One of the most important things a couple going through divorce should consider is how they are going to divide their family properties and debts. The problem is that most couples end their marriages in bitterness and so, coming to an agreement on how the division should be done is not always easy. For that reason, they seek the help of a divorce court, which ensures that everything the couple acquired during their marriage is equally divided between them. For this to be a smooth process, the San Diego Divorce Attorney can help couples who are considering a divorce in San Diego, California. The help, support, and advice you get from an experienced divorce attorney can make the process of negotiating a divorce settlement smoother.
What is a Divorce Settlement?
A divorce settlement is a written document that stipulates every agreement that has been reached by a divorcing couple. The documents will show the couple's decision on matters concerning child support, child custody, and alimony (also called spousal support/maintenance) as well as the division of property among other things.
A divorce settlement goes by many names including marital settlement; support, custody and property agreement; a mediated separation agreement; separation and property settlement and collaborative settlement among others.
Any adjustments, arrangement, and understanding that is reached by the divorcing couple and any decision made pertaining to business proceedings and financial settlements are included in the divorce settlement. The settlement serves as the final legal agreement between the couple, documenting all the terms of their divorce.
The settlement will show the spouse that will get what property and their responsibilities once the marriage is finally dissolved. It will also show the custodial parent, the visiting parent as well as the parent who will be paying child support in case the divorcing adults are parents. Matters pertaining to health and life insurances, cars, real estates, bank accounts, household items, investments, debts, pensions and retirement plans among others will be tackled in detail in the divorce settlement. They will also include college tuition if there are children in college, club memberships and frequent flyer miles among other valuable things the couple had together.
The couple must also include legal names, tax payments and any provisions they may have of modifying the agreement. A larger percentage of the settlement will, however, include division of property as this is the trickiest bit for most divorcing couples.
Marital Property Settlement
The trickiest part of any divorce lies in determining how assets and liabilities acquired during marriage will be split equally between the divorcing parties. This is a good reason to get an experienced San Diego Attorney. A smart attorney can easily split the assets and liabilities fairly if he/she has a complete record of all the family properties and debts.
California is called a state of community property. This means that every property and all the debts acquired by a family after the day they get married to the day they end the marriage will be considered as owned by both parties. After the divorce, the property should be split equally, unless the couple agrees to a different plan.
The divorcing couple is free to decide how they want the property shared but if there is no agreement then a divorce attorney can take them through a fair division of both assets and liabilities. Once a consensus is arrived at, be it on their own or with the help of an attorney, there must be a written document, stipulating everything that has been agreed upon, which is now called the Divorce Settlement Agreement. Both parties must sign this document, and then it will be ruled by the court to be assimilated into the Ultimate Judgment of the Marriage Dissolution that is delivered by the Supreme Court.
If the couple is unable to come to a settlement about the split, the court will take it upon itself and divide the property and the debts into the half.
For this to happen, there should be evidence showing the marital property and any separate property, since the separate property will not be included in the divorce.
Community or Separate Property?
The kind of evidence that is acceptable in determining whether one property is communal or separate includes documents such as a title deed or a statement to the property that one spouse wants to treat as a separate property. The party that wants to exclude a certain property should also provide a written agreement signed by the other party, that the property in question is not a share of the family property. If there is not enough proof, then the attorney and the presiding judge will assume that the said asset is family property and so, will include it in the split.
Note that not all properties can be divided equally, for instance, a car, house, or even a boat. With the help of an attorney, the couple has to come up with an impartial balance for such assets. If the matter is being handled by the court, the court will do its best to ensure that all marital properties are included in the division. If, for instance, there are properties that have been misappropriated, or one party has excluded some assets in the division, at the court’s discretion, the court must bring it back to the list of properties to be divided.
There are instances when a couple agrees to change some asset that was acquired before marriage into community property. This could happen before or after marriage. In such a case, the agreement must be in writing for it to be usable during the division of property. Changing the property with no written agreements will not be enough to make the property a family asset.
There are other instances when one partner may change a separate asset into a community asset without meaning to do it. This can be done if he/she combines a separate asset into a community one. If for instance, one partner had a bank account before marriage, but after marriage, the other partner started making contributions to it, the account automatically becomes a family asset, belonging to both of them. The same thing will happen to a house belonging to one partner if the other partner starts contributing mortgage payments or other expenses after marriage.
There are assets that are partially separate and partially communal. These are for instance retirement accounts, whereby only one partner contributed to, both before and after marriage. A business that one partner started before marriage and continues to operate after marriage will also fall into this category.
For these reasons, it can be a hard task trying to distinguish between a community and separate property, especially in cases where assets belonging to one spouse were contributed to by the other spouse. Talking to an experienced divorce attorney will help you understand how best to separate the two types of assets while planning for a divorce settlement.
How is Property Value Determined?
The two parties are expected to come to an agreement about who will take what after their divorce. If not, the court can help in determining how their property should be divided. If these two options do not work, each item of their property will be assigned a monetary value by an appraisal, then the couple will be told how much of their property each should take. This will include every real property as well as valuable items such as artwork and antiques. Assets like retirement benefits may prove difficult to evaluate, but not with the help of an actuary or a public accountant or financial professional.
Once the property value is determined, the court will ensure that the exact value of the properties each spouse will get will be equal. This way, one partner can get the family residence while the other takes over the business and so forth. What matters is that each partner gets assets of equivalent value with the other.
