San Bernardino & Riverside Domestic Violence

Property Division Lawyer and Attorney Resources

During the dissolution process in Riverside, San Bernardino and Hemet Family Law Courts, the parties must divide property acquired during their marriage. Most of the time, this process is simple.  Generally, most property acquired after the marriage is considered community property, which is evenly divided during a divorce. Property obtained prior to a marriage is considered separate property. In concept, community property concepts may seem simple but can often be subject to interpretation.  Dividing property pursuant to community property requires a Family Law Attorney who is familiar with the legal intricacies to insure your property is fairly divided.  The complex intricacies are usually complicated assets, tracing issues to determine how assets were acquired, business interests, professional practices, retirement plan benefits and personal investments are all issues which make the process more difficult.  Our Family Law Office will use the best experts in San Bernardino, Riverside and Hemet to value businesses, pensions, residential and commercial real estate, household furnishings and jewelry.


Generally, at dissolution, all community property and community debt is split evenly (50-50) between the spouses.  This requires that each item of community property be evaluated in terms of its market value.  Based on the valuation each spouse receives a value equal to one half of the entire community estate.


If a house is at issue, the court may award the house entirely to one party and award the other party community assets of equal value. Therefore, the entire net worth of the community estate is important not each particular asset.  For an example, if a couple own a car worth $30,000 and their house is worth $60,000 and the husband keeps the car and the wife keeps the home, the wife will owe the husband $60,000 less $30,000 = 30,000 divided by two = $15,000. In this example, the wife would owe the husband $15,000 as an “equalizing payment.”  This process is designed to make a "clean break" possible between the spouses by terminating the joint ownership relationship.


The court also considers the asset and its uses. Common examples of this include circumstances where the sale of the family home would uproot the couple's minor children, or where a particular item has important sentimental value for one spouse.   On the other side of the spectrum, California courts will not award any portion of a spouse's solely owned separate property to the other spouse.

Even if divorce settlements end up dividing the marital debit, creditors can legally go after either spouse for payment of debts regardless of what the judgment says.  In a dissolution it is best to use marital assets to pay off as much debit as possible as part of the divorce settlement.  For example, the house proceeds may be used to pay off all joint debt prior to dividing the proceeds.  Of, one spouse can refinance the house to retain ownership while paying off debts rather than paying the other spouse for the home equity. In any event, any joint accounts should be closed to prevent a spouse from continuing to run up debts under both names.

The Family Domicile

If the parties are divorcing and one spouse is granted exclusive use of the home, the other spouse is treated as if he or she continued to live there for home for home sale tax purposes.

Tax Credits

Most tax credits go to the parent who taxes the exemption for the children, and the custodial parent automatically receives the exemption unless the court orders otherwise. However, this may be altered by the parties pursuant to their settlement.  Transferring these exemptions may lead to overall tax savings for the parties, meaning more money for each spouse parents.

Stock Options 

Stock options, if earned during the marriage, are a community asset, even if they do not vest until well into the future.  In fact options may often represent a significant marital asset.  If they are not worth anything at the dissolution, the options often last for years into the future and represent an opportunity to see significant gains. 

Innocent Spouse Status

Congress has enacted protections for spouses who may be pursued by the IRS for tax obligations that they thought their spouse was responsible for.  They are liable when they sign the joint return each year.

1. The business: It is essential to understand how the business is run and how often the owner conducts day-to-day operations.  A visit to the premises may be beneficial.
   
2. The industry in general:  Statistics available for almost all businesses, and the subject business should be compared with others similar to it. Most notably, the profit margins should be compared and the overall profitability. If in there is a variance of the subject business from the industry norm that variance may be an indication that something is unusual, and deserving of special analysis.
   
3. Cash flow:  This is crucial. There are many things to determine, such as whether there is good internal control over the funds, which leads to the next determination, if all receipts are being recorded.  In a professional practice, the name of the person is often the name of the business and in those situations, the accounts receivable records should be compared against the cash receipts records.  In addition, the write-offs of significant amounts should be reviewed and be supported by documents indicating attempts to collect, such as correspondence, letters from the company's attorney, lawsuits and the like.
   
4. The lifestyle of the family. The lifestyle of the person earning the income is matched to the income being reported.  If there is a disparity, then the debt is evaluated to see if the lifestyle is paid for by borrowed money.  If there is nothing that explains the lifestyle then there is a good possibility that unreported income is being utilized.
   
5. Family expenses Certain expenses are consistent with the nature of the business, and can usually be verified.   For example, different manufacturing processes may require different utility usage.  The utility bill may indicate whether production is going up or down and likewise the state of the business and ultimately the valuation.
   It may be difficult to find unreported income and hidden assets, however hiring trained professionals will give you the edge in finding that income.  Our firm has experience with and uses some of the top professionals in the field for this purpose including business appraisers, business brokers, financial analysts, certified public accountants and economists. They are experience in finding assets that may be hidden by a spouse.  Some of the areas that our experts look at are as follows:
   1. Municipal bonds or Series EE Savings Bonds interest is not reported on tax returns and may be concealed from the other spouse.
   2. Antiques, artwork or hobby equipment is may be undervalued.
   3. Repayment of a fake debt to a close associate or even a family member
   4. Salary that made be paid to a nonexistent employee if the family owns a business.
   5. Look to unusual expenses that could be used for other family members or individuals outside of the marital community estate.
   6. A spouse may collude with an employer to delay bonuses and may distribute stock options or raises until after the dissolution.
   7. Cash or income usually goes unreported on tax returns and financial statements.  Accordingly, look to life-style and expenditures.
   8. An account may exist in a child’s name, really a sham account for the spouse.
   
   
   Contact us about your Property Division matter today.