanding Property Division
Q: What is the difference between community property and separate property?
A: California is a community property state. Under this system of law, a marriage is viewed as a partnership where both husband and wife have equal ownership of all assets acquired during the marriage. Obligations incurred during the marriage, as well, are considered community debts, and both the husband and wife are equally responsible for their repayment. Property owned entirely by one spouse before, and possibly obtained during, marriage by gift or inheritance is considered separate property, and the other spouse has no ownership interest in it whatsoever. The law provides that community property may be converted into separate property and separate property into community property by an agreement in writing between the husband and wife.
When a married couple separates and decides to go forward with the dissolution of marriage, it is the duty of the court to determine the value of all community property and debts and divide them equally if the Parties cannot agree between themselves. The Court will determine if any separate property exists and, if so, confirm its ownership.
Q: What records / documents do I need to provide to my divorce attorney?
A: When you consider divorce, you may need to collect financial documents, such as:
- Retirement account statements
- Income tax returns
- Stock receipts
- Income statements
- Bank statements
- Credit card statements
- Deeds and Titles to real estate property
These documents will be used during discussions about the distribution of your assets, and your divorce attorney needs to be aware of the amounts in order to effectively protect you. Having the documents before you file for divorce (San Diego County or anywhere in CA) can protect you from marital asset fraud. If your spouse tries to hide assets in a business or secret account, the documents may provide the evidence to establish the existence of a Breach of Fiduciary Duty and the funds for distribution.
In complex and high asset divorce cases, it becomes increasingly important to protect your assets. Renkin & Associates regularly works with experts who act as support staff to our knowledgeable family law practice attorneys. Our divorce attorneys exercise due diligence in the use of experts in many areas. We understand that complicated divorces will require additional support and expertise.
Q: What should I do to protect my businesses when I get a divorce?
A: When your divorce involves a business or a professional practice, we highly encourage you to contact a divorce attorney before you file. At Renkin & Associates, we handle divorces that require business valuations. We can help you evaluate your business income and profit to protect you and your business.
When you are dealing with the complexities of property and asset division during a divorce, you need legal advice on how to protect your assets and income. Contact Renkin & Associates at (619) 299-7100 or email us to schedule a case evaluation.