If you are divorcing in the state of California, if you have divorced recently, or if you expect or anticipate a divorce, you will probably have a number of concerns about financial matters.
For example, if you jointly own your home with your spouse, what will happen to it?
How can the value or equity of a home be divided fairly by a divorce court?
Of course, everyone’s situation regarding home equity will be different.
You may be making a monthly mortgage payment, you may already have your mortgage paid off, or you may be renting. Some couples own more than one home.
If you are divorcing in southern California, you’ll need personalized legal and financial advice applicable to your own circumstances.
You’ll need to consult an experienced Long Beach divorce attorney.
When a marriage ends in divorce, the fate of the couple’s home must be determined.
What are the options in a California divorce when the couple’s home – or at least the couple’s equity in their home – must somehow be fairly divided?
Selling may be the easiest solution, but selling the home isn’t always feasible.
Some couples agree to a buy-out arrangement, where one partner buys the other’s half of the home.
HOW IS HOME EQUITY DETERMINED AND DIVIDED IN A DIVORCE?
When a home’s equity must be divided in a California divorce procedure, the home should be appraised by a qualified appraiser.
You subtract the outstanding mortgage amount and any other liens on the home from the appraisal figure to arrive at the home equity amount.
The real estate market – especially in southern California – fluctuates rapidly, so when you divorce, an appraisal should be conducted at the time of the divorce, because any older appraisal will be out of date.
If the home is sold, the divorcing partners should try to agree on how to split the equity.
The divorcing partners will also have to agree on a sale price, a real estate agent, and the terms of the sale.
A dispute regarding the division of home equity will unnecessarily cost both divorcing spouses additional time, money, and aggravation.
If you are divorcing, discuss home equity – and the best way to approach the equity issue – with your divorce lawyer before a dispute arises.
In the state of California, any property that a married couple comes to possess during their marriage will be deemed community property.
Thus, if a home was purchased with community property assets, the home is community property, with each of the spouses owning a fifty percent interest in the home and fifty percent of the equity.
COULD A COUPLE’S HOME EVER BE CONSIDERED PERSONAL PROPERTY?
However, if one partner owned the home individually prior to the marriage, or if one partner inherited the home or received it as a gift, there may be no legal cause to divide the equity.
Property acquired before a marriage or received as an inheritance or as a gift is usually considered personal property, but if the home was purchased by the couple during the course of the marriage, it will probably be community property.
Divorcing spouses have the right to agree mutually to an uneven division of the home equity.
One spouse, in other words, may receive more than the other – sometimes in return for some other consideration – if both agree.
Make sure that you work out such an agreement with the advice of your attorneys, because a judge must sign off on your final divorce agreement, and any agreement that a judge determines is not equitable and fair for both spouses will be rejected.
If one of the divorcing spouses wants to buy the other spouse’s half of the home, the couple will need to arrive at a fair and appropriate price, and they will also need to negotiate a fair division of the commissions, taxes, and the other expenses associated with the sale of a residence in this state.
WHAT SHOULD YOU TELL YOUR DIVORCE ATTORNEY?
Before your divorce begins, discuss the home equity matter with your divorce attorney, and know what your options are in advance regarding home equity in a divorce.
Make your goals regarding the home and the equity absolutely clear to your attorney so that he or she can negotiate, if necessary, for the best possible arrangement on your behalf.
The financial decisions you make in a divorce will have a profound and lasting impact on your life.
At the beginning of the divorce process, divorcing spouses in California must complete a preliminary declaration of disclosure listing all of the marital and individual property acquired both outside and within the marriage.
Divorcing partners also must declare their expenses and incomes in the preliminary declaration of disclosure.
It’s wisest to complete the preliminary declaration of disclosure with your divorce lawyer’s assistance.
Along with protecting your home equity, you should pay detailed attention to your credit card and bank accounts, how and where and your important financial papers are kept, and the particular details of your debts, assets, and retirement accounts.
Work with your divorce lawyer regarding your personal finances to fill in or find any details that may be missing.
WHAT OTHER FINANCIAL CONCERNS MUST BE CONSIDERED?
You may also want to make appropriate changes to your life insurance policy and/or your will.
Some people who divorce, speaking frankly, will have to make some adjustments to their lifestyles and spending habits.
Divorcing partners who have more property, assets, credit, and debts will inevitably face a much more complicated divorce procedure than divorcing couples with more modest finances.
Anyone who is considering, anticipating, or expecting a divorce in southern California should seek legal representation and advice exclusively – and as early as possible – from an experienced Long Beach divorce attorney who regularly handles complicated divorce cases and who regularly prevails on behalf of clients.
No divorce is easy.
You will need a qualified and experienced divorce lawyer who can get the job done effectively while remaining sensitive to your needs and concerns at every stage of the divorce process.
The right California divorce lawyer will offer the advice and encouragement you need while advocating aggressively for the just and equitable divorce settlement you deserve.