Property Valuation & Property Division in California

Marital property division can be extremely complex – especially if the spouses are high net worth individuals or share assets such as real estate investments, stocks and bonds, pension and retirement accounts or a family business.

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The division of the marital estate can be an emotionally-draining aspect – of a legal separation or divorce. We have had almost 60-years experience in the assessing the valuation and working out the division of assets and debts including real estate, businesses, retirement benefits and pensions. We can help you to safeguard your property interests by properly evaluating, valuing and dividing your marital estate with skill and attention to detail. Lesser-experienced attorneys will often pay scant attention to detail of complex financial arrangements costing their clients unnecessary tax penalties and costly litigation.

Nemiroff & Cohen, LLP has almost six decades – of combined experience helping clients develop creative solutions to complex property division problems. If necessary, we call in our forensic accountants to uncover co-mingled or hidden assets. Our appraises are expert at conducting thorough and reliable business valuations.

Property Must be Located, Identified and Valued

Before the marital estate can be properly divided, all property must be located and identified as whether separate, community, or quasi-community. California law requires each spouse to provide the other spouse with a full and complete disclosure of all financial information including all assets and all debts. While it is unlawful for a spouse or partner to provide false or incomplete information, it happens all the time. It is sometimes necessary to use common legal discovery methods such as interrogatories, depositions and subpoenas to uncover hidden assets.

Separate or Community Property?

Once all the marital estate’s property has been identified, it then must be characterized as separate or community property. California law presumes that all property acquired during a marriage is community property and each spouse is entitled to an equal share. By default then, all property that is not community property is presumed to be a spouse’s separate property and will not be subject to division.

Property Should be Assigned a Value – Preferrably Agreed Values

That property characterized as community property must then be assigned a value. In fact, it is necessary that marital estate property be properly valuated before it can be divided. In the best scenario, the spouses will hammer out an agreement as to the value of all of the marital property. By agreeing to the value, both spouse can save time and cost. The court encourages both parties to come to their own valuation in advance. If the parties cannot agree in part, or in whole, the court will make the final decision based on the evidence presented by each party.

Division of Marital Estate Assets

Here is a common list of Assets:

  • Marital home
  • Vacation property
  • Investment property
  • Cars, boats, planes, jet skis…
  • Cash
  • Receivables
  • Bank Accounts
  • Investments
  • Stocks, bonds
  • Pets
  • Stock options
  • Insurance policies
  • Electronics
  • Collectibles
  • Art collections
  • Coin Collection
  • Gun Collection
  • Businesses
  • Retirement benefits

The marital estate property division is governed by a rudimentary goal – that each spouse will walk away with an equal share of the net value of all community property assets.

Property division is often creative — to the blessing of both spouses — and why an experienced certified family law specialist really shines. With creative property divisions, each spouse will more likely get what they want, avoid financial penalties, and even benefit with unexpected tax advantages. Division of assets need not be a harsh, bloody reckoning. One spouse may want to keep the family home while the other loves to run the business, and is compensated the business for the value of the marital home — so long an the final settlement is fair and equal in value.


Some “Community Property” is More Valuable to One Spouse

If you have $10,000 in community cash, each spouse will likely desire half. But what about that fishing boat, the pricey artwork, the RV, or the mountain cabin? Some of this real and personal property is clearly valued by one spouse more so than the other. The wife that had 900+ pairs of expensive shoes? Her husband, as the major breadwinner for 20+ years, had community ownership and a significant financial “stake” in that shoe collection that was of no value to him — but were treasures to her… To find an amicable way for each spouse to keep that personal property that they each want, it is usually necessary to assign a dollar value to those assets; then negotiate a fair and equitable “deal” asset by asset…

EXAMPLE – John wants the 2014 RV in exchange for an entire household of pricey furniture. According to Mary’s research, John’s valuation of the RV is way too low. Conversely, John’s assessment of all the high-end Thomasville and other furniture is significantly more valuable than Mary will concede. In the end, the Judge settled it. John’s retail invoices in his “furniture file” were unrealistic in today’s depressed economy as to their “street value”, and Mary’s Kelly BlueBook valuation of the much-upgraded RV was also significantly off. The 3 independent RV Dealer letters helped the Judge assign a fair and equitable value. In the end, John had to add a 2012 Honda Jet Ski and Trailer to go along with the house of furniture to settle the final, remaining personal property division hangup.

furniture & motorhome

Spouses often disagree over the value of certain assets – especially those assets that they will be using as “tender” for trading: RV for all furniture; marital home in exchange for the family business. That is where your lawyer can help you.

Establishing Value is Incredibly Important

In these cases involving personal property that the spouses are emotionally-invested in –and even MORE SO– when it comes to placing a value on real estate holdings, a business, or a professional practice such as a dentist or architect, it is necessary to use specialists like forensic accountants, business brokers and real estate appraisers to determine the value of these hard to quantify assets. When the valuation is agreed to, the property is divided.

