Divorce is a complex and emotionally challenging process. The task of dividing property between you and your ex can be even more intricate. From real property and personal possessions to investment and retirement accounts, you’ll need a strategic approach to divide this property to finalize your divorce and move on with your life. At Diarian & Bociaga, we understand the complexities involved and our Sherman Oaks divorce attorneys have over a decade of experience providing expert guidance to Californians navigating this process. Contact an experienced family law attorney in Sherman Oaks for legal guidance today.
What Are Community Property Laws in California?
California’s community property laws are set forth in Family Code Section 760. In community property states like California, assets and debts acquired during the marriage are considered the property of both spouses. During a divorce, these assets are typically split evenly amongst the spouses. Community property can include every type of property, tangible and intangible. Tangible property is a physical property that can be seen and felt. Intangible property, on the other hand, cannot be seen or touched. For example, real estate, jewelry, cars, and clothes are tangible, while intellectual property and digital assets like cryptocurrency are intangible. If any assets are acquired during marriage, they will be considered community property.
While there is a presumption that property acquired during a marriage is community property, it’s crucial to note that some noteworthy exceptions exist. Understanding these exceptions is paramount if you wish to avoid giving your spouse more than you legally require. Some common examples of property considered separate from community property are assets owned by one spouse before marriage, inheritance gifts given to one particular spouse during the marriage, and income earned after the couple is divorced or legally separated. Once the couple splits, this property is not divided amongst the two.
It’s important to note that separate property will not be considered separate upon divorce if it has undergone marital transmutation pursuant to Family Code Section 852. A marital transmutation allows spouses to change the legal character of their assets and debts. This means that property that was once considered separate property can be legally changed to community property and vice versa. To be valid, a transmutation must be in writing, unambiguous, and consented to by the adversely affected spouse. In the case of property being changed from separate to community, the adversely affected spouse is the spouse that once had 100% ownership and now has 50% ownership.
Property Division in High Net-Worth Divorces
Property division cases become more complicated and lengthy in high-net-worth divorce cases. Not only is more money on the line, but there are typically more steps involved in determining which spouse should get which portion of assets like businesses, investment portfolios, and expensive properties.
Businesses
If the couple is involved in business ventures together, or one spouse runs a business, the business must be evaluated to determine its worth. This can include things like property owned by the business, business income, business debts, accounts owed to the business, and intellectual property. An accurate valuation often includes employing the services of a forensic accountant who will analyze the business’ worth to ensure a precise assessment. Business debts include items like loans, accounts payable, and mortgages on properties. The court may also consider the business’s reputation, customer base, future earning potential, and any appreciation in value that occurred during the marriage to determine its value.
Investments
Investment portfolios are another vital aspect of high-net-worth divorces. Typical investment portfolios in dispute include stocks, retirement accounts, government bonds, and various other securities. Determining the value of these investments can be complicated due to vectors like tax implications and fluctuating market values. In order to accurately determine what each account is worth and how it should be divided amongst spouses, speaking to a legal professional is a good idea. An experienced Sherman Oaks property division attorney will either know how to evaluate these investments or will work with other professionals to ensure an equitable split.
Typically, properties are one of the most highly contested aspects of divorce proceedings. To determine the value of real estate, it must undergo an appraisal process. This process takes into consideration factors such as market conditions, size of the property, and location. Furthermore, property owned in states where the couple does not reside, such as vacation homes or investment properties, can have additional tax implications depending on which state or country the property is located. These tax considerations must be considered to ensure an equitable division of real property. Your property division attorney in Sherman Oaks will know how to assist you with this.
Prenuptial Agreements
High-net-worth divorces often involve prenegotiated prenuptial agreements, which are signed prior to marriage. These agreements decide how property and other assets will be divided amongst spouses in the event of divorce. An ironclad prenuptial agreement is a great way to avoid contested divorce proceedings and streamline the divorce process. These agreements are governed by California’s Uniform Premarital Agreement Act. They can include terms about which spouse will get what property, how the couple will split investments, and which partner will take on any debt accrued during the marriage.
It’s important to note that these agreements must be fairly negotiated, and one spouse must not be pressured or forced into signing these agreements by the other spouse. To ensure the agreement is considered enforceable by California Courts, it’s recommended that both spouses engage separate legal counsel to help negotiate the terms of the agreement. Like any other aspect of divorce proceedings in Sherman Oaks, both spouses must accurately disclose their financial information before signing the prenuptial agreement. Although these agreements are great tools to determine economic splits in the event of a divorce, it’s important to note that California does not allow couples to include child custody and support issues in prenuptial agreements. The reason is that those decisions must always be in the child’s best interest and reflect the parents’ situation at the time of divorce. This is why it is important to hire a Sherman Oaks property division lawyer to help you with this.
Contact an Experienced Property Division Lawyer in Sherman Oaks
Property division is one of the most important aspects of the divorce proceeding. To ensure you get a fair split, you must have skilled legal counsel by your side at every step of the process. Diarian & Bociaga bring a wealth of experience to property division cases in both standard and high net-worth divorce. We understand how to negotiate on your behalf and will aggressively fight for you to ensure your rights are protected. If you need a Sherman Oaks property division attorney, contact us today to learn how we can help you.