In this article, you will learn:
- How couples can decide on their own divorce decisions
- Common issues in divorce and family law matters
I often have to educate my client that the amount listed on their tax return is not their income available for support, specifically for child support. The state of California does not take into account things like depreciation or taking a loss on your business or those types of things. So, there is an education element that goes into it from my end to the client who is going to be the child support recipient or the payor.
How Property And Assets As Well As Debts May Be Divided In A Divorce In California?
Because California is a community property state, the presumption is that assets you had before the marriage will remain yours, and assets you acquired after the separation will be yours. For the purpose of assets acquired during the marriage or if they increase in value during the marriage, that can depend on how that increase in value took place, but the presumption is that it’s community property, which means a fifty-fifty split. That is sometimes difficult for people to understand or accept, because they might think, “Well, I was the one working, and my spouse was at home, and the money that we used to buy the house or buy the stocks came from my job.” If they want to accept something different than that or offer something different than that, they are certainly able to do that, and a court will not second-guess it as long as it was not because of a lack of information or knowledge about an asset. There are multiple reasons why somebody might agree to a division that is not the typical fifty-fifty division. However, in the absence of an agreement, the court must follow the law regarding division of assets. Additionally, if this is more complex, the court will not undergo the calculation and the parties may need to retain financial experts or a joint expert to make these calculations with input from the parties.
And as far as the assets, they are not necessarily going to be split in kind. If one person wants to keep the house and the other person wants to receive most of the liquid assets or stock, and they agree to do that, they are going to be able to do that. But courts cannot do that. Courts are more limited than what the parties can agree to among themselves, which is another reason why settling issues is better.
A Divorcing Couple’s Ability To Decide What Assets And Property Get Split And How On Their Own
Part of my job is trying to fashion a settlement and to help clients decide how they are going to divide the assets and the debts. Many years ago, I had a settlement in a case where my client was working in a company and had a significant amount of shares in that company. He jokingly asked me, “Wait a minute, so if I understand this correctly, I get to keep working in this company and she gets all the cash?” And basically yes, that was correct, because it was not the type of situation where the company could have been sold, for example, or his shares could have been sold in the company. So, is that the result that might have occurred had they litigated it? Not necessarily, but they were free to make that determination, and in the end, it was a good determination and my client went on to make exponentially more money.
Most Common Issues That Come Up In Division Of Assets And Debts In Divorce Cases
Some of the issues are not having enough money, to say, pay off the interest in a house. Currently because of the rising prices in the housing market, that is really the biggest issue for people being faced with having to sell the house because neither can afford to buy out the other the question then becomes, now what? Where do I live now that I no longer have this house? I wish I had a magic answer to these questions. Most people, in my experience, are living at or beyond their means. So, the fact that they are divorcing does not mean that more income is coming in and they must figure out a way how to maintain two households now on the same amount of income, as well as to divide assets with a limited pool of resources. Not everyone has a wealthy relative who can help finance a home buyout.
There are also retirement accounts that must be dealt with, but those are generally easier to deal with. For most people, the parties are not of an age such that they can take funds out of a retirement account without penalty, so they divide it with what is called a QDRO, which stands for a Qualified Domestic Relations Order. This then divides the account so that each person then has their own account and is able to receive the information and decide from there. We can connect clients with professionals who prepare these QDROs at a flat rate as their specialty and jointly on behalf of both parties.
For more information on Family Law in California, an initial consultation is your next best step. Get the information and legal answers you seek by calling us at (858) 225-4840 today.
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