Property Division

Why Should You Avoid Dividing Your Property in Court?

In a marriage, couples accumulate property. Everything you own is considered property, from a video game to a sailboat. Once a couple decides to end their marriage, this property must be divided between them. This is often where divorce horror stories begin. You often hear visceral phrases like, “they bled me dry” or “trying to squeeze blood from a stone.” Fortunately, there are ways to avoid believing you “lost everything” in a divorce.

Community Property Division

In a divorce, different states use different models for dividing property. California is one of only nine states that use a community property division model. This is surprising news to many. Our state has a reputation for being on the forefront of progressive legislation, yet community property division is often considered a dated, antiquated model.

There are always exceptions and caveats, but essentially, community property division is an “equal” distribution of assets. It takes the total value of the marital, or “communal,” assets and divides them in a 50/50 split between the spouses.

Marital property, according to the model, is any property that was acquired during the marriage. It doesn’t matter who bought it or used it. Say your spouse has a treasured baseball card collection. You have no interest in sports and never touch these items. Regardless, any cards your spouse bought while married are technically martial property. Separate property can also exist in a marriage. This is any property that was brought into the marriage; inherited; or gifted from someone outside the marriage. Separate property is not divided in a divorce.

Problems with the Community Property Model

Some Assets Are Difficult to Divide

To some, community property division seems perfectly reasonable. Each person gets their 50%, and all is fair. Unfortunately, it isn’t always that simple. The manner in which courts divide property can cause problems. Let’s use a house as an example. Obviously, you can’t cut the house in half and give each person their own slice. This leaves you with a few options, none of which are optimal.

In the first option, the house is sold, and the money is split 50/50 among each spouse. This leaves both parties without a home, forcing them to use their portion of the split toward a new residence. Since they are using only half of the home’s value, their new space will be meager in comparison. Otherwise, they will be forced to use more of their own money (or any other divided assets) to pay for the new home.

Another option is to allow one person to keep the house and pay the other party half the value of the home. This could put someone in a financial bind. Of course, it will be nice to stay in the home, but now they will have less money for themselves.

The third option would be not to distribute money, but to redistribute assets. Say the cost of the home is $250,000, entitling each spouse to $125,000 of its value. To cover that cost, courts could choose other assets to distribute. For example, the person who loses the home could be given the cars, jewelry, etc. until they receive $125,000 worth of assets. Imagine the conflict this creates, as the person with the house is left without transportation or their favorite necklace.

Division Does Not Account for Support

Imagine Jane is the breadwinner in the family. Her husband, Fred, is a stay-at-home father who manages and maintains the home. After their divorce, their assets are divided 50/50. Fred has no income, and he is given primary custody of the children. After receiving half the marital assets, he is awarded spousal support and child support. Many believe this is a fair system, and we will not argue that point. However, the stark reality is that Jane is now in a financial bind. Whether the division is fair or not, Jane is now responsible for spending more money after losing half her savings.

Judges Are Only Human

Property that isn’t sold and split, such as the home, must be awarded to someone. Judges are highly trained in the law, and they are meant to make unbiased decisions. Unfortunately, they are as susceptible to the same biases and prejudices as anyone else. One judge may typically favor the man in a divorce, another tends to side with the woman. Even when the couple is the same sex, subtle presuppositions can sway a judge one way or another. Your property is in the hands of the judge, and you must have faith that they are making balanced decisions. When they do not, you have little choice but to accept it.

Mediation

To avoid having your property at the mercy of a judge, you and your spouse may wish to consider divorce mediation. Mediation is a process whereby couples can choose for themselves how they wish to handle property division, spousal support, child custody, and so forth.

Mediation is a less contentious process than a courtroom trial. The couple hires a neutral third party who helps them reach agreements together. A good mediator can assist in keeping the conversation focused, free from overemotional reactions. They can help each party truly hear the needs and concerns of the other, creating common ground.

With the help of a mediator, you could avoid court altogether. You can agree to terms collaboratively, submit your agreement to the court, and move on. Divorce is never easy, and for some, it is traumatic. Mediation and uncontested divorce can at least make the transition better for everyone.

If you need help with divorce mediation, give us a call. We are committed to helping people move forward without contentious, ugly courtroom battles. For a free consultation, call (949) 558-2624, or contact us online.

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