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Common Pitfalls in Dividing Community Property During Divorce

Posted on in Property Division

CA divorce lawyerIf you are married and live in California, certain assets and debts belonging to you and your spouse form community property. In a divorce, dividing community property is a principal task.

It is also a task that may seem straightforward, but in reality, there are many things that can complicate the process. Using an attorney, and possibly also a financial professional, is advised to avoid these and other common issues:

  1. Failure to understand community property. States either use a community property regime or an equitable distribution regime. California, as noted, is a community property state. That means that assets acquired during the marriage are typically going to split equally. Other states utilize equitable distribution, which classifies additional assets as marital property but this property does not have to be divided evenly.
  2. Hanging on to the house. Typically, the mortgage for the marital home was secured by using the financial records of both spouses. When one spouse leaves the home and the other stays in it, it often becomes financially impossible for one person to handle all the expenses related to the house. In these cases, the home ends up being sold after a lot of stress and financial sacrifice. It may be that planning on selling the home from the beginning will make the process easier.
  3. Having a simplistic understanding of asset liquidity. If the community contains a stock portfolio, for example, it seems like common sense to divide the portfolio evenly or to attribute the value of the portfolio to the amount on account balance statements. This is a mistake. When dividing certain assets, you should be mindful of the liquidity, taxability, and income and growth potential. Retirement accounts also must be split in a specific, technical manner.
  4. Ignoring debt repayment. Debt such as student loans taken out before the marriage would be separate property not subject to division. It may be possible that payments the other spouse made on this debt can be reclaimed.

Contact a San Jose, CA Property Division Attorney

As you can see, there is a lot to think about when it comes to asset and debt division during a divorce. These are only a few issues that may come up in your case. Hiring a trusted San Jose, CA divorce lawyer at Dominion Law Group, LLP means that you will be getting advice and counsel from an attorney with decades of legal experience. Setting yourself up for financial success after ending your marriage should be one of your top priorities. By hiring an attorney you will be in control of this process. Call 408-288-5592 today for a free consultation.

 

Source:

https://www.foxbusiness.com/personal-finance/divorce-and-money-common-pitfalls-to-avoid

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