When you file for a California divorce, you probably know that you will be dividing your community property. But don’t forget about the other things that also must be split — the shared debts.
While it is never pleasant to haggle over property settlements, at least you walk away with tangible assets. Dividing debts is even more unpleasant because you can wind up saddled with financial burdens.
One good way to fairly divide community property and debts is to use the debts to offset any inequalities in the property division. For instance, suppose you hope to wind up with the six-figure art collection. You might have to agree to pay off the educational loans from your spouse’s law school courses to even out the arrangement.
Of course, couples are free to divide their property as they see fit as long as they agree to the terms. In most cases where the divorcing spouses have reached accord, the court will sign off on the agreements they make.
Sometimes, everything may be settled except for one or two assets or debts that become sticking points. The attorneys for both spouses can negotiate to come up with an acceptable decision. If that fails, litigating the matters in court is the next step.
A good thing to keep in mind when dividing community property is that not all assets should be divided based on their present value. For instance, in a bear market, you may not want to unload any stocks or divide an IRA. Waiting awhile until the markets are bullish once again may be the best choice for both parties.
Also, real estate markets fluctuate depending on current financial trends. It might be a terrible time to put the family home on the market, but you still need to make some decisions about the property. One spouse might sign an agreement to remain in the home and be responsible for its upkeep and bills until the property is sold and the profits divided later.
There is no right and wrong way to divide your community property in a divorce. You and your San Jose attorney can work together to get you the best deal possible to begin your new life.