In order to get divorced, you need to let the court know your division of assets and debts from the marriage. Like the other main areas of required decision making in a divorce (spousal support, child support and a parenting plan), it is usually best to make these decisions yourself. You have a lot of discretion in the division that you agree upon. The court will normally only question your division if it appears to be incomplete or if one of you is taking substantially less than half of the marital property without the benefit of legal advice.
Approach for Division of Assets and Debts
A common four step approach for working out a division of assets and debts is:
1) list all the assets and debts;
2) characterize each of them (as marital property; separate property or a combination of the two);
3) value each of them;
4) come up with a fair and workable division.
Each of these steps is very important. As regards listing the assets and debts, it is better to err on the side of too much detail than risk forgetting something important. Also, part of the legal process for getting a divorce includes providing each other with a listing of your assets and debts which you affirm under oath to be complete.
Characterizing the items as marital, separate or mixed property can be somewhat complex and will be covered under separate post(s). Marital property is referred to in the law as “community” property.
You will be able to value many of the assets and debts easily yourself. Others such as a house, a business or a pension often require the services of a valuation professional.
There are many different considerations involved in coming up with a fair division and often many creative ways to do it. If you are unable to come up with your own division of assets and debts, and the court has to do so, it is required by law in California to give each spouse exactly half the total value of marital property. Separate property, which for example may have been brought into the marriage by one spouse and kept separate for the whole marriage, is not subject to division by the court.
Under the umbrella of division of assets and debts, there are also sometimes requests for reimbursement by either or both spouses. This could happen for example if after separation a marital asset (such as the family home) was used exclusively by one spouse and/or if a spouse used his or her separate money to pay for marital expenses. This will be explained further in later post(s).