Details of Divorce: Asset Distribution and Apportionment
You have decided to split up with your spouse, and you’re beyond ready to move on with your life. You can’t wait to feel the freedom to live life on your own terms and to start living life to the fullest.
Not so fast, though.
Before you can bid adieu to your future ex-spouse and start fresh, you must address asset distribution in divorce. This aspect of the divorce process is multifaceted, but with an attorney’s help, you can navigate it with confidence from start to finish.
Here’s a look at what asset distribution, also known as apportionment or property division, involves during a divorce proceeding in California. We’ll also take a look at some asset allocation strategies you can use to your advantage when dividing property in the Golden State.
Apportionment: Legal Definition
Apportionment involves the process of dividing your and your spouse’s jointly owned property, or community property. When it comes to asset distribution during divorce in California, the family law court will split your property equally—or 50/50—based on the community property principle.
This task isn’t generally too difficult when you’re trying to split bank accounts that you both opened during your marriage, for example. However, other assets are harder to split based on the apportionment legal definition in a community property state like California. For example, how exactly do you split your marital home down the middle? And what if you acquired a certain asset before you got married but committed jointly owned funds to this asset?
Let’s take a look at how to address these scenarios when going through asset distribution in divorce.
Property Division Involving Real Estate
If you owned a home by yourself prior to getting married and refinanced it in both your and your spouse’s name when you got married, your home is no longer deemed separate property. Instead, it is community property, which means that it is subject to asset distribution in divorce. However, if you kept it as separate property during your marriage, meaning that your spouse did not contribute any funds or resources to it, then it will remain your property after you divorce.
So, let’s say that you determine that the real estate you own is community property. What now? In this situation, you have a couple of options when it comes to asset allocation strategies. One, you could sell the house and split the profits of the sale with your spouse during the divorce proceeding. Two, you could keep the home and give the other party another asset whose value is equivalent to that of his or her share of the home. This other asset could be cash, for example.
Property Division Involving Retirement Savings
Retirement plan money must also be split with your future ex as you navigate asset distribution during divorce. If your spouse earned a pension while you were married, then you are entitled to receive a portion of this defined benefit plan. Likewise, with a defined contribution plan, like a 401(k), you must divide the money accumulated in the plan. Again, only 401(k) contributions that were made during the course of your marriage create what’s known as a community property interest.
As a general rule of thumb during divorce, the name listed on an account or piece of property doesn’t automatically determine who actually owns the asset. In addition, the timing of an asset’s acquisition doesn’t determine this, either. Rather, how the asset was funded determines who owns the asset and how much of it he or she owns. Figuring all of this out can certainly be complicated, but an attorney can guide you through it so that you make the right decisions in light of your particular circumstances.
Enlist the Help of an Attorney Who Can Help You with Asset Distribution During Divorce
If you’re ready to divide your assets during your divorce proceeding, it’s paramount that you understand the apportionment legal definition and how it applies in your and your spouse’s case. After all, no two divorce proceedings are alike. And the decisions you make during property division today will have long-term implications for your financial situation tomorrow and in the years ahead.
Fortunately, I, attorney Michael C. MacNeil, have personally been through the divorce process, so I understand what all is involved in asset distribution during divorce. Get in touch with me today to find out more about the best asset allocation strategies for your divorce situation. I’ll help you to pursue the most personally beneficial property division outcome possible.
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