Keeping or selling the marital house can be a bone of contention with divorcing couples. One may want to sell it for financial gains and the other may want to retain it and live in it because it means financial security for him or her. In order to avoid such a situation, it is best that they have solutions in place.
If one person leaves the house, then the other person will have to worry about paying out the mortgage, insurance, tax, maintenance and so much more. Also, maintaining two households is expensive. But any financial gains made from the house by one party does not mean the gains will come to an end with them moving out of the house.
Certain other solutions may help you to sell or keep the house.
Buyouts – One spouse sells the house to the other spouse. An appraiser will determine the value of the property. After deducting the mortgage amount and any related encumbrances, the equity value of the house is determined. The spouse will pay half of the equity value in cash or via exchange of other assets or spousal support, and so on.
Tax consequences – Selling the house would mean having to pay capital gains tax. But if you retain the house, over time there will be depreciation of the property. It will mean that you will have lesser tax to pay.
Court order to sell the house – Situations may arise where neither of the spouses have the ability to buyout the house. The court can be asked to grant an order that would allow the house to be sold at the end of the divorce trial. It also happens when the spouses are unable to reach an agreement.
The court can also be asked to grant an order for selling the house before the divorce trial begins. If the spouses feel that they do not have the means to pay their attorneys or that the financial settlements such as child and spousal support will be difficult to meet. They may also fear about a foreclosure (inability to pay mortgage) of the property.
Getting a stipulation and order (agreement) – Selling a house while the divorce procedure is on can be quite complicated because certain restraining orders come into effect during this period. The complication can be avoided by asking the court to sanction a written agreement signed by both the spouses.
To learn more about the divorce process in California and how mediation can help, please visit our page, What is Divorce Mediation.
Similar to the rest of your property and assets, your retirement plan requires proper division post a legal separation or divorce. Although you are entitled to reaping the benefits of your retirement plan only when you actually retire from your job, the division of the balance in the plan may be divided between you and your spouse in case of a divorce long before your retirement. The state laws of California have adequate provisions for dealing with the splitting of your pension plans, just like the property owned by you and your spouse.
Community versus separate property
As per the family law of California, the property owned separately by a couple before they get married is considered as separate property which is not subject to any division in the event of a divorce. This implies that the monetary contributions you might have made to your pension plan before your marriage or after its dissolution will be considered as separate property which will not be split up in a divorce. However, the contributions that you made to your retirement fund during your marriage will be referred to as community property, which is considered to be jointly owned by you and your spouse and will be subject to division in the event of a divorce.
Usually, the division of pension plans is usually carried out by one of the two methods: by a Qualified Domestic Relations Order or by a buy-out.
Reservation of jurisdiction
The most widely accepted method of pension plan division, the reservation of jurisdiction employs a court order which states that the other spouse will be granted a specific percentage of each installment of the pension received by the employed partner post his retirement. The percentage is generally obtained by dividing the married years by the number of years for which the employed spouse has been contributing to the pension plan. The figure obtained as a result is considered as the community property portion of the pension plan.
Buy-Out
A rarer alternative of pension plan division, the cash out approach incorporates actuarial evaluation of the retirement fund. An actuary is a financial expert who deals with statistical evaluations of pensions, annuities and insurance policies. Through this method, the actuary first reviews the terms and clauses of the pension plan and then determines the ‘present value’ of the community property portion of it. Through this method, the entire pension plan is granted to the employed spouse and the other spouse is entitled with the acquisition of other community assets which are of equivalent value.
The division of pension plan post a divorce can be a complex issue to deal with. It is advisable to consult a professional attorney who is well aware of the intricacies of such cases.
To learn more about the divorce process in California and how mediation can help, please visit our page, What is Divorce Mediation.
Property division is one of the most crucial aspects related to divorce or legal separation settlements. California community property law states that all the property and debts acquired by the couple during marriage should be divided equally between the two in the event of a legal separation or divorce. Many times, the couple reaches a mutual agreement regarding the property and debt division, whereas in some cases, the couple needs to take the help of a court of law to decide upon a fair decision.Irrespective of whether you decide upon the division yourself or request a court judgment for it, the property division process comprises of three crucial steps.
