Divorces can be complicated, particularly for high-net-worth individuals and those who own a lot of complex assets. California is a community property state, which means all assets should be divided equally. However, it can be difficult to determine how to divide real estate and other physical property. Learning about the process of dividing complex assets in Glendale and Inglewood can help you get an idea of how to start the process.
Understanding Community vs. Separate Property
While it’s true that California is a community property state, some assets are considered separate property and not subject to division, regardless of how long you’ve been married. Separate property includes:
- Assets you’ve had since before the marriage
- Gifts or inheritances you or your spouse received while married
- Money you’ve earned since separating from your partner
- Any property explicitly stated as separate in a prenuptial or postnuptial agreement.
If you’re not sure whether a particular asset is subject to division, consult your Inglewood or Glendale property division lawyer.
Key Considerations in Complex Asset Divisions
Some types of assets are easier to divide than others. It’s usually simple to divide the contents of a bank account, for example. Some more difficult assets to deal with include:
- Businesses. If you and your spouse both own a business, you’ll need a valuation to determine how much the business is worth. You and your spouse will have to decide who will retain ownership of the business.
- Investments. Stocks, bonds, and other investments must also be assessed for equal distribution. This process is more complicated than dividing bank accounts because you’ll need to take into account early withdrawal penalties and tax implications.
- Real estate. If you own multiple properties, getting a fair valuation is essential to ensuring the proper division of those assets. In addition to fair market value, you’ll need to know about outstanding mortgage balances, rental income, tax consequences, and whether the properties will be sold or if one spouse will retain ownership.
- Trusts. Revocable trusts are considered community property if they were created or funded during the marriage, while irrevocable trusts are protected from division. If you or your spouse has contributed marital funds to the trust, they’ll need to be traced to determine how much of the money in the trust is community property.
Many neighborhoods in the area, like Fremont Park and Adams Hill, feature homes with high property values. This can make asset division more difficult.
Concerns Regarding Hidden Assets
In complex financial situations, one spouse may try to hide assets from the other to avoid a fair division during the divorce process. You can identify hidden assets in Glendale or Inglewood with the help of a property division lawyer or a forensic accountant. These professionals can:
- Trace hidden bank accounts
- Identify offshore holdings
- Analyze financial records for discrepancies
- Find undervalued or omitted assets
Understanding the Tax Consequences
Dividing assets can have significant tax implications. You and your spouse may have to pay capital gains taxes or property transfer taxes that come from asset liquidation. If you want to avoid unexpected tax burdens, you may want to consult with an accountant during this process.
Protecting Your Financial Interests During Property Division
Dividing property can be a complex process that requires legal experience and financial skill. You can streamline the process and make sure your interests are protected by:
- Hiring the right professionals
- Gathering relevant documents
- Negotiating a fair settlement
- Avoiding court involvement through alternative dispute resolution
Why Complex Property Divisions Are So Common in California
Complex property division issues come up frequently in the Golden State. This is partly due to the fact that real estate values are twice the national average. An estimated 2,600,000 people own registered or non-registered recreational boats, and many more own antiques or rare collectibles, which can sell for upwards of $3.5 million.
With all of those expensive items, it’s no surprise that many couples share a complex array of assets as part of their marital property. Few people consider the potential benefits of prenuptial agreements prior to getting married, and many couples commingle formerly separate property in marital accounts.
FAQs
What Is a Fair Division of Assets?
A fair division of assets in California is generally a 50/50 split. Unless you and your spouse agree on a different equitable distribution of assets and debts, this is how the court will divide your marital property. A property division attorney can help you navigate complex issues like how to divide real estate and other material property.
How Do You Convert Separate Property to Community Property in California?
To convert separate property to community property in California, you need to produce a written agreement that shows clear intent and the consent of the adversely affected spouse. This process is known as transmutation, and it can be accomplished through a Community Property Agreement to ensure that it will be legally enforceable.
What If You Have Property Together but Do Not Want It After a Divorce?
If you have property with your spouse but do not want it after a divorce in Glendale or Inglewood, there are several approaches you can take. You can mutually agree to sell the property and split the proceeds, one person can buy out the other person’s share, or you can file a partition action through the court to force a sale or division.
How Do You Transmute Community Property to Separate Property?
You can transmute community property to separate property by producing a written agreement. It must be signed by the spouse who plans to give up their separate property to the marital estate. By law, the document must show that the spouse understands they’re relinquishing the right to their separate property, and it must clearly identify that property.
Hire a Property Division Lawyer
Property division is one of the most difficult aspects of getting a divorce. If you and your spouse plan on dividing complex assets in Glendale and Inglewood, you should hire a property division lawyer to help.
The team at Kramer & Zitser, LLP knows Glendale property division laws inside and out. Our experienced lawyers can protect your interests in your Inglewood property division case. Contact us to schedule an initial consultation today.
