Valuation and Characterization of Separate/Community Property
By Henry F. Lewis on July 08, 2018
When dividing property at the end of a marriage, it’s important to differentiate between community property and separate property. Community property refers to property that belongs to both spouses, while separate property refers to property that belongs to just one spouse. That is not always as straighrtforward as it sounds.
As you can imagine, these kinds of issues can get quite complicated, and made even more difficult given the emotions involved in a divorce proceeding. Our Oakland, CA family law attorneys want to consider the basics of property characterization and valuation and why these are such important topics in divorce cases.
How Types of Property Are Characterized/Differentiated
Differentiating between types of property is essential when couples undergo a divorce. In terms of characterization and differentiation, the following considerations are made:
- Community Property - Community property will generally mean all assets and debts that are acquired during the actual marriage.
- Separate Property - Separate property generally refers to property that belongs to or is inherited by a spouse prior to the marriage or after the marriage. During a marriage, creditors may inquire into issues with separate property or community property.
During a divorce, only the community property will be divided. The separate property will belong to its respective spouse.
Determining the Value of the Property
When determining the value of community property, it will be important to add up the value of all assets and all debts. This includes earnings, payments, property, loans, businesses, and so forth.
Division of Assets and Debts
In the process of a divorce, community property is typically divided evenly unless there are certain stipulations made in a prenuptial agreement. In some cases, a spouse may acquire more property as well as more debt than another spouse in order to ensure an equal distribution.
Where Disputes May Arise
In many cases, disputes arise over whether community property is actually separate property. If a person’s business begins before their marriage but expands in some fashion during the marriage, there could be arguments over the expanded portions of the business actually being community property. The same can be said of rental property, certain business earnings, and so forth.
Additionally, there may be the matter of debt to consider. Sometimes a spouse may prefer to avoid taking on debt as part of the division of property given the interest owed and the sheer amount of the debt involved. This can lead to major disagreements that slow down and complicate the divorce process.
How a Divorce Lawyer Can Help
By working with a divorce attorney, you will have someone on your side who is always considering what is in your best interests. We will help present your disputes to court reasonably, and help ensure that you receive fair consideration during the divorce proceedings. A divorce attorney can help mitigate the emotional tension common in divorce cases, keeping the negotiations as cordial and even-tempered as possible.
Contact Our Team of Attorneys
For more information about your legal right and options when it comes to divorce, separation, and other issues related to the end of a marriage, we encourage you to contact an experienced family law attorney. The legal team at Gardner & Lewis, LLP is here for you.
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“The needs of your family are always at the forefront of our legal services. Whether through litigation or mediation, we believe that reaching a fair, efficient solution with minimal negative impact to your family is of the utmost importance.” Henry F. Lewis