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Do I Have to Give My Spouse Equity in a Divorce?

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Many divorcing couples struggle to agree on how to divide the marital estate. This is especially true for divorces between high-income couples. With so much money and your financial future at stake, it is understandable that you want to fight for a fair distribution of marital assets.

Many states use an equitable distribution method to ensure both spouses have access to the standard of living they enjoyed during the marriage. This also reflects the work each spouse has put into a marriage. However, some states, such as California, have community property laws requiring a judge to split the marital estate 50/50. The even split does not include separate property owned by each individual.

If you are facing property division in your divorce, you should get assistance from a trusted legal professional who can help you identify assets that are your separate property to protect your hard-earned wealth from unfair distribution. Large items, like the marital home, will most likely become items of contention during the divorce. To learn whether you need to share equity with your spouse, reach out to our legal team immediately at 949-889-1227.

How Is Property Division Handled in a Divorce?

How your property division is handled depends on where you live and how your local laws operate regarding dividing the marital estate. For example, the law mandates a 50/50 split of communal property in California. Couples may decide how to handle this through a private agreement that a judge reviews and approves. If the couple cannot decide on their own, a judge may have to issue a court order after the case goes to trial.

Talking to a lawyer is one of the best ways to divide marital assets fairly. Your attorney can help provide evidence that certain items are separate property, such as a down payment made on a home from funds you had before the marriage. An attorney can also help you and your spouse navigate mediation to resolve the issue of property division without litigation.

What Is the Difference Between Separate and Community Property?

One crucial aspect of property division that every couple should understand is the difference between separate and community property. Separate property is not subject to division during a divorce, but community property is regarded as items owned by the couple together and would be divided.

Separate Property in a Divorce

Separate property includes items that you owned prior to the marriage or after you separated. This category may also include gifts or inheritances given to you during the marriage.

Some examples of separate property include:

  • A business you built and owned prior to marrying your spouse
  • Student loans taken out before the marriage
  • Properties acquired before the marriage or after separating
  • Assets acquired using funds you owned before marrying
  • An inheritance you received from blood relatives
  • Gifts received by one spouse during the marriage

Community Property in a Divorce

Community property refers to assets the couple owned jointly or that increased in value due to the diligence of both spouses, such as:

  • The marital home
  • Other properties purchased with shared funds
  • Joint bank accounts
  • Expensive physical assets, such as furniture, artwork, and vehicles
  • Investments and retirement accounts

Transmutation of Property in a Divorce

It is also essential to understand that a couple can give written consent to transmute an item from community property to separate property or vice versa. If the item becomes separate property, it will no longer be subject to division. Likewise, if the couple chooses to transmute an asset from separate property to communal property, the item would be divided between the two individuals in a divorce.

Does Equal Distribution Mean I Have to Give My Spouse Equity in a Divorce?

The only way to truly answer this question is to meet with you in person and discuss the circumstances of your divorce. In an equal distribution state like California, the law requires the marital estate to be distributed equally to both partners. This could sometimes mean sharing equity in the home or selling the house to divide the value between both individuals.

However, the couple is at liberty to decide how they want to divide the assets, even in an equal distribution state. This could mean making a trade that ends up being similar in value, such as one individual keeping the cars while the other keeps the house, as long as the vehicles are the same value as half of the house. Finding solutions through mediation or alternative dispute methods can be beneficial as the couple will save the time and money of an expensive court battle. But if they cannot come to an agreement, a judge may need to decide for them in court.

How Can I Protect My Assets During a Divorce?

Protecting their assets, including equity in the home, is one of the top priorities for many individuals going through a divorce. Walking away with a fair distribution of the marital estate can make a huge difference in your stability as you start a new life. Our legal team is happy to provide counsel and representation to ensure your assets are protected during property division.

Some simple steps you can take to prevent losing too much of your property in a divorce include:

  • Having an accurate idea of how much your property is worth. This may mean calculating the amount of equity you have, figuring out how much money and effort you put into renovating the home and inventorying any other marital and separate assets you own.
  • Deciding outside of court who gets what during property division. When you reach an agreement with your spouse through mediation or settlement, you avoid a costly legal battle that results in a judge deciding for you. Many couples find that cooperating and reaching a decision together brings them lasting satisfaction and gives them more control over the decision.
  • Identifying tax consequences of keeping or selling the home. Consulting with an attorney can help you understand whether you face a higher tax burden if you sell your home. Refinancing may also be an option, depending on your circumstances.

What Factors Will Influence the Division of Marital Property?

If you live in an equitable distribution state, the division of marital property will depend on several factors, including the length of the marriage, the income-earning ability of both spouses, the child custody order, and more. On the other hand, community property states, like California, require the equal division of the marital estate.

If you live in California or another state with community property laws, the marital assets will be divided evenly every time. You and your spouse may choose how to distribute the assets or use a judge to issue a final order. If your spouse has narcissistic tendencies or another mental disorder, it can be impossible to reach a decision, and you may rely on a judge to decide how to divide the marital estate equally. This can be helpful when your spouse is manipulative and seeks to control you and get you to enter an agreement that would be harmful to you or your children.

How Can a Divorce Lawyer Help Me with Dividing the Marital Estate?

Having an experienced divorce lawyer on your side can make all the difference when facing critical decisions such as marital estate division. Your attorney will be a great source of emotional support and legal knowledge, especially in a high-income divorce where a lot of money is at stake. You should also consult an attorney if your spouse is manipulative or has narcissistic tendencies so you can avoid falling into their traps and losing your rightful property.

A lawyer can also help with other aspects of your divorce, such as establishing child custody agreements, child support payments, and getting you a fair alimony agreement. Whether you are a custodial or non-custodial parent seeking or making support payments, you deserve legal representation. Contact our law firm today to learn more.

Should You Hire Our Divorce Attorney?

Going through a divorce can be challenging and extremely stressful. Questions of marital estate division can affect the rest of your life, either giving you a chance at financial stability or robbing you of your hard-earned wealth. If you and your spouse are divorcing, you can reach out to our caring, capable legal team for a divorce attorney who will listen to your concerns and work tirelessly for a fair decision.

Our law office proudly represents individuals seeking a better life following their divorce. We will answer your questions carefully and in terms you can understand so you will know exactly what to expect at each stage of the divorce. Call now at 949-889-1227 to schedule a consultation and find out how we can help you.

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