Determining the property as community or separate
As per the Californian law, it is presumed that all of the property and debt which is accumulated by the couple during their marriage is termed as community property and belongs to both of them equally. On the other hand, the property acquired by either of the spouses before the marriage or within the marriage in the form of a gift or inheritance is referred to as separate property. In addition to this, a property acquired by a partner after the date of separation up until the date of divorce will also be termed as separate property. There are several types of property such as a retirement account, or an operational business, which are regarded as partially community and partially separate.
Determining the value of the property
In order to evaluate the actual worth of the property, either the couple or the court of law is attributed with the task of assigning a specific monetary value to each of the items. For establishing the present worth of antiques, artwork or real estate, appraisals can be performed by professionals. More complex property items such as retirement assets will need to be evaluated by more knowledgeable professionals such as a CPA or an actuary.
Division of the property
The couple can proceed with the actual division by allotting the items to each partner, by buying out the other partner’s share of the property or by selling off the assets and equally sharing the proceeds. In some cases, the couple might even agree to jointly hold the possession of the property even after a legal separation. For example, a couple might wish to hold onto a family residence until their kids complete their school.
Property division can be an extremely complex process. To learn more it, about the divorce process in California and how mediation can help, please visit our page, What is Divorce Mediation.
It usually means the end of visiting the court and interacting with lawyers once a divorce has been finalized. But if the divorced couple has children, it does not mean an end to an emotionally ugly divorce case. It is because after a divorce has been granted, the divorced parents will have to deal with the issues of child support, custody and alimony.
A number of rulings from the divorce can be modified post-judgment. Some of these have been discussed here.
Child custody and visitation
Any parent can seek a modification to the final custody ruling. But you will have to prove to the court any significant change in circumstances that may have happened since the judgment. Also, you need to show that the newly proposed order will be in the best interests of the child. If a parent misses visitations but makes up for it later, you cannot ask for modification in custody.
If you want a modification of the custody and visitation rights, you have to make a showing of a “substantial change of circumstances” since the judgment was entered. Also, a parent who feels that the other parent is not spending sufficient time with the child or is causing physical and emotional abuse can request for post judgment modifications.
Child support
You can also modify child support after a judgment. It can be done at any time if there is a change in the incomes (increase or decrease) of both the parents. But you, the parent, should be able to determine if the change in your income is permanent or not. Also, a slight change in income should not be a reason for seeking post judgment modification. Your request will not be entertained if the judges feel the change in income is not significant.
Alimony
If the divorce ruling was agreed upon by the spouses, then a modification of alimony post judgment is not possible. The amount of alimony awarded, though, can be modified. But it is not a very straightforward or simple process. The Court considers the 13 factors stated in the Family Code section 4320 and other related aspects to reach a decision.
Always consult with experienced divorce lawyers in California before requesting for post-judgment modifications or defending such requests. They will help you to plan a strong strategy and approach the court with a solid case.
To learn more about the divorce and post-divorce process in California and how mediation can help, please visit our page, What is Divorce Mediation.
Property and debts have to be divided during a divorce. Many times, the divorcing couple does it itself or enlist the help of a mediator (a neutral third party). But if the couple fails to reach an understanding, it takes the dispute to a court and the judge gives a ruling based on state laws.
The court categorizes property and debts under equitable distribution or community property and then divides them among the couple.
Community property – Any marital property jointly owned by the married couple is known as community property. In certain states such as California, community property gets divided equally among the spouses. Apart from this, each spouse retains their share of the separate property (individual ownership).
Equitable distribution – The rest of the states divide all marital property, assets and income equitably or in a fair manner but not equally. The separate property may be awarded to one spouse to balance out the division.
