When a marriage ends in divorce or legal separation, spouses must find a way to equitably divide all of the assets which they shared as a couple. Often, this becomes a source of contention, and couples must rely on attorneys and courts to settle their disagreements. It is important that you obtain representation from a knowledgeable attorney in order to protect what is rightfully yours and ensure that you are not held responsible for more than your fair share of the community debt. At Violet P. Woodhouse, APC in Newport Beach serving Laguna Beach, Anaheim, and all of Orange County, an experienced divorce attorney and Certified Financial Planner can provide the expertise and guidance you need to negotiate a fair and equitable marital settlement.
California is a "community property" state, which means that assets and debts acquired during your marriage will be divided equally when you divorce. Each spouse owns one-half of community property. However, not all property is considered community property. For example:
It is important to collect as much information about your property as you can, including purchase dates, approximate worth, account numbers, and so forth. Collecting this information before you come see our Newport Beach divorce attorney and Certified Financial Planner can save you a lot of time and money.
In community property states such as California, separate property is the term for property owned and controlled by one spouse. At the time of divorce, separate property is exempt from division under the state's property division laws. It remains under the control of the spouse who owns it.
Separate property includes all property a spouse obtained before marriage. Separate property can also include property received by one spouse through inheritance or as a gift, or any assets that can be traced to separate property such as proceeds from the sale of property owned by a spouse prior to the marriage. Spouses may also determine between themselves what they agree to be separate property and therefore confirmed as that person’s separate property at the time of the divorce or separation. If separate property is commingled with community property, it can still be divided; if it can be traced to your separate property, it will retain its separate property character.
In general, all debts acquired during the marriage are considered community debts. However, there are exceptions. These can include support debts from a previous marriage, student loans, debts for which the creditor was looking to only one spouse for repayment (e.g. one spouse claims unmarried status on a credit application or stipulates that his or her spouse’s income would not be used to pay the debt), and debts financing things that in no way benefited the community (e.g. one spouse charges a getaway with his or her lover).
Married couples may file singly or jointly for bankruptcy. By filing jointly, they can eliminate all separate debts incurred by each spouse as well as all jointly incurred debts. However, some debts cannot be erased (discharged) by bankruptcy, including student loans and support-related debts (spousal and child support). It is in your best interest to discuss your decision to declare bankruptcy with a divorce attorney and financial planner to gain a better understanding of the full legal and financial impact of your decision.
By examining your own and your spouse’s W-2 forms and your marital tax returns, you can gain a clearer picture of your finances, especially if your spouse was the one who primarily handled them. These documents can provide valuable information regarding income available for child and spousal support. Also, they can help you determine whether your spouse is concealing assets and may direct you to previously unknown sources of income or assets to be included in the division.
California community property laws are complex, and it is in your best interest to seek knowledgeable counsel during your divorce to ensure that you receive an equitable share of the marital assets and debts. Contact Violet P. Woodhouse, APC in Newport Beach – also serving Laguna Beach and Anaheim – to consult with an experienced divorce attorney and Certified Financial Planner who can help you seek a marital agreement that will works for you.
Contact our Newport Beach firm serving Laguna Beach and Anaheim to consult an experienced divorce attorney and Certified Financial Planner. We can help you to negotiate an equitable marital agreement and preserve your rights.
Violet P. Woodhouse, APC
Newport Beach, CA
2 Corporate Plaza
Suite 250
Newport Beach, CA 92660
Phone (949) 640-8861
Fax (949) 640-8862