One of the most difficult parts of divorce proceedings is the division of assets. In California, the law divides assets into community assets and separate assets. Community assets are assets that are attained during the marriage, while separate assets are those attained prior to the marriage or prior to the divorce but after separation. California also recognizes value increases of assets over the time of the divorce. Add to this the fact that agreeable couples may agree to change the status of an asset from the community to separate or vice versa and asset division can become very complicated and cause frustration between both parties. A professional divorce lawyer who is knowledgeable and experienced in California law can help you move more easily through asset allocation and division of assets.
Asset Division and Disputes
The division of assets during divorce proceedings can become emotional, frustrating, and hurtful to both parties. Dividing the assets in a divorce is similar to the division of assets after the dissolution of a business. Just as a business partner owes certain fiduciary duties to his colleagues, a wife or husband owes them to his or her partner. During divorce proceedings, one member might consider an asset as theirs, while the other member contests that the asset belongs to them.
There is a broad range of articles and monies recognized by law as assets and debts. Each couple who is entering into divorce proceedings will come with a very diverse and unique set of assets for the division. Take a look at these profiled case studies to gain an understanding of the diversity of assets that are eligible for division.
|Type of Employment by Asset Holder||Community Assets for Division||Community Loans for Division||Disputed Community Assets/Loans|
|Restaurant Owner||Family Home
|Corporate CPA||Family Home
Defined Benefit Plan
|Grad School Debt||Grad School Debt|
Home Brewing Equipment
Vintage Pickup Truck
|Home Brewing Equipment
| Sales Executive
The above chart of case studies illustrates the diversity and uniqueness of community assets as well as the possible disputes that may occur as asset and debt division proceeds. For example, the restaurant owner may have bought his restaurant prior to the marriage and may dispute that this asset is considered a separate asset. Or the firefighter may dispute that although the vintage truck was purchased during the marriage, it was informally recognized throughout the marriage as “his truck.” These disputes are common as couples initiate asset division and can often prolong divorce proceedings.
Get an Expert!
We’ve already seen how complicated asset identification and division can become. Even parties without considerable community or separate assets benefit from the use of experts to help in the assignment of value and division of assets. Experienced divorce lawyers are able to move asset division proceedings and ensure their represented party receives the appropriate value of assets. But divorce lawyers aren’t the only experts needed in asset division. Divorce lawyers depend on the experience and knowledge of a wide range of experts to help in asset division.
The Need for Experts
The need for additional expert help in asset division usually occurs during the value assessment phase of asset division. During divorce proceedings, couples first must identify the shared and combined assets and debts. Once they have decided on these, values must be assigned to these assets and debts before they can be divided among the parties.
Parties often do not know the values of these items or are unable to agree on the value of the items. There may also be contention by parties and disputes regarding the value of assets. If parties are unable to agree to the value of an asset, the divorce lawyers will contract experts to value the items. These experts become the deciders in the value of the product able to appraise and establish an appropriate value. The early retention and use of an expert can significantly enhance the chances of settlement and success.
As you saw from the chart of profiled case studies, experts are often needed in a broad range of asset appraising. From vehicles to wine collections, assets are diverse and unique and require an equally distinctive team of experts to evaluate value.
An experienced divorce lawyer will be able to contract professional appraisals to value assets and items during divorce proceedings. Some of the experts commonly used to appraise and establish value to assets include:
A forensic accountant is a specialized accountant who is recognized by the court. A forensic accountant often works closely with lawyers in legal disputes but can also be employed by government, banks, and insurance companies. They are often used to investigate and analyze complex financial matters during divorce proceedings. A forensic accountant may also be consulted if one member of the partnership is concealing assets, if the true income of one partner is difficult to ascertain, or the value of certain assets remains in dispute.
A forensic accountant can resolve issues such as:
- Calculating a marital standard of living.
- Tax issues including debts.
- Characterization and allocation of stock options, retirement plans, and other assets.
- Business valuation.
- Controllable cash flow.
- Tracing separate property.
- Credits and reimbursements.
- Income determination.
During divorce proceedings, the addition of a business as an asset can create some added complications. Not only is the worth of the business taken into consideration, but the equipment used to run that business is also considered. For example, if one partner owned an excavating company, there would be a large value and/or debt in the equipment used to run the company. If a business is involved in a divorce, an inventory of the equipment owned and utilized by the business must occur to evaluate and establish the value and/or debt associated with the equipment. Equipment appraisers specialize in establishing the value of equipment; they must be certified and the appraisal must be on-site. Depending on the type of business, a specialized equipment appraiser may be consulted to establish the value of the business’ equipment. The business equipment appraisal may include equipment such as machinery, trucks, computers, and other mechanical/electronic devices.
For couples who have fine art, coins, antiques, or other collectibles listed as assets, an accredited art/collection appraiser may be consulted to establish value to the collection. Art/collection appraisers are specialized appraisers who are experienced in a specific collectible. Art/collection appraisers establish the value of the collection using “fair market value,” the amount the collection would sell for today. Fair market value is the only value recognized in litigation for art and collection appraisal.
Forensic Computer Experts
Similar to forensic accountants, forensic computer experts may be used if one party speculates another party is not forthcoming with information or has willingly destroyed electronic information. Forensic computer experts are specialized in uncovering electronic information that has been hidden or destroyed. Forensic computer experts are often used to uncover or analyze data and information from one party’s computer. Because California abides by no-fault divorce, uncovering an electronic trail of one party’s lifestyle or character is generally unnecessary. However, forensic computer experts may be consulted to uncover hidden assets, undisclosed credit cards or bank accounts and financial manipulations.
Real Estate Appraisers
Many divorce proceedings involve valuing and division of a family home. Real estate appraisers are often consulted to appraise and establish the value of a family home or other real estate. Real estate appraisers are able to identify the features of the home and identify the comparable sales in the location of the home. Real estate appraisers are also able to appraise rental properties, land, and vacation homes. Real estate appraisers may also be consulted for a historical appraisal to establish the value of a home or property at some time in the past.
Vehicle Appraisers are specialists who appraise vehicles using market-based researched values. Watercrafts are generally appraised by surveyors; however, most other vehicles — from vintage cars to aircraft — are appraised by vehicle appraisers.
The Benefit of Using Experts
The use of experts can ensure that shared and separate assets are given a determined value based on the knowledge and experience of a professional expert. The use of experts can make determining the value of assets a much easier process and provide an indisputable value for all assets. Once the value of the assets has been established, the next steps in the divorce proceeding really depend on the wishes of both parties.
Depending on the value of the assets and the financial obligation required for them, parties may be unable to fully accept the division of an asset and will instead decide to sell the asset. This often occurs with the family home. If neither party is able to financially afford the family home alone or would be more financially stable with a smaller, less expensive home, the couple may choose to sell the family home and divide the associated money from the sale. The couple may also choose to delegate assets to one another or to “buy” an asset from one another. There are many options during this stage of the proceedings and a credible lawyer will help you choose the best option for you.
Once you get to dividing assets as part of your divorce proceedings, using an expert to establish value can avoid frustrations and make the task much less daunting.
If you’re in the New Port area and are looking for a divorce lawyer, want to consult with a lawyer about asset division, or think you might need an expert to help establish value during your divorce proceedings, Max Hills Law Group can help! Contact us today to schedule a consultation.