Division of property does not necessarily mean a physical division. A spouse may be awarded a certain share of the total value of all the property. Apart from this, they will have their share of personal property, assets and debts.
Determining community and separate property
Community property – All earnings and acquisitions made, debts incurred during the period of marriage fall under community property.
Separate property of one spouse – Gifts and inheritances received by one spouse becomes their separate property. Any property purchased using their funds become their separate property. If the spouse owned any business before the marriage it will remain their personal separate property. But if the value of the business increased during the marriage, the increased value will be considered community property.
Separate and community funds used to purchase property – Any such property will become part community and part separate property. But you need to show that separate funds were used. But if separate property and community property is mixed, it usually becomes community property.
Determining who gets the marital home
If there are any children, the parent who is the primary care taker of the children retains the marital home. But if there are no children and both the spouses jointly own the property, it can become quite tricky.
To learn more about the divorce process in California and how mediation can help, please visit our page, What is Divorce Mediation.
A divorce or legal separation is both mentally and financially traumatic for the parties involved. The grief of a broken relationship, of shared dreams and hopes, combined with the grueling task of making a fair division of your shared possessions, may leave you completely exhausted. Once you have parted ways, your shared property too needs to be distributed.
The biggest problem with carrying out the division all-by-yourself is that it might give rise to further conflicts and an unsatisfactory outcome. Obtaining legal advice in such situations is the most acceptable thing to do. However, since court litigation is a highly expensive and lengthy procedure, it is advisable to go for a legal out-of-court mediation for the division of your property.
What is mediation for the division of property?
Mediation is the process wherein a neutral, independent third party, called the mediator, tries to resolve the conflict by using standard mediation techniques. The mediator does not have the authority to arbitrate the dispute on his own. However, his job is to assist the two conflicted parties, address their issues and individual interests, and arrive at a set of plausible settlement options that might be agreed upon by both the parties.
In the event of a divorce, generally, the division of shared assets and property is the biggest and most complicated issue that can be resolved within the separating couple without requiring any outside help. However, due to the pre-existing disputes, the couple often requires legal aid for addressing the issue and reaching a non-biased fair settlement.
How is mediation more advantageous than litigation?
Mediation is a quicker process as compared to the court lawsuit. It only takes a few days or weeks to reach a resolution with the help of a mediator, whereas the court proceedings go on for months on end.
Mediation is a cheaper process as compared to filing a lawsuit, and can be more affordable in times when you are already in a financial fix.
Since mediation is a more informal approach to resolving a conflict, it provides more room for the parties to open up and discuss their individual interests freely. On the other hand, a lawsuit requires a slew of rules and regulations that bind the parties and restrains them from speaking up.
The confidentiality of a mediation process renders it a more acceptable form of settlement as compared to court litigation. Court proceedings are public and most people do not want to discuss their personal issues in front of the others. Mediation provides a private platform for the parties to reveal their personal details and problems.
Hiring a mediator for the division of your property in your divorce can be extremely useful and rewarding while trying to arrive at a mutual agreement without any further conflicts.
To learn more about the divorce process in California and how mediation can help, please visit our page, What is Divorce Mediation.
It is easier for unmarried couples to separate or breakup mutually rather than go through a divorce. If both the parties can agree on the division of their assets, there is no need to approach a court of law. At most, you may need to employ the professional help of a legal mediator.
If you and your partner cannot reach an agreement and have to go through a divorce procedure, here are some of the legal rules pertaining to property division that you need to be aware of:
Divorce laws governing married couples are not applicable to unmarried couples who are separating – Only those couples recognized under a legal marriage or registered as domestic partners get to divide their property following the family law available to married couples.
Each unmarried partner has right to their own property – If the unmarried partners have not signed a deed establishing joint ownership of the house or do not have joint accounts in the banks, each partner is the owner of their own property. All debts and assets remain with the original owner unless the partners have signed any agreement.
Partners have signed a written agreement – If written agreements have been signed, the partners will get shares as stated in the agreement even if they approach a court for a separation.
