Divorce is never easy, especially when it comes to dividing assets. If you’re facing the challenge of dividing assets, understanding the legal distinctions between community and separate property is essential.
In California, anything acquired during the marriage is generally considered community property and must be split equally. However, exceptions exist, and strategic planning can help safeguard your financial future. From identifying and documenting assets to avoiding common pitfalls like co-mingling funds, there are key steps you can take to minimize losses. Mediation, prenuptial agreements, and financial planning can also play a vital role in ensuring a fair outcome.
In this video, Sina Mohajer from Mohajer Law Firm breaks down five ways for dividing assets during divorce proceedings. At Mohajer Law Firm, we specialize in family law, divorce cases, and asset division. We can help you understand community property, ensure fair asset security, and secure financial stability. Contact us today to schedule a consultation!
Transcript:
Are you involved in a divorce process where you’ve got assets that need to be divided and you’re unsure what to do to protect those assets for yourself? Well, you’re in the right place.
I’m Sina Mohajer with Mohajer Law Firm. We specialize in family law, civil litigation, criminal defense, and personal injury.
If you’re new to this channel, I welcome you. Please don’t forget to hit that like button. And don’t forget to subscribe so you’re always notified of any new videos being posted.
In these mini-series, I like to tackle complex issues and try to simplify them for our viewers in order to give you that education and that know-how to continue with your divorce process. So without further ado, I welcome you all to A Walk in the Park.
How Do You Divide Assets in a Divorce?
In this video, I’m going to hit up five key points. First one, understanding community property in California. Second is identifying and documenting assets during the divorce process. Third is understanding the difference between separate property and community property. Fourth is strategies to minimize that asset loss. And lastly, is to plan for your long-term future financial security.
1. Community Property
So what is community property? Well, California is a community property state, which means anything you acquire from the date of marriage to the date of separation is all going to be presumed to be community property. But there’s always a way to overcome that presumption. But always remember as a golden rule, if it was acquired during the marriage, it belongs to the marriage and therefore it needs to be divided equally at the time of divorce. But some exceptions are going to be instances where you receive an asset that is either given to you as a gift or through an inheritance. Those usually will remain separate property and you don’t need to divide that—that belongs to you.
But it’s important to take these key steps moving forward that we’re going to address later on to ensure that we keep that as separate property and it doesn’t end up being converted to a community asset where it does need to be divided at the time of divorce.
2. Identify and Document Assets
Identifying and documenting assets. I cannot emphasize how important it is to do this during the divorce process, because of course you’re not going to know everything you acquired during the marriage or anything that you acquired pre-marriage or post-separation. So identifying these assets, and documenting them is going to be key in this step.
One thing to always keep in mind is pulling up statements, going into your accounts, for example, while you are an account holder, to pull out those statements during the marriage so we can understand the value all your accounts have. If you have Roth IRAs or any 401(k)s or pensions, documentation is so key in this process.
3. Difference Between Separate Property and Community Property
So what’s the difference between separate property and community property? Well, separate property, unlike community, is anything that you acquire before the date of marriage and after the date of separation. But like I mentioned earlier, there are instances where you do acquire an asset during the span of the marriage that would constitute a separate property. And it’s important that you maintain that characterization of that separate asset as separate at all times.
One way to deviate from that is co-mingling. Now, when you co-mingle an asset, for example, let’s say you received a substantial amount of money as an inheritance or a gift. Naturally, that is going to be your separate property and it’s not going to be shared. But what happens if you deposit those funds into a joint account where there are community funds available? At that point, you have now co-mingled funds. There’s no way I’m going to be able to have a cup of water, pour a few drops into another cup, and separate those drops later on. The moment they’re co-mingled, it transmutes into a community property asset.
Prenuptial Agreement and Post-Nuptual Agreement
Another way to keep things separate is through a prenuptial agreement or a postnuptial agreement. Now, I have other videos where I dive deeper into the difference between the two and what to do to safeguard your interest in your assets. But that’s one other key thing to keep in mind when dealing with your divorce process and trying to figure out what is separate and what is community.
4. Strategies to Minimize Asset Loss
So how do you strategize to minimize your asset loss? One best way that I can recommend is always to try to mediate and come to some type of settlement agreement. Any time you step foot in a courtroom, you always give up that control and that predictability of what’s going to be the outcome after the judge hears your case. You’re essentially giving them all the power to determine what assets are going to be yours, what assets are going to be the other party’s, or how things are going to be split up.
But if you take control of that wheel and you’re able to negotiate a fair or equitable agreement with the other side, it ensures the stability of your future.
Another way to ensure asset loss is not to transfer any assets that potentially may have a community interest in them to a friend or a family member in hopes to hide assets.
You always hear people talking about, “Oh, my spouse hides assets, and I’m never going to find out.” We find out. We always find out. And once we find out that you’ve hidden assets or you’ve improperly transferred certain assets out of the community to somebody else in an attempt to defraud or misrepresent to the court, courts have this inherent power that they may punish you. And the way they can punish you is not to have an equal division of that particular asset but to give more of it to the person who didn’t violate the law, who followed the rules, and played by the rules.
5. Plan for Long-Term Financial Stability
So how do you plan for long-term financial stability or security? Well, when a divorce is finalized, you have to realize that during the entire marriage, you built up with your spouse this great nest egg, which might have a lot of financial resources, might have assets, and etc. But when the two of you split up and your divorce is finalized, everything is split equally.
You may not have that financial support. Perhaps your spouse was the breadwinner. You’re not going to be able to maintain that same standard of living. Although the court tries to establish some type of spousal support in order to assist you to maintain that same standard of living, I’ve got another video about spousal support, so I won’t take up your time in this video to discuss that in detail.
So please feel free to browse around and see that on your own. But it’s very important that post-divorce, you set yourself up for that stability and security that you’re concerned about. One way is to speak to a financial advisor. If you’re getting a lump sum from a Roth IRA or a lump sum from your spouse’s 401(k) or a pension, what do you do with those funds to ensure the longevity of those funds?
Speaking to a financial advisor to get some tips is always a good idea. As attorneys, we have good suggestions we can make, but at the end of the day, we only practice law. We don’t deal with financial situations where we can advise you on where to put your money and how to handle it. So it’s always a good idea to talk to a financial advisor when it comes to that.
Conclusion: Ways to Split Assets in Your Divorce in California
So in this video, we went over what is community property and understanding community property in California. We talked about identifying and documenting assets during the process of your divorce, understanding separate property versus community property, strategies to minimize asset loss, and lastly, planning for long-term financial security.
If you have particular questions about your case, you’re going to need to talk to an attorney. I welcome you to call our office—we’re happy to schedule a consultation. But if not, look for a local attorney of your own to be able to address your issues in more detail.
And like I said at the beginning of this video, if you’re new to this channel, don’t forget to subscribe. And if you found the contents in this video to be helpful to you, please share it with friends. Hit that like button so we can continue doing what we do. And as always, I always welcome you all—whether you’re new or old—to A Walk in the Park.