Dividing property in a California divorce is not always straightforward. While the state follows community property laws, meaning most assets acquired during the marriage are split equally, several factors can make the process more complex.
High-asset divorces, in particular, can be problematic. Below are some important points to consider.
Community and separate property
California law considers property acquired during the marriage as community property, while assets owned before the marriage or received as a gift or inheritance are separate property. However, complications arise when separate and community assets mix. For example, determining ownership percentages can be difficult if one spouse uses separate property to invest in a family home.
Business ownership and valuation
If one or both spouses own a business, dividing it can be challenging. A business started during the marriage is usually community property, but if one spouse owned it before, only its growth during the marriage might be divided. Proper valuation, including future earning potential, is necessary but often disputed.
Hidden assets and undisclosed debts
California law requires full financial disclosure, but some spouses try to hide money, investments or property. Undisclosed debts can affect property division. If one spouse secretly accumulates debt, courts may assign it to that spouse rather than splitting it evenly.
Property division is an essential component of divorce in California, but it can be complicated. It is essential to uncover hidden assets, accurately appraise properties and establish clear ownership.
To ensure you receive maximum value in your divorce settlement, it will be beneficial to seek legal guidance.