If everything is jointly owned – If the unmarried couple jointly own any property or assets or debts, everything gets divided 50 -50. An exception can be made if an agreement stating otherwise has been signed.
If a situation arises where you have to approach the court for a settlement on matters related to property, it would be considered similar to the dissolution of a business. The ordinary business section of the state’s civil court will settle the matter.
To avoid such confusing and difficult situations related to unmarried separation, unmarried partners are encouraged to prepare and sign a written ‘living together agreement’. The agreement should cover matters related to property, house, and other assets.
Written agreements are legally enforceable in all courts of law. A written document can, in most instances, do away with the need of going to the court. It makes the separation a lot less difficult.
To learn more about the divorce process in California and how mediation can help, please visit our page, What is Divorce Mediation.
The end of a marriage is never a good feeling, especially for the people involved. The dissolution of the matrimonial bond between two people is governed by laws that differ around the globe. The legal process that follows a divorce may involve the following issues:
Alimony or spousal support.
Child custody.
Child visitation rights.
Child support.
Property division.
Debt division.
Property division
Following the separation of a married couple, their assets are split between them. This division is carried out in agreement or via a judicial decree. The spouses are entitled to split the property acquired during the course of their marriage following the dissolution of their union.
The marital property is jointly owned by the spouses until a final order has been issued by a judge. The spouses are advised to divide their property and debt equally to avoid altercations; however, most cases do not end so peacefully.
How to split your property
If you are in the process of a divorce and need to split your assets, the first thing you should do is create a list of all that you own. This will help you understand which items qualify as marital property and separate property. If you are living in Orange County, California, and are looking to get a divorce, you will need to fill out a Schedule of Assets and Debts form as part of a “Preliminary Declaration of Disclosure,” where you will list out their assets. This form must be shared with your spouse while you are disclosing financial declarations. This is a mandatory issue for legal separations and divorces.
You are advised to remain honest while you list out your assets and while categorizing them as separate and matrimonial property. The penalties for withholding information regarding your assets can be serious.
Once your spouse and you have filled out your respective forms, you can compare details to learn if – your spouse and you disagree on what has been categorized as matrimonial or separate property or there is a large difference in how you have valued the matrimonial property. If you are in agreement, then you can settle the case with your spouse easily enough, but in case you disagree, you will have to go to trial. The judge will then make a decision and issue a final order.
You are also allowed to buy out your spouse’s share of the marital property if you have the financial capabilities. Spouses are also allowed to jointly own a property together even after they have legally separated, but this will need for the couple to maintain a financial relationship, which can make it a very unattractive option.
To learn more about the divorce process in California and how mediation can help, please visit our page, “What is Divorce Mediation.”
A divorce itself can be a complex and tight affair. Add retirement plans to your already complex divorce and you have lots of things to deal with. There is a term used in divorce cases known as deferred compensation. This is a word used to refer to 401K plans, pension plans and other assets of retirement. There are a number of ways that these plans can be made divisible regardless of them being one party or the other in a settlement agreement.
Their division usually depends on the nature and the value of the asset. Here is a list of a few common retirement asset types.
· Saving Plans
These are plans such as the ESOPs, 401k plans, Thrift saving plans, IRAs etc.
· Defined Contribution Plans
A define contribution plan is different to a savings plan. The value of this plan is determined with respect to the contributions that are made to this plan over the course. The money invested in such plans can be invested and can grow.
· Defined Benefit Plans
A defined benefit plan is one plan that compensates the spouse once they have retired to the date when their life time ends. This is usually done through a monthly payment every month for the rest of their lives.
Dividing Saving Plans
Saving plans are considered cash plan and hence can be divided as part of a divorce between two spouses. They can be liquidated, but before the liquidation happens, it is important that the accounts custodian is given a certified copy that has the court order clearly written down on it. The IRA proceeds can either be directly paid to the spouses or they may be used to make two separate IRA accounts for both the spouses. This could however result in a loss of the 30% for taxes as a penalty for early withdrawal.