Debt and Bankruptcy Settlement
Just like property acquired during the marriage, debts acquired during the marriage are supposed to be divided equally between the divorcing parties. There could be a problem though because no one is usually prepared to inherit a debt they did not create. California law is very considerate in matters concerning debts and categorizes debts as necessaries and non-necessaries. The same law will also consider the ability of a spouse to pay the debts or their needs in deciding about debts and bankruptcy settlement.
Debts are one of the reasons why some marriages fail. There are instances when debts become too overwhelming, causing a lot of stress and financial distress that makes it hard for the marriage to stand. This too will change the way the divorce settlement will be drafted. If the debts are too many and the couple finds it hard to get over the debts even after divorce, an experienced divorce attorney can advise the two parties to file bankruptcy before the divorce. This will make it easy for the couple to divide whatever little is left of their property.
If the couple agrees to file bankruptcy before annulling their marriage, they will not incur a lot of costs than they would if they did it separately after divorce. Again, unlike other states, California law does not allow the doubling of asset exemption in bankruptcy for married partners. Depending on the family’s financial situation, filing bankruptcy individually will not be the best option. Making such decisions will not be easy for the couple, without the expert guidance of an experienced Divorce Attorney.
The Family Residence
This would be the first thing that comes to mind when dividing properties during a divorce settlement. Determining the partner who will keep the home is tricky because of a few reasons. First of all, a home is the most valuable of all family assets. Again, some people develop great attachments to their home; therefore letting go of such an asset will be hard. It is assumed that children have greater emotional attachments to the places where they grew up in; therefore they too have to be considered when making the final decision.
In cases where children are involved, the custodial parent is the one who ends up with the family residence once the divorce is finalized. During the divorce proceedings, the partner who is living in the family residence is expected to cater to all the expenses such as property tax, mortgage payments, home insurance payments, and any other financial obligation. However, if there is a significant difference in the couple's income and resources, the other partner may be required to help in making those payments.
If, on the other hand, there are no children in the marriage or the last child has already attained the age of the majority, the couple may agree to sell the home and divide the proceeds equally between themselves. Alternatively, one partner may agree to buy out the other so as to keep the family residence. When this happens, one partner assumes full ownership of the home, then pays the other partner his/her part of the residence. The spouse who decides to keep the home will be required to refinance the home, in order to remove the selling spouse from the mortgage.
If this is the best option for the divorcing couple, they have to determine the buying couple and the one who will take full ownership of the residence. So many costs will have to be considered in this, including insurance, monthly mortgage payments, property taxes and repairs, utilities and maintenance of the home.
Pension and Employment Benefits
The interest a married person accumulates in a pension, profit sharing, retirement or any other employment benefit while married will be considered as community property and so, it is subject to division in the event the couple decides to separate. If the partner who is the owner of the benefit had contributed to the benefits plan before getting married, the amount of money he/she had contributed then will not be part of the community assets and so, will be exempted from the division.
To make things easier during a divorce, the owner of the retirement or pension plan can agree to pay his/her partner an amount of money as the non-owner share of the community interest. If not, the court will order that each spouse will receive an equal share of the benefits when they are paid.
Division of Closely-Held Professional or Business Practice
Professional and business practices are assets just like any other and so, they are also included in the divorce settlement. If, for instance, business practice or a profession has been advanced during the union, there is some aspect of community property in it and that should be dealt with during marriage dissolution. An evaluation of good-will has to be done when it comes to evaluating the worth of a professional or business practice and this is the trickiest bit. Good-will, in this case, is meant to determine the intangible value of the practice based on how its performance is expected to be in the future.
Since the law assumes that the business will continue operating at the same pace, without losing any customers in the future, good-will will be done on a going concern. The law will not consider what would happen if the business operator stopped working or the business stopped making profits.
To make this easier in such evaluations, a certified business appraiser or public accountant will be hired to help determine the actual value of the professional or business practice. The appraiser will go through the business records or practice before making a report.
Education Degrees and Practice Licenses
Degree qualification or a practice license that was earned during the marriage will be part of the family's assets and so, it is subject to division in the event of marriage dissolution. The costs determined in this case will include tuition, books, and fees that were incurred when a partner was earning a degree or professional license. In California, unlike other states, the other spouse is not entitled to a part of his/her spouse's earned ability during the marriage.
What is the Role of a Divorce Attorney in Divorce Settlement?
There are many requirements and procedures that must be adhered to in divorce settlement which the divorcing couple may be unaware of. Working closely with an experienced divorce attorney can ensure that everything is dealt with to make the divorce proceedings easier and flawless.
Again, an experienced divorce attorney will be able to offer advice in case the couple cannot agree on the division of their property. Sometimes a couple can easily come up with a divorce settlement that works well for both of them. If this fails to happen, a mediator is needed to help them come into a consensus.
Determining the value of certain assets will not be an easy task to handle without professional help. If there are so many assets involved, a divorce attorney can help appoint appraisers and financial analysts to help the couple determine the actual value of their estate and determine the value each of them will take home.
The attorney will handle all paperwork as well, and ensure that the couple is honoring all court dates for a smooth proceeding.
Consult a San Diego Divorce Attorney Near Me
A divorce settlement is a tricky affair when family assets are involved. While it may be easier for some couples to divide what they have to everyone's satisfaction, some divorces do not end well and may need the intervention of an experienced attorney. San Diego Divorce Attorney will help you come up with the best divorce settlement that each partner will be content with. Call our Divorce Lawyer in San Diego at 858-529-5150 if you are facing a Divorce today.
