Los Angeles Property Division Attorney
Property Division, Complex Property Division and Valuation of Properties
Diving assets during a divorce can be complicated, especially when you consider property, 401k’s, and pensions. If you’re going through a divorce and need assistance, call Los Angeles property division attorney Hossein Berenji for a free consultation. We have over 20 years of combined experience helping our clients obtain or retain their fair share of the marital assets during a divorce.
Community Property Laws in California
California is one of nine states which operate under community property laws in the event of a divorce. The other eight states are New Mexico, Arizona, Texas, Idaho, Nevada, Washington, Wisconsin, and Louisiana. The remaining states operate under what is known as “equitable distribution” laws. Under equitable distribution laws, property acquired during the marriage belongs to the spouse who earned it—barring unusual circumstances—and during a divorce the marital property is to be divided in an equitable manner, according to a variety of factors.
Community property laws, on the other hand, divide marital property right down the middle, regardless of mitigating circumstances. This means that even if only one spouse was employed for the duration of the marriage, husband and wife own all money earned equally. Equal ownership extends to debts in community property states as well, making both spouses equally liable for debts—even when one spouse was unaware of those debts. Property Division—Often the Largest Source of Contention in a Divorce
Along with child custody, property division may well be the largest source of contention between couples during a divorce. Both parties are likely concerned about how the marital assets will be distributed and whether they will receive the level of assets they feel they are entitled to. This can be especially true if one spouse has vowed to leave the other in poverty, simply out of spite.
There are many factors, even in a community property state, which can determine the eventual property award; however, having a knowledgeable Los Angeles family law attorney by your side during the entire process could be the single most important thing you can do for your future. Particularly in cases where you feel your spouse has engaged in dissipation of assets prior to the divorce, your attorney could bring in a forensic accountant to prove you are entitled to a larger share of the property distribution.
Separate vs. Marital Property
The community property presumption is that all property acquired during the marriage by either spouse (while a resident of the state) is community property, including real estate and personal property. Where the real estate is located (outside the state) is not relevant so long as the spouses retain a home in the state of California. In some instances, settlements in a personal injury lawsuit may also be considered community property.
The exception to community property laws for property acquired jointly during the marriage is a pre or post-nuptial agreement which specifies the property is separate. Despite the presumptions associated with California community property laws, outlined in California Family Code §§ 760 – 761, it is still possible to make an attempt in court to refute a particular item as community property, however the judge will require a preponderance of evidence to do so. Some additional facts about community property distribution in the state of California include:
- Neither partner can legally sell or give away community property without the knowledge and/or agreement of the other partner.
- Once a California divorce petition has been filed, restrictions are in place which limit property transactions, including borrowing against marital property.
- Property allocation by a California judge can only be avoided if there is a valid written agreement in place (like a prenuptial agreement).
- While married persons are generally allowed to control their separate property independently of their spouse, once a divorce or legal separation is in the works, temporary restrictions will be in place even for the sale of separately owned real estate.
You may wonder what constitutes separate property. Under California law, the following qualify for separately owned-property (which would not be included in property division):
- Property owned by one spouse prior to the marriage;
- Profit from property owned by one spouse prior to the marriage (with certain exceptions);
- Property inherited by one spouse or received as a gift before or after marriage;
- Profit from property inherited or received as a gift before or after the marriage;
- Earnings or wealth acquired after a legal separation is in place, and
- Income earned while living apart and separately.
When Separate Property is Turned into Community Property
With the consent of both spouses, separate property may be changed into community property—or vice-versa—through the recording of a title change (known as transmutation). Another example of turning separate property into community property would be if a husband owned a Ferrari prior to the marriage, then added his wife’s name to the title during the marriage.
For a transmutation to be valid, it must be in writing. If such a transmutation affects a third party, such as a creditor, that creditor must be notified of the change in ownership. All assets and debts will be investigated and identified during a divorce, and characterized as community or separate property.
Complex Property Division
Although some property division cases are relatively simple, others may be much more involved. This generally occurs when there are stocks, retirement accounts, pensions, 401(k)s, bonds and large amounts of real estate. It is often necessary to collaborate with experts such as investigators, business valuators and forensic accountants during a complex property division case. Divorces which have complex property divisions must be handled especially carefully, with assets and property being thoroughly evaluated. Complex property divisions can include:
- Dividing a business which is primarily operated by one spouse;
- Valuing a business, particularly a family business;
- Dividing corporate partnership assets;
- Valuing and dividing commercial and ranch real estate;
- Valuing stocks;
- Determining if inheritances are marital or separate property;
- Determining how the divorce will affect taxes for both parties;
- Dividing the pension of one spouse;
- Dividing retirement assets, including IRAs and 401(k)s;
- The preparation of Qualified Domestic Relations Orders;
- Deciphering pre or post-nuptial agreements, and
- Determining spousal support and child support amounts.
Valuation of Properties During a California Divorce
Any time spouses disagree over the value of an asset or assets, it may be necessary to bring in a real estate appraiser or forensic accountant to determine the value of a home, a business, or any other assets. The marital home or other homes will have their value determined through a Comparative Market Analysis, which takes into account comparable homes recently sold or currently listed in the neighborhood. Appreciation and depreciation and home improvements will also be taken into consideration when valuing a home. There are three methods commonly used for valuing personal property. These are:
- Property is valued at the cost it would take to replace the property.
- The market comparison might be used for items which are considered rare or collectible, which could not be easily replaced. This method takes into account recent sales of similar items.
- An expert appraiser could be brought in to calculate the future value of an investment, such as a piece of artwork.
When a business is valuated, a certified forensic accountant will consider assets and debts of the business, the profits for the business, whether the business has increased in value since the marriage, and the valuation date.
Call Los Angeles Property Division Attorney Hossein Berenji Today
It is important that you have an attorney by your side who is experienced in dealing with negotiation, litigation and valuation of property division issues, particularly complex property division issues. Our experienced family law attorneys will use our extensive knowledge of California family law to advocate on your behalf.
We will work hard to negotiate an equitable property division which allows you to face your future with optimism. We are committed to our clients, and can help with any property division issue, no matter how complex.