The vast majority of court cases now end in settlement. Parties to a divorce have a strong interest in reaching a settlement in their case instead of going all the way to trial. The most obvious would be that the parties can make their own agreement and make their own decisions about their children and their property, instead of having the judge make the decisions for them. Parties should keep the state of the law in mind when deciding whether a settlement is fair and reasonable. With respect to property division, California is a community property state. This means that all marital assets and marital debts will be divided equally.
Dividing assets and debts equally sounds quite simple. However, once parties get down to the brass tacks of actually splitting up the marital estate, they can quickly discover the equal division can be complicated. For example, if there is a credit card bill for $5,000, how should this be handled? Agreeing to have each party send in exactly half of the monthly payment until it is paid off is unwieldly and not practical. Another option could be to have one party just hand the other party half of the balance in cash and have that party be responsible for paying the entire balance. However, especially when it comes to large debts or large assets, parties may not have the ability to do this.
An excellent alternative to this property distribution problem is to look at the marital estate as a whole and attempt to divide the estate that way. In other words, tally up all the assets and all the debts, and arrange these in such a way that both parties come out with half of each. For example, if the parties have $50,000 of equity in the marital home and $40,000 in retirement accounts, it may make sense for one party to take the house while the other spouse takes all of the retirement accounts plus another $10,000 worth of other marital property, such as furniture, vehicles, or jewelry. This is a double benefit. For one, the parties do not have to worry about selling the house. For another, it means the parties will not have to divide up the retirement accounts, which may result in harsh tax penalties or require complicated paperwork.
We have extensive experience in helping our clients to craft a property distribution settlement that makes sense for their family. Contact us today at 619-800-0384 for a consultation to discuss your case and what solutions we have for your case.