Dividing Defined Contribution Plans
Before defined contribution plans can be divided because of a divorce between two spouses, they’ll need to be valued. Their valuation is carried out by multiplying the vesting percentage to the balance of the account. Generally when such plans are divided each spouse gets one half of the vested current value of the plan.
Diving Defined Benefit Plans
The workings of a defined benefits plan are different to the above mentioned retirement plans. In such plans the benefits of the participants will not be liquidated before the retirement age of the owner spouse is reached. Once the age is reached the participant spouse will receive her retirement plan in her name with respect to the marital interest they have in the participant’s plan. This plane given to the spouse will also have the same terms and conditions as the original retirement plan has.
To learn more about the divorce process in California and how mediation can help, please visit our page, “What is Divorce Mediation.”
Ben Affleck and Jennifer Garner, who made headlines after announcing the end to their 10-year marriage this past summer, have chosen to take the mediation approach to their divorce.
Media reports have described the divorce as “not contentious,” with the Hollywood actor couple choosing to settle their divorce amicably out of court for the sake of their three children — Violet, 9, Seraphina, 6, and Samuel, 3. They are working with a mediator to resolve financial, property and custody issues and expedite the divorce process. Affleck, 42, and Garner, 43, will share joint custody of their children and intend to co-parent as equals.
In a joint official statement, the couple said, “We go forward with love and friendship for one another and a commitment to co-parenting our children whose privacy we ask to be respected during this difficult time.” According to media reports, Affleck and Garner plan to continue living together on the family’s property in Brentwood, California, but in separate houses in order to effectively co-parent and focus on consistency for their children.
The decision to seek mediation is unusual as many divorcing celebrity couples tend to become involved in drawn-out court battles that often turn ugly. Mediation takes the drama out of divorce and keep things efficient for the sake of the family. Adopting smart co-parenting strategies can ease the burden of divorce on children. Contentious divorces place the focus on seeking revenge, while amicable divorces involve setting egos aside and making children the top priority. Couples who manage to take a sensitive, selfless approach will ease the stressful nature of divorce on children, especially young ones.
Besides parenting issues, the couple also faces the task of dividing their assets. They are estimated to have combined wealth upwards of $115 million. The media has speculated that Affleck and Garner purposely announced their split one day after their tenth anniversary due to California’s spousal support laws. In California, a marriage that crosses the 10-year mark is considered long term, which affects the amount and length of spousal support. However, many of the state’s courts do not prefer to award lifetime spousal support if they feel that the lesser-earning spouse is able to support themselves. If the divorce involves a prenuptial agreement or decisions made during mediation, the judge may not even have to rule about spousal support.
To learn more about the divorce process in California and how mediation can help, please visit our page, “What is Divorce Mediation.”
Gerald A. Maggio is a trained divorce mediator who has amicably resolved cases many cases out of court, as well as an experienced divorce and family law attorney. Mr. Maggio founded California Divorce Mediators in 2012 with the belief that although “not every marriage can be saved, every family can” and a mission to save families from the financial and emotional distress associated with traditional divorce litigation. California Divorce Mediators is located in Irvine, California, and serves the Orange County area and other counties in California offering divorce mediation, child custody mediation and mediation of other family law matters.
Keeping or selling the marital house can be a bone of contention with divorcing couples. One may want to sell it for financial gains and the other may want to retain it and live in it because it means financial security for him or her. In order to avoid such a situation, it is best that they have solutions in place.
Gerald A. Maggio is a trained Orange County divorce mediator who has amicably resolved cases many cases out of court, as well as an experienced divorce and family law attorney. Mr. Maggio founded California Divorce Mediators in 2012 with the belief that although “not every marriage can be saved, every family can” and a mission to save families from the financial and emotional distress associated with traditional divorce litigation. California Divorce Mediators is located in Irvine, California, and serves the Orange County area and other counties in California offering divorce mediation, child custody mediation and mediation of other family law matters. 