Division 7 of the California Family Code Governs Property Division

The laws governing how marital property is divided and what properties are subject to division are outlined in Division 7 of the California Family Code. These laws specify the type of property, and why the time in which property was acquired are relevant factors that the Judges are to consider at the legal separation or divorce settlement. It is important that you retain an experienced property division attorney to protect your property interests. No matter how large or small your assets and debts, we can help you.

Avoid Penalties – Take Advantage of Tax Savings

Property Division of certain assets requires careful attention and knowledge to avoid penalties and take advantage of tax laws. In legal separation and divorce cases where one spouse is a big earner, the tax savings he or she will realize, while not important to the other spouse, can be significant! Cashing out CDs, Treasuries, Bonds, Life Insurance and other financial assets often come with a sizeable penalty or “hit.” The hit affects the eventual net worth of both spouses, and there are clever ways to structure property divisions to where both parties will walk away far better than they could ever imagine with the right lawyer their established and trusted financial experts.


Title Presumption: “I Purchased THAT CAR in my Name!”

Many clients over the years had believed in a common misconception that marital property ownership is determined by which spouse’s name is on the title of the property. A variation is “name on the loan,” where one spouse might want to buy that special car, sought out a loan for its purchase; the loan was in their name only and that spouse may have even paid for their new car from their earnings during the marriage. If your name is the sole name on the loan and/or on the title of a property, that does not legally convert that community property into your separate property.

Exceptions to Title Presumption – If there is a specific written agreement or written statement between the spouses or domestic partners at the time of acquisition, clearly stating that a specific property will belong solely to one party (and not the other), that would be a valid exception. Short of that, all properties are considered to be community property — owned jointly — in the State of California.

Debt Ownership Presumption: “I Didn’t Run Up Those Credit Cards!”

Another misconception is about debt. – Just like Title Presumption, ALL DEBT incurred during the marriage is community property — it is irrelevant if only one spouse’s name appears on the item, loan, or credit card(s).


Division of Business Interests & Business Valuation

Legal Separation and Divorce cases that involve a business or business interest – necessitate calculating the valuation of that business. Nusinesses are complicated to value. Also, many self-employed spouses or “professional spouses” (psychologists, dentists, CPAs, etc.) may instigate litigation to confuse or delay the other spouse from obtaining an accurate valuation.

Businesses, like the people who operate them are complex – and there are no standard ‘valuation rules’ that the courts can apply to valuing a business or a partial business interest. If left to the courts, a Judge may use an variety of valuation schemes such as the fair market value, or investment value to arrive at a gross valuation figure. It is better to come to court with clear evidence of value that is either agreed by both parties, or supporting evidence to make your case for your value assessment. It may be necessary to get the financial records of a business including tax returns, balance sheets, profit and loss statements, customer invoices, and other information by using legal discovery avenues such as interrogatories, depositions and subpoenas.

Division of Deferred Compensation Assets

Deferred compensation assets includes pension plans, government pensions, military pensions, stock options and the like. Deferred compensation assets can be divided by the court if they are community or partially community. Often times we need to have experts assist in valuing these deferred compensation assets.

Pension Plans – If your spouse has a pension that was earned during the marriage, all or part of it may community property. Some pension plans must be “joined” as a party in your divorce case and your attorney will help you with that. Without this joinder, the Judge cannot issue rulings dividing the plan’s benefits. If your spouse works for the county or state, chances are the the plan must be joined; if they work for the Federal government, those pension plans do not.

Qualified Domestic Relations Order (QDRO) – Some pension plans can only be split through using a Qualified Domestic Relations Order. A QDRO is an order that needs to be included in a divorce settlement agreement when dealing with pension funds. To be valid, these orders must meet specific legal requirements, including approval by the judge and the pension benefit provider. Since QDROs can be very complicated, there are no standard California court forms that fill this requirement.


Nemiroff & Cohen – Protecting Your Rights – Reducing Your Stress!

Property division in divorce court is one of areas where disputes arise. The most amicable divorce cases often get messy when attempting to identify property ownership, attempt to agree on valuations, and each spouse comes with their own expectations. Hiring an experienced divorce attorney is critical. Nemiroff & Cohen, LLP are well-versed in California division of property law.

To help our clients resolve all of these complex property division issues – you deserve a qualified and experienced divorce lawyer on your side. Lauren Nemiroff and Gail Cohen are both Board-Certified Family Law Specialists with the experience that makes a difference for our clients. We have helped literally thousands of people in the San Fernando Valley successfully emerge from a divorce, even when the process appeared overwhelming at first. Divorce will not always be easy, but with us on your side, you’ll have the support you need to be confident going forward.

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